Welcome to Curious Business
Every Friday, I post a small insight into running Curio City and/or Blue Hills Editorial Services. 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.
Friday, July 14, 2017
I briefly took umbrage a few weeks ago when a reader commented "Based on the posts here at least, [Curio City's] been in a slow death spiral for years". That's true no matter how you slice it. And yet, somehow I still don't think of my store as a failure, maybe because I set such a low bar for success. (Incidentally, I like getting comments, so don't let this anecdote discourage you from sounding off.)
Curio City grew by double digits from 2006 through 2009, when my salary topped out at $16,737 and a year-end profit brought my total compensation to $20k. I wasn't exactly closing in on my ultimate goal of earning $50,000 a year, but things were moving in the right direction. When growth fell to single digits in 2010-11, I chalked it up to the Great Recession. Curio City's first-ever decline in 2012 was only 1.4% -- hardly cause for alarm. Alarm would come with 2013's unexpected 21% drop.
Perhaps I should have seen the handwriting on the wall at that time. Instead, I decided it was a fluke; every business has occasional bad years, right? 2014-15 extended the losing streak to four consecutive years, but those declines were just 1% and 2.2% -- again, not good, but not significant.
The scales finally fell from my eyes when Christmas 2016 fell a record 24% and left me deeply in debt. A retailer that fails Christmas is a dead retailer. I think my posts this year have been clear-eyed about that.
So yeah, failure. The thing is, I could still turn this around. It would take money -- a lot of money, enough to both get out of debt and renew my product selection -- and effort. Money is always hard for honest people to come by, but not impossible; it's just money, after all. It's my enthusiasm that will never recover. Even if I were to redouble payroll to its former level after my debt is retired, it still wouldn't pay much. Realistically, I'd need at least three successful years just to climb back to the 2009 peak. By then I would have spent 15 years, or a quarter of my life, doing something that doesn't matter and that I no longer care about. I hope to "retire" (i.e., start drawing Social Security, although I'll never stop working) in seven years. I don't want to spend half of those years clawing my way back up to 2009.
In retrospect, I wish that I'd realized that in 2013. I have a life history of staying in losing situations long after normal people would have cut their losses -- partly because I hate change, and partly because I cling to optimism too long. If I've learned anything by now, it's that when any organization's glory days are gone, they don't come back.
Booming sales this May and June made me second-guess my decision to close. But all of that business came from kites. Those sales are already petering out and they'll be completely over in a few weeks. Everything else I sell is moribund and I have no new product lines to pick up the slack. If I had the stomach to launch an all-out effort, I could probably still turn this Christmas into a winner and restore the ground that I lost last year -- remember that I'm running 15% ahead of LY so far. But my commenter also observed that "your new business pays a lot more with far, far less overhead". That's undeniable. Blue Hills isn't reliable enough to replace Curio City yet, but -- if we continue to avoid the overdue next recession -- I'm confident that it will get there within the next year. I would rather spend my last official working years writing and editing than taking stuff out of big boxes and putting it in small boxes.
Just for the record...last month did finish as the second-best June ever, and only missed first place by $300. July might have extended the winning streak if I hadn't closed the store for four days. During every vacation I've taken over the past 12 years, I suspended my advertising but kept the store open and monitored business while I was away. Because I only took three days off this year, I actually closed for the first time ever. Statistically, I forfeited $600 worth of business...but since that only would have put $60 in my pocket, it hardly seemed worth intruding on my short getaway. Ignoring Curio City entirely for three days whetted my appetite for the day when I never have to think about it again.
Anyway, this July is indeed running about $600 behind LY, and I don't expect to make up the difference.
Friday, June 30, 2017
June was another good month. Beating LY was unexpected because a blueberry farm in Maine bought $1,400 worth of kites last June. Because most of this month's orders were dropships, I had to buy $2,000 worth of merchandise to drive $4,100 in sales, which means that only a trivial fraction of my sales came from the old inventory that I'm trying to dump and implies that business is going to crash hard after kite season ends. I can probably squeeze out one more good month before that happens.
Total income: +28.7
Net Income (Profit) vs LY: +2,412.6% (+$2,809)
Net Income (Profit) vs LY: +2,412.6% (+$2,809)
Actual Profit/Loss: +$2,693
Total income: +15.1%
Total COGS: +13.4%
Total COGS: +13.4%
Net Income (Profit) vs LY: +219.7% (+$4,299)
Net Income (Profit) vs LY: +219.7% (+$4,299)
Actual Profit/Loss: +$2,342
I've reduced my debt from $8,800 to $4,200, but that progress will end when kite season does. Curio City's profit should disappear of its own accord. If it doesn't, I'll make it evaporate with markdowns.
Friday, June 16, 2017
Closing a store is similar to what I imagine divorce must be like: One must endure a lot of confusing and emotionally charged milestones before one breaks through to a promising, yet seemingly distant, future. Here's my tentative roadmap for Curio City:
ONGOING: Stop ordering new products. Debt has already forced me into this; now I'm just formally stating that it's a policy.
ONGOING: Stop replacing sold-out products. Again, I've mostly stopped already. I'm only reordering 100% sure-fire sellers (kites, basically), and I'll continue to do that at least until I'm entirely out of debt.
ONGOING: Discount/write off very old stuff: I need to round up some ancient products and test them to see if the batteries are dead. If they are, I need to decide whether they're worth the cost of reviving with new batteries. They usually won't be worth spending money on. For example, I paid $2 apiece for these PetLits in 2012. After five years in storage, they're probably spent. They aren't selling at $4. Maybe they'll sell at $3, or maybe they won't; does a buck really make that much difference in someone's purchase decision? If it costs me a buck to replace each one's battery, the cost goes up to $3, so in the best case I'm merely recovering my cost, and it's more likely that I'll end up with dead products that cost me $3 instead of $2. It's better to write them off and cut my losses. I should be doing this right now, but handling old failed products is really depressing, to be honest. Somehow it never floats to the top of my to-do list.
ONGOING: Cut back on advertising: This has been a long-term goal, and it's down by better than 50% (while leaving sales flat). At some point I will cut it to zero; probably not until after Christmas, though. Meanwhile, I continue trying to stomp on it.
AUGUST: Let unneeded URLs expire: I only need to keep curiocityonline.com and krakenenterprises.com. It never made much sense to pay for .biz or .net except as a defensive thing.
DECISION TIME, Sept. 30, 2017: Am I going to support this Christmas with new/replenished stock? If so, I need to do some very careful, limited buying beginning in October. This will largely depend on whether my debt is paid off by then. Right now, I'm inclined to simply sell down as much existing stock as I can without buying anything more.
November? Announce a clearance sale. I'd need to find a way to exclude kites from that.
MARCH 2018: Let the UPS Store box expire, or renew it for another year? I only need this address for receiving packages and deflecting junk mail. I won't need it once I'm sure that I won't get any more shipments. But I probably ought to keep it as long as Curio City is still doing business. It's my Blue Hills address, too, but there is no reason that Kraken Enterprises can't "relocate" to my home address after Curio City is gone.
This will mostly depend on whether I decide to sell kites through another summer. I'm inclined to do so after this year's successful May and June, but $200 to renew this for another year (even though I'll only need it for six months) seems pricey.
JUNE 2018: Close hosting account: This is a point of no return. I'll need to pony up another $150 if I want to keep going through the end of kite season. This looks like a fairly likely closing date; it will depend (a) on how much non-kite stock I'm still trying to get rid of, and (b) on how steady my Blue Hills income has become.
SEPTEMBER 2018: Let curiocityonline.com lapse. Another point of no return. Renewing it only costs around $20, but coming as it does at the end of kite season, and before another Christmas season, makes it seem very sensible. I really don't want to flog another Christmas after this one, so if I didn't close in June, I will certainly do so in September.
One of life's cruelest ironies is that time flows subjectively faster as one grows older and closer to death. By age 60, a year seems to fly by. So, while a year from September might sound like the distant future to a younger person, it's right around the corner in my mind.
AFTER CLOSING: Write off everything that's left. Even after spending a year winding down, I'm still going to have $10-15,000 worth of stuff in the cellar. Writing it all off will be a huge one-time tax deduction. I'm not sure yet how I'll physically dispose of it.
Cancel the Curio City Mastercard...but not the Kraken Enterprises Amex. Think about opening a Blue Hills Visa.
Close the Curio City checking and savings accounts.
Reevaluate maintaining Kraken Enterprises. Being a corporation costs me around $1,000 per year. It made a lot of sense for Curio City, but it doesn't offer any tangible benefits for Blue Hills alone. Killing Kraken without shuttering Blue Hills would be messy, though. And since Blue Hills has almost no other expenses, it won't be hard to cover the cost of keeping it going. The main drawback would be continuing to pay my CPA for a separate corporate tax return instead of folding Blue Hills into our personal returns. I might have to reconstitute Blue Hills as a partnership or sole proprietorship. This gets into lawyery/accountanty stuff that's over my pay grade.