Whom Should I Hate This Week?

Today you get a mercifully short story.

Google Checkout has officially crossed the line from nuisance to persistent problem. I can receive and process GC orders, but Sunshop is not quite playing along. The “callback API” is the last step in the process. Google uses that to call Sunshop, update my transaction list, and adjust my database. Without that callback working, I have to debit my database manually and the sale never appears in Sunshop at all.

The GC error message implicates a security problem. Turnkey’s support guy opined that there is a problem with my chained SSL security certificate. GoDaddy, the certificate provider, says that my site design is to blame – mixing secure and non-secure items on the same page breaks their seal. My developer says that my certificate is not a chain and is installed just fine…but because Google isn’t trying to load a page, GoDaddy’s explanation makes no sense. He did not offer a theory of his own.

Meanwhile….

GC had the same parcel post rate lookup bug that has been in every Sunshop build for years, so I notified them about it. They were grateful, and fixed it. I asked them why they don’t offer First Class parcel rates. They had not heard of that, said they’d add it, and were grateful again. I asked this twice-grateful contact in Google’s tech support for help with my callback problem. He says that my chain certificate is, in fact, not properly installed. I installed the “intermediate” certificate without installing the “root” certificate. I need a “GoDaddy Class 2 CA”. Yeah...of course I do. Back to GoDaddy again.

They punted me to another support department. I begged them: Please send me this root certificate thingie, and clear instructions on what to do with the gorram thing. Just minutes ago they replied that “the intermediate certificate is not installed correctly”. Damn. That was the one and only thing that I thought I had done right. Now what? Do I go ahead and reinstall it? Run it past my Google buddy first? The odds are high that I'm going to screw up whatever's working right currently. Will I finally be forced to beg for MochaHost’s cooperation? That went very poorly the last time I tried it.

My hunch says that before this is all over, I am either going to end up either buying a new SSL certificate from somebody else, or moving to a new web host. My server performance has been marginal lately anyway.

I don’t even know how to tag today’s post. I certainly hate somebody for all of this, but whom? I think this deserves a new label.

March Sales Update

Cap sales came roaring back last weekend – what a relief after an eerie several-days silence. The prospect of my best-ever seller petering out emphasized the importance of finding the Next Big Thing, and soon. Maybe I’ll get lucky at this weekend’s Boston Gift Show (a.k.a. Cavalcade of Crap).

March delivered some very happy statistics. With a day and a half left to go, I've already exceeded LY by 118% and beaten plan by 25%. Year-over-year gross sales are up 105%, gross profit is up 94%, my personal paycheck is +91%, and the bottom-line profit is +216%. (Usual disclaimer: the dollars behind these percentages border on trivial, and the year will come down to November and December, as always. But still.) Next year I can raise my payroll percentage another half point. Yay, me.

Potpourri

Last weekend Eric upgraded my site from Sunshop 4.0.8 to 4.1.0. It did not go as smoothly as one would hope. At first sale prices didn’t appear at all, and now they’re displaying incorrectly. But I finally have Google Checkout hooked up (if still untested) and the shipping calculator is installed (although turned off because it's missing its text label). I hope those details can be cleaned up very soon. My April strategy depends on sale pricing.

Except for one telephone sale, I haven’t sold a single lighted cap for five days now. Traffic plunged yesterday to 65 visits from its usual 85-100 level. My best keyword ad is still at the top of Google’s search page. I don’t see any new competitors or significant price undercutting. Has America tired of lighted caps? Is the American consumer finally played out? Or is this just a natural dip? This is the same week as LY’s record-setting six-day shutout. Easter is probably to blame. Many Christians take a long holiday weekend…and when people aren’t at work, they aren’t shopping. I wish I could force sales when a slowdown like this hits, but all I can do is wait it out.

Despite the past few days, March is already in the bag. I doubled LY and beat my ambitious sales plan, with a full week left to go. This is what “making hay while the sun shines” means. April will be more challenging.

The organic search result for my best cap keyword doesn’t appear until page 5, far below many less-relevant sites. While investigating, I realized that Google displays the META description. It’s presumably looking for keywords there. So I inserted them a couple more times without making it read too unnaturally. We’ll see if that page creeps up at all in coming months. Remember that improving organic search results is one of my top priorities for this year, even if I have to hire somebody to do it for me. We’re going to come back to this subject repeatedly.

Speaking of the telephone…

I hate the telephone. I have trouble following conversations. By the time you reach the end of your sentence, I’ve forgotten the beginning, and if you’re going to string three or four sentences together, forget about it. My mind has wandered on to something else. I don’t quite grasp the etiquette of when I’m supposed to talk and when to listen, so I often blurt out thoughts and interrupt people. Lousy cell phone sound quality routinely causes misunderstandings on both ends. I try to compensate by taking notes during the conversation, but I still hate using the phone. I don’t even like F2F conversations. I’m a written-word kind of guy. You can imagine how popular I am at parties.

Some online shoppers prefer to order by telephone. Some find the web technically challenging – and I know that my site is slow and unreliable sometimes. Some think that ordering online is insecure. Of course, that’s just plain wrong. When you submit an order online, your encrypted payment info passes from your computer through my host’s web server through Authorize.net to the acquiring bank, all unseen by human eyes. When you give me your information over my cell phone (which anyone can intercept) I write it down on a piece of paper. Then as soon as I hang up, I enter it into the website exactly the same way you would’ve done…except now I have your credit card info on a piece of paper. So much for improved security.

But even people who don’t order by phone find a prominently-displayed toll-free phone number reassuring. Knowing that you can easily ring up some kid in a call center in India means that you’re dealing with a big, successful company. My phone number, OTOH, is buried on the “About Us” page. You have to dig to find it. If you do call, you get my cell phone. If you’re lucky, your call will go to voice mail. If you’re unfortunate enough to reach me live, you will think you’re talking to a blithering idiot. You will not be far off the mark.

Displaying my telephone number could conceivably increase sales measurably. I’m going to have to do that eventually if I hope to achieve “Curio Metropolis”. Not an 800 number, yet. And not on the front page, yet. But I should probably make it easier to find, even now. I can always hide it again if nuisance calls become too burdensome. Maybe I’ll do that when the 4.1.0 fallout settles.

A new reason to hate Yahoo:

Yahoo Search Marketing is finally getting rid of the 10-cent minimum keyword bid that’s always made them a second-rate service. Yay! But they’re also changing the formula for pricing keywords. The general consensus is that this will amount to a big, behind-the-scenes price increase. Boo! (If you click that link, be sure to scroll down past their marketing-speak to the Comments section.) I write good ads and sell relevant products…but so do my real competitors. I’m going to have to overhaul my Yahoo PPC campaign again, and very likely reduce its scope as some keyword prices spiral out of reach. Ah well, I’ve been leaving PPC on autopilot lately anyway. Shaking it up won't hurt.

Ding, Dong, The Store Is Dead!

What a relief.

I tried to talk myself into it. The financials probably would have eventually worked – as the wife observed, I was probably too fixated on a sales-per-sq-ft number with a weak basis. A year or more of exhausting hardship and chaos might have eventually settled into a stable, profitable base of operations. Of course, surviving until “eventually” was always the corker. Certain aspects of owning a mature store did (and still do) appeal to me. But I could never convince myself to go through hell to risk that nebulous payoff. I’m almost certain that I couldn’t have done it all by myself, and I would’ve destroyed my web business in trying.

The certainty that a store would completely take over my life was the biggest drawback in my mind, along with the staggering amount of work required to make it happen at all. To Anne, it was the thought of borrowing >$60,000 during an economic recession, and with our personal finances already very wobbly. We aren’t doing very well. I make doodly squat, and she hasn’t had a raise or a bonus in three years even though she does nothing but work, work, work. Savings are bleeding away, debt is mounting, and inflation pinches the household budget more and more every time I buy groceries or try to pay property taxes or need car maintenance. Coddling Curio City looks more and more like a luxury that we can’t afford.

Wife Summit II ended with a mutual commitment to endure a couple more years of hardship, at least for as long as growth remains encouraging. Now that I don’t have to open a store, I’ve decided to divert a couple thousand dollars out of “startup money” and into our house, which is literally rotting away. Hopefully we won’t have to tap the home equity line of credit that we have no way of repaying.

“Curio City Offline” is not dead. It’s merely resting until such time as “Curio Metropolis” needs to move out of the house. By then, Kraken Enterprises should have enough cashflow to reduce the risk of rapid failure. I might even be able to hire someone to help me do it. In theory, anyway.

With the store slain for now, I can focus on moving the website forward. Although the risks are much less than a store’s would be, they’re out there. I need to push forward aggressively if I hope to keep doubling my sales. There are some time bombs coming up.

The first one, paradoxically, is lighted caps. If you’ve been following along, you know that this single product line accounts for 75% of my total sales. It is the sole reason that March is demolishing LY’s sales. In my fine tradition of finding the dark cloud beneath every silver lining, I know that these caps won’t sell this well forever. Sooner or later, a deep-pocket competitor will out-compete me, or consumers’ whims will just wander on to something else. Even if caps do keep cranking along, I’ll soon be up against LY sales figures from months that included cap sales. The year-to-year comparison will look a lot less rosy when I’m comparing apples to apples.

Earlier I identified three major steps to take Curio City to a higher plane:

1. Increase my merchandise selection and improve its presentation;
2. Increase my traffic by improving my search-engine placement; and
3. Improve my conversion rate.

Step 1 is the most straightforward, and the most fun. So let’s talk about that one this week.

I have two immediate problems: Way too many inventory dollars locked up in old and unsalable products, and an open-to-buy budget that is constantly struggling to reach black ink.

Nothing cures a budget shortfall faster than a big wad of cash. But pouring in more of my own money is counterproductive; after all, Curio City exists to put money into my pocket, not take it out. I would much rather let operations lift the budget back to where it belongs than infuse a new loan for it. (And just because I have money in the bank labeled “startup money” doesn’t mean that I want to spend it on Curio City; I would love to divert some of it into personal needs instead). So rather than transfer all my money into Curio City’s treasury and go on a shopping binge, I’m ordering just those half-dozen or so new products that I’ve had wishlisted since January. Maybe they’ll sell enough to cover the bills before the charges hit, or maybe I’ll need to inject doses of rescue money here and there to keep the charge card out of the red. The objective is to keep my options open without loaning the company a lot of new money.

I started with an expanded line of purse hooks. They would not have been my first choice, but the vendor is offering trade show pricing plus free shipping. I can’t resist a bargain. And maybe they'll get a bump from Mothers Day.

Next up is a line of recycled bicycle chain housewares (Use the Related Products tab to see the whole line). I expect them to sell slowly, but reliably, like the Vinylux products. I’m bringing these in right now to take advantage of the upcoming Aging Hipsters linkage. Which, it occurs to me, I’m supposed to finish today. Drat!

Neither the purse hooks nor any of the other new things on my list have blockbuster potential, but they all enhance my overall product mix and promise to sell steadily. Steady sellers are just as important as bestsellers, if you have enough of them (remember the 80/20 rule?). Meanwhile, I’ll keep some cash ready in case I luck into the Next Big Thing. If my friend Matt had not mentioned lighted caps last summer, I never would’ve found them. If I hadn’t had a few bucks in my open-to-buy at the time, I might never have tried them. There’s a huge right-place, right-time factor in product discovery.

To recycle some of my frozen inventory dollars, I should be ruthless with the markdown pen, and then send out another newsletter announcing a sale. Markdowns hurt the bottom line, but merchandise languishing in the cellar hurts the top line. So those are my objectives for the next week or two: Bring in new product. Turn over the Aging Hipsters list. Take draconian markdowns on my oldest stuff. And announce it all in a newsletter.

The hoped-for Sunshop upgrade didn’t happen, btw.

About Newsletters

My Constant Contact bill rose from $15 per month to $30 when my mailing list topped 500 email addresses (at the beginning of last week, I had 506). My mail open rate averages 21.3%, and Constant Contact says that the average for retailers is 26%. So those were two good reasons to prune my list.

With some effort, I figured out how to identify those addresses that have never opened a newsletter. 335 of my 498 contacts were on the never-opened list, leaving only 163 presumed “good” addresses. Last week I sent those “dead” addresses – which included a surprising number of friends whose ISPs must be blocking my emails -- a confirmation request. A week later, a handful of them had confirmed that they want to stay on the list (although none of my friends confirmed). Now my monthly fee is back down to $15, and I expect a much higher open rate from the 180 good addresses remaining.

None of this is likely to help the bottom line: each newsletter ultimately only delivers 1-3 “extra” sales (those with coupons work best, of course). They barely cover the cost of the newsletter service, much less my time spent creating them. But there is value in keeping my name in front of people, and like most other things about Curio City, newsletter results improve very gradually as I keep building a bigger and stronger customer base. Also like most things about Curio City, it’s not growing big enough fast enough.

Reasons to hate Massachusetts

Sensing that Kraken Enterprises is a great source of untapped wealth, the Commonwealth just raised my unemployment tax contribution rate from 2.53% to 4.78% -- retroactive to the first of the year. Thanks, guys! I guess I can collect a few bucks a week if I lay myself off. Which I might have to do, if this bloody state keeps raising my taxes. Massachusetts has the highest unemployment taxes in the nation, and pays the most generous benefits.

Reasons to hate Blogger

This interface for post creation blows. I can't tell what font or size I'm using. The spacing goes all wonky. Headlines never look like they should; it absolutely refuses to resize the "Massachusetts" headline above. Whenever I open a published post to edit it, the font appears to be 72-point.

I am nearing my 100th Blogger post. Maybe it's time to move the blog.

March On!

Steel yourself, dear Reader, for another long navel-gazing session. This one has one particular reader in mind.

Year-to-year sales comparisons are a little flaky because I’ve changed the way I define gross sales, and the way I chop the calendar into fiscal months. Last March was a five-week month, and this March has only four weeks. By any measure, though, last March was a bloodbath. It held 11 days with no sales at all (including a record six-day shutout streak) plus three more days with gross sales under $10.

This month started out looking just as grim. Postage costs sent the first two days negative. When I left for my habitual Tuesday bar night, my weekly gross sales had recovered to a whopping $1.22. Then a flurry of orders turned the month around. By Wednesday morning I had done 66% of last March’s monthly sales and a third of this year’s plan. As of right now, I’m happily looking at 90% of LY and 50% of plan. Even my deep open-to-buy hole is finally filling in. It’s astonishing how suddenly things can turn around. (And that cuts both ways; sales can, and often do, collapse without warning. It would not surprise me to go directly into a days-long shutout).

Here's a paragraph is from a draft of this post written on Tuesday evening, before I left for the bar:

“All of my choices look hopeless. “Steady As She Goes” is going steadily nowhere. “Curio Metropolis Online” seems like a pipe dream when I can’t even solve my current minor technical problems or find a new developer to knock off my extremely modest and oft-postponed upgrade checklist. And how could I possibly cover the rigid cost structure that comes with “Curio City Offline”: $2,500 for rent, $500 for utilities and insurance, $1,300 for payroll (that’s one minimum wage employee and not a cent for me), another $1,000 in debt service, hundreds more in assorted smaller bills…where does all that money come from??? I would need to gross a minimum of $12,000 a month just to cover core expenses and replace the goods sold, without making a dime for myself. That is ridiculous. There is simply no way a store is going to bring in that much money, not in March.”

What a difference a day makes. After three days without a single order, Curio City snagged 15 sales in three days, and the tenor of this post changed from despair to optimism.

T.C.O.B.

Before I return to my regularly scheduled anguish, two operational trends bear mention:

First: Since I upgraded PayPal from "standard" to “Express”, at least half of my receipts have gone directly into the interest-bearing PayPal account where I park my operating cash. Before the change, fewer than 10% of my sales went through PayPal. PayPal’s processing charges are about the same as credit card fees, without the annoying 2-4 day delay and the weird fee guesswork. The less business I have to put through CTS Holdings, the better. I loathe that credit card processor.

Second: For reasons unknown, I had several international sales last week – three to Canada, one to Great Britain, and one to Ireland. Although I’m ambivalent about the extra work and the uncertainty involved in exports, I am grateful for every sale I get, especially during March’s anticipated drought.

Incidentally, my original developer has unexpectedly found time to upgrade Sunshop from version 4.0.8 to the current 4.1.0. In addition to fixing a couple of obscure bugs, the newest version will finally let me enable the Google Checkout routine that gave me such grief. And it adds a shipping charge estimator to the shopping cart. Both of those additions are sure to improve conversions a wee bit – and given the increase in PayPal payments since I upgraded, I expect a lot of shoppers to use Google Checkout, too.

Crystal Balls

Why did I give you this long diversion about March sales?

Wife Summit II happens tonight at the Randolph Picadilly Pub, a homey place that has hosted many earnest discussions over the past 20+ years. This post is my last chance to lay it all out before I try again to force a conclusion. I have cash earmarked for Kraken Enterprises in the bank right now, with two more CDs maturing in the next six months. Will I finally spend the last of my inheritance? Will I roll it over for another year? Stay tuned….

(You might have figured out that I hate spending money. I only even had an inheritance because I was raised to be cheap. This is not exactly an entrepreneurial trait. Frugality separates the capitalists from the managers. I’m a good manager. The jury is still out on whether I’m a capitalist.)

This week’s unexpectedly strong sales emphasize the folly of changing direction while my business is still strengthening (in a recessionary climate, no less). QuickBooks says that YTD gross sales are 99.3% ahead of last year. Payroll – which lines my pocket – is running 75% ahead of LY. Net income – a.k.a. The Bottom Line -- is +145%. I must always hasten to add that the actual dollars involved are still low-budget, and I’m still poor. But despite my puny scale, the year-over-year improvement is undeniably dramatic. Now that I know how profits work, “Steady As She Goes” could almost double my personal income over LY. If I don’t change direction, I can take out some profits in December. Again: It’s not very much money, but how many people do you know who might double their income this year?

I know how to evolve “Steady” into “Curio Metropolis”: Increase and improve my merchandise selection…improve my organic search results…and raise my conversion rate. I understand how to do all of those things in theory, if not in practice. None of it is beyond my ability to learn. An expert customer who took an interest in my blog very kindly sent me a long, detailed list of SEO instructions that ought to improve my organic traffic at very little cost.

Last week’s unexpected busy-ness kept me from reviewing my store financials spreadsheet. I’m still using numbers that I compiled nine months ago. But I don’t think it’s going to change much. My calculations are correct. The most important starting assumptions (rent per square foot and sales per square foot) still look realistic. I can tweak a few variables here and there, but it’s not going to change the big picture very much.

A store is expensive and risky. At best, opening and running one will freeze my web business at its current level as I put it into caretaker mode. More likely, the store’s ravenous demands will force me to mothball the website entirely for at least a few months. At worst, the store will drag the website into bankruptcy as it goes down. The short-term financials are downright frightening; I see no way to avoid losing considerable money coming out of the starting gate. A store might offer the best income potential in the medium term (about five years), when the loan is paid off and I’ve worked the kinks out of my merchandise, advertising, and operations -- if it survives that long. But in the long run, you can only put so much stuff on the shelves and get so many people through the door. The internet is comparatively limitless. I always think of a store as a base for my web operations, rather than a goal in itself.

If I were forced to choose today – which is sort of the point -- this is what my crystal ball reveals: I stay with what’s already working (duh). I transition from “Steady As She Goes” into “Curio Metropolis Online” in an evolutionary way, getting constantly better at what I’m doing and investing money here and there as needed, rather than all at once. I won't need debt, and maybe not even all of my remaining startup money -- I could potentially spend some cash on personal needs instead. When the web business gets consistently too busy to run from my home – and I mean most of the time, not just for a couple of months – then I will open an offsite base of operations. This facility's main role is shipping/receiving, warehousing, and a place to employ help. It would be nice if it included a sales counter that earned enough to cover its own costs, but that would be secondary. For convenience, I'll refer to it as a "store", even though that isn't its main function.

When, Ken?

Sounds logical and practical, doesn’t it? How long would this process take?

I don’t know. My hunch, based on current growth, says that Curio City Online becomes Curio Metropolis by the end of this year or beginning of next. Curio Metropolis outgrows being a home business pretty quickly, and moves out either in late 2009 or late 2010 (assuming that its new home is a store, which has to open during the Christmas season). Late 2009 is my most ambitious projection, and late 2010 is my cautious one. Cashflow from the web should be substantial enough to subsidize the store while it finds its market and I iron out my inevitable mistakes. By the beginning of 2011 – about three years from now -- I would have a break-even store hosting a very profitable web business that pays me a living wage, and I would consider Curio City a mature business.

Look at it this way: Averaging five sales per day would produce enough income to help out with the bills. Ten sales per day would constitute success. Twenty would make me wealthy. So far this year, I’m averaging 2.25 sales per day. Getting from 2.25 to 5 does not seem that daunting.

Look at it another way: There are 6 billion people in the world. Maybe a billion of them participate in market economies. More and more of them shop online every day. At least 100 million of them make a lot of money. I just need to land 10 out of those 100 million people each day. Piece o' cake!

Asterisks and Fine Print

The first drawback is temporal. While I have a real shot at doubling LY’s sales this year, doing that year after year gets more difficult as the absolute dollars involved increase. My three-year timeline is a long way from guaranteed. Seventy-five percent of my business this year comes from one product line. That could peter out at any time, and finding something comparable is not even remotely guaranteed. There is very little that I can do if I find myself without at least one high-volume product to keep driving sales.

Anne has been supporting me for the better part of two years. I’m just now starting to make enough to keep myself in pocket money, and I’m nowhere near making a meaningful contribution toward our joint bills. We are both over 50 years old. We’re constantly postponing such goals as travel, housing upgrades, and even furniture and basic home maintenance. Our short-term, non-retirement savings are essentially gone. Anne’s being bled dry by consumer debt and parasites (me and her mother). Yes, Curio City should ultimately grow into our primary source of income. I’m counting on that. I have no other fallback. But how long is “ultimately”? We can’t wait 10 years. Even five years is an awfully long time. Can we endure three more years of tight money from a single income? How durable is my wife's patience?

None of my scenarios -- including opening a store – pay off any quicker or any bigger than the one I outlined above. The only reliable paycheck comes from a conventional job. At what point do I pull the plug on self-employment and try to get back into somebody else’s harness instead?

The second drawback is technological. I was an English major, for crying out loud. Understanding and solving technical failures, and keeping abreast of innovation, will always be a little beyond my grasp. “Steady As She Goes” cannot morph into “Curio Metropolis Online” until I can count on the services of an expert developer/webmaster – and the $90 per hour variety is not going to cut it when I’m earning $1.50 per hour myself. I should be spending my time searching for new products and creating web content, not trying to figure out why Yahoo hates me or why I’m getting 100 spams a day or why my Google page ranks are so poor or how my shopping cart generates H1 tags. I just spent over three hours figuring out that our internet connection died because I forgot to update the password in our wireless router.

I am better equipped to understand and solve the kinds of problems that a store will encounter than those posed by the Internet. I will always be behind the technical curve as long as the web is my primary emphasis.

The last drawback is logistic – physically moving and storing ever-growing quantities of merchandise, and ultimately moving it out of the house. My proposed path does not solve this. There is still a move to deal with eventually, and the impact of interrupting web operations grows worse as my sales get bigger.

So that’s all I’ve got. Anne still talks as if she wants to own a store, and I’ve pretty clearly acknowledged that I really don’t. She has an equal voice in the future of this business. Will tonight’s summit solve anything? By the gods, I hope so. I am sick of writing about this. I am sick of the uncertainty. I want to move forward.