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 27, 2015

Wobegon City: Where All the Sales Are Below Average





Two lousy weeks killed February. Most of the month saw the expected 1-3 sales per day, but they were way below the historical $40-45 average. Feb. 3-7 averaged less than $20 per transaction. At $34.38, even the biggest sale was below average...and the smallest was $7.82. I don't mean to be ungrateful, but you're supposed to add little knickknacks to bigger orders, not buy them alone. A $3 shipping charge should deter you from buying a $5 product by itself. I probably ought to either stop carrying the cheapest stuff or pad the shipping charges.

The week of Presidents Day is always a low point (as are school vacation weeks in general). The five sales totaling $93 from Monday, Feb. 17 through Saturday the 21st still managed to disappoint very low expectations this year. If that's not my worst week ever, it's a contender.

Business was fair-to-middling outside of those two deserts, but not good enough to head off another huge percentage decline:
  
February 

Total income: -32.5%
Total COGS: -27.0%
Payroll: -44.9%
Marketing: -11.9%
Net Income (Profit): +22.3% (+$44)

Year to Date

Total income: -29.5%
Total COGS: -24.0%
Payroll: -26.4%
Marketing: +32.4%
Net Income (Profit): -13,553% (-$930)

There's nothing to like there. I really thought that last February's numbers would be low-hanging fruit. March ought to be easy, too, but I take failure for granted nowadays.

Switchables' slow boat from China didn't dock on Feb. 6, as expected. Since I was completely out of plugs (#4 bestseller with 698 sold) and most of the popular holiday-themed covers, I suspended my advertising to save two or three bucks a day. I just turned them back on yesterday when a fixtures backorder arrived unexpectedly. 

Funny thing is that Switchables still sold reasonably well this month (February is when people snap up the Valentines, St Patricks, and Easter designs). If I'd had normal inventory I might have made my month. They resupplied my Easter designs yesterday, but the St Patricks covers are gone forever. 

You'd think that the product scarcity would hold down my Mastercard bill...but noooo. I have to keep replacing the stuff that people are buying. I need to raise $2,260 by March 15 to pay off the credit card, hire my CPA, and pay the state. At the rate I'm going it will take four weeks to raise that much, and only if I stop spending money entirely. Massachusetts gives me two weeks, whereas Mastercard will be happy to carry me forever, for a price. Guess what gets punted down the road.

As I sit here diligently not spending money, I'm doing the legwork to greatly expand the Metal Earth department. In my dreams I would add 80 new models. I'll only ever be able to afford a fraction of that, and possibly not until next Christmas. Gathering and formatting graphics for all of them is slow, tedious work. But I'll be ready if the money ever materializes.   

Friday, February 13, 2015

Winter





Endless snowstorms have kept Anne working at home numerous times these past couple of weeks, so Iggy's absence hasn't been as pronounced as it might have been. But I have  been home alone all day for most of the time since he died. For most of his life the most agreeable being you would ever meet, Iggy wasn't very good company after he went deaf and became frail and demented. I don't miss the past year's whining and complaining or occasional litterbox lapses. I like being able to sleep through the nights and take occasional catnaps and to take a phone call on speaker without caterwauling in the background.
 
I do, however, miss Iggy. The house feels profoundly quiet and empty sometimes. When my eye goes to his favorite place on the table by the window over the radiator, where there is a small bouquet of flowers and a pine box full of ashes where my little friend used to be, I feel lonely and sad. I like solitude and I don't think it's driving me mad...but would I know if it were? I interact with other humans as seldom as possible anyway. 

This is the first time in 40 years that I haven't had a feline companion. I really don't want another cat -- I enjoy the $10 cut to our weekly grocery bill and not having to deal with a litter box. I'll soon be 58 years old. If the next cat lives 16 years I'll be coping with its death when I'm 74. I don't relish the burdens of a failing pet when I'm in my 70s, never mind the grief of losing it. I like being free of responsibility in the meantime -- able to travel freely, for example, or rent winter housing in some warm clime without worrying about a pet. Not that I actually do either of those things. But I could.

OTOH, of course, there's 10 or 15 good years of companionship and enjoyment that a kitten would bring, and there's a very good chance that it would outlive me anyway. Anne lobbies relentlessly for getting not just one, but two more cats. She'll probably get her way in the end even though I'm the primary caretaker. But the longer I go without one, the less I want one. 

*****************************

The snow has literally never been this deep, even during the record 107.6" we got in 1995-96 (yes, I shoveled that, too, and I didn't have a snowblower back then). This year brought no measurable snowfall until the last week in January -- and then, Wham! 70" in two weeks. Usually one enjoys pauses between storms that allow at least a little melting. Not this year; it's all still out there. There is no thaw in the immediate forecast. There is, however, another blizzard coming tomorrow night. Quite simply, this is the worst winter in Boston's history.

Sunday is ordinarily my grocery day. This Sunday we'll most likely be housebound. All of the yahoos will mob the stores and strip the shelves tomorrow; I don't want anything to do with that. Monday is a holiday and there are early rumblings about another storm coming on Tuesday, so Monday's likely to be just as frenzied as Saturday but with worse selection, since choked roads are already delaying deliveries. Tuesday we might be housebound again, and I don't have enough food to last until Wednesday. Therefore I'm going to do the marketing in a couple of hours. Shopping on a Friday is unprecedented, but I'm glad Curio City gives me that flexibility. 

This week's picture is of Anne's car in our driveway, btw.

Friday, February 06, 2015

Imaginary Milestones


Excel says that Curio City passed $500,000 in lifetime planned sales recently. Skim to the end, where I wax philosophical, if you don't like numbers. To me, generating statistics is the fun part of a business, inasmuch as "work" and "fun" can ever coexist. 
 
Last December brought my total planned sales to $506,000 since 2007 (as far back as reliable records go). Actual life-to-date (LTD) sales reached $434,352.
The spread between plan and reality isn't huge because I adjust the plan as we go along. In the earliest years, before I knew what to expect, I hoped for explosive early growth that would gradually settle down as the business matured. I pulled these numbers out of thin air:

·         2008: $ 85,500
·         2009: $128,000
·         2010: $160,000
·         2011: $176,500
·         2012: $185,000  
·         ...and that's as far out as I could see.

If I'd hit those marks, I'd have been earning $37,000 plus profits by 2012 -- not exactly Mitt Romney-level wealth, but adequate for someone who had never earned much more than $50,000 working for The Man. 

Reality had other ideas. Actual sales for the same period:

·         2008: $51,803
·         2009: $59,905
·         2010: $61,816
·         2011: $64,566
·         2012: $63,665 (first-ever decline)
·         2013: $50,528 (first major decline)

I didn't earn $40,000 in 2012. I made a little over $12,000, and didn't quite clear $10,000 last year. Two things got in the way: The realities of trying to compete in a brutal and ever-changing marketplace, and the Great Recession. 

So these scaled-back "realistic" plans made up this post's $500,000 milestone:

·         2008: $51,330
·         2009: $64,753
·         2010: $68,891
·         2011: $67,998
·         2012: $69,408
·         2013: $69,408
·         2014: $65,211 (that's 1% over 2011's high-water mark)

It's obvious now that Curio City will never crack $100,000 in annual sales, and that means that I'm never going to earn $20,000. The funny thing about expectations is that we adapt to our circumstances. I've come to regard $15,000 as a respectable definition of success. 

Now here's the philosophical part.

A rational actor would stop plumbing Curio City's depths year after year and instead pursue a more lucrative future as a minimum-wage drone. After all, minimum wage just went up to $9. That's $18,720 a year based on a 40-hour week. But a real rational actor can rationalize, right? So here's my rationale: 

·         First, 10 years of working at home with no boss has destroyed my tolerance for wage slavery and simultaneously obliterated my credibility as a slave; I never thrived in traditional work environments and would have a harder time tolerating regimentation now.
·         Second, Curio City doesn't suck down 40 hours of life most weeks. I work hard during Q4 and slack off during the dog days of Q2. I probably average 20 hours a week over the course of a year. Twenty hours at that same $9 would only bring in $9,360, and that's less than the $9,930 that Curio City paid me LY. When minimum wage tops out at $11 in two years it will still only be good for $22,880, or $11,440 for half-time work -- and that's within realistic expectations for Curio City pay.
·         Third (and most important), my wife's happy in her career. She earns enough to buy us both a modestly comfortable lifestyle and my ample free time gives me the freedom to be a housewife. I only need to earn enough money to keep myself in beer and tobacco. I don't want things that I don't need, and there's nothing else that I need. This arrangement suits both of us fine, most of the time.
·         Finally, I'm getting close to the exit ramp. In a year and a half I could theoretically tap into my retirement accounts without penalties. In three years I could take early Social Security benefits. I'm just seven years away from Medicare. And full retirement age is less than nine years out. As fast as the years fly by, those goals are almost upon me. Maybe I'll keep Curio City going through retirement, or maybe I'll fold it, but it will be nice to have those options. 

Making $434,000 in nine years is really dismal for a retail business, but it's pretty remarkable for some old guy selling stuff out of his cellar. It's bought me a lot of beer and tobacco, anyway.

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