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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.
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Friday, October 17, 2008

The Not-So-Great Depression

I’m going to keep reporting sales trends for as long as economic ruin remains the foremost topic on everyone’s mind. Hopefully that won't be for very much longer. I would be remiss to gloss over Curio City’s experience in the worst economy of my lifetime.

Except for a few hairy days, sales are surprisingly strong. The first half of October blew away LY and came in comfortably ahead of plan. That’s phenomenal in these circumstances. Maybe the financial pain has not yet seeped from the rich investors and over-indebted young people who are the worst afflicted. My customers tend to be a little bit older and more settled than the general population.

Although October's on track to be a very good month, sales targets for the next two weeks are steeper. Can I keep the streak alive?

That’s up to the American consumer. Curio City has no debt, but after paying Q3 payroll and sales taxes it hasn’t got much cash, either. Fortunately, most of my costs scale with sales. I have very few fixed, uncontrollable expenses and I keep an iron grip on my financials. My conservative, no-debt, bootstrap business model looks very prudent in light of current events. Of course, the business still doesn’t pay me a living wage, and it still needs to grow rapidly if it’s going to become a viable means of support. My paycheck only amounts to 25% of the $8 Massachusetts minimum wage. I could quadruple my paycheck if I got a job bagging groceries. (That doesn't include the year-end profit that I can pocket).

So Curio City’s viability depends on reaching some very ambitious growth targets: 75% in 2009, 50% in 2010, 35% in 2011, and 20% in 2012. Can I really strive for phenomenal growth during an all-out economic crash? Or should I wave the white flag now and look for a job after the holidays? Eight bucks an hour sounds to me like a lot of money.

What can I do to buck the tide?

Priority 1 is obvious: fix the max_connections bug. This is my single biggest frustration, and it’s entirely beyond my control. Why should I hustle to drive more traffic when that traffic brings my website to its knees? I found a third-party mod that is supposed to speed up Sunshop by reducing the number of MySQL connections. The latest Sunshop patch plugs a major security hole that’s making me very nervous. Eric says that he’ll upgrade me to the latest version and apply that mod sometime next week – if nothing else comes up. Of course, I’m not even sure that’s the solution, but it’s all I’ve got. I believe that sales from August to date would be at least 10% higher, and possibly more, if my site was reliable. Long term, I might move to a new web host and start with a fresh install. But I’m going to need a new developer first, and I can’t step up that search until Eric’s role is completed.

New merchandise always promises to drive growth. Among the things I’ve already bought, I’m most optimistic about the Fuzz scarf. I’ve got at least a dozen more products wishlisted (as always). But the cash isn't there. A big Switchables reorder took a whack out of my OTB this month. The minimum order quantity (MOQ) on my bestselling Mini Briefcase Business Card Holder quadrupled to 200 pieces; reordering those now would set me back an entire month’s merchandise budget. A company rep offered to reduce the MOQ to 100 pieces – still double what I want, but I can just barely swing it, so now I'm just waiting for a free shipping offer next Thursday (they wanted to charge me $75 to ship a box that shouldn’t cost them more than $25, tops). My supply of some Panther Vision cap styles is getting ominously low, and those reorders are budget busters if I want the best pricing. Anyway, with my cash either depleted or tied up, my Christmas lineup is mostly frozen unless I either start buying on credit (which recent economic events suggest is perilous) or use some of the startup cash that I’ve been hoarding all this time. I could float the company a $1,000 cash loan to be repaid out of December sales (assuming, of course, that the economic collapse doesn’t kill Christmas). But since my next startup CD doesn’t mature until early December, I’d need to use the credit card float anyway, using my savings as a backup to guarantee the December repayment. Whether Curio City borrows money from Mastercard or from me, it would mean carrying some debt for the next six or eight weeks. That makes me nervous.

I put out a newsletter advertising my new stuff last Wednesday, with no apparent results. Ten of the 220 emails that went out either bounced or unsubscribed. 78 people are known to have opened their newsletter so far (the tracking is imperfect). They’ve made only 18 clicks and no purchases. It’s certainly important to let my regular customers know what’s new, but the immediate payoff is always pretty small.

I still need to contact a SCORE (Senior Corps of Retired Executives) representative for meta-advice about my business strategy – my SCORE post was originally going to be this week’s topic, and might be next week's. My wife is nagging me about it. But this seems like a terrible time to look for big-picture advice. Even if I can find an internet-savvy retired retailer, what practical advice can anyone offer in this economy?


Speaking of my wife...she wants to sent out a media mailing in the hope of garnering some free press mentions. Every year we try this, and every year it fails. But the cost of trying is very low. If she's willing to put her time into doing the mailing, I'll put some time next week into creating the email.

I spent a little time following up my earlier musings about Facebook. Created a business page and a personal account, although I still don’t know what I’m supposed to do with them, and they have apparently garnered exactly zero interest. If any Curious Business readers happen to click that link, please leave me a comment or write on my wall or whatever they call it. I also stumbled across the interface for creating pay-per-click ads on Facebook. Hooray! PPC ads are something I know how to do. I might test a couple of ads there next week. Maybe I can eventually replace my perennially worthless Yahoo campaigns. New product ads have sent Yahoo’s cost northward of $5 per day, and it rarely delivers any sales.

An SEO newsletter persuaded me to join Twitter. It feels a lot like instant messaging with a bunch of strangers. I don’t think I can fake enough sociability to squeeze any value from this, but I’ll keep reading it for a few weeks anyway. Maybe an opportunity to pimp my merchandise will come up.

Once my website code is stable, I can implement many (free) third-party mods to Sunshop. Most are very minor, but taken together they’d add up to some nice improvements. Of course, I don’t want to do that until I have backup dev support.

There’s always the hoary old idea of hiring an SEO expert. That takes time to show results; it’s very expensive; and I’m not convinced that my pages need substantial optimizing (I’ve been writing my web copy with SEO in mind for a long time, and quite a few of my pages are rising on their own). It’s not a magic bullet by a long shot. But it's still one option for investing my remaining money. Maybe that SCORE idea isn’t so bad after all. I could use an expert second opinion.

Finally, I'm going to have to revisit those aggressive growth projections. Can I simply reverse the required percentages so that the big increases come during the anticipated recovery, instead of the depths of the crash? Or does that leave me too poor for too long? I’m going to have to get out the calculator again.

Coming Topics:

  • Score!
  • Wacky Ideas

1 comment:

  1. Matrix12:54 AM

    Hey, good to see that business doing good. I think you are local enough, not to see sales decline at least for now. If you need free SEO advice, let me know. I am not top expert, but i do well and positioned well on Google, yahoo and msn.
    I am pretty fine at this moment, but we have completely different sales model. My ebook sales slowing down, but since its so seasonal, i don't pay much attention to it.

    If i were, i would start doing more edting jobs, make some cheap pre made website, concentrate on certain field (resume or print or etc) and you will be making nice $. I am telling you this for sure. Get some good domain, here is a hint. Get some domain that makes you sound offical (something with "write" in it or copy editing)

    ReplyDelete

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