Welcome to Curious Business

Every Friday, I post a small insight into running Curio City and/or Blue Hills Editorial Services. My most recent posts are directly below. You can also start with the first post, or use the subject labels to the right to home in on particular topics. Feel free to comment on anything that interests you.
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Friday, March 27, 2009

Long Post, Eventful Week

Sheesh, what a week. Let’s take it in pieces.

Baking Babies

I've started buying groceries at Shaws again because Stop 'N' Shop is reorganizing. Nothing is where I'm used to finding it. Shaws is a worse store in most ways, but at least I know where everything is there. S&S just relocated the bread aisle across from diapers and baby supplies. Yech! Now instead of smelling baked goods, I smell talcum powder. That’s just nasty.

I have wished for years that Curio City's navigation bar would show any associated subcategories when you click on a main category. Commissioning a programmer to implement that would have cost more than it's worth. I've known for some time about a free software "mod" that adds that functionality. The catch was that I would have to do it myself. It was pretty scary looking.

This week I gritted my teeth and made the prescribed changes to Curio City's SQL database, six program files, four templates, and the style sheet. Lo and behold, it worked on the first try! Not bad for a retailer with an English degree and no technical training.

The bad news is that, like the Stop 'N' Shop, Curio City's going to raise a little dust moving things around in the coming weeks. The good news is that the layout will make more sense, be easier to navigate, and please the search engines more. I just have to make sure that the bread aisle won't reek of babies.

The Cavalcade of Crap Rebooted

Tomorrow is the Boston Gift Show, known to Curious Business readers as the Cavalcade of Crap. Yes, I’m taking the T into Boston and walking from South Station to the convention center, where I will waste the whole day shuffling like a zombie through aisle after aisle of boring consumer trinkets. The Fall ’08 show was canceled after steadily declining participation. Its new owners are trying hard to revive the tired old event…obviously an uphill struggle in this business environment, but isn’t everything? Throughout March I rebuilt my open-to-buy from -$350 to over $1,000 in the black. I’ve got my eye on one new product that will take $120 of that, and I’d like to place about $2,200 worth of reorders. But at least I do have money in the bank in case I find something really great tomorrow.

I Am Not A Lousy Month

This week surprised me with not just one, but two, very large sales. I sold 71 I Am Not a Paper Cups to a marketing firm near Chicago. The UPS tracking site assures me that they were delivered to the UPS Store yesterday afternoon, so I can reship them this morning. The product is made by DCI, the same company that was behind the great Christmas tree debacle. So I won’t believe that the correct merchandise arrived in the correct quantity until I actually drive over there this morning and see it.

Two days later a gentleman organizing the 2009 Turkey Ridge Youth Hunt in Kansas bought 50 camo caps. (Presumably the youths are hunting turkeys, and not themselves being hunted.) Twenty-five adults and 25 youths participate. It was pure luck that I had exactly 50 of these caps in stock when he called (not the 53 that my spreadsheet indicated). A 20% discount and rapid order fulfillment sealed this deal.

I get about one of these institutional inquiries a month, but they almost never pan out – people almost invariably want imprinting/embroidering and deeper discounts than I can afford. I was quite surprised when the first sale went through, and downright stunned by the second in one week. Even after the hefty discounts, this week’s net sales will approach the entire month of March 2008.

March had been looking really anemic before this lucky break. I thought I was going to fall short of LY. This big shot in the arm put me comfortably ahead of my YTD sales plan. Awesome…for now.

The year-to-year numbers:

Total income: +72.4%
Total COGS: +97.3%
Payroll: +26.6% (yay me!)
Net Income (Profit): +107%

Year-to-date sales are up 33.3%, gross profit is up 38%, and the bottom line is up 202%. There are even some hopeful signs that the economy might finally be bottoming out.

Two More Reasons to Hate UPS: An order for a 2nd Day Air shipment came in on a Friday. I dropped off the package at the UPS Store on Saturday so that it would go out first thing Monday. UPS helpfully picked it up on Saturday, then unhelpfully billed me $15.38 extra for Saturday pickup. OK, it’s my own fault for dropping off on a Saturday…but $15 to toss it in the truck? So typical of their “gotcha” pricing.

One of the shipping supplies that UPS offers for free is a two-part adhesive label. You can’t actually use them for UPS packages because their shipping label prints out off-center. The labels are perfect, however, for USPS shipping. Over the past couple of years I've recouped some tiny fraction of UPS’s extortionate charges by using their free labels to ship US mail packages. Well, it looks like they have finally wised up. I’ve been unable to reorder labels the last two times I tried. For some bizarre reason, these things are crazy expensive -- $11.25 per 50 sheets if you buy them through the USPS website, and still pricey even at Office Max. I’ll bet I’ve gone through 300 of those UPS sheets between the time that I realized that I could do this and the time that they started rationing. Now I’m going to either have to go back to taping plain paper labels, or find a cheaper source and buy them in bulk.


Friday, March 20, 2009

President Obama Thinks I'm An Idiot

Obama has a plan to jumpstart small business growth. I have been wondering if I’ll ever get to belly up to the free money trough along with the big guys. Not yet.

What’s Obama’s bold plan?

  1. The Small Business Administration will step up lending guarantees. The SBA currently guarantees payment on 85 percent of a loan up to $150,000 and as much as 75 percent on loans of more than $150,000. The administration is raising the guarantee to 90 percent, reducing lender risk as an incentive to lending.
  2. In addition, fees of as much as 3.75 percent of the loan's face value are being waived effective today, and people who obtained loans and paid fees since Feb. 17 qualify for a refund of those fees.
  3. Obama ordered the Treasury Department, effective March 31, to begin using as much as $15 billion from the $700 billion bank rescue fund to purchase SBA loans on the secondary market, freeing up bank liquidity to make more loans.

That’s it? Another bank giveaway?

He is trying to trick me into taking on debt so that I will grow big enough to fail. But I am not the idiot that he thinks I am. If/when I do borrow money to expand, I won’t involve the federal government. Kraken Enterprises has almost four years of history and two years of demonstrated profitability. Any banker should regard me as a good credit risk.

An SBA loan becomes available only after you’ve been rejected by a private lender. The SBA then guarantees a loan from the same bank that just turned you down. Obama’s bank-friendly largess will undoubtedly make banks more likely to turn entrepreneurs down in the first place, forcing us into the guaranteed arms of the SBA. A cynic might see here a backhanded attempt at nationalizing small businesses.

According to the Internet (distilled from multiple sources), SBA loans carry these advantages and disadvantages:


1. An SBA loan can be stretched over 10-20 years, vs. seven years for typical bank loans;
2. The SBA will lend to businesses that are in trouble;
3. The SBA supports areas in which no financial institution would otherwise bankroll new businesses.


1. The SBA places a lien on the borrower’s property. If I default and the SBA has to pay off the guaranteed principal, it will go after my personal property and assets to protect the taxpayer.
2. SBA loans take up to six months to process.
3. The SBA may require the owner to put up 20% of the funding himself.

Clearly, this move is meant to be a credit lifeline for businesses that are in trouble. It is certainly not going to persuade anyone to take on debt and expand. Not me, anyway.

Sources agree that a borrower should enlist a lawyer and an accountant when negotiating a bank loan in order to limit personal liability. I will tell you this much: I absolutely will not risk my house to borrow money for my business. If that dooms my business to remain tiny forever, so be it.

Obama said that these measures are “a first step”. I will wait to see the next step.


Here’s a little more hatred in the credit card processing field…American Express reclassified my business to Internet Sales and raised my discount rate from 3.25 to 3.5%. I have no idea what my old classification was. American Express doesn’t use resellers, so there’s no appeal or competition – you pay them what they tell you, or you don’t offer Amex. Since the new classification is obviously correct, I’ll resist the temptation to create a new “Reasons to hate American Express” tag.

Amex and Google nullified my effort to reduce credit card processing costs. I suppose changing credit card processors kept the overall increase smaller than it would have been otherwise. (sigh) I give up. The banking industry is determined to restore solvency at the expense of small businesses and consumers.

Google apparently implemented their no-refund policy a month early; my past five deposits have had fees totaling nearly $8 withheld. I emailed Google despite the trivial sum. They answered a completely different question than the one I asked. I restated it. They replied that "Our engineers are looking into it." O RLY? For the moment, I shall content myself with a new “Reason to hate Google”.

Next week's topic: Too Small to Fail

Friday, March 13, 2009

Let's Spread a Little Hatred

New Reason to Hate Google

Free transaction processing via Google Checkout will end in May. Currently, their nominal rate of 2% + 20 cents per transaction is waived on sales up to 10 times your previous month’s AdWords spend. That’s always meant free processing.

Their new rate will be 2.9% + 30 cents, with no waivers. That’s cheaper than PayPal, but more expensive than my average charge sale. So much for reducing payment processing costs. Discontinuing GC would be easy enough, but I’d only be doing so out of spite. It was a bitch to get working right in the first place, it’s a very small percentage of my business, and it costs about the same as other payment methods. For my customers’ convenience, I will continue accepting it despite its flaws – defective realtime shipping lookups chief among them, but that’s a whole ‘nuther subject (see the “Reasons to hate Google” subject tag, and particularly this post.)

PPC Advertising Again

I got an email from Yahoo warning that more than half of my bids are below those of my competition. That tells me that my spending cuts are paying off. Another message warned that my account reached its daily spending cap 52% of the time last month. That tells me that my bids are still higher than I’m willing to pay. I wish I could convince myself to shut Yahoo down entirely, but since PPC is the only advertising I do, I can’t really justify closing off one avenue completely. (OK, I did shut down MSN a long time ago, but they were never a contender).

Google is running me nearly $10 per day. I need to get it below $7 to be within budget, and I need to do that without harming sales. I fixed some ancient ads whose old-style Sunshop URLs landed on broken pages. I’m finding lots of keywords whose minimum effective bids have skyrocketed (example: EcoFluxx went from 15 cents to $1 for page-one placement – who in their right mind is bidding a buck a click for a $14 card game?). Keywords that have been priced out of the market are obvious deletions. I'm cutting my bids on winter products and raising the ones on warm weather stuff, like bird kites – which just happened to be among the ads with broken landing pages.

Another New Reason to Hate Google?

This might be premature. Google just emailed a late-night announcement about their AdSense program – the little text ads that get inserted into web pages. They’re introducing something called “interest-based advertising”. I haven’t studied this in detail yet, but here’s the gist of it:

“Interest-based advertising will allow advertisers to show ads based on a user's previous interactions with them, such as visits to advertiser website and also to reach users based on their interests (e.g. "sports enthusiast"). To develop interest categories, we will recognize the types of web pages users visit throughout the Google content network. As an example, if they visit a number of sports pages, we will add them to the "sports enthusiast" interest category.”

If I read this right, it means they’ll be displaying those ads based not on a website’s content, but on the visitor’s browsing history. That’s a little disturbing, don’t you think? The bit that really got my attention is this:

“As a result of this announcement, your privacy policy will now need to reflect the use of interest-based advertising. Please review the information at (URL) to ensure that your site's privacy policies are up-to-date, and make any necessary changes by April 8, 2009. Because publisher sites and laws vary across countries, we're unfortunately unable to suggest specific privacy policy language.”

If I read this right, it means their new data collection will invalidate most existing privacy policies.

I only use AdSense on this blog (which Google owns). My readers have clicked the Google ads exactly 116 times in the past three years, generating a whopping $88.68. Hey, I’m finally nearing the $100 payout trigger! If you’re running Firefox with AdBlock, you probably can’t even see Google’s ads. If you can see them, please help a guy out with an occasional click. Go ahead, do it now. I’ll wait.

Since the revenue involved is trivial, I’ll probably either opt out of their new program or remove AdSense entirely...after I reach that magic $100 payout, that is. Either way, this is one more thing I need to investigate.

Speaking of revenue...traffic has gradually fallen from 175-200 daily to under 150. Should I blame my advertising cuts? The calendar? The recession? It’s probably all three. Regardless of falling traffic, I’m only $33 under plan with a day and a half left in the week.

Web Hosting: Somebody New to Hate

My web server has been acting cranky again – timing out or encountering errors several times a day. It's a chronic problem. Sometimes MochaHost finds and fixes a problem and performance improves for awhile. Once, they even moved me to a new server. More often, they deny that there’s anything wrong.

Moving a website is not trivial. I’d need to pay my developer to perform the actual move. The new host would have to coordinate with GoDaddy to install my SSL certificate. I’d have to restore all of my customizations to the newly-installed site. It would cost $hundreds, take a lot of time, potentially disrupt business, and harm my search engine rankings (Google rewards an IP address’s longevity). And I don’t know where I’d find substantially better hosting at a comparable price anyway. Mocha charges only $75 annually, while a lot of other places get $25 per month or more. I’d willingly pay a little more for better performance, but I can’t afford to quadruple one of my few fixed costs.

So I’ve opened another non-specific support ticket with Mocha. I hope they can find something wrong with the server. I hope they won’t need to move my site internally again. Even though my heart isn't filled with rage, this week’s theme is spreading hatred. Therefore, please welcome the “Reasons to hate web hosts” tag.

Friday, March 06, 2009

Big Picture and Little Picture

The Little Picture

I didn’t know that Authorize.net bills in arrears until they raided my checking account one last time. Oh well. Now, at last, the savings from changing credit card processors can begin to accrue.

Or can they?

Today I was charged $31.97 for “Visa/MC discount fees.” (At least they have a web page that explains the charge; Pipeline Data did not). They also debit my account daily for discount amounts ranging from a few cents to a several bucks. Turns out that they collect the discount amount daily, but batch and authorization fees are billed with my monthly support fee. Maybe if their online billing report called the charge something snappy like “support and authorization fees” instead of “Visa/MC discount fees”, I wouldn’t have wasted 30 minutes investigating.
This little revelation makes their fee structure about as opaque as was the old bank’s.

It is damned hard to see if I’m saving any money.
Pay-per-click advertising has crept over budget again -- it's running 12% of net sales, vs. my budgeted 9%. It’s my own fault, of course. I’m a sucker for buying more traffic, even when conversion reports suggest that it’s not paying off. Half the time that I set out to pare back my campaigns, I end up raising as many bids as I reduce or cancel. Conversion tracking isn’t perfect, after all. Some people block tracking cookies. None of my “kite” ads reported any conversions on 15 clicks one day last week…but I did sell one bird kite.

Anyway. The point is that I need to keep the big picture in mind while I focus on small day-to-day things that I can control.

The Big Picture

Today’s economic climate does not encourage thinking about long-term strategy or addressing major challenges. As I said above, I am concentrating on controlling costs and making incremental sales…beating LY one week at a time.

Two things that happened in 2008 need counterparts in 2009.

The first is a website upgrade. Last summer I added some new features when I went from 4.1.0 to 4.1.4 -- nothing major, but enough to improve overall sales incrementally. I need to do that again this year, and the sooner the better.

The second was the NY Times gift guide picking up one of my products. That was a lightning strike that I can't reproduce at will. I’ve sent press kits and announcements to major media for each of the past three years, with never a nibble of interest. I’ll probably try again this year, since the only cost is my time. But if December is going to match or beat LY – as it absolutely must if the year is to succeed – then I’m going to need some publicity.
I’ll probably need to buy that publicity…which is to say, place an ad. The potential to waste money is high. To be profitable, an ad has to return about 10x its cost in new sales. If I'm going to spend $1,500 or more on a magazine placement, it can't look like something I made in Paint Shop Pro. But because December 2008 set such a high bar, I need to take that chance. That means identifying a specific product to promote by fall, producing an ad, and placing it to run in November or December, preferably in multiple places.

The Passing Picture

Business started strong last week, then fizzled. This will be only the third week this year to come in below LY. LY was unusually strong, and the rest of March looks more attainable. And, of course, one big sale could still rescue the week.

When a shopper asked about the Infinity Tunnel Clock, I started to reply that it’s no longer available. Before clicking Send, I thought to check. Lo and behold, it’s back! So my open-to-buy deficit suffered a little setback. The next morning I sold an Infinity Optics Lightshow. Coincidence? You be the judge.

And O, how I hate Blogger! I finally figured out a workaround for their resizing fonts; now when I copy my draft from MS Word, I paste it into Textpad before copying it here. Then I can set the font and restore my formatting. Unless, that is, I decided to add images. First, they aren't inserted where I specify; I have to drag and drop them after uploading. Worse, they remove all of my formatting and reset my post to the default font.

With a database of 140 hyperlinked posts built up over three years, I'm not inclined to move my blog. Neither is Google inclined to fix their lousy interface. So I guess I'll have to content myself with complaining periodically.

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