I finally decided to blame my merchandise for my ongoing sales decline. The star products of 2006 sputtered out, and nothing new flared up in their place.
My working conclusions:
Online probably isn’t going to achieve the goals that I defined for this year. Sure, the year’s only half over – and, for the first time since April, this week’s business unexpectedly beat LY. But I’m on the verge of falling behind in YTD sales – inconceivable, considering that I had planned to double LY. Why? First, as I said, my 2006 bestsellers are languishing. Second, the big Sunshop version 4.0 upgrade that was due last Fall has still not shipped. That endless delay killed my enhancement plans. (Sunshop was probably a bad choice anyway, but that’s a whole ‘nuther column). Finally, running a web business draws upon my weakest skills. I am always a step behind the curve in understanding the technology and the retailing environment…and consequently I’m at the mercy of outside experts. It takes a lot of effort and money just to keep up with the status quo. Therefore, I am not going to invest very much more startup money in Curio City Online, although I’m not turning off the spigot entirely. We’ll see what happens when that Sunshop upgrade finally does ship…any day now, yessirree. Any. Day. Now. Curio City
- Of the several possible futures that I’ve considered, opening a store offers the most promise for profitability. Doing that by myself will be incredibly challenging, but at least there should be no mysteries that I can’t solve, and few dependencies on independent contractors. On a personal level, I am ambivalent about spending my old age shackled to a store; most businessmen my age are starting to think about turning the keys over to someone younger. But on the professional level it’s the only logical move. Therefore, I’m going to invest most of my remaining inheritance in opening a store.
- This is NOT the end of Curio City Online! It’s my only source of income until my store opens in September 2008. Even after that, it will remain an important marketing/supplemental sales tool, and an integral part of the
concept. I think my heart will always be in the online business, and ultimately that’s still where most of the income potential lies. Therefore, even while I’m laying the foundation for the Curio City store, turning around the web business is still my primary focus for the rest of this year. Curio City
What’s the turnaround plan?
Finding new products has to be priority 1. Promoting them is priority 2. Reorganizing categories and subcategories to make the store easier to navigate should be priority 3, although it depends in part on upgrading the site itself. Previously my primary goal, improving the website is now last priority, since I can’t do that without infusing new money, and it still depends on a Sunshop upgrade that might never come.
The rest of today’s post is about finding new products.
I dissected my cash flow projections to liberate as many dollars as possible beyond my known obligations (payroll taxes, sales tax, orders outstanding, marketing budget, normal open-to-buy, etc). There wasn’t much cash lying around, but there was a little leftover startup money from Phase 2 that never got spent. It’s enough to buy maybe half a dozen “rescue products”. This leaves me with no cushion against unexpected expenses, but sitting on the money only ensures a prolonged bleeding to death. So I’ve been shopping aggressively.
These lighted caps are my first rescue product (many thanks to my friend Matt for showing them to me). Selling them online will be challenging, as usual. First, the caps don’t photograph well; that’s my chore for this weekend. Second, some competitors are already underselling me. Third, similar products of lower quality sell for less. Fourth, the minimum outlay to bring these in took more than 1/3 of my “rescue” money. If my hunch is wrong, I’m hosed. But they get to the heart of what
I sank even more money into a couple of related products: This clip-on unit offers a similar function for less money (and with a much better markup!). And this strap-on head lamp covers another base. My hunch says it’s the most marginal of the three, but we’ll see. I think I’ve got the bases pretty well covered in this product line now. (NOTE: At post time, these products have still not arrived and these links are inactive).
Getting people to come in brings me back to my old nemesis again: Marketing. I’ll grapple with that again in next week’s column.
Calling this a bet-the-company risk is overly dramatic. It’s more like bet-the-company’s-direction. If people go for these new products, I’ll feel confident in my concept of this store’s future. If the rescue products flop…well, I’m not sure what I’ll do in that eventuality. I don’t have enough money to try yet another direction.
As my “rescue money” evaporates and I keep finding promising new products, I’m tempted to mark down some of my nonperforming stock to sacrificial prices, just to free up dollars. But some of the items that I can’t sell online might do well in my store, so I won’t panic. In the long run, I’ll still make money on this inventory. The trick is making sure that there is a long run.