Dealing with deal websites
By SANDRA GUY firstname.lastname@example.org February 24, 2012 7:44PM
Updated: March 26, 2012 8:04AM
Silhouette artist Carter Kustera, whose work can be seen at Barney’s Co-op stores and in Jonathan Adler’s home-décor boutiques, will offer a coupon for a custom silhouette in celebrities’ “swag bags” at this weekend’s Oscar Awards ceremonies in Hollywood.
He is also working to license and launch a mobile app based on his artwork.
Kustera’s ventures are aimed at amplifying the success he’s had with two Chicago-based daily deal sites: Groupon and the newly launched Cing.com, the latter founded by one of Chicago’s growing cadre of self-made technology entrepreneurs whose success is allowing them to create new ventures.
Kustera has spent the past year painting 5,000 captioned, expression-filled portraits on watercolor paper that customers bought mainly online through daily-deal websites.
That’s a remarkable 12,400 percent increase in his yearly earnings.
Though Chicago-based daily deal site Groupon boosted Kustera’s business with an initial sell of 3,000 silhouettes, Kustera switched in January to Chicago daily-deal startup Cing (Cing.com) because of its immediate offer to sponsor deals nationally and take no cut. Groupon started its business by taking about half of the deal price, but has said it will lower that percentage in certain cases.
“Cing’s deal is better for the merchant,” said Kustera, 49, owner of Carter Kustera Productions in Brooklyn, N.Y. “Cing offers national sales rather than targeted market-sales, which aren’t necessarily (offered) in the right markets.”
Kustera usually charges $400 to $3,000 per silhouette, depending on the size, because he interviews his subjects, uses a full pallete of colors, draws and paints by hand, and customizes each portrait to reflect the person’s personality and expressions (CarterKustera.com).
On Groupon, he offered half-price deals of $55 for a $110 9-by-7-inch portrait and $159 for a 9-by-12-inch version, with a limited selection of colors and drawn on paper. People who purchase the deal send Kustera the photo they want to be turned into a silhouette, along with a caption.
On Cing, Kustera offered a 5-by-7-inch color silhouette for $20.
“Once people started contacting me, many told me they had been following my work for nine or 10 years, but could never afford it,” he said. “The majority are gay couples and families who include the children and the dog.”
Kustera appreciates the daily-deal experience because it has given him the chance to get outside of the gallery system and “get out in front” of thousands, not to mention earn more money.
“It has made a segment of my artwork, which might be considered the level of haute couture, like ready-to-wear,” he said. “In the long run for me as an artist, it may be better because I have a following of people who support me.”
Cing launched on Jan. 19 after founder and CEO Anthos Chrysanthou decided to change the daily-deal paradigm by charging no commission to let merchants offer goods, services and unsold inventory on the site.
Chrysanthou, a 27-year-old southwest suburban native who founded interactive development firm Emerge Media in the West Loop, said he has achieved a degree of success that lets him focus on changing the world.
“I decided that building another ‘daily deals’ site was OK, but it wouldn’t change the world,” he said. “I decided I could do something better that every small business would want.”
Chrysanthou credits entrepreneurship professor Steve Kaplan of the University of Chicago Booth School of Business and his own membership on the parish council at St. Constantine & Helen Greek Orthodox Church in Palos Hills with inspiring him to create Cing.
Chrysanthou, who grew up working in his dad’s karaoke bar, Rusty Nail, landed on the name “Cing” because it made him smile every time he said it.
“It was the fun-est sounding name I could get my hands on,” he said.
Emerge Media makes money by running popular websites such as womens-health.com, mens-health.com, dayspas.com and bands.com, the latter for musical groups looking to create a digital presence.
“I would like for Cing to be the place where the local mom and pop restaurant or retailer can say, ‘Thank God that this (site) came about,’” he said.
Experts say the daily-deal industry faces challenges ranging from consumer burnout to geo-location privacy concerns to shifting sales-tax laws. And Groupon reported a $37 million loss in the fourth quarter of 2011, in its first earnings report as a public company.
Yet a poll by Triton Digital for Daily Deal Media showed the biggest percentage of respondents — 31.1 percent — say they dislike deal offers cluttering their email inboxes, but they have come to terms with it as long as they can save money. Another 28.3 percent said they love the idea of saving money and would sign up for more programs.