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.

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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.