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, June 26, 2009

June Wrap-up: Worse and Worser

Another month gone by, another year half-gone. Thoughts of Christmas intrude already. They say the Great Recession will be lifting by then.

In June 2008, two extraordinary sales brought in $2,400 above and beyond ordinary daily business. This month, then, “breaks even” at $2,400 below LY if you toss out the outlier sales. A smaller shortfall would count as a gain. I can therefore kid myself that the $2,100 shortfall is a $300 increase over LY, which is not too shabby.

Of course, that’s sophistry. The fact is that this June came in $2,100 below LY and killed my YTD numbers. The week now ending is on track to be the worst of 2009. I’m paying more to maintain the same level of traffic, while both conversions and the average sale are down. I shudder to even compile these numbers, but here we go:

Total income: -41.6%
Total COGS: -45.5%
Payroll: +6.5%
Net Income (Profit): -83%

The YTD numbers:

Total income: +10.5%
Total COGS: +11.9%
Payroll: +42.9%
Net Income (Profit): -73.6%

Payroll is rising at the expense of profit – more money in my pocket each week means a smaller payoff at the end of the year. That’s unfavorable from a tax standpoint (I pay Medicare and Social Security taxes on payroll, not on corporate distributions), but I need the income up front. Anne’s been out of work for almost five months now.

Can I take consolation in the black YTD numbers? Not so fast. July is preparing to smack me down again. This year’s summer vacation comes a month earlier than usual. I have a $950 computer expense to absorb and I’m planning to pay my new developer to perform his first Sunshop upgrade. With a week’s less business and well over $1,000 in new expenses, July will be an accounting Armageddon.


In light of the above this tidbit is just nutty: I cut my handling fee from 65 cents to 60. I obviously need every penny I can get, and customers won’t notice a nickel either way. But the May rate increase pushed the total price of one cap shipped via first class mail from $23.00 to $23.05. Now I’m back at $23 even and my inner purist is assuaged.

Far from making any headway on my inventory-reduction goal, I actually spent all of my OTB and increased my stock position last month. Chalk that up as another failure for June. (shrug) I needed some reorders, and a free freight offer persuaded me to finally test these wooden puzzles. I’d love to find a successful new product line on a par with Switchables, golf balls, or bird kites. Now if only somebody would oblige me by actually buying a puzzle, I'd feel better about that decision. At least the month ended with my open-to-buy $10 in the black. I hate red ink.

My new Vorlon is en route to arrive early next week. Moving in to a new computer is always fun. QuickBooks is the only major headache I’m expecting.

Friday, June 19, 2009

The QuickBooks Crisis II

Prolonged contemplation kept leading me back to three thoughts: Whether I like it or not, QuickBooks is one of the key tools I need to run my business, and it will no longer run on my old hardware. As an Internet business, I need to keep my technology current. And I have a budget for “technology” that I would not have completely drained otherwise (although I am planning to pay for a Sunshop version upgrade in a few weeks).

Dell had a tempting sale on their Vostro line of business laptops (which, as a Babylon 5 fan, I simply must call the “Vorlon”). Vorlons won praise in my source for all things techy, the Octopus Overlords computing forum. The deal I was looking at expired within 48 hours. So I jumped. Yes, I bought a new computer.

On one hand, this is a bad development for all of the reasons that I laid out last week. OTOH, I haven’t had a new computer since 2005, and I’m really looking forward to moving into my new souped-up Vorlon – I upgraded the CPU from 2.1 to 2.4 GHz, added a 256 MB Nvidia video card for gaming, and upgraded to a “wide view” (higher resolution) screen. Obviously, I have to name it Kosh.

Kosh is not due to land until around July 1. I hope this will keep me current for another four years:

Vostro 1520, Genuine Windows Vista® Business Bonus-Windows XP Professional downgrade Unit Price $1,143.00 (Sale price $948, delivered)

  • Operating System Genuine Windows Vista® Business Bonus-Windows XP Professional downgrade
  • Processor Intel® Core™ 2 Duo P8600 (2.4GHz, 3MB L2 Cache, 1066MHz FSB)
  • Memory 4GB Shared Dual Channel DDR2 SDRAM at 800MHz, 2 DIMM
  • Video Card NVIDIA® GeForce™ 9300M GS 256MB
  • Hard Drive 250GB 7200RPM SATA Hard Drive with Free Fall Sensor
  • LCDs 15.4" Premium WXGA+ Anti-Glare Display (Wide View)
  • Optical Drives 8X DVD+/-RW with double-layer DVD+/-R write capability, Roxio and Cyberlink PowerDVD™ DX 8.1
  • Wireless Cards Dell Wireless™ 1397 802.11b/g Mini Card
  • Primary Battery 6-cell Lithium Ion Primary Battery

SanDisk 8GB Hi-Speed USB Cruzer Micro Drive with U3 technology

Friday, June 12, 2009

The QuickBooks Crisis

I reluctantly decided to install the seemingly unnecessary copy of QuickBooks Pro 2009 that I was tricked into buying. When I opened the package I learned that the minimum supported CPU is a Pentium 4 at 2 GHz (a tidbit that I really ought to have noticed when I was researching the software, but never mind). I have a Pentium 4 at 1.86 GHZ. Ordinarily I would figure that 1.86 is close enough to 2.0 to squeak by, but QB is a notorious resource pig. Suppose I go through the install and then find that I can’t run the program at all, or that it slows my computer to uselessness? Some of the reviews warn that one cannot revert to 2006 if the QB 2009 install goes badly. Inserting that install disk is an irreversible act that I dare not risk.

So it seems that I have two choices. I can set aside the $100 program that I bought and continue running my unsupported version until something else compels me to buy a new machine. Or I can lay out $900 for a new laptop now. Do I really need a new computer?

On one hand, it has been four years. As an internet business I do need to keep up with the tech curve. Even if my Inspiron isn’t obsolete yet, it is getting there. I do have a technology budget that probably would have gone mostly for SEO or website upgrades, had I spent it at all. And yesterday I found a sweet deal on a Dell Vostro that, with a couple of upgrades to make it acceptable for gaming, would cost just under $900 delivered. Compared to the $1258 that I paid for my old Inspiron, that's a bargain.

OTOH, spending $900 on a new machine so that I can run a $100 piece of bloatware is ridiculous. The outlay would come directly off my bottom line and reduce my year-end bonus, so even though it's coming out of Kraken Enterprises's pocket, I ultimately end up paying for it personally (although with untaxed dollars, I think). The Inspiron still works fine for everything except QB, and migrating to new hardware would entail recreating or porting over four years worth of settings and customized programs. The new machine comes with a Windows XP downgrade, but that might just be a runtime environment within Vista – might I have to “upgrade” such hoary mainstays as MS Office 2000? Once I install QB 2009 on a new machine, how tricky would it be to import and convert my QB 2006 company file from the old machine? Might I end up right where I started, with an unusable copy of QB 2009?

Crap. I don’t know what to do. That Vostro deal expires today and I am unlikely to find a better value without considerable shopping. One way or the other, it looks like my hand will be forced again, and within the next few hours.


A nice little sales surge late last week finally convinced me to place the full $1,300 cap reorder to get the best pricing and maintain my margin. So much for reducing inventory; my OTB is back in the red, and I still have orders wishlisted. And, as you might expect, sales quickly died again as soon as I placed that big honking order. It looks like Fathers Day is going to be a big disappointment this year.

May's national retail sales actually increased over last year, but that was entirely in automobile and gasoline sales. Real retail sales shrank again. That's some cold comfort for my own lackluster May.


Constant Contact's benchmarks for retailer mailings are 8.0% bounce rate (bad addresses or blocked), 17.9% open rate, and 3.2% click rate. The corresponding numbers from my last mailing are 0.7% bounce, 32% open, and 32.2% clicks. So I guess my results are actually a lot better than I had thought. It’s been over a year since I last purged my list of non-responsive addresses…I could drive my percentages much higher if I did that again. Of course, that wouldn’t change the number of clicks that convert to sales, which is all that matters.

Friday, June 05, 2009

Whining, Grumbling, and Griping

My inventory reduction effort is not making any headway yet. Only golf balls and kites are selling with any regularity now. Even my old standby lighted caps are becalmed. I’m nervous about those. Panther Vision said that they’re slow, too, but that their business usually recovers in June. Let’s hope so; no other product is in the same league. Oh well, the newspaper says that retail sales fell more than expected in May. Maybe the depression is finally catching up with me. I certainly did not see the Fathers Day bounce that I was expecting this week; June is off to a very poor start.

Incidentally, I’ve carried those bird kites since I opened Curio City, and this is the first season that they’ve sold in any quantity. My pay-per-click bids must have finally reached the critical threshold.

The point of all this is that every time my open-to-buy recharges, I have to spend it on golf balls, kites, or caps. I could easily drop $2,000 today to replace merchandise with a decent sales history, and I have 20 catalogs with wishlisted new stuff stacked up...but my OTB is a whopping $679 this morning. I need to reorder $1,440 worth of caps to get optimum pricing, and I’m trying to reduce inventory, remember? Going $800 into the red is not going to help.

Maybe I’ll order fewer caps and swallow the higher unit prices. Maybe I’ll bring in one new product line today. These wooden puzzles that I’ve been eying for years have a free freight special ending today, and their minimum order is only $100.

Advertising costs (meaning PPC bids) keep creeping up faster than sales are growing. Google routinely runs $10-12 per day, and Yahoo adds another $3-4. The temptation to kill Yahoo Search Marketing grows stronger every time they hit my credit card. I don’t think that the $100 per month I’m spending there is driving anywhere near the $1,100 worth of sales that would justify it. I hate to do anything that I know will reduce traffic and sales. But the next time my account runs dry, I’m going to mothball it for a month and see what happens. What better time to try this than the summer doldrums?

I could shut down Constant Contact, whom I pay $20 a month for the capability to send out newsletters. The past three newsletters brought in no known sales. Maybe I suck at newsletters…but it does seem like a waste of money and time. I just sent out 281 emails this week. The 86 that were opened (30%) generated 29 clicks (34%, or barely 10% of the total distribution). AFAIK no sales resulted. Those are very typical numbers.

QuickBooks Pro 2009 is sitting in front of me right now, mocking me. Apparently I foiled Intuit’s evil plan by turning off the auto-updater; my copy of QB 2006 is not visibly crippled. I don’t want to go through the upgrade hassle that I wrote about last week, but I do own this $95 piece of bloatware now. I suppose I must hold my nose and install it next week. I'll soon see just how justified all the griping was.

We haven’t had a new reason to hate UPS for a few weeks, so here’s one: my application for the UPS-affiliated Visa card was rejected. It’s hardly surprising, given that my personal income is about 1/3 of the federal poverty line. But I think my main mistake was applying before my Advanta card was actually closed. Two of the three reasons given involved having too much available credit for my income. OK, I know that UPS really had nothing to do with issuing credit cards…I just thought they were overdue for a little more hatred. Maybe they’ll at least stop soliciting me every four weeks now.

I ought to have a Mastercard or Visa, but nobody’s raining down offers in this tight-credit economy. I could probably get the crappy PayPal card (pays off in “rewards vouchers” that are only good on PayPal purchases), or maybe one from Citizens Bank (anemic rewards program and no online application – I’d have to go inside a bank and talk to a human? No thanks!). No, for now I think I’ll lean on my business Amex and use my personal Chase Mastercard (cash back, yay!) where Amex isn’t accepted. Eventually the credit market will recover and I can get a decent card. Who knows? Maybe Advanta will even come back someday.

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