Art-Exchange.com Inc.

Richard Gipe sees the worldwide art market as a relatively featureless canvas full of potential. In most mature markets, Gipe said, the industry leader has a 30 percent market share, and second place has 15 percent.

But the top two players in art world have only about 1 percent each.

“Somebody ought to get a 30 percent market share,” said Gipe, a former investment banker. “That somebody ought to be us.”

Gipe runs what he says is the world’s only art exchange. About 10,000 artists have paid to list 100,000 pieces online.

Its beginnings date back to 1994 when Gipe moved from Newport Beach, Calif., to Hot Springs to help open the family art gallery, Legacy Fine Arts. He quickly realized that finding art for customers required a long trail of transactions.

“It was a pretty easy jump for me to think about what if there were an exchange in the art business like there is in the investment business,” he said.

So between 1999 and 2000 he raised $4 million through a series of private placements, a convertible venture offering and seed capitol from the Arkansas Science & Technology Authority.

Gipe went against the current art business paradigm “that you have to convince every buyer to buy your stuff,” he said and instead opted to find out what the buyer wants.

The resulting business-to-business art exchange has grown from less than $200,000 in annual sales to nearly $2 million.

The company earns money from listing fees and sales fees. About 50 percent of its sales are retail and 50 percent wholesale, which includes jobs the company has done for 20 of the country’s top 200 design firms.

The company has also forged a partnership with the American Society of Interior Designers, which has about 40,000 members.

On the supply side, the company has made about 1 million phone calls to convince artists to list their art. And because listing a piece requires its artist’s permission, a copycat exchange would have to repeat all of Art-Exchange’s legwork.

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