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, October 14, 2016

Loose Ends

Remember when I bitched about getting a chargeback from a Switchables customer who claimed unauthorized use of her card? That was on Sept. 7. I challenged the claim the next day and PayPal market it "disputed" on 9/25. All this time, I've been expecting them to snatch away $76.06 plus at least $25 in fees. Well, on Monday I discovered that it's marked Closed. Their explanation reads:

Using the information you provided, we are in the process of disputing this chargeback with the buyer's credit card company. Please note that this dispute process can take 75 days or more and that there is no guarantee that we will be successful in our attempt to recover your funds. If we are successful, we will promptly return to your account any recovered funds that we previously debited for this chargeback. We will notify you of any updates about this case by email and in the Resolution Center.
This matter has been resolved and no funds were debited from your account for this chargeback. We were charged a fee for processing this chargeback and have debited your account a Chargeback Settlement Fee.

They never did notify me of any updates and I'm quite sure they didn't take a fee, so I'm skeptical that it's really over and done. I've been keeping a $125 minimum balance just in case. If I've really heard the last of it, this will be the first chargeback dispute I've ever won. I tagged this as a Reason to Hate Banks, but it's really a reason to un-hate PayPal.


Last week I announced the Skeleton Hand Jewelry Holder on Facebook, as I routinely do with new products. A day earlier I had announced the Skull Tidy and gotten the usual 23 views and one Like. For some reason, the Skeleton Hand got three Shares and was seen by 151 people -- almost surely a new record. (On Facebook, Likes are copper pieces and Shares are gold pieces). After a newsletter autoposted to Facebook I got more than 200 views for the week. Only one of those 200 people clicked through to my store and s/he didn't buy anything. I learned long ago that Facebook advertising is useless, but one click from 200 impressions is impressively awful.  


Believe it or not, the Google tracking code saga grinds on. It's working right about 75% of the time. My developer, who graciously put in far more hours than I paid him for, is stymied by that other 25%. So am I. 

My years as a Quality Assurance tester taught me that reproducing a bug is often the hardest part of fixing it; you can't fix what you can't understand, and you can't understand what you can't see. His code is probably fine -- it should either work or not -- so the fault is most likely either in Sunshop, or in individual customer checkout processes. Are they using smartphones or computers? Apple or Windows or Android? PayPal or credit cards? I started a spreadsheet to look for patterns, but Analytics only gives me aggregate information about users' technology -- I can't see it for each transaction. With a sample size of just four conversions this week, it looks random to me. I might not even be asking the right questions.  

He can't work on the script any further without more information; at some point I might just have to accept that half-working is as good as it gets. But I'm going to compile data for a couple of weeks before that happens. I might have fixed it a few days ago by pasting his script into a page called by the long checkout form that my template supposedly doesn't use -- I haven't seen a failure since I did that.

Friday, September 30, 2016

The Good-Bad, the Bad-Good, and the Pretty Ugly

This month's numbers look good because September 2015 was so weak. It's a clear win when income goes up and advertising goes down. Coming in as the 9th-best/3rd-worst September ever doesn't mean much because this September had only four full weeks, versus five last year. The QuickBooks numbers below are a better apples-to-apples comparison.


Total income: +26.8%
Total COGS: +31.4%
Payroll: +44.7%
Marketing: -9.7%
Net Income (Profit) vs LY: -1.9% (-$8)
Actual Profit/Loss: -$451


Total income: -6.7%
Total COGS: -5.9%
Payroll: -6.4%
Marketing: -4.9%
Net Income (Profit) vs LY: -19.3% (-$392)
Actual Profit/Loss: -$2,417

I haven't had a single sale since my developer switched my site from "http" to "https" and implemented the new AdWords script (see below) on Tuesday. I get nervous when a big drought follows technical changes to my site. Sure enough, last night I noticed that Firefox was showing my product pages as "partially secure" and displaying a yellow warning triangle. Uh-oh. It turned out that my reCaptcha plugin was broken, and the Reviews tab has a Captcha to thwart bots. Fixed that and the lock icon turned green. I still haven't had a sale, though, so I'm not sure that was *the* problem...but it was definitely *a* problem. I'll feel better if/when I get a real sale...the four-day drought makes this the worst week in, well, maybe ever.  
Something good-bad happened: I finally hired my developer to implement the AdWords value-tracking code that I couldn't do myself (and that Google wouldn't help me with). That's good because it will allow me to control one of my biggest expenses more effectively over the long haul; it's bad because I had to pay up-front for something intangible. As it turned out, implementation required several hours of reverse-engineering to discover some necessary Sunshop variables, so Google's support wouldn't have been able to fix it anyway. It would have been nice if they'd told me that and saved me six weeks of grief. 

Then something bad-good happened: A product that caught my eye led me to a new vendor with dozens of products that fit into my unusual/useful philosophy. That's bad because bringing in all of the items I want would set me back a cool $2,400 that I don't have; it's good because I'm confident that this stuff will sell, and until now I had nothing but the same old, same old for Christmas. Then it's bad again because I see most of these products on Amazon for a lot less than full price. One product, for example, costs me $19 apiece. Because it's sold in dozens and comes in three colors, I'd need $684 (plus inbound freight) to bring in the minimum assortment. I'd make that bet if I could sell them at $38. Since it's retailing for as little as $24 on the Amazon, that's one big investment I won't be making. In fact, competitors are selling many of these products at unacceptable prices (an $80 globe retailing at just $105, for example). A shark ice mold that costs me $5.50 (plus inbound freight) can be had for $6.49 with free shipping on the Amazon -- how can anyone make money on that? An umbrella that costs me $17 is going for $25 with free shipping. This got less bad when I realized that Amazon logs me in as a business account, so I might be seeing prices that aren't advertised to the general public. 

In the end, I decided to focus on just six of the 14 products that I wanted. That still sets me back $1,100. But I ain't ordering anything until I start getting some business again. 

Finally, something good-good is in the pipeline: I have a line on a part-time, work-at-home editing gig that pays such a handsome hourly rate that working just 12 hours per month would effectively double my income. If it pans out -- and it's not in the bag yet -- I'll cut my pay in half next year to pull Curio City mostly out of debt. As much as I hate to take it out of my own hide, that's the only way I can see it surviving. QuickBooks says my profit margin last year was -4% and I'm running at -7.5% so far this year. No way I can dig out while expenses exceed income.  

What's pretty ugly is that my debt actually crept up last month just as I'm on the verge of burying myself in Christmas purchases. The cautious debt ceiling that I had defined just two weeks ago has to fall unless I'm willing to paralyze the holidays, and a retailer who can't play the Christmas game is already dead.   

Friday, September 16, 2016

After Christmas, What?

Christmas is crowding out debt repayment as I begin bulking up for holiday sales. This year I'm going to pass up virtually all of the cute novelty items that I ordinarily buy from the same vendors and invest only in sure bets, with very few gambles. I am going to hold my debt to $8,000 (I'm at $7,000 already) and I am going to be stingy with advertising. That's going to mean lower sales.  

In days of yore, November and December combined brought in $25,000; for the past two years, that's been closer to $16,000. Let's say that this year's extra caution knocks it down to just $13,000. $6,500 of that pays for merchandise (I'm pre-spending some of that already in the form of debt, so I won't need to spend an additional $6,500, but let's pretend that I do as a worst-case scenario). $2,600 goes to payroll (I'll live on that until June) and another $300 to payroll taxes. I refuse to spend more than 20% on advertising, or another $2,600. PayPal's cut is about $400. The $600 "profit" that's left is diddlysquat. So I anticipate being $7,500 in debt when the 0-interest Amex promotion expires in January. I'll need another $1,000 to pay my CPA and taxes, and this year I have to come up with $400 for the USPTO if I want to keep my trademark. $9,000 would get me free and clear after Christmas.

That's an obscene amount of money. Where could it come from? PayPal Working Capital allows one to borrow up to 18% of one's annual PayPal sales; if my sales this year come in at $50,000, that just happens to be the $9,000 that I need. PayPal would then take a percentage of my sales plus a one-time fee based on the percentage that I choose to give them. For example: If I let them take 30% of my revenue, their fee is just $762 and I have to repay $9,762 for an 11.8% interest rate; at the other extreme, they skim just 10% of my income and tack on a $3,005 fee, making the repayment amount $12,005 (33% interest). One must pay at least 10% of the total debt every 90 days for the first 540 days of the loan. So on a debt of $12,005 I would need to pay them $1,200 every 90 days, or $400 per month. A typical month's sales are $2,500, so if they're taking 10% I'm going to come up short by $150 per month. I'd have to make up that difference or go into default. And it would take me 30 months to get out of debt. 

At the low extreme my debt would "only" be $9,762, so I would owe $976 every 90 days or $325 per month. 30% of my sales would be $750 out of my monthly $2,500, easily covering the minimum requirement, and it would only take me 13 months to get out of debt. Of course, that assumes that I can function on 70% of my usual income without going further into debt, which would defeat the whole purpose.  

Amex "only" gets 12.49%, which isn't too bad for a credit card. Their minimum payment requirement is trivial. However, the interest isn't finite, as it would be under the PayPal scenario, and would siphon off $100 per month indefinitely. Because it's revolving credit, I'm constantly adding to the same balance that I'm trying to pay down, so no monthly decrease is guaranteed. The PayPal scenario has the advantage of separating past debt from current operating expenses, while the Amex scenario can drag on forever. 

I'm probably going to look for a part-time job come February. My Curio City salary this year happens to also be $9,000 -- again, equal to the capital that I need. If I stop taking a salary and survive on my outside job I can bail Curio City out in a year. But then, what's the point of owning a business that doesn't pay me? 

I need to think on all of this a lot harder. I won't be able to take any action until I see how Christmas goes, but I need to have some options defined before then.


Google finally wore me down. When I gave the whole sordid history to an account rep and begged her for help she just said "That sounds like a Support issue" and gave me the 800 number for the same people who failed me last time. I'm absolutely not going to waste any more time with Kriti in India, so I'm stuck...for now, anyway. Implementing conversion value tracking is beyond my paltry skills and I can't get any help from Google. Maybe I'll pay my developer to do it.

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