The Arcane Art of Shipping

Last week was consumed with xmas, of course, and by my preliminary effort to tease some meaning out of the results. Since that's still in progress, and because something unexpected siphoned off my attention for a couple of days (I can’t write about that yet), today’s post is one that I’ve been chipping away at for a few weeks.

First, though, I’m pleased to mention that the last week of December was much stronger than expected. I have still not had a shutout since mid November.

I do 95% of my shipping through the post office. They do the best job of delivering packages in a timely manner and in good condition for a reasonable price. USPS is certainly more reliable than UPS or FedEx. But they do piss me off sometimes.

I buy my shipping labels at the USPS Click-n-Ship website so that I can just drop the paid-up packages at the post office and be on my way. Online purchases get free or reduced-cost delivery confirmation, and some services also earn a small discount off the walk-up postage rate. This is all well and good as long as you ship via priority mail or express mail.

Problem is, at least 75% of my customers choose the cheapest shipping method. That is usually first class mail (under 13 ounces) or parcel post – services that USPS doesn’t sell online. Why? Because they have sweetheart deals with Stamps.com, Endicia, and Pitney Bowes. If you want to access the full range of USPS services online, you have to pay one of those third parties for the privilege. That will set you back $16 per month for a convenience that the USPS could easily offer for free.

It offends my sense of fair play to bribe a third party for a service that ought to be free. I’m sure that the USPS gets a kickback from those third parties. So I usually upgrade my parcel-post orders to priority mail when that’s cost-effective, or I stand in line at the APC (automated postal center) when it isn’t. The APC offers most domestic services, but it soaks you 75 cents for delivery confirmation, and it can’t print customs paperwork for international sales.

The last resort is standing in line for a human clerk. There is nothing a postal clerk enjoys quite so much as telling you why you can’t do something, or that you have to fill out additional forms, or that your box is somehow below standards.

International shipping too often sends me to the counter. Packages under four pounds – most of mine – are cheapest via first class international, and guess what? You can’t buy first-class postage online. The price gap between first-class international and priority international is way too high to upgrade. And so I have to fill out the customs paperwork by hand, and wait in line for a surly clerk to scowl at my packages and look for reasons why I can’t ship them.

December’s frenzied pace made that $16 monthly fee at Endicia look so tempting that I finally overcame my inner cheapskate and signed up for their 30-day trial. From Dec. 4 thru Dec. 26, I shipped 78 first-class or parcel post boxes through Endicia. For each one, I paid 18 cents for delivery confirmation instead of 75 cents at the APC. That’s $44.46 that I saved, not to mention several hours of standing in line. Sixteen bucks for that looks like a bargain. Now I have until my trial ends on Jan. 4 to decide whether the time and money savings make sense during my slow months, too. Financially, probably not. For convenience and stealth, maybe so. I'm going to keep it through January and see how the numbers come out.

Stealth? Did I say "stealth"?

Endicia’s basic rate is only $6 per month. I'm paying an additional $10 to print labels that say “Postage & Fees Paid” instead of showing the actual amount. That’s called “stealth postage”.

I strive to keep my shipping charges neutral – to take in very slightly more than I pay out. Ideally, every single order would cost a few cents less than I collected. In practice, it’s very difficult to calculate shipping charges accurately. Consider the lighted cap.

One packaged cap weighs 10 oz. It’s simple enough to set the weight of one cap at 0.6 lb (9.6 oz) and charge those customers accurately. The problem is that packaging accounts for much of that initial 10 oz. The caps themselves actually weigh only 3-4 oz. If a customer orders two caps, the assessed weight of 1.2 lb takes them out of the first-class mail table and puts them on the 2-lb priority or parcel post rate. But the actual package weight is just 13-14 oz, which could go first class, or for the 1-lb priority rate. The more caps I put in a single box, the greater grows the disparity between the assessed weight and the actual weight, and the harder I soak my better customers.

My workaround is to add an invisible handling charge charge (currently 85 cents) to every order, and reduce the weight of each cap to 0.4 lb (6.4 oz), which is closer to reality. Now the single-cap orders remain pretty accurate, and multiple-cap buyers get a better deal. Careful analysis would let me optimize the handling charge and cap weight for my most common orders. This would be great if I only sold caps, but mixed merchandise makes it impossible to charge everybody accurately. So the best I can shoot for is overall balance. In December I collected $1408 in shipping fees and paid out $1353. I think you’ll agree that a $55 overcharge is reasonable and minor…unless you happen to be one of the unlucky customers who contributed to it (remember that some customers are undercharged, too, so there were actually more than $55 in overcharges).

Enter stealth postage. :)

While I’m complaining about carriers, here’s a new reason to hate UPS, too: A number of weeks ago a customer placed a telephone order just minutes before my 2 pm cutoff for same-day shipping. Literally minutes after the call, I had her box packed up and on its way. A couple of hours later, she tried to cancel the order. That's when I discovered that UPS has a package recall feature. You can intercept it prior to delivery and have it returned to sender. I told the customer that I was doing this, and that she’d have to pay return freight. She was displeased, but why should I take a loss because she changed her mind?

The return freight should be the same as the outgoing freight, which was $9.50. And it was -- plus a $10 intercept fee. Yes friends, it cost $19.50 to have that little box returned before it reached my customer. With the original shipping fee, it cost $29 to transport merchandise that she never even got.

Because that $10 surcharge was news to me, I ate it, and just charged her the $9.50 that she would’ve had to pay if she had returned the package herself. Everybody loses! Except UPS, that is.

Winding Down

I hope my legions of fans were not too disoriented by my failure to post yesterday. I just spaced on it. I hope it won’t bore you too much if I continue the day-to-day format that I used last week. Reviewing this will be helpful when next Christmas rolls around.

Last Friday ended up as the third-best day of the season, with 14 transactions from just 186 visitors. Saturday was better than expected despite another drop in traffic, to 153 visitors. It was not enough to save the year’s busiest week from ending 12% behind LY. Ouch! Well, what’s done is done. I’ll continue flogging what business I can for the next few days, but we’re definitely in the winding-down period now.

Sunday belied that last sentence; traffic recovered to over 200 and sales were unexpectedly strong. On Monday I awoke to three more orders in my intray; one is going to Belgium via Express Mail for $86 in shipping costs! (More on this one below). I thought I was going to have time today to balance my personal checkbook, pay the household bills, wash the dishes, take out the trash, and make dinner – all the normal-life stuff that keeps slipping. But it looks like Xmas is going to remain front and center for a little longer.

Tuesday – when I was sure things would start to die down – set a new record for the most transactions in one day (19). On Wednesday I had another stellar day, tying the 19-sale record that I set just yesterday. People are paying the big bucks for shipping now. Traffic declined steadily from 200 visitors on Sunday to just 153 on Wednesday, when my conversion rate set an all-time record of 11.76%. There aren’t as many shoppers, but they are serious about it.

Things slowed down enough on Thursday (138 visits and just four sales) that I actually had time to shovel the driveway and start my own Christmas shopping. The frenzy is gone. Friday's mere 117 unfestive visitors delivered just three more sales. There’s still plenty of work to do, some of it (like tamping down my PPC ad spending) pretty urgent. But I feel almost like I’m on vacation. On one hand, I obviously need the sales, and a fast pace makes the days fly by quickly; OTOH, I’m exhausted after working at full speed every day for the past three weeks (by one report, I shipped 469 boxes so far this month). It is a relief that I can shovel the driveway again today and finally pay the bills that were due five days ago. This brief interlude – too late for Christmas orders, and too early for complaints – is sweet.

Anyway, this week was so much better than LY that it not only erased the deficit from early December...it put me ahead of LY for the month! I sure didn’t see that coming.

*******

This week I had the always-weird experience of buying stuff from myself – something I do very seldom because Curio City pays me so little. Kraken Enterprises buys my merchandise from the vendors. Then I buy it again with my own money (earned from Kraken Enterprises) at slightly over cost. I’m tempted sometimes to just mark it down to zero and take it, since Kraken Enterprises is really just me, but that would be stealing from myself. When I buy it the company records a sale…which contributes a few bucks to my paycheck, but also obliges me to pay sales tax! What a bizarre circle. It gets even weirder when, during the depths of the summer slump, I start selling my personal property to Kraken for disposal on eBay. The difference between me and Kraken is only legal, but I observe the line pretty strictly.

What did I buy? you may wonder. I can’t tell you because my wife has been known to read my blog. She’s already using her new Lightning Sky Fusion PurseHook, though, so there’s no secret there.

Next week I’ll start a retrospective on the good and the bad aspects of 2007, and then start the tortuous examination of my prospects for 2008. January is all about fallout – paying taxes and dealing with complaints and returns. I’m pretty sure I’m going to turn a small profit this year. I didn’t expect to be profitable until next year at the earliest. As an S Corporation, Kraken Enterprises won’t owe any federal income tax; profits get distributed to the shareholders – that’s me – as Schedule K income. The Commonwealth of Taxachusetts, of course, has no such compunction against taxing corporations. I’m sure they will extract their pound of flesh.

*******

I mentioned earlier that a Belgian paid $86 to have a $80 globe sent to him via Global Express Guaranteed –- a premium service provided by FedEx and sold by the USPS. Knowing the futility of dealing with human clerks, I made a pre-visit to the post office to get the necessary paperwork (you can’t buy that service online). The traffic director there gave me two Customs forms to fill out. I came home, filled out their forms, boxed up my item, and stood in line for 30 minutes…only to learn that the traffic lady had gaven me the wrong forms. So I had to start over. Then the clerk couldn’t find a necessary item code, so we had to fudge it. Then it turned out that my site’s shipping routine had read the cost table for documents instead of packages; shipping a box would cost $30 more than the customer paid. That wiped out the markup on the item. Altogether I spent about 90 minutes shipping a parcel that netted $0 profit. You know I’m ambivalent about international orders anyway; the first thing I did when I got home was remove the Global Express Guaranteed shipping option.

The Home Stretch

Oops! I did it again: Another customer claimed that I short-shipped him two USB fans. Although I’m reasonably sure that I put them in a box, I can’t swear that they went into his box. My physical count inconclusively came up 1 over. Fortunately, the cost of this mixup is minor.

The setback that I wrote about last week had a happy ending. The customer whom I suspected of receiving my mis-sent parcel really did get it, and she contacted me as soon as she got back from a vacation. I must bear in mind that not everybody lives online and works 365 days a year, like I do. Normal people get days off…holidays…even vacations.

I was briefly tempted by her kind offer to return the caps, but I stuck with plan A and offered them to her without repercussions. She immediately placed a large second order that partially offset my loss. That reinforced my long-held belief that a satisfied customer matters more than a profitable sale. Although I must say that I do like profitable sales.

**********

I usually write or revise a bit of my weekly blog entry each weekday, then clean it up and post on Friday morning. This week I thought it might be interesting to preserve the day-to-day journal approach as I chronicle Curio City’s performance during this busiest week of the year in 2006, with its daunting sales targets for this year.

The first week of December (last week) never quite made up its poor start, and ended up about 14% behind LY, so I'm going into this intimidating week with a deficit already.

Sales were mediocre on Sunday, surged nicely on Monday, then turned strange on Tuesday. On Monday 293 customers visited my store, setting an all-time traffic record. (For comparison, normal non-holiday traffic is around 100 visits.) Just as the first of three huge backup orders of Panther Vision lighted caps arrived, this hottest item of the season stopped selling almost entirely. I had been selling at least a dozen caps a day for the past couple of weeks. I found another store undercutting my price by $3 per cap, so I promptly cut my price. While I was in a sacrificing frame of mind, I knocked my Pursehooks down a couple of bucks, too. What started out as a novelty in the fall seems to be ubiquitous now, and robust early sales sputtered out almost entirely.

So Tuesday looked like a bloodbath – one of those disturbing days when things get so quiet that I suspect technical problems. A rare, large jewelry order staved off disaster, but still left me substantially behind LY. Then, just 15 minutes before midnight, two more orders arrived to save the day. Traffic fell to 196 visitors, down a third from Monday’s peak.

Wednesday, which should have been the strongest day of the week and one of the best of the year, continued the slowing pattern. The smaller items that I’ve been selling in great quantities (and with which I’m very well stocked) are dead. I should be bouncing off the walls trying to keep up with them. Instead, I’m selling just enough large-ticket items to keep a pulse going. (Levitating globes FTW!) Each day I fall farther behind LY, and I don’t know what changed. It is as if Christmas shopping ended on Monday night, just as my major reorders started to hit. It makes me literally sick when something major and unexplained like this comes along. I feel an urgent need to do something, but I have no clue what, or if anything I do would make any difference. At times like this that I wish I had coworkers to talk to. Wednesday ended many hundreds of dollars behind LY. Traffic was basically flat at 203 visits.

Thursday opened with only one small sale waiting for me. I resolved during my morning walk that I am not going to stress out over it anymore. I’ve done everything I can do. This morning I added shipping advice right on my key product pages, and cap sales revived. Maybe that’s all I needed all along? If so, it’s a valuable lesson. I wish I’d learned it two days ago. This is the time of year when every day counts. Traffic is still around 200 visitors per day.

My ambitious plan to kick out one last newsletter plugging my new 4-LED Camo cap died in a major snowstorm. My delivery run to the post office and UPS Store – normally a 30-minute errand -- took more than two hours. I’ve been scrambling to update my product pages and get the newsletter ready, but it’s 7 PM, and tonight is the Kraken Enterprises Christmas party. I’m outta here.

This morning (Friday) I spent two hours shoveling. so I don’t have time to polish up this post. I need to crank out that newsletter and ship my orders. Yesterday ended up pretty strong and today is off to an encouraging start. With luck and hard work, I can probably keep sales up for about five more days, and maybe recover a bit of my sales deficit.

Setback

It’s been an exhausting rollercoaster week. After last month’s stellar end, I promptly fell more than $800 behind LY during the first two days of December. That’s not insurmountable, but it’s discouraging.

And then the phone rang.

A customer who ordered five lighted caps worth $100 received instead five clip-on cap lights worth $30. My inventory numbers are all correct, meaning that I shipped those five caps to somebody – and I think I know whom. I had another order on the same business day for five clip-ons. I probably switched the two orders – they looked very similar on paper (5 caps, 5 cap lights….) – and I did reverse two shipments once last year, too, so I know I'm prone to such things. The suspect customer didn’t reply to email; she no doubt intends to keep her windfall. I decided against phoning her for several reasons: First, the postage on the second shipment should’ve been inadequate for five caps, so there’s a slight doubt in my mind that she really got them, and I can't prove it anyway. Second, I think it’s bad form to harass a customer about an error that I made. Third (and most convincing), the cost of recovering those five caps and replacing them with clip-ons would leave me with a net gain of only $20 after all the postage. Is that worth the hassle and ill-will? The reasonable thing to do is let it go.

I refunded the first customer’s purchase, of course, and let her keep the clip-ons as an apology (and because they really aren’t worth the cost of return postage). So I lost a $100 sale and $100 worth of merchandise. That’s a pretty nasty hit.

The December 2006 numbers that I’m up against are extremely intimidating. Remember, I had a product in two gift guides LY, and I don’t have anything comparable going on this year. I need very strong sales both today and tomorrow just to match LY. And next week is even more challenging.

So I’d better stop writing about it and knuckle down, don’t you think?

Hold On To Your Seats, Kiddies

Here We Go….

Xmas sales exploded this week. Office workers came back on the job – where they do all their shopping -- after the Thanksgiving lull. I did two weeks’ worth of summertime sales on Wednesday alone, and then (thanks to a humongous telephone order) set a new one-day sales record on Thursday. Together, those two days exceeded my individual monthly totals for March, April, and May. It’s really an astonishing feeling to do a month's worth of business in two days.

With a day and a half left to go in the fiscal month, I am already comfortably ahead of last November. You might recall that I was very worried about that going into the month. I sure can’t relax – every day counts during these next few weeks – but I’m feeling happy and confident now. I am currently showing a YTD operating profit, before taxes, of about 7% of gross sales – without December! If I can keep this up for three more weeks, I might finish slightly in the black even after paying my web development costs. I am so giving myself a raise next year!

As much as I’d love to stay and crow about numbers, there’s a ton of work to do.

Sunshop's Broken Promises

Although I mention Sunshop frequently, many readers probably don’t know about shopping carts. I didn’t, until I started up Curio City. Herewith, then, a quick primer.

The shopping cart is the software engine that handles product display, inventory tracking, sales, payments, shipping…pretty much everything except the database (customer info and the product catalog). Curio City is a shopping cart, a database, and some graphics.

You can build an e-commerce engine from the ground up for big bucks, or you can license a commercial shopping cart for a very low fee. You have to pay it annually if you want ongoing support and upgrades (which I do). Back in the mists of time, before I had any clue about this stuff, I test-drove a couple of carts and chose one called Sunshop, from a company called Turnkey, because I liked their documentation and support – which will turn out to be ironic.

As a web store, I can’t get away with using an off-the-shelf display template. I need customizations, and that’s where the money starts to mount. Between configuring the original Curio City website and performing this recent upgrade, I’ve spent at least 50 times the base license fee on developer support. And yet, because our focus in this upgrade was on functionality, I have only a fraction of the visual customization that distinguished my earlier store. Curio City 2.0 actually looks comparatively generic. That might be a good thing, if it means that shoppers will know intuitively how to use it, but I would like to eventually restore some elements of my previous look.

You’d think, since this is a commercial software package, that operating it would be straightforward. It isn’t. I spend large amounts of time and treasure just trying to make things work as designed.

Google Checkout is a prime example.

Google Checkout (hereafter called GC) is a new electronic payment system comparable to eBay’s PayPal. PayPal takes about 4% off the top of every transaction. Credit card processors are even worse, skimming more like 5% of gross when their many hidden fees are taken into account. That’s a pretty bad haircut. You have to do a lot of volume before you can qualify for reduced fees.

GC appeals to merchants because it reduces the expense of payment processing. You can link your Google AdWords spending to your GC account, and earn credit toward transaction processing. I spend enough on PPC ads that my GC business would cost me nothing. If GC sales were to become a significant fraction of my total sales, I could lower my overall processing costs by a point or so. That’s a big deal. It’s a percentage of gross that could go toward payroll, for example. So the integration of GC into Sunshop was a major reason to spend the bucks on this upgrade.

I installed and configured GC. I didn’t test it thoroughly – too much else to do – but it looked fine superficially. When we finally got everything else up to speed, I linked my GC and AdWords accounts and applied for the GC badge to make my ads more visible, which would goose my traffic a bit further. Good deal all around, right?

On the new site’s first day, I got my first GC transaction. Score! Oh, wait. It didn’t charge shipping! WTF? Turns out that Sunshop doesn’t support GC with realtime shipping lookups. Turnkey neglected to mention that you must use a fixed shipping table if you want to offer GC. I’m not going to change something as fundamental as my shipping structure just to offer a new payment method, however tempting that is. (I hit a few other glitches, too, but they turned out to be simple configuration errors that I could solve.)

Reluctantly, I turned off the GC module. A few hours later I got an email from Google informing me that my pay-per-click ads are now displaying the GC badge. Curses! I has to ask them to undo that, and put the whole GC program in suspended animation. I’m still getting two email notices per day about communication errors, which I assume are happening because the module is turned off.

GC could have been big. Instead, as far as I’m concerned, Sunshop does not support it. Will it be added in the next update? They won’t say. Will it ever be supported? They are mute. Even if it is, their update process is too techie for me to handle without developer support, and I am about to lose mine as Eric becomes a first-time father. The developer who had expressed interest in taking over got a fulltime job and is no longer interested. Because he is kind and responsible, I’m sure that Eric will help me out as he can. But beyond basic troubleshooting, I am effectively without developer support for the foreseeable future. (That, btw, is why I had to perform this upgrade going into the xmas season – the worst conceivable timing).

Don’t even get me started about PayPal Express – another selling point for Sunshop 4 that turned out to be an empty promise. Today I discovered that the cart makes rounding errors when applying discounts, so I’ve had two transactions come out a penny off. The free shipping coupon that I've long offered to my local-pickup friends didn’t work at all. After a full day’s work by Turnkey’s support, it now sort-of works. Shipping is technically free, but it doesn’t disregard the handling fee. So “free” shipping now charges people that (small) previously-invisible markup.

I could list half a dozen more annoyances and outright bugs, but you get the idea. And so I am inaugurating a new subject tag: Reasons to hate Sunshop. I could probably apply this tag to a dozen old posts if I had the patience to go thru them.

Ironically, the money that I ultimately spent customizing and upgrading and fixing Sunshop probably would’ve been enough to build a custom engine.

* * * * * * *

It’s a week now since the new Curio City debuted. How's it going?

Sales this week were in the toilet. I don’t have enough experience to know why: Thanksgiving? Lack of publicity? The new cart? The change in my URLs? The eroding economy? It could be any or all or none of those things. But I am not panicking. Not yet. It’s just one bad week, and it's not even over yet; a couple of big sales could still pull it out. The next four weeks will determine much about Curio City's future, and there’s no longer much that I can do to affect them.

So it's nail-biting time. This is harrowing. And kind of fun.

Meet Curio City 2.0

What a strange week. Led by three very big orders, Sunday was my third-best day ever. Yahoo pay-per-click ads led two shoppers to clean out my pursehooks. Sunday’s sales alone were enough to beat the corresponding week LY.

On Monday (Veterans Day), my sales total was $6. On Tuesday, I issued a refund and ended the day $3 in the hole. Wednesday, no business at all. The week utterly died after this incredible Sunday, at a time of year when I should be doing at least $100 a day. It is as if my site disappeared entirely. With all the work we’ve been doing on the new site, maybe it did. Who knows?

Wednesday night we launched. I turned off my PPC campaigns. All of the delays and anticipation for the new Sunshop finally paid off, almost exactly two years after Curio City’s original launch. This upgrade cost almost as much as creating the original website did.

It did not go smoothly. We didn’t get the bugs out and bring the site back up until Thursday evening. And then, within half an hour of going live, the new site recorded its first sale. What a relief! Another followed a couple of hours later. I’ve still got plenty of tuning up to do, and then a newsletter to send out. But I think I’m back in business.

The launch party consisted of me, a growler of Opa-Opa Brown Ale, a shot of Seagram’s, and a cigar. Iggy (my cat) sent his regrets; he had to go out and nap under his bush. He missed a good time.

In vaguely related news…I placed an enormous pursehook order that pushed my open-to-buy very deeply in the red. I am counting on those pursehooks to blow out of here. If I gambled wrong, I’m going to be in some real trouble. I hope they will arrive today.

The Pursehook Postcard Fiasco

Pursehook postcards went out as I left for the Berkshires, and started hitting on Monday.

Hitting my own mailbox, that is.

I printed the address labels with my return address above the recipient’s address, as I always do on packages. The post office scanners read the first address they encountered, so that’s where my cards went. I mailed them to myself.

At first I thought the whole batch would bounce. As of yesterday, though, I’d only gotten four cards back. Did the others get through alright? Or are they rattling around the delivery system somewhere, waiting to trickle back in?

I don’t know. It was a long shot anyway. Right now I’m up to my earlobes in the Sunshop 4 upgrade, which I dearly hope will occur this weekend. So, FWIW, I will just re-mail the four cards that came back...without return addresses on the label this time! Maybe one of them will be the magic card that gets attention and saves Christmas.

Oooooooo Scary!

Scary!

We’re going to the Berkshires today to see Nosferatu at MassMoCA and cash in a couple of free nights at the North Adams Holiday Inn. I think the hotel has WiFi, but I want to minimize the work hanging over me this weekend, so I’m posting a little early today, and writing short.

October sales finished only 5% below LY. The month ended with a small profit, and I’m still in the black YTD as I go into the busy season. Not bad. Web upgrade costs will soon revive the red ink...but that's ok; YTD sales don’t mean much in the face of the next two months. It all comes down to Christmas, and a very good one could pay for the web upgrade without making me hit startup cash. I’d love to get through 2007 without infusing any more funds.

November is a scary, scary month. It came out of the chute very strong, then fizzled for Halloween. I can’t imagine how I’m going to match LY’s intimidating sales. It seems impossible, to me (with my tiny token paychecks), that so many people could really have so much money to spend on non-essentials. And yet the consumer orgy somehow spools up for Christmas, as it does every year. It is the central miracle of capitalism, and it is already underway. People grumble about retailers starting to promote Christmas after Halloween, but I assure you that I’ve been seeing Christmas shopping since the beginning of October.

The web upgrade is progressing well; it should go live next week, at long last. Thanks to Anne’s work with the mailing list, the pursehook postcards that I told you about last week will go into the mail before I leave town tomorrow, and I’m going to send out some of the remaining caplight cards a few days after we get back. None of these media mailings have borne fruit yet. But it will just take one success. Media feeds upon media. One mention leads to another.

Here’s something odd: After going nearly six months with no international sales, I’ve shipped three packages to Canada in the past week. The USPS rate tables are still not working, so Canadians can only choose (overpriced) UPS delivery. If three Canadians placed orders despite that disincentive, others almost surely abandoned their carts when they saw the shipping cost. I wonder where this apparent surge in Canadian traffic came from. Did repeatedly mentioning Canada in my last several blog entries somehow raise Curio City’s profile in Canadian web searches? Search engines work in mysterious ways. If there is anything to my theory, this paragraph should continue my sudden and unexpected surge in Canadian business…about which I’m ambivalent; as I said earlier, export sales are more effort and expense than they’re really worth, but Curio City is too lean and hungry to discourage them.

Climbing a Tree Technologically (Metaphorically)

The pace of web development is quickening. A Halloween launch begins to look feasible. The cosmetics won’t all be done; in fact, I’m abandoning much of my custom look in favor of a modified standard template. Shoppers want easy and familiar, not clever and original. I’m fine with that, although I’ll miss the urban look of Curio City 1.0. Maybe I can gussy things up later on.

The transition process is going to be a ton of work, and it’s starting right now. I have to rebuild many product pages to take advantage of what they call “option inventory” – tracking the quantity of each variant of a product (e.g., a running total of how many of each color/size/design I have). I have to plug in all those quantities. And in many cases, that will entail consolidating multiple pages into one. A new HTML editor allows me to use formatting when I build product pages. Imagine that: fonts, colors, even simple graphics! Ultimately I want to revise all of my product pages to fit a template that I’m going to design this afternoon.

In the interest of search-engine optimization, Sunshop has changed the way it builds page URLs. That means that all of my existing product URLs will become invalid. And that means that I have to create a .htaccess file to redirect the old addresses, which are used in literally hundreds of pay-per-click ads, to the new product pages...something I can begin now that the product catalog is being moved over. Ultimately I should revisit both of my PPC campaigns in great detail, replacing old URLs with new ones and generally overhauling the ads. Oh, and speaking of SEO…the new Sunshop allows me to create title tags for each product page, instead of using the automatically generated ones.

If September was low-hanging fruit, I started stretching for higher branches in October. Now I’m grasping at the beanstalk of November, twining up the unimaginably high redwood of December. September finished 73% ahead of LY. Right now October is 16% behind LY; the last two days left in the fiscal month could reduce that to single digits. Year to date, I’m running 22% ahead of LY, but it all comes down to November and December. The last week of October and all of November 2006 were buoyed by my one and only marketing success. This year I have nothing comparable going on. Due to the lack of a mailing list, I only ended up mailing out six copies of my 50 caplights postcards, with predictable non-results. Now I have a pursehooks postcard in production, and I still have no mailing list. My media-savvy, but overextended, wife says that she’s going to supply that.

This years-delayed rollout of Sunshop 4 is my only ace in the hole. If the launch goes without serious bugs, I expect some immediate benefits.

Easier navigation, plus the perception of greater security, will lead fewer shoppers to abandon their shopping carts. If I were smarter, I could probably extract my current abandonment rate from Google Analytics. But I’m dumber, so I just believe some indirect clues that the number is substantial. If I can cut abandonment in half, sales should improve measurably.

Better PayPal integration should eliminate the handful of customers who never actually pay because the PayPal interface isn’t perfectly clear. Introducing Google Checkout will give customers another payment option, and allow me to jazz up my PPC ads with the Google Checkout logo, drawing more attention to them. Together, those changes might be good for another small boost.

Fixed international shipping will enable me to serve overseas customers again for the first time since last May. It’s a tiny fraction of my business, and one that I don’t actively pursue – exports are just too much work and expense. But it should be good for a few bucks, anyway.

Over the longer term, built-in SEO abilities should goose traffic by improving my natural search results. I don’t expect that to make any difference for this Xmas season, though.

Working against me…changing all those URLs will torpedo my natural search traffic in the short term. Natural search drives 15-20% of my traffic. The .htaccess redirect file that I mentioned earlier will keep some of that from drying up. But I do expect a dip until the new URLs get indexed, and my page ranks might suffer in the process. Eventually, the new search-engine friendly features should more than offset the changing URLs. But November and December are not “eventually”, they are now.

Oh. Speaking of exporting…I had my first sale to a military APO address last week. The postal clerk said the package was going to Iraq. And remember how I said that Canada is the most difficult country to deal with? This week a Canadian customer paid nearly $20 to have $60 worth of merchandise sent to him via UPS. Then, for some random reason, Customs assessed him $40 worth of taxes and duties. He ended up spending $60 to import $60 worth of merchandise that I bought from Canada in the first place! Somebody’s getting rich, and it ain’t me.

On the Enduring Appeal of Lighted Camouflage

In contrast to the 5-LED clip-on cap light that’s burning up the bestseller list, my Panther Vision lighted caps went into hibernation some weeks ago. Regular readers will remember that I once called these my “rescue products” and invested a lot of inventory dollars in them, with good initial results. When I found out last week that QVC and the Sharper Image are both selling Panther Vision caps, I figured that they’d gone mainstream and worn out their welcome at Curio City.

Tuesday morning I awoke to an order for five of my remaining six camouflage caps. Somebody bought the last one later that morning. Then I took two phone calls from people wanting more. One caller pre-ordered four caps. Nobody could quite tell me how they found Curio City or where they saw the caps advertised, but one customer said that QVC no longer sells them at all. Another mentioned that hunting season is starting. In the hope that I'm not closing the barn door after the horse is gone, I racked up more debt to order 48 of the camos at Panther Vision's second-most attractive price. (The best possible price requires an order of 144 pieces!).

I’m still using my American Express card for everything, btw. Ordinarily, I use my MC for merchandise and supplies, and my Amex card for operations. Some vendors won’t even take Amex because processing is so expensive (almost as bad as Discover). But the rewards programs are my main concern. Mastercard pays cash back. Amex pays card rebates. Since I’m ordering heavily right now, I’m racking up account credits (which help the business) instead of cash rebates (which go directly into my pocket). I hope the replacement MC gets here soon. I like cash.

Orange is hot

The Sunshop upgrade that began on August 25 is progressing nicely. The cosmetic changes are mostly done. After some functional fixes, I can import the catalog and start updating items. This will inevitably uncover more bugs. I still hope I can open this thing by Halloween.

Speaking of Halloween...What’s up with orange? I noticed it all over my new store templates: orange text, orange buttons, orange accents. It’s not a very appealing color, yet it’s pervasive on the web. Is it a fashion trend? Is there some functional reason to use orange? My wife tells me that it’s all the rage in women’s clothing this season, and I’ve even seen a disproportionate number of new orange cars. Orange is hip. Orange is now. Orange is happening.

Orange is ugly. It will look dated a year or two from now. I’m having all the orange removed from my design.

Reasons to hate UPS: The charge that appears on my statement often differs from the nominal charge at the time of purchase. Sometimes they credit me a few cents, sometimes they surcharge me a few cents. Altogether, it makes little to no difference in the monthly spend, yet this practice makes my charge statement difficult to balance.

Christmas Merchandise: I recently pushed my open-to-buy deeply into red ink with a Fascinations levitating globe order. This is one of a handful of vendors with whom I bothered to establish credit, so the bill doesn’t go on my credit card. Christmas sales will be pouring in – or had better be – when it comes due in 60 days. It almost shouldn’t count against my OTB at all.

Nearly 50% of my annual business will come in November and December. So I am continuing to order despite a dearth of current sales to recharge my budget. I might even carry a credit card balance for a month – heresy!

Speaking of my credit card...yesterday Advanta called to tell me that Mastercard had informed them that my card number was compromised. My corporate MC account is on hold and a new card is being sent. Luckily, I have a fallback Amex card.

You could just visit my New Arrivals page to see where the money’s going…but since one purpose of Curious Business is to create links for the benefit of search engine spiders, here they are:

PurseHooks were one of the two products that I found at the fall Boston Gift Show. I have since seen them everywhere. I think they’re going to be like lighted caps -- a cool novelty just six months ago, they’re now sold at Sharper Image and the QVC shopping channel. I can see this being an ongoing problem for Curio City: When products reach a certain level of success, they’re no longer appropriate for my store. If I’m right, the purse hooks are at the beginning of that arc. They’ll do well through xmas, and maybe into Valentines Day if I’m lucky, before they attract the Walmart crowd.

Record purses (the other product that I found at the Boston Gift Show) are a natural companion to purse hooks. These also tie into my Vinylux line, which sells steadily if unspectacularly. Vinylux has achieved fairly wide distribution over the past few years and may have lost its novelty. The record purses, OTOH, are brand new and exciting. If their creator can supply them consistently – and especially if she can accommodate special orders in a timely way – they could become the Next Big Thing. Alternately, supply vagaries could send them the way of my late lamented typewriter key jewelry. Customers like these recycled art products, but their very authenticity makes it very difficult to supply the most popular designs. Just as each typewriter keyboard had only one “M” key, there’s also a finite number of surviving copies of any given LP. Selling them online adds another familiar challenge: It’s going to be very difficult to reorder the best-selling titles, and I’m not sure that photos will be enough to drive impulse sales. If I have to make new product pages every time I restock, they might not be practical for me.

My last major investment went into levitating globes. These big-ticket items sell steadily when I can afford to keep them in stock, and the manufacturer has several new models for this Christmas. They don’t sell them to big retail chains -- hooray! On the down side, complaints about defective units leave me anxious about their quality. They’re bulkier than most of my products and getting them here from California is quite expensive. The closely related Floating Ideas has never sold a single unit. The number of variations on each design, plus chronic stock shortages, makes it difficult to present a coherent, reliable line of floating globes. Despite these concerns, I restocked four older styles and introduced three new ones.

The order just arrived yesterday. This afternoon I need to unpack it and photograph the new styles. I need to see a copy of the invoice to ensure that I got the special pricing on Zero G Sports. The Golf version has sold slowly at a discounted price. Fascinations is offering the rest of the line at a special discount, so I’m bringing those in, too.

He's an Important Exportin' Man

WELL HE'S DONE A LOT OF TRAVELIN' TRYIN' TO BRING THE BEST TO YOU/

YOU CAN SEE HIM IN NEW DELHI OR EVEN MAYBE KATMANDU

-- The New Riders of the Purple Sage, “Important Exportin’ Man”

I did not grieve when the USPS broke my international shipping module last May by changing their rate structure. I’ve sold to customers in countries ranging from Canada to Japan and Brazil. As much as I welcome every sale, foreign addresses always make me cringe. Canada is the worst. Besides the usual complicated Customs forms, NAFTA countries require me to testify in a “certificate of origin” that my made-in-China products originate in the USA. Lying always makes me uncomfortable, but I'm told that the form must be fudged to avoid scrutiny and tariffs.

Importing from Canada is a pain, too. Big Schnozzes take more than two weeks to get here from the wrong side of Canada. My last reorder was mis-addressed, got returned to Vancouver, then reshipped to me. It took six weeks and two pieces arrived damaged.

Besides paperwork hassles, I also lose money on payment conversion and processing fees. Not only are export sales extra work…they’re also less profitable.

Last winter, a Chinaman tried to buy a Neverlate clock. He couldn’t put a charge through because his Mastercard and address information were in Chinese characters. We tried to arrange manual payment via money order. His bank wouldn’t sell him dollars, and Citizens Bank would not accept “renminbi” (“the people’s currency,” or "Commie yuan"). After I finally gave up on the sale, I tried to find him a local source. After all, American Innovative gets their Neverlates from China. But of course they would not tell me where their clocks are actually made. Not that it matters; the Chinese factory makes them exclusively for export. My would-be customer couldn’t have gotten one if he’d lived next door to the Neverlate factory.

Is there enough irony in that paragraph for you?

Imagine how I laughed last week when somebody tried to pitch me foreign-language website optimization. “I have noticed that your website cannot be found on foreign search engines…” Thank the gods! Sure, I need every scrap of business I can get. In spite of the hassles and expense, I will be relieved when the Sunshop 4 upgrade brings international shipping back online. But I’m sure not going to spend money pursuing foreign sales!

On the importin' side.... There is real money to be made by importing directly from China, rather than buying from wholesalers as I normally do. The products themselves cost next to nothing, allowing very attractive markups even after shipping and tariffs. So I thought I'd found the gravy train when I stumbled upon a couple of websites that enable small companies to import manageable quantities – hundreds, rather than thousands -- of products from China. That didn’t pan out. Two inquiries via one portal went unanswered. Another Chinese exporter who supplied two of LY’s popular products ignored six separate inquiries about a large reorder. Even if I’m too small to be worth their bother, you’d think that they’d at least acknowledge their own Contact form.

From where I sit, globalization is a one-way street. Products from China flood in, and they don’t go back out.

Despite all that griping, I would welcome some international sales right about now. Thanks to a $50 returned item, this week is on track to be the third-worst of 2007, and my fourth-worst of all time. My paycheck for this week is struggling to reach $20.

Why I Blog

I started Curious Business for three reasons.

First, I hoped that it would be a clearinghouse of information for startups. Some small business owners out there have solved the same problems that I face, and others are encountering problems that I’ve solved. I wanted Curious Business to make connections and share experiences. That has happened a couple of times, although not the way that I’d envisioned. Rather than leaving comments, people send me email. Blogger technology is just not appropriate for a message-board style of interaction.

Second, I hoped that Curious Business would drive a little business and instill customer loyalty. Readers would follow links to my products and sign up for my newsletter. The search engines would index my posts and raise the page rank of linked products. Has that happened at all? Google Analytics, my best source for traffic information, says that Curious Business is my #16 referring site, having sent me only 40 visitors in the past six months. That's not very impressive. Only 10 of those visitors (25%) bounced without shopping, and a very impressive 12.5% conversion rate made this blog my #8 source of website referral sales. It’s not driving much traffic, but it’s driving good traffic. I also know of two newsletter signups through the blog interface. I hate to say it, but I'd probably get better sales results if I wrote my posts in marketing happy-talk instead of being my curmudgeonly self.

Third, I want to keep a history. Someday I might tell the story of Curio City in book form. Whether it turns out to be a rags-to-riches success story or a cautionary tale about how not to start a business, I need a record of events, goals, and thoughts. Deep down, I’m still an English major with a compulsion to write.

Who’s reading?

You are. Thanks for coming! Please make yourself known – leave a comment if something interests you.

My wife reads it, sometimes. If I nag her. One or two friends have visited in the past, although I don’t think they’re regular readers. AFAIK none of my friends or relatives follows the progress of my business. I don't blame them. There's a lot of interesting material on the web competing for our limited time, and my writing can be dry.

At least two other small business owners stop in periodically. Some of my vendors have been here, but I don’t think they’re regular readers. Every time I send out a newsletter, a few customers click the blog link. Some people stumble across it when Blogger’s random “next blog” link serves it up. That’s pretty much everybody that I know of. The counter at the bottom of the page says Curious Business has had 688 visits. Even if 200 of them were by me, that’s still nearly 500 real page views. Somebody’s reading, and so I keep writing.

**********

Months from now, when economists are arguing over when the recession started, I will point to Friday, September 21, 2007. Business hit a wall that day and has not recovered. Still, thanks to a long run of decent sales, the month is already 50% over LY, with a day and a half yet to go. It looks like September will finish with a tidy little profit.

October and November look scary. I’m up against LY’s big score with nothing comparable working for me this year. I’m hoping that some cool new products and the Sunshop upgrade (which is still going painfully slowly) will make up some of that ground. But, let’s take it as it comes, shall we?

Some People Never Learn

Nine months ago I wrote about the demise of the Ultra Bright Finger Lights, a fun and profitable little bestseller that succumbed to dead batteries.

Several weeks ago, I discovered that the supplier of my bestselling cap lights is now offering a new incarnation of finger lights called Rocket Rings. The casing is a little different, the battery compartment was redesigned to use smaller batteries, and the price is much lower. Even allowing for a generous markup, I can retail these things for a buck apiece (versus $4.50 apiece for the old finger lights). How could I pass that up?

A few orders soon revealed that the Rocket Rings share their ancestors' tendency toward battery problems. About one in ten of them don’t work; since they come in three-packs, that means about a third of my stock is unsalable out of the box.

Luckily, the packages are very easily opened and re-closed, making it easy to reassemble working three-packs (although achieving the proper color assortment adds a bit of challenge) and reduce the spoilage to only the lights that are actually defective.

I am not the kind of guy who just throws things away. Even though they’re so cheap that they hardly merit the time and attention, my cheap nature compels me to rehabilitate what I can. Usually, the only defect is one bad battery of the three tiny ones in each ring, or even just a bent contact. With enough time and patience, I can salvage almost all of the defectives. It's a nuisance, but as long as people buy only a few packages at a time and I’m only shipping a few orders a day, I can squander my time.

Yesterday somebody ordered 30 three-packs. Ninety lights. And so this corporate CEO once again spent a solid hour fussing over his latest bestseller. I ended up trashing only four lights. I've only written off two packages out of the 37 sold to date.

There is a wrinkle, though. The same customer who bought 30 packages asked about potentially buying up to 1,000. I obviously can't do triage on that many. If I can get them at all (my source is down to 25 left), I’ll offer the customer a generous allowance for defects. Slightly more worrisome is the potential for these things to start selling in great numbers very soon, now that they've made the bestseller list. I can imagine them blowing out for Halloween and Christmas. If that happens, I'll probably have to raise the price and throw away the defects more aggressively, or I'm going to be spending hours every week playing around with these tiny batteries.

The Boston Gift Show, Again

I think this was the first time I attended one of these things with actual money in my open-to-buy. Even though this show should be subtitled “Cavalcade of Crap,” I did find two new product lines, and one older vendor’s display convinced me to try a small assortment of their merchandise (emphasis on the last syllable; they are a dice company. I’m an adventure gamer).

Three hits from 525 exhibitors (down from 625 last spring) is not too bad for a store with Curio City’s focus on the unusual.

Business remains strong, btw. Last week was down a little, but still more than doubled LY’s comparable week (low-hanging fruit, remember?). I’m guessing that consumers are pausing after their annual back-to-school spending. If LY’s pattern holds up, they’ll come roaring back next week.