Welcome to Curious Business

Every Friday, I post a small insight into running Curio City. My most recent posts are directly below. You can also start with the first post, or use the subject labels to the right to home in on particular topics. Feel free to comment on anything that interests you.
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Friday, February 05, 2016

Puzzling Models




I keep saying that I need to find a reliable new product line, like Switchables and bird kites are and Panther Vision caps used to be. Some experiments (like chrome auto emblems) fizzled and I haven't had a major new score in years. I can't shake the feeling that the solution might already be in my cellar: Metal Earth models. (What, you thought this was going to be about fashion?)

I love these things because they're uniform, lightweight, easy to ship, and indestructible; they have zero defects and no batteries to wear out and require virtually no storage space; and their vendor is easy to order from. My customers usually buy more than one model and some become repeat customers; a wide range of subjects appeals to nearly everyone. In the last 30 days my Product Listing ads bought 210 clicks (out of 20,000 impressions) at 15 cents apiece, and I could get a lot more with a higher bid. Yet all of those clicks only brought two conversions. Spending $32 to generate two sales of a product that can sell for as little as $6 doesn't cut it, and the 1% conversion rate is only half of normal.  My more expensive Search Network ads get so many hits that I can't even afford to turn them on. Shoppers seem to be interested year-round and there's more search traffic than I can handle...so why do they only ever sell during Christmastime? 

I had thought that people only regard them as gifts. Everyone thinks that somebody else will like them, but very few people ever buy them for themselves. There's certainly some truth to that, but it doesn't explain the ocean of search traffic. 

None of my pages appear in the first 10 pages of organic search results. Why does Google hate my pages? They show up when I search on "Metal earth curio city", so they're obviously being indexed. Metal Earth pages aren't any different in kind from Switchables pages, and those rank pretty well, so I don't think there's a technical fault. If there is, I don't know what needs fixing, much less whether my rudimentary technical skills could handle it within the limitations of my shopping cart. As much as I'd love to get at least some free traffic, the dearth of organic search doesn't explain why paid visitors aren't biting. My competitors' pages don't look any better than mine do, to me...but I'm a lousy judge of what appeals to people. 

Maybe I'm just being out-competed. The competitors who rule page one of a search include such 900-pound gorillas as Amazon, Target, Wal-mart, Game Stop (are they really still in business?), and Thinkgeek, all of whom can afford to undersell me and/or give away free shipping or have splashier websites. I can't compete with those big boys, and in any case one of Curio City's guidelines has always been "stuff you won't see at Wal-mart." So maybe this product line just isn't right for me in spite of its considerable appeal. 

Finally, my selection could be better. I only carry about half of the 150 models that are available, I lack many of the newest and most popular designs, I can't keep up with the steady pace of new releases, and I don't have nearly enough money to fix any of that. The $600 that I already spent on models this month hasn't brought a single sale, February sales are always crap, and my tax deadlines get closer every day.  

In spite of all this, my gut says that I should keep flogging it. At worst, those dollars aren't dead, they're merely resting. I'll recoup the investment next Christmas. And I do have one ace up my sleeve. In a couple of weeks, Souvenirs.nyc is going to start selling 36 Metal Earth models that have (some very loose) New York City connections. That store is strictly a dropshipper, and I'm the guy who's going to fulfill their Metal Earth orders. I think that I can do it profitably, possibly while driving some traffic to my own site. Curio City will be essentially invisible in this partnership, but observant customers can see the name on the shipping label. The fellow behind Souvenirs is really good at marketing and Web optimization -- my weakest suits -- while I'm pretty good at order fulfillment and inventory control. This partnership might be the kick in the pants that gets Metal Earth off the ground, or at least generates enough cash to expand my selection. 

By the way, I haven't completely given up on those chrome auto emblems that I linked in the first paragraph. They're a lot like Metal Earth in that they only sell around Christmas and my selection is too small, and they have the same storage and shipping appeal. I've wanted to expand those for a couple of years now, but there's never enough money. And that won't change while I concentrate on Metal Earth.  

Friday, January 29, 2016

January By the Numbers





January and YTD


Total income: +7.2%
Total COGS: +13.8%
Payroll: -3.2%
 

Marketing: -53.7%
Net Income (Profit) vs LY: +116.2% (+$781)
 

Actual Profit/Loss: +$109



Three unexpected kite returns and a lost package nicked those numbers. The (fortunately small) lost shipment has been replaced. The return that I authorized grudgingly has been completed. The one that I was bullied into authorizing and the one that I authorized cheerfully are both still out there. If they'd all arrived in a timely fashion this would have been Curio City's first-ever negative sales week. Instead it looks like procrastination will push those payouts into February.   



The numbers for this rollercoaster month ended up pretty good. I don't like to see COGS rise more than income, but the big drop in marketing more than makes up for the overall cost increase. The bottom line doesn't mean much until taxes and fees are all paid, and I have way more debt than I can handle, but it's nice to see black ink anyway.



February is traditionally the slowest month of the year so this year's targets are nice and soft. I'm more concerned that cash flowed in the wrong direction this week than I am with beating benchmarks. Maybe I'll get a bump from the Metal Earth project that's scheduled to launch after Valentines Day.

Friday, January 22, 2016

Going Political, Part 2: The Red Post





Let's get my bias out of the way up front. I am  not a Democrat, but I'm even less of a Republican. I've sometimes voted for socially liberal, fiscally conservative, moderate Republicans of the type that New England breeds. But now that the national Republican Party's anti-science, anti-intellectual tea party wing has discovered open racism and xenophobia as a winning strategy, supporting Republicans is virtually impossible. I am a highly rational person who is going to try to treat the Republicans rationally in this post, even though they don't do themselves the same courtesy.  

To put it mildly, the Republican Party is in disarray. It might be disintegrating as a national force, although it will always dominate the South and rural areas, especially out west. I don't take any delight in watching it die; to the contrary, I feel sorry for reasonable Republicans. Our political system needs at least two functional parties and it's worrisome if one tears itself apart. In an effort to impose some order on this chaos, I'll divide their field into three categories: the Insurgents, the Establishment, and the Irrelevant, whom we can simply ignore. 
 
Liberals understand the appeal of insurgents, too. Dissatisfaction is propelling Bernie Sanders past Hillary Clinton despite the tremendous odds in her favor. Left or right, we can all agree that the middle class is in decline. Polls indicate that roughly 70% of Republican voters favor one of the Insurgent candidates -- Trump, Cruz, and Carson -- while the 30% who prefer a traditional Establishment candidate can't unite behind one. Since none of the individual Insurgents poll much higher than 30%, there's still an opening for a united Establishment. 

The frontrunners in Iowa and New Hampshire are both Insurgents. Donald Trump and Ted Cruz both court the same alienated, poorly educated, angry, white, and elderly demographic. Misled by FOX News and talk radio, these so-called "low-information voters" are primed to direct their fear and hatred at outsiders like terrorists and immigrants, rather than the oligarchs who pose the true threat to our republic. Science, education, and reality are all liberal plots to these people. They want to burn government to the ground. A defensive tribe who are not swayed by facts or logic, they vote emotionally, and are therefore easily manipulated. Trump and Cruz both use authoritarianism to simultaneously calm and excite these voters. They are masters of misdirection, diverting concern from the two smoldering crises that really can bring down our nation (income inequality and global warming) to two acute problems that cannot (terrorism and immigration). Trump's probably doing that consciously, while Cruz is harder to read. 

Understanding Trump is half the battle in understanding the Republican field. Trump is a demagogue who's starring in a reality TV show that some voters passionately love. He'll utter whatever outrage keeps the spotlight on him and feeds his ego. He has no consistent ideology (the "fascist" label doesn't fit him because fascism is an ideology). He's a Republican in name only and mainstream Republicans know it. Somehow, he is popular with evangelicals despite being a thrice-divorced casino developer who displays no convincing faith of his own. Trump is a bully and a blowhard whom people find charismatic. He speaks his mind with no filter and he isn't for sale. The man is pure Ego. Any ideology and policies that might lurk under his bluster are a cipher.

Ted Cruz, OTOH, is an ideologue hiding a real political agenda under the same glib xenophobic scare-talk. Cruz has shrewdly positioned himself to take Trump's place if that show gets canceled. He is accused of being a Dominionist who believes that the Bible should be the supreme law of the land -- the Christian version of Sharia Law. If Cruz wins Iowa, it will be his fundamentalist bona fides that give him the edge. Cruz is more dangerous to Republicans (and to the nation) than Trump is if only because True Believers are always more dangerous than opportunists. Cruz appears to have almost no support beyond his evangelical base and would lose the White House by a historic landslide. I've read that establishment Republicans really, really hate Cruz personally, too, and in the past week they've started reluctantly coming together behind Trump in order to stop Cruz at any cost.

Ben Carson -- is he really still in this thing? -- is the least qualified candidate to hit the national stage since Sarah Palin; I guess that he draws the same anti-intellectuals who liked her. Since Carson will surely join the Irrelevants after the first round of voting, that's enough about him. 

Remember the original "insurgent" candidate, Rand Paul, who staked out the "crazy" niche before anyone else did? Paul lost control of that niche because he has demonstrated an ability to work within government rather than try to tear it down, as the insurgent voters prefer. Paul has one foot in the Irrelevant camp, but he's not there yet.

So much for the Insurgents. The Establishment wing of the party hasn't coalesced behind an electable candidate yet, nor have the Koch brothers showered one with money. Nobody in this group can unite the three legs of the Republican stool: Evangelicals/social conservatives, military interventionists, and corporate supremacists. For what they're worth, recent polls have either Chris Christie or John Kasich eking out a second- or third-place finish in New Hampshire and suggest that Marco Rubio might run the strongest nationwide. Jeb Bush reportedly has enough money to stick it out to the end; his "last man standing" strategy is not quite impossible.

The Establishment needs to narrow its field quickly and significantly to channel the non-Trump demographic into an anointed one, whomever that proves to be. There's no sign that that's happening yet, but don't dismiss the Establishment's power to manipulate the game behind the scenes.

Can I get behind any of these Establishment guys? Despite 30 years of experience showing that they clearly don't work, all of them fall back upon some flavor of the same weak beer: cutting taxes on the rich; cutting benefits for the poor and middle class under the guise of reducing deficits (spoiler alert: they won't); pumping up military spending and doling out corporate welfare; and undoing regulations.
 
As I said earlier, I understand the appeal of blowing up the system and frustration with the status quo. If you want an Insurgent, Trump is the most satisfying choice -- you know that he will upset the apple cart and that he'll entertain you while doing so. Trump's nomination will probably keep the White House in Democratic hands, but it won't damage the Republican Party as badly as Cruz would because Republicans can easily disown Trump. Cruz, OTOH, is one of them, whether they like it or not. He has Tea Party bona fides that could tear the Republicans down for many years to come by sending minorities, young people, and independents into the arms of the Democrats. Trump has lost the Latinos, but he could still make a credible bid without them if he can peel away enough of the Democrats' older whites.

If you want the most electable candidate, then Rubio's name usually floats to the top, although I think he's too young and glib to take seriously. He probably lives with his parents and doesn't have a driver's license. Christie's just another bully and he doesn't pull it off as successfully as Trump does. Rand Paul has shown that he's capable of governing, and he's the only Republican who isn't promising to start another war in the Middle East. If you want to vote for an "outsider" (insofar as any senator can be an outsider), then Paul is the one least likely to destroy the country, the party, or both...so there's a lukewarm endorsement for you. If you want to actually win the presidency, your best choice to submit to an increasingly liberal electorate is John Kasich, who passes for a "moderate" in a party that's fallen off the right end of the cliff. He seems to be the most pragmatic of the bunch and is the only one who is pushing a positive message (so there's another tepid endorsement). Bush might be innocuous enough to entrust with the presidency, but his brother poisoned the family name for at least a generation.

Well, that was tortuous, but there are your endorsements: Vote for Rand Paul if you want an Insurgent who won't destroy your party, or John Kasich if you want a safe and competent Establishment man who could conceivably win the White House. 
 
All of this is probably moot because the nomination looks to be Trump's to lose. That will transform the party for a generation, which isn't necessarily a bad thing; the Republican establishment degenerated into the Party of No during the Obama years and has nothing to offer besides obstruction and stale failed policies. I don't think that Trump can defeat Sanders. He will have a somewhat better chance against Clinton. I honestly can't see the American electorate sending him to the White House under any circumstances...but I'll save the general election analysis for another day.  

Polls and predictions are notorious for falling apart when the voting begins. Maybe Trump does not even want the job. It would be a huge pay cut; the POTUS lacks the dictatorial powers of a corporate CEO; government is not a for-profit endeavor; and Trump hates to lose. Maybe he will sell the nomination at the convention rather than risking all that. 

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This week brought last week's boom to a crashing halt. Curio City Online started out offline when MDD Hosting's server upgrade didn't go well. (I still recommend this company highly for fast, usually-reliable, reasonably priced web hosting.) Since going dark always tanks my ads and search rankings for at least a few days, I can't tell if the technical failure killed the magic advertising strategy that worked so well last week or if it was just random luck in the first place. In any case, the doldrums of late January are back. Next week's numbers will look good anyway thanks to that one unexpectedly great week -- this January is already a smidge ahead of LY with more than a week left to run.  

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