Molson Hart spent the past decade building an online business selling stuffed animals and other toys, mostly on Amazon.com. This year, he told me, has been the toughest he’s experienced. Sales haven’t rebounded from a steep industrywide drop last year, costs have risen and profit has dwindled.
Hart’s company, Austin, Texas-based Viahart, is betting on a revival with the help of what US officials have warned is a threat to American businesses: Chinese-owned Temu. The discount shopping app controlled by PDD Holdings Inc. has come in for criticism for undermining domestic merchants by using a trade loophole to elude tariffs.
But Hart, who sold his first toy on Temu in August, sees things differently. He’s just happy to have somewhere other than Amazon to reach US shoppers. Amazon.com Inc., which captures about 40 cents of every dollar spent online in the US, is the target of an antitrust lawsuit filed last year by the Federal Trade Commissionthat accuses the company of illegally maintaining monopoly power to the detriment of US shoppers and online merchants like Hart.
“I understand where the government is coming from, but we really need alternatives,” said Hart, who testified five years ago before the House Small Business Committee about his unhealthy reliance on Amazon for revenue. At the time, about 98% of his sales were on the e-commerce platform.
Temu is giving him a sense of hope as he heads into the holiday shopping season. Take his October sales of a plush black cat toy that is one of his top sellers around Halloween. Amazon shoppers on average paid $18 for the cat, with about $7 going to Hart’s business. Temu shoppers paid $14 for the same item, with more than $8 going to Hart. It's cheaper for sellers like Hart to shift inventory on Temu. The trade-off for shoppers is they need to wait as many as five business days for delivery, compared with getting their Amazon order in a day or two.
“We’re making more money on Temu even though the price is higher on Amazon,” the seller said.
In just three months, Hart’s sales on Temu have grown to surpass those on the websites of Walmart, eBay and Target, as well as via his own website. Hart began selling on Temu when the app was recruiting US businesses on an invite-only basis. Earlier this month, Temu opened its marketplace to any US sellers who fill out an application online and clear its vetting process. Temu didn’t disclose the number of US sellers on the platform, but a spokesperson said the company has been “inundated” with applications.
“Independent sellers set their own prices on Amazon – and Amazon offers optional tools to support them in offering competitive, low prices,” Amazon spokeswoman Maria Boschetti said. Amazon fees are 15% or less in most product categories, which helps pay for a variety of tools that help sellers remain competitive, she added.
Hart realizes it might seem bizarre for a US business to defend Temu, which uses a 90-year-old trade loophole to let Chinese factories sell direct to US shoppers at steep discounts while dodging tariffs. Regulators are increasingly calling out the business model, which ships small parcels from China direct to US shoppers, as a threat to US interests.
Hart imports his products in cargo containers from China, Indonesia and Vietnam and pays tariffs when they reach the US en route to his warehouse, so he doesn’t benefit from the loophole. He says his experience as a US business on Temu shows it can help level the playing field in the US — not tip it — by providing an Amazon competitor.
“Temu is a very serious contender to Amazon,” he said.—Spencer Soper
The shocking growth in healthcare “administrator” jobs
The PA Democrat who subdued The Blight
Operation Warp Speed for everything
Dear Rational Optimist,
It’s time we talk about The Blight.
First coined by our friend and entrepreneur Andrew Cote, The Blight describes the ever-growing bureaucracy that’s suffocating American prosperity.
The Blight is why your health insurance costs five times what it did in 2000. It’s why our bridges and roads are crumbling. It’s why houses are unaffordable.
For my entire lifetime, The Blight’s only gotten worse. But now, we have a real chance to expose and kill it. We can uncuff innovators and restore America back to a nation that builds great things.
This is our Berlin Wall moment. When that concrete barrier fell, it unleashed an explosion of human potential. Today, we face our own wall, but it’s made of paperwork.
First, let’s look at how The Blight impoverishes us. Then we’ll discuss our duty to take advantage of our once-in-a-lifetime opportunity to fix it.
It takes longer to build a house today than it did in 1971. Did we forget how to hammer nails or pour concrete? No. We let regulations get out of control.
In San Francisco, regulations add about $400,000 to the cost of building a single apartment. $400,000! Just to get permission to build.
The shakedown starts with a $50,000 environmental impact study that often takes 18 months—longer than it took to build the Empire State Building. Then comes the mandatory neighborhood meetings at $25,000 each.
California wins the gold medal for regulatory madness. But New York, Boston, and Seattle aren't far behind. No wonder young wannabe homeowners in these cities are angry. To whom should they direct their anger?
Well, homes haven’t gotten more expensive to build. Construction costs, adjusted for inflation, have barely changed in decades. It's the regulations.
We know this because, in America, most housing regulations are local. Some places still let builders build. Take Austin, Texas. It’s green-lighting new homes faster than any major city. Rents dropped 7%+ in the past year while prices soared elsewhere.
Source: Apartment List
It's not rocket science. Just let builders build.
One estimate suggests housing prices would drop by half nationwide if we simply let builders build until prices fell to near actual construction costs. Imagine cutting your biggest expense in half.
But the real gain would be a human one. My wife has thoughts on why people have fewer kids these days. “A bird doesn’t lay eggs without a nest,” she says. The Blight shrinks families.
I recommend Bryan Caplan’s new book Build, Baby, Build: The Science and Ethics of Housing Regulation if you want to understand this topic better. I plan to have Bryan on the Rational Optimist Podcast soon.
For those who don’t remember, humanity likes to rewrite history every now and again. There are long periods when we tell ourselves everything is fine when it’s not fine. Then there are episodes where we face hard truths and realign with reality. These reality checks are hard. They happen fast. We veered from the era of Marie Antoinette, with its high finery and extreme poverty, to almost twenty years of revolution that leveled the elite and gave the proletariat a voice. During the time of the Soviet Union, we saw massive famines and day-to-day life defined by fear of the secret police and the struggle to buy a loaf of bread before they were all gone. Many people ended up in gulags or became silenced by the fear of ending up in one. The entire social structure was built on denial of reality. The Head of Gosplan, The Soviet Economic Planning Agency, issued orders for production, knowing there wasn’t enough steel or food to meet the fabricated target. The principal purpose of the state was to manufacture enough fear to keep control. So, when Mr. Gorbachev came along and said “glasnost,” it was the beginning of an irreversible reality check. Glasnost means openness and transparency. It meant people could examine the state and criticize the state. And they did. All of the denials suddenly gave way to a multitude of angry opinions. Today, America is having a glasnost moment. It is as radical a revolution. Except, the goal is not to permit criticism. It is to get the raw data, put it in the hands of the most sophisticated data analysis experts in history (Elon Musk, Peter Thiel, etc), package the evidence in a way no judge or jury could deny, and commence a prosecutorial process. Republicans call this accountability. Democrats call it revenge.
So, we are not witnessing the usual passing of the baton back and forth between the left and the right. This is the Tech Bros storming the ramparts. Their goal is to shine a bright light into the darkest corners of government. The cameras will now be trained on the state instead of on the citizens. If you think Elon Musk and Vivek Ramaswamy are going to be running a new, yet uncreated, Department of Government Efficiency (DOGE), ...
November 10, 2024In 2018, Douglas Gold’s parents were moving house in Bellmore, New York, and decided to have a tag sale. Among the items they’d hoped to unload were a few exceptional paintings, so they hired an expert to choose the best ones to advertise.
Eli Sterngass saw the ad, and he had one free day between ending his job at Questroyal Fine Art, a gallery specializing in 19th- and 20th-century American paintings, and starting a new one at the art-appraisal firm Gurr Johns. He took the Long Island Rail Road from New York City to Bellmore to check out the Golds’ sale.
When Sterngass, then 24, met the couple’s son, who was 22 at the time, he recognized a kindred spirit. “I was shocked to find someone my age who was equally or more knowledgeable about early American paintings,” he recalls. “We became fast friends socially, and I brokered a painting by George Condo for Doug.”
Over the next few years, Sterngass worked his way up from associate researcher to fine-art appraiser at Gurr Johns, and Gold became director of the gallery Graham Shay 1857, on Manhattan’s Upper East Side.
By 2022, the two men felt seasoned enough to launch their own space, Lincoln Glenn gallery, in the town of Larchmont, following a wave of New Yorkers to the suburbs and exurbs during COVID.
Calvert Coggeshall, who painted this Color Field canvas around 1975, is representative of the kind of under-known talents that Lincoln Glenn gallery showcases. Top: Lincoln Glenn founders, Eli Sterngass (left) and Douglas Gold, hang the painting Polynesian Image, 1960, by Edward Zutrau, in their flagship space in New York’s Chelsea gallery district. Photo by Alexandra Rowley
Lincoln Glenn quickly gained a reputation as a place to discover exciting works by lesser-known American talents — like Abstract Expressionist Sherron Francis, Color Field painter Calvert Coggeshall, Surrealist Gerome Kamrowski and landscape painter Georgina Klitgaard — who had shown their creations alongside the biggest names of their day but who vanished from the limelight for one reason or another.
In May of last year, Lincoln Glenn opened a second location, inside Graham Shay 1857, to showcase its more traditional paintings by American Impressionists, Hudson River School painters and Ashcan School artists. Six months later, Sterngass and Gold relocated their flagship from Larchmont to New York’s Chelsea gallery district, focusing on abstract works by postwar painters.
Asked about the moniker Lincoln Glenn, the founders explain that they preferred it to one composed of their own names. “Gold Sterngass does not have a ring to it and may sound more like a law firm,” says Sterngass, who hails from Saratoga Springs, in Upstate New York. “We opted to combine our hometown streets.”
Introspective caught up with the young gallerists to find out more about their adventures in art dealing.
An installation view of “Gerome Kamrowski: An American Surrealist”at Lincoln Glenn. Photo by Alexandra Rowley
What’s the rarest or most unusual object you’ve ever handled?
He painted this work in 1864, when he was a member of the Seventh Regiment of the Union Army, and then exhibited it in 1872 at the Parisian vendor Goupil & Cie, where it was purchased and lost for 150 years.
It’s certainly well-painted, but I especially love that it’s a female artist painting a female subject for a female author. And the antique automobile is awesome!
How do you go about finding lost art treasures from the past century or two?
Gold: We pore through old exhibition catalogues of museum group shows, as well as major galleries, searching for names we aren’t familiar with. The work of the artist has to be of quality and match the interesting bios.
Artistic innovation is always something we seek out. We recently purchased the research library of legendary dealer Joan Washburn, of Washburn Gallery fame, and that has been an amazing resource.
Except for the artist estates that we represent, we own most of what we’re selling, as we’re both collectors at heart and like to actively participate in the market. Because we like to buy, we have a network of “pickers,” collectors and dealers who offer us new material each week.
Calvert Coggeshall was an interior designer and furniture maker turned abstract painter between nineteen fifty and nineteen eighty. He was close with Bradley Walker Tomlin, Grace Hartigan, Dorothy Miller, Walker Evans and dealer Betty Parsons but hadn’t had a solo exhibition in twenty years. Many of these paintings were in a barn in Upstate New York and still wrapped since the artist’s retrospective at Bowdoin College in 1977.
Gold: We have a policy to keep collectors confidential, but we have sold to celebrities, politicians and billionaires, and some of these sales have been on 1stDibs. We also do a lot of business with interior designers and art advisers.
Are you seeing an increase in the popularity of certain styles, eras or artists?
Gold: Abstract Expressionism and Color Field painting have risen to the top of popularity.
Also, collectors and museums have been intrigued by Black artists, Asian American artists and female artists. A lot of museums have been rehanging to more accurately represent the tremendous diversity of our country, and this has trickled down to galleries and collectors as a result. We have tried to be ahead of the curve when we can!
Sterngass and Gold outside their Chelsea gallery. Photo by Alexandra Rowley
Can you tell us a bit about your current shows, “Gerome Kamrowski: An American Surrealist” and “Georgina Klitgaard: America Through Her Eyes”?
He moved out of New York in 1946 to take a professorship at the University of Michigan, and as a result, his contributions to both Surrealism and Abstract Expressionism are not as recognized as they should be. We are presenting his nineteen-forties works right now and will present nineteen-fifties and -sixties works in an exhibition next year.
More forgotten is Georgina Klitgaard, a Woodstock-based modernist who exhibited at the same gallery as Edward Hopper, Reginald Marsh and Charles Burchfield. Her paintings from the late nineteen twenties through the nineteen forties are great examples of American Scene Painting. Our exhibition explores her travels throughout the nation.
Gold: The next exhibition at our Chelsea gallery is of Color Field painter Edward Zutrau. In early 2025, we’re exhibiting the work of female Surrealist Juanita Guccione, who is one to look out for, especially after a recent record auction price of over $200,000. Perhaps, she’s the next Leonora Carrington?
On the Upper East Side, we will have a group exhibition beginning in January on historical instructors of the Arts Students League, which is celebrating its 150th anniversary next year. It will be a wide array of artists, styles, media and prices.
What’s your favorite American art movement?
Sterngass: Ashcan School from nineteen hundred to nineteen twenty, or the WPA era, nineteen thirties to early forties.
Gold: New York School abstraction, nineteen forties to fifties.
More psychedelic paintings in “Gerome Kamrowski: An American Surrealist.” Photo by Alexandra Rowley
What item do you love too much to sell and why?
Sterngass: The first painting I ever bought, and thus the beginning of a journey — it is a panel by Andreas Jawlensky that reminded me of my time in college studying abroad in Central Europe.
What item do you regret having sold and why?
Sterngass: A watercolor on silk by Chiura Obata. I have become extremely interested in early Japanese American artists. This was a fantastic and rare example that I sold for far too cheap.
What would be your dream artwork to own and why?
Sterngass: The Icebergs, 1861, by Frederic Church. It’s a masterpiece showing the natural wonders of this planet and the artistic abilities of humans. [END]
