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, August 28, 2009

Whither the American Consumer?

Hither the American consumer:

Total income: +96.2%
Total COGS: +75.2%
Payroll: +29.5%
Net Income (Profit): +411.4%

Year-to-date:

Total income: +11.8%
Total COGS: +11.3%
Payroll: +17.8%
Net Income (Profit): -76.2%

I beat my sales plan for the first time since April, the cost of goods sold is rising slightly less than revenue, I narrowed the profit gap a wee bit while still increasing my own pay, and the bottom line is showing black ink. Not bad for the worst economy since the 1930s.

So what are my prospects as September ushers in another Christmas season?

The macro economy is rising from the dead. Our regional housing market has bottomed out. Having been settled for nearly 500 years, New England doesn’t have open land to plop down the big tracts of overpriced McMansions that dragged down the sprawl cities. And Yankee thrift prevented the average down payment from dropping much below 20%, compared to near zero in boomtowns like Las Vegas; that means that we didn’t have many new homeowners with negative equity. Housing might not lead us back out of this mess, but at least it’s no longer dragging us down. Even the overbuilt sprawl cities are showing a pulse.

Gloom always sells better than good news so dire warnings are still easy to find. Some economists foresee another plunge as collapsing commercial real estate prices drag down more banks and persistent unemployment keeps the American consumer on the sidelines. Three hundred banks have already failed this year and 111 more joined the “troubled” list this week.

Wise men intone that consumers, bloodied by falling retirement accounts and home values and frightened by persistent unemployment, will remain on the sidelines. As a lifelong tightwad myself, I approve. But if everyone was as thrifty as I am, capitalism would have collapsed a generation ago. I have boundless faith in Americans’ instant-gratification materialism – Curio City depends on whimsy, after all. When they see their 401ks and house values rising reliably again, Americans will shrug off their ill-fitting prudence like a fading nightmare and resume the impulsive and frivolous spending that has powered the economy since the 1980s. When you combine a revived consumer with Obama’s aggressive deficit spending (most of which kicks in in 2010), you have the potential for a real boom – possibly even one whose proportions will mirror the recent collapse.

I’m going to buck the wise men. So remember, you read it here first: Gradual improvement will lead up to a robust December and accelerating growth after that. Year-over-year numbers should look quite good as we go up against last year’s most dire months (October through April).

The other possible scenario is stagflation – we get the slow recovery that economists predict while inflation and interest rates shoot up because of all the money that Washington printed this year. In that scenario we continue struggling for years to come. Let’s not dwell on it.

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I braced for a run on free money when I announced the new Customer Rewards Program last week. Didn’t happen. AFAIK, nobody has used the Refer-a-Friend feature to earn an instant $5. Exactly three new customers have created accounts that generated 3 points altogether. One returning customer might have tried to take advantage of the program, but he failed to log into his account and so didn’t earn any points. I’m glad that customer reward points are not going to break the bank, but mostly disappointed that my big innovation for 2009 flopped. Well, it’s a long-term thing that should build momentum over time. We’ll see how it goes.

Following the SCORE exec’s advice, I have been slowly building up cash and selling down merchandise. My open-to-buy is now in four figures and I can begin acquiring new merchandise just as Christmas season gets started. In fact, my rough OTB formula tells me to spend all of my cash on hand; I need to be careful.

I applied again for another new MC to replace the Advanta card that I lost this spring, but I’m not optimistic. The people at Citizens Bank (where I have my business checking as well as a personal account) are notoriously incompetent. The clerk who took my application insisted that I’m a sole proprietor, and not an S Corp, and could not grasp that my store has one name and my company another. Clerical errors will probably sink this application. Still, I'm holding back on placing orders until I get a ruling on this credit card.

Next week: Curious Business tackles healthcare reform.

Friday, August 21, 2009

Upgrade Today for a Rewarding Tomorrow

Alert the media: I’m finally running Sunshop 4.2.0! The upgrade went smoothly, considering that it was my new developer’s first experience with both the software and my store; I’m encouraged about future projects (like the 4.2.1 upgrade that’s due out within weeks). Now I can finally offer a semblance of the customer rewards program that I envisioned in my original site design four years ago. The trick is setting the values high enough to motivate customers without breaking the bank. Three new customers who placed orders on the Rewards Program’s first day didn’t earn points because they didn’t create accounts, but a long-time customer just earned the program's first points a few minutes ago. Nice to see a newsletter pay off!

I had originally set $10 to earn 1 point, with 1 point being worth 50 cents (a 5% rebate). Anne declared that earning 50 cents is not very enticing. So I decided to make the points more valuable (1 point = $1) but harder to earn ($20 = 1 point). It’s still a 5% rebate, but the perceived value is higher...and I can hold double-point promotions with less confusion than raising and lowering the value of points would cause.

Switchables stained glass night lights, once among my strongest product lines, stopped selling entirely when a new competitor appeared. Apparently this retailer is following the “Tentacles of the Kraken” strategy that I rejected as too labor-intensive for a one-man operation. The new store – one of five that they operate -- is named after the product. It sells the entire line (including dozens of cutesy designs that I rejected). Because they carry nothing else, they can offer cheap fixed-rate shipping – something I can’t match because Sunshop won’t let me define shipping costs by product category. That’s a lot of obstacles for me. They have a bigger (and less thoughtful) selection…they are named after the product…their prices are the same as mine…and they have cheaper shipping. Oh, and a brand new, nicer-looking store, too. To top it off they’re outbidding me on most of my keywords. Bummer. I hate when somebody new comes along to eat my lunch…but that’s capitalism for you.

Well, the lunch was free for a long time. Now I face a dilemma: Should I order the new August styles and try to compete, even though the line has died completely? Or should I just try to liquidate my substantial inventory and cede the business to the new kids?

I have longevity going for me. I worked hard to achieve natural page-one Google search results. Shoppers (like me) who run AdBlock, or who ignore paid search ads, should find my store first. Also, some of the many people who’ve ordered Switchables from me in the past ought to come back for more -- customer loyalty again. I'm still in the game as long as I have those two things going for me.

As long as I’m telling fascinating product stories…DayClocks made a decent comeback when I started discounting them. A quick spot check found only one serious discounter ($24.99 on Amazon.com plus free shipping? WTF?). A couple of other stores are still doing the shady old “free shipping” on an inflated price trick. I reduced my discount by a buck to see what happens. I'd love to get full price for these clocks again.

Incidentally, I want to widen this blog’s focus to include more general thoughts about life, politics, the economy, etc. – the context in which Curio City exists, in other words. I’ve said that before, and I’m sure my legions of fans want to know Curio City’s take on health care reform, for example. Such subjects are more likely to win the attention of social media users as I continue to grapple with Facebook and (moan) Twitter. This week I just happened to have a lot of store-related news.

Speaking of Facebook, see that new signup box in the right column? Yeah, don’t be shy. Click that “Become a Fan” button right now. I’ll send you infrequent announcements and, once I have a few fans who aren’t friends and family, special discount codes, too.

Friday, August 14, 2009

What Do You Want for Christmas?

Noticing winter a-settin’ in got me a-thinkin’ about Christmas merchandise. First I attacked three piles of old catalogs and recycled all but half a dozen serious contenders. (I threw away at least 100). Then I started plowing through my six-month backlog of marginally relevant and mind-numbingly dull trade magazines. Once I’m done with that I’ll whip up some dummy orders/reorders to cost out everything. Then I’ll forecast how much I can spend, and finally pare things back until those numbers match. If this year is typical, I won’t find the best stuff until October anyway. I must resist the impulse to shoot my wad in September. It’s a small wad, after all (sing that to the tune of "It's a Small World After All").

Trade magazines aren’t written for one-man, work-at-home, technologically na├»ve souls like me. The articles often make me glad that my life doesn’t involve mainstream, high-stakes retailing. A few make me despair that my website lags behind the tech curve, and I’m helpless to change it. I am always at the mercy of Sunshop.

Speaking of which: On Sunday my new, post-Eric developer is scheduled to perform his first job for me, upgrading Sunshop from version 4.1.7 to 4.2.0. I’ll write more about that after the deed is done. The new version contains one major new feature, and Turnkey has promised to add some new templates that could offer me a whole new look.

I want to figure out social media before I get sucked too far into Christmas. I need to link this blog to a Facebook page and a Twitter account (both of which I have, but don’t understand), and then figure out how to use it all in concert with my email newsletters. Social media are as much about attracting media attention as actual customers. I do know how to provide a personality -- an often disagreeable personality, yes, but at least genuine.

Finally, I started using Google’s keyword tool to broaden my ad campaigns for a few products – casting a wide net for obscure but effective search terms that I’ve overlooked. I’ll have to winnow out a lot of crap in the process. This is driving up my ad costs in the short term.

Reasons to hate myself: I always log into my bank account to schedule payment immediately after reconciling a credit card statement. I’m sure that I ordered last month’s check as per my routine. But I must have forgotten to click the “Finished” button on Citizens Bank’s crappy interface, because last week I got a late-night overdue payment notice. I logged onto my Amex account and paid them online within minutes. Alas, they’d already extracted their pound of flesh. Forgetting to click that stupid “Finished” button cost me a $38 late fee and $42.81 in interest. So much for the $100 windfall I got for my old computer.

Why hate myself, rather than Amex or Citizens? Because we all know the sleazy games that card issuers play to “earn” fees nowadays. Before the Great Recession, I’d have begged Amex for mercy due to my stellar payment history; post-crash, I know better than to even ask. And the Citizens Bank interface just plain sucks. They are rolling out a redesign next month.

Reasons to hate QuickBooks: The eighth major patch for QB 2009 came out. Number of my previously tagged reasons to hate QuickBooks that were addressed: Zero. I can’t believe Intuit deliberately left the transaction-list sorting bug intact.

Friday, August 07, 2009

Winter's a-Settin' In

Thursday morning I awoke in an uncomfortably cool room. Every year at about this same time a cold front blows in a crystal blue sky...and my pollen allergies. The shadows reach some critical length, the quality of sunlight changes, my tomatoes and peppers reach a certain ripeness, and when I put that all together somehow I just know. Fall is bullying summer in the back yard. Pretty soon summer will run home crying and fall can start its annual killing spree.

“Fall blew in last night,” I told my wife. “Winter’s a-settin’ in.”

That last phrase always riles her up. My mom used to say it. She could detect those same subtle cues that I pick up on, and see the same thing. Yes, it’s still August. Yes, several more weeks of summery weather lie ahead. But the fix is in.

Naturally, Anne thinks I’m nuts. And I am nuts. But I’m right about this.

Imagine my righteous delight, then, when I came home to find an order for the LED Peace Sign tree topper waiting for me. And imagine how a subsequent order for the Recycled Motherboard Christmas Tree compounded my smugness. And then, to top it off, I got an unrelated order from somebody whose surname is “Christmas”. I’m not clever enough to make this stuff up.

Winter’s definitely a-settin’ in.

A jolt of anxiety is probably a good thing, because for the fourth year in a row I have no marketing plan or holiday strategy. Maybe lightning will strike like it did last year. I need to zero in on a few good products, erect some lightning rods, and pray to the gods of greed for a miracle. Without one, I won’t match last year’s phenomenal sales and 2009 will go down the toilet.

At least my open-to-buy is in the black and I’m well-stocked on my major lines. By mid-September I’ll have enough cash on hand to bring in a few of the products I’ve been wish-listing since spring. None of them excite me, but neither does life in general.


Something new to hate about Quickbooks: Each day, I match individual transactions in the “make deposits” window to the day’s actual bank deposits. This window used to sort transactions by date, as you’d expect. In QB 2009, it sorts them alphabetically by deposit type (so all cash transactions, then all checks, then all Discover, then all Mastercard, then Paypal, etc). Since the bank doesn’t discriminate between MC and Visa I have to combine and re-combine mixed charges until I reach an amount that matches the deposit – a minor nuisance now, but it’s going to become a real time-sink come December. The standard Windows sort-by column header doesn’t work. Intuit deliberately broke it. Intuit’s customer service/help desk board has dozens of complaints about this bug and one official reply saying (in effect) “We changed this in 2008. It works the way we want it to, so it’s not a bug. Deal with it.” Users accuse Intuit of breaking this so that we will subscribe to their payment processing service. Intuit might just be the most arrogant software developer I’ve ever encountered – and I used to work in the PC games industry, where contempt for customers is legendary.

Something else to hate about Quickbooks: The 2009 desktop has new icons for “Intuit.com Services”, “Accept Credit Cards,” and “Learn About Payroll Options.” These are advertisements, and they cannot be removed. Here’s a clue, Intuit: Do not spam paying customers.

More hatred for Quickbooks: During a routine backup QB waved its scrawny arms around and shouted “Danger Will Robinson! Your data file is damaged! You need to run Rebuild Data! Danger!” Trying to do so triggered more dire warnings – “don’t try this unless instructed by an Intuit technician!” Screw you; that costs money. You know what the repair utility found? A duplicate template. Now, *I* certainly didn’t create a duplicate template…. And of course QB won’t let me delete a template.

A new reason to hate Yahoo: As soon as I paused my campaigns, I started getting daily emails saying: “There is an issue with the analytics tag for account 'Kraken Enterprises, Inc.-US' [xxxxxx]. Data has not been received since xxxxxx. If analytics data is not received for 46 consecutive days, your analytics will be temporarily deactivated. Please verify your analytics settings and check the tags on your web site(s).”

Of course, my tags are unchanged. I re-enabled Yahoo ads for a few top products; I’ll shut them down permanently after I use up my last $70. Data is flowing, but I’m still getting the same email warning every morning, with the date incremented by one day. Of course, Yahoo’s analytics are useless anyway.

Oh well. Microsoft bought Yahoo’s search business. I hope they nuke YSM from orbit.

An even better reason to hate Yahoo: No sooner did I reactivate those keywords than I got a notice that some are being deactivated because the minimum bids have increased. Yup, they’re raising prices again. My account doesn’t tell me which ones, if any, are endangered.

Something new to hate about my Vorlon (and I really hope I won’t need a tag for this!): The headphone/speaker wire jack is in the front of the machine. Grrrrr. Maybe iPod zombies appreciate having easy access to that jack, but for those of us who keep external speakers plugged in it’s just one more thing that’s constantly in the way. The Vorlon is a great machine functionally, but the ergonomics are really screwed. You’d think Dell would know better.

Oh, and when I run a graphics-intense game, the heat output is phenomenal. I wish I’d known that before I bought the video card upgrade.

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