Thank Janus It's Over

I should’ve known 2010 would end with a mini-disaster: Sunday’s blizzard took out our Internet access. For most people that means being deprived of funny cat pictures and Facebook chatter. It’s a little more serious for an online business.

I shoveled for three hours on Monday to excavate Anne’s car for the short drive to Panera Bread to pay too much for coffee and free WiFi. But I couldn’t print postage (thank Janus nobody bought expedited shipping!) and therefore couldn’t ship the weekend orders. Tuesday morning, still no Internet. I couldn’t let the weekend go unshipped for another day. Anne figured out that I could at least create my Priority Mail labels at the FedEx/Kinkos shop; I wasn’t sure how I was going to handle First Class labels (USPS doesn’t sell those online). Our cable finally revived shortly after lunch on Tuesday and spared me that effort and expense, but not the anxiety.

Hmm…that’s a micro disaster at best and a boring story at worst. In fact, this post doesn't even merit a "Disasters" tag. It seemed like a fitting end for 2010, though. I was reminded how completely I rely, both professionally and personally, on technology that scarcely mattered 10 years ago. I am a lost soul without the Internet.

Here are the grim (Quickbooks) numbers:

December:

Total income: -9.0%
Total COGS: -14.1%
Payroll: +2.5%
Net Income (Profit): -17.0%


2010 (almost) Complete:

Total income: +6.3%
Total COGS: +12.4%
Payroll: +13.5%
Net Income (Profit): -38.1%

Now it’s time to set 2011’s plan. Ignore discrepancies with the official numbers shown above; I use Excel for planning, and those numbers are typically a little grimmer than Quickbooks.

Sales have more than doubled since 2006, yielding a long-term annual growth rate of about 50%. But as you can see, most of that growth came all at once:

• 2006-07: 14.8% (^ $4,142)
• 2007-08: 61.5% (^ $19,722)
• 2008-09: 15.6% (^ $8,102)
• 2009-10: 2.9% (^ $1,714)

I need to sustain double-digit growth if this business is going to earn me a real living by the time I reach retirement age. But the rate is slowing as the dollars involved increase, my business matures, and both technology and popular culture leave me farther and farther behind. Needing and wanting 20% growth isn’t exactly a sound reason to plan for it. What’s a reasonable compromise between the number that I need and the number that I consider likely on my current glide path?

First, let's consider outside forces: The economy is noticeably quickening. Benighted states like Michigan and Nevada and California probably don’t see it yet, but progress is obvious here in Massachusetts. The $660 billion of new economic stimulus that Obama bought with his millionaire tax bribe will surely fuel the trend. Barring any shocks, the economy will exceed expectations in 2011 as even the worst state economies finally turn around, employment picks up, and consumers get back to consuming.

Counterbalancing that, the activist 111th Congress yields to renewed Republican obstruction and backsliding next week. Blocking new progressive legislation won't actively harm the economy. Real (not symbolic) spending cuts certainly will, though. Mainstream Republicans don’t have the stomach for cuts of sufficient magnitude to start another recession; they eat from the same trough as Democrats, after all. But the battle for control over their party in the 2012 election cycle makes the Republicans a wild card; they could do real damage if their newly energized fringe acquires serious policy influence while the party leadership is focused on destroying Obama (as it has vowed to do).

Does the national economy even matter? If there’s any relationship at all with Curio City, it’s inverse. The deepest year of the Bush Recession (2008) brought my best growth ever. The second half of 2010, when the economy gained real traction, is when my business started to slump.

So let’s set the economy aside and focus instead on my own history. If you throw out the outlier years then 15% is a reasonable growth expectation. Given 2010’s weak ending after a robust first half – as of August I was still running 30% ahead of LY -- I’m pessimistic about 2011’s chances. But 3% growth (or 6% by Quickbooks reckoning) is unacceptable. If that’s to become my new standard, I should pull the plug on this endeavor right now; I’d make a lot more money bagging groceries. So I’m going to split the difference between the 15% that is my birthright and the 3% of recent experience. Halfway between 3 and 15 lies number 9. Being unwilling to embrace a single digit, though, I’m going with a 10% plan this year.

My hunch says that I’ll fall short during the first half of the year and make it up during the all-important Q4, when 2010 unraveled.

Christmas 2010 is probably an accurate baseline. Both 2008 and 2009 enjoyed unexpected stimuli. In 2008, the NYT Gift Guide drove many of the sales records that still stand today. In 2009, the Boston Globe gift guide mentioned Whisky Stones on the same day that my last reorder happened to arrive, while Panther Vision introduced a new cap line. Supply problems created pent-up post-holiday demand for their new 3-LED caps, bringing surprisingly strong numbers during the last two weeks of December.

This past Christmas shows what happens when lightning doesn’t strike.

To bring these numbers down to the pocketbook level: I raised my salary from $10,870 to $12,417 this year. But my raw profit fell from $5,900 to $3,760. That adds up to just $16,177 of the $20,000 that I was looking for and falls slightly below last year’s $16,737 compensation. If I worked 40 hours a week for 52 weeks I earned $7.77 per hour – better than the “20 cents an hour” that Anne thinks I earn, but still a little below minimum wage. Using a more realistic 35-hour workweek brings me up to $8.88/hr. That makes me feel a little better.

Of course Kraken Enterprises can’t really pay out its entire profit. My rule of thumb has always been to take out 75% and leave in 25%. This morning I took the $750 needed to cover the personal income taxes due on $3,760, plus an additional $2,050 in free and clear bonus money to get me through next year’s slow months. That leaves $960 in retained earnings. And although it fell short of expectations, pocketing $2,050 makes me feel better, too.

Officially, this is a stockholder loan repayment, not a shareholder distribution. There’s some obscure advantage to repaying my investment and letting the company keep its whole profit, but I don’t remember what it is. I think it improves the company’s worth despite giving me $2,800. Kraken Enterprises still owes me $17,475 of the $28,500 that I invested in it so there’s still plenty of room for profits in that bucket…for whatever reason it is that I do that.

Next week: Ideas for restoring double-digit growth

Good Riddance to Bad Elves

Christmas finally died last Tuesday after a long illness. It will not be missed. After a second consecutive December decline, I’d love to hibernate until Valentines Day…but when the self-employed rest, we lose. I am already pondering how to better cash in on next year’s spending orgy.


Since my past few posts were so number-heavy, and since I'll have the year-end wrap-up next week, and since I’m currently suffering yet another lousy week, I’ll spare you the nitty-gritty today.

I only lost one Christmas shipment this year, sending a $10 item to West instead of East (Whatever) Street in NYC. UPS apparently lost a 2nd-Day Air shipment this week, although I haven’t confirmed that yet because the customer fell silent after her initial complaint (she’s traveling). Otherwise everybody’s packages got where they were supposed to go. That’s 235 packages in November and 410 (so far) in December. With one more crappy week left in this crappy month, I should end up very close to LY’s 705 shipments – the monetary decline reflects the Curse of the Small Orders that I identified a couple of weeks ago, not an absence of customers. (I’m sorry, I said I was going to skip the statistics!)

The three thefts and two cellar floods that washed more than $1,000 off my bottom line were this year’s lows. New fraud control will prevent those scams from being repeated, albeit at the cost of rejecting some legitimate sales – APO addresses in particular usually fail the metrics (sorry, soldiers). Pray to Neptune that global warming won’t raise the waters again next year.

At the beginning of 2010 I had set myself the goal of acquiring 100 Facebook “fans” by the end of the year. As of today I’m at 112. FB changed “become a fan” to “Like” midway through the year because “liking” something is a lesser commitment than “becoming a fan” of it. The effect is the same, but the goal was easier to reach. FB seems to be spreading of its own accord now – not that I don’t still need the active support of my FB “likers”.

Other items on my 2010 agenda were:

Drop international shipping: Nope, didn’t do it. I was sorely tempted after this year’s thefts (all of them by foreigners), but I’m still reluctant to cut 1-2% off my top line. I'll reconsider if sales recover beyond expectations.

Drop Google Checkout: Nope. In fact, my GC business grew slightly last year. That’s fine; their processing fees are slightly lower than the competition. I hate to see so many of those customers drastically overpay for shipping because of Sunshop's flawed GC integration, but I’m not going to lose sleep if it doesn’t bother them.

Drop Giftwrapping: Nope. In fact, I sold $8 more worth of giftwrap this year than last despite lowering the fee and removing the option from many products. The $124.50 that it brought in is trivial when merged into general sales…less so when committed directly to payroll. Unfortunately, the floods forced me to replace $94 worth of destroyed paper, so the company barely broke even on the deal. I am dropping it from everything that’s bulky or odd-shaped, though.

Cosmetic Facelift: Nope, the unexpected expenses torpedoed that. It's probably for the best, since Turnkey seems to have abandoned the Sunshop template that I was going to adopt. It’s still on my wishlist for next year.

Discontinue Greeting Cards: Yup, wrote those suckers off and folded the department. I might not have done so if I’d known about the other losses 2010 had in store…but I’m glad they’re gone.

Another Raise: Yup, I increased payroll in two steps from 19 to 20% of net. That’s why my paycheck set a record this year despite lackluster sales.

In a couple of weeks I’ll publish a similar punch list for 2011.

Although I don’t celebrate Christmas myself, neither do I fight it like I used to. Why try to harsh everybody else’s buzz? In observance of the holiday (and the impossibility of accomplishing anything this weekend anyway) I’m taking this afternoon off. I’m finally going to finish moving into the new computer that arrived just before Thanksgiving. I might even treat myself to a new game next week...it would be my first in years.

Next week: Counting the money and planning the plan.

If I Only Had the Stones

Week 6 finished at 91% of LY. Not bad. It would’ve topped LY had it not been for the 2009’s Boston Gift Guide stroke of luck. I only foresee setting one new record this year, but it's a doozy. Here are some milestones from Google Analytics and my accounting spreadsheet.

• Most visits in one day was 2,012 on 12/8/08 (New York Times gift guide mention); this year, 514 on 12/8.
• Most sales in one day was 51 on 12/9/09; this year, 39.
• Biggest day ever was $2,168.69 on 12/9/08; this year, $2,099.65 on 2/1 (two huge cap sales on one day).
• Biggest week ever was $6,344 on 12/13/08; this week is going to top $5,000. It ain’t $6,300, but ain’t bad.
• Best 2-week paycheck ever is the one I’ll collect next Friday: $1,900 and still counting. That’s almost as much as I used to make with a real job! Previous record was $1,692.39 on 12/27/08.

Week 7 – the last week of Christmas – opened with the month staggering along at 75% of LY. I feared that Christmas had already died when I had only three paltry sales before I left for Sunday’s 5 pm grocery run…then a rush on Whisky Stones pushed the day to 22 sales, including a few juicy orders for Panther caps (why do these things always happen in clusters?). Being low on stones and with the calendar running down, I killed my Facebook ad and placed a hail-Mary reorder…only to learn on Monday morning that the manufacturer was out. You’d think there’d be enough stone in Vermont, but apparently not. I shipped my last nine Recycled Motherboard Christmas Trees – the product that drove those 2008 records -- to Italy Monday morning.

Monday brought 32 whisky-fueled sales. Tuesday was this year’s high water mark with 39. Where were all these people during Weeks 5 and 6, when I expected them? I gradually lost control of my business and started making dumb (but so far minor) packing and shipping errors as I scrambled to beat the post office’s 5 pm daily close. I stopped answering the telephone entirely and spent many hours in our dark, cold, dungeon-like stone cellar. Wednesday started out downright sedate. And then lighted caps rallied unexpectedly for 25 healthy sales. Sweet.

Financially speaking, it's a good thing I didn't kill myself when it seemed prudent. The week made up all of last week’s shortfall and put a sizable dent in Week 5’s disaster. With 50 more stones I could have recovered completely. Quickbooks, whose word trumps Excel’s, says that sales are currently within a few hundred dollars of LY, so the official numbers I’ll report at the end of the month won’t look nearly as dire as my more useful planning numbers do. Although the Seven Weeks of Christmas are effectively over, sales should remain elevated until Presidents Day, and we’re down to where fewer dollars can change the year-to-year comparisons.



The mouth-breathing knuckle draggers came out this week, too. You know who they are: The customers who overpay for the slowest and least reliable shipping method (UPS Ground), send two frantic emails at 2 AM asking when their order will arrive…and mistype their email address so that I can’t reply. Or they are looking for an order that they never actually completed because the internet is just too complicated (“I’m checking on an order I placed last week to be billed later” Yeah, right…how did you do that exactly?). Or they want to phone in their credit card number and make me place their order because it’s too scary to do it themselves. Or they want pick it up locally and get pissed when I won’t let them come to the house to save $3.

Yeah, those people. I know this is indiscrete – I genuinely appreciate my customers and I am unfailingly polite to them -- but I can’t resist sharing this message from somebody who bought a $10 business card holder:

ATTENTION PLEASE! I am purchasing this as a Christmas gift for a prominent leader in science/academia. Overall, I have been impressed with the reviews but there was a review that I found on amazon regarding this particular product that I found VERY DISTURBING. He had said that the latches did not work and that it was an inconvenience just to open and shut because it would not open properly and would not close properly. He went onto say that the gold latches and such did not appear as nice like the one with the silver latches he had seen from another picture. I think it was because the gold was not bright in color but rather discolored. PLEASE DO CHECK ALL THE LATCHES FOR EASE OF OPENING AND CLOSING AND FOR NICE GOLD LATCHES AND SUCH. Also for SYMMETRY in the apperance of the case outside and inside. The person I am purchasing this for has a Type A personality and is very particular, QUITE PARTICULAR. I believe in customers' reviews and it seems like you take great pride in showing highlighted reviews of highly satisfied customers. Sincerely, xxxxx, PhD Candidate

I talked her off the ledge and assured her that she would get her $10 worth. Don’t take this the wrong way; it’s a great little item that’s sold nearly 600 pieces...but how much can you expect of something that Chinese slaves stamp out by the millions? I genuinely hope that her Curio City purchase will raise this PhD candidate’s status in the eyes of her Type A eminence.

Rant over. Thank you, I feel better now. Venting like this is one of the perks of being self-employed. Yes I’m an asshole, but you can’t fire me!

The Christmas Curse

Week 5 staggered to its knees with 19 sales on Friday, but could still only reach 60% of last year’s corresponding day. Saturday finally broke the small-purchase curse with a whopping 26 sales amounting to 115% of LY. One stellar day couldn’t staunch the bleeding and Week Five ended up at only 60% of LY.

Week 6 took off like a rocket with 27 sales on Sunday; I’d already beaten LY’s total by 5 pm. I spent five hours boxing and labeling shipments and completely failed at my normal Sunday priority: Planning the week’s menu, clipping coupons, returning bottles, buying groceries, and making dinner. This was obviously no normal Sunday. Was the panicked desperation of Christmas finally here?

Sadly, no. I’ll spare you the daily blow-by-blow, but Christmas gradually sputtered out as the curse of the small orders returned. I’m working flat out to ship about 20 orders a day, but the boxes are too small and the dollars too few. Last year, Panther Vision ran out of caps in Week 5 and I sold out in Week 6. With no corresponding inventory shortages yet this year, I had hoped that Week 6 would recoup some of Week 5’s epic loss. Until today I did indeed have a tiny lead over LY. But on this day in 2009 the Boston Globe Gift Guide unexpectedly featured Whisky Stones on the same day that my last reorder arrived; I sold all 36 sets in one day. This year’s Globe guide had only typical mainstream crap. Today’s target number is impossible – I’m currently at $160 vs. $1200+ LY -- so this week will surely finish behind LY again, although not as dramatically as Week 5 did.

In another one of those random acts of media that I mentioned last week, Fuzz Scarves mounted a bizarre run of 13 sales in one hour on Sunday. I had no idea why until one customer added a note explaining that a character in some football game wore one on television.

Just one more week to go before Christmas sputters out. Maybe Week 7 will surprise me…it was comparatively slow LY. This year hasn’t been any fun at all – it went from frenzied buying to whining and complaining in just days, rather than the usual two weeks. Ordinarily people don’t sink into bad humor until next week.

You're a Mean One

Week Five of the Seven Weeks of Christmas was the high water mark of 2009. This year’s Week Five is breathtakingly bad. Superlatives cannot convey just how bad things are going. 2010 is almost certain to see my first-ever year-over-year decrease as this week single-handedly wiped out the gains of the previous 11 months.

On “Cyber Monday” I spent about $70 to lure an astonishing 474 visitors who placed 17 orders, yet sales still didn’t reach half of LY. Tuesday delivered a still-respectable 13 sales, but they were only worth $299 versus a benchmark of $650 – again below 50%. And so it goes, with each day finishing at a third to half of LY’s sales. Today I’m already at nine sales by lunchtime (which rocks) worth $161 (which sucks).

I am not quite ready to open a vein yet. Divorced of context, those wouldn’t be bad sales numbers. Money’s coming in, product’s going out, and I’m busily taking things out of big boxes and putting them in small boxes. Christmas isn’t over for two more weeks and it’s supposed to be a time for miracles, right? What’s lacking is the usual sense of panicked urgency. I am not as frantic as I should be.

So…who stole Christmas? I’m too busy for nuanced hand-wringing, so these thoughts are raw and unsorted.

Too many small sales – or rather, too few big ones. While the problem really is this simple, the solution eludes me. Where are all the people who should be putting half a dozen things in their shopping carts? I don’t think bottom feeders are the problem; I’m not selling more discounted merchandise than usual. I wonder if it’s cell phone shoppers. People’s IQ drops at least 25 points when they use smart phones. They are distracted and rushed and their reading comprehension nosedives. It stands to reason that they would only buy the one item that led them here, especially on a text-centered site like mine. Whatever the cause, this dearth of big orders is my big downfall. In a few minutes I’ll take 15 orders downstairs to pick, box, and ship. If those 15 orders averaged $50 I’d be feeling smug. Fifteen orders averaging less than $20 is unambiguous failure.

I can’t blame the economy unless there’s an inverse relationship at work. My sales were strong while the economy was in the dumper and they’ve been fading ever since it started to revive in September. Maybe big-ticket mass-market items are crowding out the cheap novelties that people contented themselves with when times were harder? It would be comforting to believe that forces beyond my control are to blame…which probably makes it wrong.

I did make some bad product gambles. I’ve written about the infamous Buckyballs several times, but at least those are selling a little bit and I can understand why they’re disappointing. Why is nobody at all going for Jumbo Magic Christmas Trees or Christmas Boots? People ordinarily love holiday novelties. I haven’t even sold a single set of Peace Sign Ornaments, which did pretty well last year. But I always bring in some turkeys every season; it’s just part of the game.

Old standbys are disappointing me, too. Panther Vision caps are doing OK, but not nearly as well as they should be given my advertising spend. Fuzz Scarfs are moving at about 25% of the pace I expected. These things should be sure bets. Are they just too old and familiar now?

Thank the gods for Whisky Stones. At least one product is approaching my sales expectations.

My bush-league marketing efforts are failing – pay-per-click ads have grown too expensive, the competition is too crowded, and – for the first time ever – I didn’t get any serendipitous media this year. Usually at least one product enjoys a gift guide recommendation or a review with a link. This year the media has passed me by.

Trying to milk “Small Business Saturday” instead of Cyber Monday was a really idiotic tactical blunder. Nobody ever heard of Small Business Saturday and it’s meant for B&M stores anyway, whereas Cyber Monday has gained traction in the popular mind. Two shoppers contacted me on Cyber Monday (a first) to ask about sales or discounts, and I had nothing to offer. Even if it was the same shopper twice, that’s an opportunity foregone.

I don’t have the time to work through these thoughts methodically. I’ve just got to get through the next two weeks. I’ll try to make sense of it later.

The Turkey Month

First there was Black Friday, and it affected me not at all. Then there was Cyber Monday, and it affected me not at all. Now, courtesy of American Express, there is Small Business Saturday. Anne told me about it last Sunday morning. I signed up for a free $100 Facebook ad even though the promotion supposedly ended three days prior. These geo-targeted ads hawk physical stores, so it should affect me not at all. Even though the “official” promotion is a non-starter, I sent out a newsletter with a coupon that I still hope will spur more than the one sale it has garnered so far.

When we last saw Week Three, it was dragging behind LY by $850 with a day and a half left on the clock. I had hoped to narrow down that gap by the $450 that I racked up during the corresponding two days last year. But a good Saturday couldn’t make up for Friday’s embarrassing $40 total and the week ended down $600 – my biggest Christmas shortfall yet this year. It would’ve been a weak week even without that $160 customer return blowing a hole in the middle.

Last year a single $1,000 day pushed the otherwise lackluster Week Four (Thanksgiving week) over the top. This year a surprise $750 lighted cap order placed on Thanksgiving morning kept Week Four in the game. Now I just need average November sales on Black Friday and Small Business Saturday to finish the month very close to LY. (My weird accounting calendar puts Sunday the 28th in December).

November:

Total income: -3.7%
Total COGS: +3%
Payroll: -7.8%
Net Income (Profit): -3.9%


Year to Date:

Total income: +12.1%
Total COGS: +23.2%
Payroll: +29.4%
Net Income (Profit): -59.3%

UPS plumped up my COGS last week by losing an incoming shipment worth $124. I’ve filed a claim for reimbursement, but even if it goes through I don’t have that merchandise to sell and I’m carrying a $124 inventory shortage on my books. This year has thrown me one such curve after another.

Inventory shortages made December '09 weaker than expected. That means there’s still a chance that this December will repair the damage of the past few months and get Total Income back to my +15% goal.

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The 900-pound gorilla who’s paying obscene bids for lighted cap keywords turns out to be an amazon.com seller pushing the cheap 2-LED version that Panther Vision created for the promotional market. Although he must be doing amazing volume, he can’t be making much money between his bargain prices and ridiculous advertising costs. Since I don’t carry that inferior product line he’s not a direct competitor at all. He can have his $2.00 clicks. In fact, I gave him a few clicks just for fun.

The manufacturer of Buckyballs is freezing out competition with an absurd $4.00 per click bid for that keyword. The maximum financially justifiable bid for that product belongs in the 50-60 cent range, and 40-45 cents is more realistic. They solicited retailers, required us to sign a price maintenance pledge (no discounting), and then kept us little guys from advertising – pretty slick! I’ve sold a few sets, but it’s nowhere near the star product that it should have been. I’m not going to need a single reorder. I should have believed the instinct that told me it was too mainstream.

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And now I have a personal confession: My attention is not 100 percent focused on Curio City right now (shocking, I know).

My sole hobby is PC gaming – specifically strategy and epic-scale wargames, not the action games that kids play on consoles. When I worked in the industry, I needed to replace or upgrade my gaming PCs every couple of years. But when I traded the lucrative world of game development for the impoverished life of a self-employed shopkeeper, I lost both the compulsion and the means to keep my gaming machine up to date. My current 7.5-year-old gaming rig hasn’t been able to run anything new in the past three years.

Civilization 4 and Galactic Civilizations II are both wonderful games, but even with mods one can only squeeze so much gameplay from them. And so, despite my busy season (and biggest paychecks) being hard upon me (and with the tragically flawed but still compelling new Civilization 5 enticing me) I raided my ever-shrinking savings account to buy a new PC two weeks ago. My screaming new machine arrived from Cyberpower Tuesday night.

To say that both Thanksgiving and Curio City are distractions from what I really care about is putting it mildly. In the three and a half days that I’ve had the machine I’ve only managed to devote a few hours to setting it up…with almost all of that time troubleshooting its network connection. Getting a Win 7 machine onto an XP network is turning out to be trickier than I expected since I’m a newbie with the latest OS and not very good at networking in the first place.

Anyway, as soon as I get today’s orders on their way I’m spending the rest of the weekend doing what I want to do, rather than what I should be doing. I hope that I’ll have the new beast fully up to speed and ready for gaming by Cyber Monday.

On the Third Week of Christmas, Some Shoppers Gave to Me...

Blog entries will be terse between now and New Years as I focus exclusively on sales. I’m largely repeating last year’s posts anyway, right down to griping about leaf removal. The nine or 10 sales per day (16 yesterday!) that I’m averaging now is healthy, but not quite as robust as LY, when the discounted 2-LED caps were flying out of here.

Week Two ended up a little short of LY. O Veterans Day, why did you have to fall on a Thursday? You encouraged the Normals to take 5-day weekends, and you know that sales plummet when office workers are trapped at home with their idled children instead of happily shopping on the job. Together with Week One’s tiny surplus, the month was flat going into this week.

Week Three (ending now) is also falling short. The large customer return that I authorized last week sent Tuesday deeply into the red. It barely clawed its way back out of the grave (yeah, I’m watching Walking Dead) but the week never recovered from that setback (barring a miraculous resurrection in the remaining day and a half).



Last year’s Week Four included a negotiated $450 cap sale. There’s nothing like that on the horizon this year, although one company has been playing coy for weeks about buying a dozen caps. Next week’s prospects look grim with that big holiday squatting in the middle, and the Christmas season is half over.

Credit card sales seized up completely at one point. PayPal ordinarily makes up no more than 15-20% of my transactions…and usually the smallest ones, as people tend to use PayPal as a spare-change account. Last weekend PayPal suddenly accounted for 90% of my sales. Even perennial also-ran Google Checkout picked up a bit of share. I feared that credit card processing was broken.

My batch didn’t settle last Wednesday night. No biggie; it’s happened before. I batched out manually on Thursday morning and sent them an email, to which they replied that they’d done some routine maintenance and my account was overlooked in the cleanup. That’s when charge sales fell to nothing. My test transactions were fine, and I still got one or two real charges on Friday and Saturday – just enough to assure me that nothing was actually broken.

Small sales could partly explain the over-abundance of PayPal transactions. But I think Americans are trying harder to park their credit cards this year. I suspect that if I could distinguish debit from credit sales, the former would prevail. I would applaud my countrymen’s worthy efforts if Curio City didn’t depend upon them impulsively buying unnecessary stuff.

Credit cards came back from that dramatic fade, but I’m actually seeing more Discover charges as people try to maximize their cash back. Seeing my PayPal balance surge past my checking balance is creepy. PayPal has the advantage of paying instantly, and they pay a token interest rate on balances each month (just a few cents)...but their processing fees are the highest.

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People are splurging on giftwrapping. I used to hate how it slows me down while the trivial amount collected (all of $51.50 last year) gets lost in the bottom line. I’m much more kindly disposed toward giftwrapping since I started diverting those fees to payroll this year. So far it’s put $95 directly into my pocket.

Here We Go Again

Every fall, I tremble before my November and December sales targets. I don’t care for Christmas personally, but professionally it’s everything. Right now we’re still in that relaxed phase when holiday sales are building steadily, but shoppers’ sense of urgency is still two weeks away and their desperation is farther out still.
Where on earth do people get all the money?

My paycheck today – the first of four healthy ones that I earn each year – works out to $7.75/hour based on two 35-hour weeks – higher than the federal minimum wage and only slightly below that of Massachusetts. Not bad! I’m going to raise payroll from 20% to 20.25% of net sales if I achieve my 15% planned sales increase in this difficult year. Of course, every dollar that goes into payroll is a dollar that doesn’t go into my profit payout at the end of the year. Without sales growth it’s a zero-sum game.

Week One just barely beat LY, but a large customer return that I authorized yesterday will wipe out that small gain (and then some). This week petered out after a very strong start; it’s still achievable, but it’s another nail-biter.

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Four customers have selected “I clicked an ad on Facebook” since I added that choice to my optional “How did you find us?” dropdown list. Absent tracking code from FB, that’s my only ironclad evidence that FB advertising works. It’s certainly driving traffic; the “referring sites” category has gone from 15 visitors a day to 100, and Facebook is the single biggest referrer. What I can’t measure directly is sales conversions. I did get this message from somebody who saw my FB Switchables ad:

This is an extremely good idea. I am sharing this on Facebook. This is genius :-) The ad caught my eye. This is an EXCELLENT CHRISTMAS IDEA as well, to new home owners, people with new babies (or even old babies :-) (…) I shared your weblink with my FB friends (about 300) and will do so again because the idea is awesome, and your prices are very, very good for the quality and detail.

That alone is worth FB’s sky-high ad rates.

My biggest current worry is spending obscene amounts on advertising while just barely eking out my sales numbers. Keyword bids have gone insane – some genius is bidding $2.50 per click – not per conversion, per click -- on Buckyballs. Even an unrealistically high 5% conversion rate would mean paying $50 per sale of a $30 product. Nobody can compete with that…which is how it works. Astronomical bids ensure you top placement, but your actual charge is what it costs to beat the next-highest bidder. In other words, if the second-place bidder is “only” offering 75 cents a click, then our 900-pound gorilla’s $2.50 bid really costs him “only” 76 cents. If the number-two bidder calls his bluff and goes to $5.00 then suddenly the original gorilla is actually paying $2.50 for second place, while the usurper gets the top for $2.51. It’s a high-priced game of chicken that I can’t begin to play. Keyword inflation is happening across the board. Every time I go into my accounts to pare back my bids, I end up raising them instead just to maintain my positions.

Buckyballs are this year’s biggest disappointment, btw. I was sure that they were this year’s Big Thing before I found out that I can’t afford to advertise them. They’re getting some clicks, but nobody’s buying.

Actually, scratch what I said above; my biggest current worry is raking the yard. Every year I vow that I will hire someone to do it for me next fall; every year, I can’t afford that. So I’ll lose 2-3 hours each afternoon for most of next week (getting dark at 5 pm doesn't help). We have a tiny lot, but a lot of huge old trees. And now I need to eat lunch, box and ship orders, and start raking. What a smegging waste of time.

I Fought the Web (And the Web Won)

Technology seldom beats me outright. Oh sure: constant change, complexity, and expense bedevil me as much as the next guy. I don’t understand smart phones at all, for example, or why we need to pay $110 a month for dumb cell
phones on top of $120 for normal phone/cable TV/internet. I know only the rudiments of using the DVR. I don’t own a MP3 player and I rarely take my cell phone out of my office. I haven’t been able to run a new game on my 7.5-year-old gaming PC for at least three years now. I have never seen a Blu-ray disk. I am, in short, permanently stuck circa 2005.

And yet, the years that I worked in software development equipped me with the basic skills to muddle through this whole internet thing. When I can’t solve a problem myself, I know where to seek help. Persistence and money usually bend technology to my will. Usually. Some problems can’t be solved.

The PayPal Checkout Loop goes back to at least 2007, but that’s a Sunshop bug – there’s nothing I can do about it. Turnkey can’t fix it because I can’t reproduce it, and since nobody but me has ever reported it it is likely to endure forever.

The Admin timeout bug has plagued me ever since I moved to MochaHost. It’s caused by an operating system setting on my shared server that they refuse to change – unless I upgrade to a dedicated server or change hosting companies, I must continue logging in every 24 minutes for the rest of eternity, like Desmond pushing his button. At least the island doesn’t move when I blow it off, Brother.


Now we can add USPS shipping times to that short list. Here’s the background that I wrote back in February:

In January the USPS raised rates on Priority Mail and Express Mail; First Class and Parcel Post rates stayed the same. Customers usually choose the least-expensive Parcel Post option, and I've always upgraded those orders to either UPS Ground or Priority Mail. The upgraded price is still at or below my actual cost, the customer gets better service than they paid for, and everybody’s happy.

Or was until now. Priority Mail rates went up and Parcel Post did not. That means that my shipping costs rose while the fees I collect – which come from rate table lookups -- didn’t. The advent of zoned pricing sometimes makes West Coast upgrades a losing proposition. Shrinking the small spread between fees collected and costs paid out is harming my bottom line.

To rectify that, I could:
1. Raise my handling fee. But that penalizes my First Class, UPS, and east coast customers.
2. Increase product weights. But that punishes my most desirable customers – those who buy multiple products at once.
3. Eliminate Parcel Post. But taking away the lowest-priced option would make my shipping charges visibly higher and harm a competitive advantage.
4. Leave everything unchanged and accept the smaller spread. But that makes it more difficult to reach my sales plan (which I calculate based on net sales after shipping costs) and ultimately comes out of my pocket.
5. Actually ship via Parcel Post more often. But shipments that now take 2-3 days would take 7-10 days. Customers won’t like that.

An attentive reader suggested a sixth solution: Show customers the transit times. If they see “Priority Mail: 2-3 Days” and “Parcel Post: 4-10 Days”, most will pay the incremental cost for Priority, my rate spread will be covered, and profitability will improve. Brilliant! I just need to edit the shipping method dropdown list that appears in the shipping estimator and at checkout. That’s, like, five minutes’ work at the most, right?

Yeah, about that. USPS domestic, USPS international, and UPS each have a shipping module consisting of a single small file. When I edit them in Textpad my UPS text shows up immediately. USPS text never does. So is it stored somewhere else? The independent developers in Turnkey’s Modifications forum keep referring me back to the same USPS.php file that’s not working. Turnkey itself remains silent; they’re not obliged to support user mods. In one last shot at ending the stalemate, I prevailed upon my developer to investigate. His verdict:

Usps.php has an install method that clearly writes this stuff to the database when the module is "installed" and it looks like checkout is calling a function in global.php called "get_shipping" which really looks like it's reading from the database to generate dropdown options... but I don't know how any of this stuff ties together... so I could be way off base.

I do see something that looks like it might be setting up a http call and parsing a response in usps.php as well... so maybe it's a web call. *shrug*

I'm fairly confident it's not reading values from USPS.php (that would be... extremely idiotic)

Turnkey hasn't made this very straightforward... so it’s not trivial to figure out how that's being generated.

If you want me to figure this out I will, but you're going to have to give me a few weeks to find time to do some hardcore reverse engineering and put up with me hacking up (and very likely breaking) your shipping functionality for a bit while I troubleshoot.

Higher shipping charge receipts would eventually recoup the cost of hiring Brad to reverse-engineer this function – assuming that he can “fix” it at all; if the text is being passed from the USPS server along with the rates, I’m just screwed. And “eventually” is a long time; I can’t afford any more unplanned expenses in a year that’s already been hammered by them.

So I am back to Square One. Right now I’m still absorbing the increased costs. If sales were running anywhere near plan I might remove the cheap Parcel Post option; very few other shops offer it. But sales have still not crawled out of the crapper that I plumbed last week; I can’t risk doing anything that might flush them deeper.

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Speaking of last week…Forget everything I said about Facebook advertising. Turns out that I can advertise products directly, so I started with an ad for my old warhorse, Panther Vision caps. After a week my exhorbitant 75-cent bid bought 5,555 impressions without one single click. Crap. On Monday I added Switchables and Buckyballs to my campaign. On Tuesday I reordered golf balls and started advertising them. As of this morning Switchables has racked up 54 clicks, golf balls have 45, Buckyballs have only six, and Panther caps remain stuck at 0. FB’s tracking code is in beta, so I can’t be sure, but I don’t think that the $27.75 I spent this week brought in a single sale. Click-through rates are abysmal on FB, and the cost to buy impressions is very high. As nice as it is to see overall traffic spike past 300 daily visits (!), I can’t afford this for very long.

FB’s infamous intrusion on its members’ privacy is its main appeal to advertisers: I can target my ads very narrowly based on the interests that users willingly reveal. I’ve decided to cough up $50 of my own to prolong this experiment for another week; if I can figure out how to use this precise targeting to reduce my cost, it's worth flogging through Christmas.

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Speaking of the crapper…Christmas is finally starting to crawl out of it. For the rest of this year I’m throwing plan out the window; I just need to match LY. At the moment sales are running 22% behind last year with a day and a half (21% of the week) left to go. It’s going to be tight, but I might just barely make my nut for this important first week of November. It’s a fairly big nut.

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Now that the voting is over I can get back to being my usual level-headed, moderate self. After one parting shot at politics, that is.

After spending $250 million on midterm campaigns, corporate America has got the Congress it paid for. I’ve cut next year’s planned sales increase by 50% to reflect the two additional years of economic stagnation that voters just ratified. There will be no second stimulus package. There will be no more unemployment benefit extensions. The economy has been cut loose.

Americans did not vote the Republicans in so much as they voted the Democrats out. Republicans owe their gains to two factions (apart from the Tea Party’s billionaire backers), and the fate of their party depends on which one they reward. Their main support in 2010 came from the same independent, moderate voters who flocked to Obama in 2008. These swing voters expect them to work with the Democrats on solving this country’s real problems, and they will desert in 2012 if they don’t see tangible progress. Republicans would be wise to deliver it. The other faction -- Tea Party extremists – promised conflict and confrontation. Their uncompromising ideological purity, if indulged, will ensure that nothing gets done. Republicans certainly owe them some grand symbolic gestures, like introducing a doomed health care repeal bill, but they would be unwise to give them anything substantial. Tea Partiers have no alternative to voting Republican so the party need not kowtow to them.

This struggle for control over the Republican Party is fascinating fallout from their recent victory. I’d actually feel sorry for Republicans if the poor and middle class weren’t going to be the main casualties of this power struggle.

My home state of Massachusetts successfully fought off the Republican wave entirely. They did not win a single position of consequence here. Our Commonwealth remains solidly blue and unashamedly liberal after roundly rejecting budget cutters and tax cutters. So I’m somewhat insulated from whatever shenanigans they pull in Congress – except inasmuch as the harm that they do to the national economy drags Massachusetts down with everyone else. Nobody’s going to take away our universal health care or gut social programs or repeal our rights here, so I can be sanguine about developments that are alarming progressives elsewhere.

From Curio City’s point of view, two more years of tepid economic growth are the most chilling result of last Tuesday’s election. This business was predicated on rapid growth to bootstrap from zero to a living wage. The Great Recession already trimmed my sails; Republican-induced stagnation could ultimately sink the ship. It just depends on how much longer I’m willing to keep bailing.

October Numbers, November Politics

The slowdown in growth that began in July and intensified in August and September has turned negative. This October wasn’t the first month ever to finish behind last year, but it is the biggest decline ever. This week started out strong. Then yesterday came in at $10.66 and a return drove today (so far) $13.68 into the red. Net sales for the past two days: (-$3.02). Total for the corresponding two days last year: $363.66. Every time I think I’m cruising toward a decent paycheck, a lull like this one takes the wind out of my sails. These blips smooth out over time, but they’re downright frightening as they occur.

October:

Total income: -18.2%
Total COGS: -10%
Payroll: +52.9%
Net Income (Profit): -19.8%


Year to Date:

Total income: +14.8%
Total COGS: +27%
Payroll: +31.9%
Net Income (Profit): -66.6%

Year-to-date sales are now running a smidgeon below plan as we go into the most critical months. November’s targets are intimidating. Increased costs have cut my YTD profit by more than half. At least I’m in the black -- many stores don’t see that until November. In light of current trends I’ll be content if 2010 can just finish even with last year (which was lackluster).

My Google AdWords spend, which historically has hovered around $10/day, is routinely exceeding $20 as the page-one placement price of many keywords skyrockets. Words that for years have cost me 20 or 25 cents now start at 65 cents and range well over a dollar a click. I raise my bids by a nickel one day and find the threshold a dime higher the next. Someone’s using the 900-pound gorilla tactic that Wal-mart uses to destroy local businesses: Use your deep pockets to run at a loss while you overwhelm a market, then establish profitability only after all of your competitors are dead. That’s the only way I can fathom someone paying $1.25 a click for a $20 product.



Despite losing page-one placement to these bid bombers, my $20 still buys 80-100 clicks a day. Traffic hovers a bit over 150 daily visitors. Conversions are steady at around 2.3% and the occasional large sale keeps the average purchase in the $40 range. I’m starting to get a little traffic from Microsoft’s AdCenter now. Tuesday’s newsletter to 372 subscribers got 96 opens (26%) and 24 clicks (25%)…yielding zero sales despite a free shipping coupon. In other words, all of my metrics look pretty good…so what gives?

I turned off Firefox’s AdBlock in order to see Facebook ads after they sent me another $50 coupon. Most retailers run product-specific ads linked to a dedicated product tab on their FB page. That’s predictable; targeted traffic always converts best. But I can’t figure out how to create that product tab. Maybe it’s because my Curio City page is a subpage of a personal account that I don’t use, rather than a top-level page itself. Or maybe the big players have developers customizing their FB interface for them.

Well, I do have my ShopBuddy tab and I can edit that product feed. Should I list (a) just a handful of top products; or (b) most of my catalog with the worst junk stripped out; or (c) my entire inventory? Is my goal selling products through ShopBuddy, or using it to drive traffic to my site? Should I focus people on a few likely sellers or draw them in with variety? I have to decide and write my ad this afternoon if I’m going to use that $50 credit.

OK then, decision time: People use FB primarily to kill time. Therefore, they’d rather browse a large inventory than be shown just a few things. I’m going to go with option (b) above – show them everything except the crap that I’d write off if I could afford to.

This is one of those times that I wish I had coworkers to blame when I make the wrong decision. Well, at least that $50 credit makes it a cheap education.

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I’m indulging in a last political ramble before the midterm elections. Next week I’ll probably permit myself a little hand-wringing, and then I’ll banish politics from my business again.

When politicians say “small business” they mean firms with fewer than 500 employees. That’s a big business in my book. None of the federal initiatives offered to date affects a one-man, owner-operated concern; in fact, as we sank into our health insurance crisis I discovered that owner-employees are explicitly excluded from those subsidies. Tax policy is irrelevant to an operation as small as mine, hence a political platform centered upon tax cuts is spurious at my scale of existence.

On the large scale, tax cuts are stimulative if taxes are too high to begin with. Federal income tax rates are now at historic lows thanks to Bush’s huge unfunded cuts (which gave us a bubble, not a boom). Raising or lowering taxes on the working poor makes little difference because we don’t pay very much to begin with. The rich, who benefit greatly from tax cuts, squander their marginal income on exotic vacations, luxury cars, yachts, political contributions, and other extravagances like the rest of us can scarcely imagine – when they spend it at all, that is. Mostly they invest it in esoteric ways to make even more money.

What my company needs is not lower taxes, but more demand. You don’t get that by taking a few bucks less each week from a struggling person’s paycheck. You get it by instilling confidence in consumers. In the short term, that means creating jobs, and you do that with government spending. Corporations are already sitting on $1.5 trillion in cash reserves; they’re obviously not inclined to buy employees with it. Meanwhile this country’s transportation, water, and power systems are crumbling. Not only is the era of epic public works behind us…we can’t even maintain those that our forebears built.

Today’s obsession with jobs drowns out the long-term conversation we should be having about the emerging post-employment economy. Traditional jobs, where you work for somebody else at a place of employment and collect a regular paycheck, are dying out. More and more workers find ourselves permanently sidelined. A few of us manage to start businesses or invent self-employment…a few more of us can retrain for the specialized job openings that still exist…still more of us turn to the black market economy…but most of us just sink into chronic poverty. The poverty rate in America is at an all-time high. We should be asking what happens to those who will never have jobs again, as well as the undereducated youngsters who will never hold one. Jobs that have been automated or exported do not come back, and the industries that will create new jobs require higher literacy and numeracy skills than high schools impart. Even the armed forces, our historical employer of last resort, no longer accept uneducated cannon fodder.

Neither party will ever start that conversation, but the Democrats are tacitly addressing it with a more robust role for government. We need a bigger public sector, dramatically higher taxes on the rich, and a livable guaranteed minimum income for the dispossessed. Social Security and Medicare must be fully funded and expanded. Nobody should face a Dickensian doom after losing their job and their health insurance, yet that is exactly the past that Tea Partiers pine for.

To restore demand and revive the economy, let's redistribute the obscene wealth concentrated at the top to the working classes, who will spend it of necessity. The superrich hold more wealth than at any time since 1928 while the middle class's purchasing power steadily erodes. Let's emulate the social democracies of Scandinavia and Europe that consistently rate the best quality of life. (Yes, I know that France took the #1 ranking this year; and no, nobody admires France!)

How we'll pay for that is beyond the scope of this post, but it's not as hard as you'd think when you put our $700 billion military budget on the block.

Kraken Enterprises will never create a single job other than my own. Employees are parasites – I know: I was one for 35 years. I do create jobs indirectly when I buy from wholesalers and manufacturers. Someday I will outsource my shipping to a fulfillment company and contribute to someone’s job that way. I’ll probably hire marketing and SEO expertise at some point. I’ll contract for developer support more often. I might even leave Sunshop behind and build a custom website someday. All of this creates income for others without burdening me with employees. I’d only need to rent an office and hire helpers if Curio City grows much larger than I expect, and even in that worst-case (best-case?) scenario I can’t imagine employing more than one or two people – certainly never enough to trigger the health insurance mandate, which is 10 employees in Massachusetts and will be 25 (or is it 50?) under federal law. Health insurance should be delivered by the government, not by employers.

Ah, well. All indicators say that Americans are going to go in exactly the wrong direction on Tuesday. Unfettered capitalism and under-taxation got us into this mess; surely they will get us back out, right? So here comes my futile exhortation to vote against the Tea Party know-nothings “where truth and science and facts don’t weigh in”. Despite knowing full well that I won’t change any minds I at least feel better for getting it out of my system.

Progressives can only grin and bear it. The Senate minority leader says “The single most important thing we want to achieve is for President Obama to be a one-term president.... Our single biggest political goal is to give our nominee for president the maximum opportunity to be successful." Yep, that’s their agenda: destroy Obama at all costs, even if that means hobbling the economy for two more years. If there’s any justice, the blind obstructionism that's bringing them to power now should set up a backlash in 2012.

Should You Sit Out This Election?

“If voting changed anything, they’d make it illegal.” –Emma Goldman

This election cycle finds me wearing the halo of the small businessman. As the improbable economic hero of the hour I claim the right to preach politics. These few short paragraphs won't change your party affiliation or your core political beliefs, so don't be afraid.

Pundits say that voters are about to sweep away the people who failed to restore prosperity in the past two years and replace them with the ones who ruined it in the first place. I see little evidence of anti-incumbent fever here; Massachusetts is better off than most states. But Americans have short memories, shorter attention spans, and even less patience. They just might be foolish enough to throw the bums out and reinstall thieves and cutthroats.

Over the decades my economic philosophy has spanned the spectrum from socialist to libertarian; morally, I’ve been consistently licentious and anti-religious. I voted for third parties and independents in every election except for Gerald Ford and Barack Obama. I voted for Ford because he was a friend of my dad’s, and how often do you get to elect someone with whom you’ve had coffee? I voted for Obama because I trusted him to sweep away the last eight years of Republican misrule that destroyed our economy.

The Great Recession pushed me back to the left. Our epic struggles with health insurance, as documented in this blog (see “health insurance” in the Labels list at right), made us staunch supporters of reform. Unemployment benefit extensions, the federal COBRA subsidy (and COBRA itself), and our state Medical Security Program kept us clinging to the bottom rung of the middle class; without them we’d have joined the ever-growing ranks of the poor. Thank the gods we live in the most liberal state with the most generous unemployment benefits in the US! Republicans tried time after time to eviscerate these lifelines; time after time, Democrats fought to preserve them. It’s obvious which party was on our side.

Today I am more sympathetic to the Democratic Party – or, more accurately, more hostile to the Republicans -- than I’ve ever been. This is not to say I’m a Democrat, though. I’m still independent and plan to vote for at least one liberal Republican in our state contests.

With my biases laid out for all to see, let’s get down to it. We have four choices on Election Day:

1. The old-line forces of evil that got us into this mess (a.k.a. Republicans);
2. The incompetent sellouts that failed to get us out of it (a.k.a. Democrats);
3. The anti-government extremists who are financed by the old-line forces of evil (a.k.a. Tea Partiers); and
4. None of the above (i.e., stay home).

Conservatives face an interesting dilemma. Your long-entrenched powers are losing control over the party to well-bankrolled ignorant and misinformed media darlings. A party agenda shaped by Tea Partiers would consign the Republicans to the fringe for many years to come, and I find that tempting. But the American political system works best when two evenly-matched parties fight over the middle and temper one another’s worst impulses. Conservatives should shun the Bush-era veterans who destroyed our economy, because they’re unashamedly promising more of the same. You should also shun the fundamentalists who will destroy your party if they gain power. That leaves you with supporting moderate Republicans where you have that option or staying home where you do not.

I mostly want to talk to progressives. We’re disappointed with the Obama administration and its Congress. They have so ceded the political narrative to the right-wing hate-and-fear machine that even their successes are twisted into political liabilities – a strange failing for such a mediagenic figure. The stimulus package is reviled even though economists agree that it averted economic collapse and should have been larger. George Bush’s TARP has been painted as a Democratic giveaway to greedy bankers, even though most of the money has been paid back – with $25 billion in interest. While the voters expected bold, New Deal-scale jobs programs we instead got a Republican-designed healthcare giveaway to the entrenched interests. Rather than fight for the single-payer “Medicare for All” system that we really need Congress enshrined private insurance coverage in law and condemned employers to forever deliver it. Extending coverage to 30 million Americans while reining in the insurers’ worst abuses is a laudable achievement, but we all know that it doesn’t address the crisis of rising prices.

So we have little enthusiasm for the Democrats (if indeed the pundits are right about that; early balloting suggests otherwise). They compromised repeatedly to evoke bipartisanship that never materialized while the Republicans somehow made a virtue of blind obstructionism. Who wants to vote for sellouts and cowards? We have no left-wing insurgency comparable to the Tea Party, but if we don’t support beleaguered Democrats the progressive agenda will be overrun by flag-waving fundamentalists. From global warming to energy policy to rebuilding infrastructure and creating jobs, there is still much to be done. You should only skip this election if your choices are limited to conservatives or turncoat Democrats. Obama isn't on the ballot; don't throw away your vote to express displeasure with him.

I have nothing to say to Tea Partiers. As a mercy to my readers I deleted six futile paragraphs of facts and logic because ideologues are impervious to those. They embrace that which supports their beliefs and reject everything else. It’s up to the rest of us to ensure that the Christine O’Donnells and Sharron Angles and Sarah Palins and their ilk remain amusing entertainers on the fringe.



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By the way, my new Facebook blogcaster displays a thumbnail of my blog itself when it doesn’t find any graphics in the post. Since that’s boring, I’ll be embedding pictures more often than not. Sometimes they’ll be more relevant and interesting than others.

I rather like this one.

Flow My Cash, the Merchant Said

Eighteen months of unemployment honed my skill at redlining budgets. I used to preserve generous margins for error, even though I rarely err financially. Now those comfy cushions are gone. I often drain my accounts down to their last $5.

That’s safe with my meager personal finances. It’s more chancy with our household finances. It’s downright dangerous when applied to Curio City. For the first time in five years, I may have frakked up.


If September sales were worrisome, October is downright frightening. Only five days have beaten last year and I haven’t hit my plan even once. The income that I was pre-spending isn’t coming in, but the bills are. I’m averaging a decent five sales a day but too many of them are in the $10-15 range. Five sales a day at $40 is about where October should be. Five sales at $10…well.

And yet, spend I must. This compulsion could be a sign of the apocalypse, so alien it is to my nature. Skyrocketing keyword prices have doubled my advertising spend even as sales decrease…but cutting back on advertising would be suicide. After waiting literally for months for the supplier of my bestselling 5-LED Cap Light to restock, I finally gave up on them and found an alternate source – one who also sells a color version. Woo! This will be a surefire hit. But, of course, I had to spend money to bring them in. (Those links won’t work until the products arrive next week).

So I’ve deflated my cushion (I keep reminding myself that investing it in Christmas merchandise could pay off better than the $2 it’s earning in monthly interest). As of this morning, bills are outpacing cash by $1,600. Receipts between now and the end of the month might or might not cover that gap. I might carry a small credit card balance for the first time ever. That wouldn't be the end of the world, but it would feel like a frakup.

Well. October’s only halfway over and I have one good-sized sale in the pipeline (I’m waiting for a paper check to arrive for a deal struck a month ago). Lighted cap sales revived after I bid up my keywords and hopped up the page text to seduce Google. The next two weeks probably won’t reverse the damage from the first two, but they could at least stop the slide.

Curio City isn’t the only one who needs cash. Anne’s birthday is two weeks away, my packie’s huge fall beer tasting is almost upon us, the Boston Globe bill is due again, and I’ve got all of $17.74 in my checking account.

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Weird footnote: More than half of this week’s orders came from Texas, California, and Florida. I don’t know why. Under the “How did you find us?” dropdown one customer chose “You were linked in a blog or online article”. Really? Another said “Heard about you on radio or TV.” Wow. She probably saw Panther Vision caps on TV – one of the shopping channels used to sell them…if that’s begun again it would explain the cap revival better than my feeble efforts does. Believe it or not, most consumers don’t understand that retailers and manufacturers are different entities; many of my customers think I’m Panther Vision. I don't care if they think I'm Satan Claus as long as they place those orders.

The Good and the Bad

As much as I fret and complain, you might wonder why I do this for a living. I’m not a risk-taker or a capitalist or even a consumer. I don’t care about buying and selling. I don’t follow popular culture or keep up with technology.

I do it because it’s the only thing I know how to do without any education or training. It uses skills I picked up haphazardly over the decades. I need to pass the years productively until I retire or (more likely) die in harness. So what consolations does Curio City offer me?

Things I Like

I love being in control of my schedule. Freedom is the single biggest tradeoff for living in poverty. I don’t need anyone’s permission to spend a day tending to my garden or household chores. Business is slow? This week I cleaned the oven and mopped the floor. Living la vida loca!

I love being responsible only to and for myself. I never do busy work for appearances sake. My labor doesn’t further enrich some rich guy. Although I might fail, I can’t be laid off and if I’m not at the mercy of somebody else’s competence. Nobody else's fate depends on my performance.

I like statistics. I enjoy the accounting aspects when the numbers are good.

I like order. My wife, who was raised by wolves, lives in perpetual chaos and upheaval. Curio City is a tiny oasis of order. Plans are made, budgets are followed, accounts are balanced, bills are paid on time, loose ends are tied up, and trash doesn’t become clutter.

I like the way my paycheck tracks my results. I make more when sales are good and less when they’re poor. I get nice big checks when I’m working flat-out in November and December. I earn next to nothing during the summer drought, but I don’t have to work very much.

It has potential. If everything breaks my way, I could earn enough money to survive on and own a salable business by the time I’m eligible for Medicare. That’s my pipe dream, anyway: By the time I turn 65 (in 12 years), either hire someone else to run Curio City while I just skim off the profits, or sell it and live off the proceeds. Unfortunately it needs to be an order of magnitude larger for that to happen. The Great Recession was a major setback and I'm moving in reverse at the moment.

Things I Don’t Like

Uncertainty. Half of my annual income comes in November and December. Spreading the other 50% over the other 10 months yields laughable little paychecks. I’m thinking about level-funding my payroll next year. That is, I’d figure out my average weekly pay based on this year’s paychecks and then parcel that out evenly through the year, keeping enough of Curio City’s holiday windfall in the bank to subsidize the slow months. Of course, doing this would break the workload/reward mechanism that I listed under “likes”, and it doesn’t affect the next point:

Low pay. If I did level-fund my salary, the bi-weekly check would be uniformly disappointing with nothing to look forward to during my busy season. I do get tired of being chronically broke.

Slavery. I can never go home from work. I can never take a true vacation. I can never call in sick. There is no such thing as a holiday or a day off.

I’m on my own. Nothing ever gets done unless I do it. Nobody else ever has insights or initiates anything. When I suspect that something might be wrong, I have to figure it out myself. For example, the sales decline that began in July is still gathering speed. I blame lighted caps. Last fall they were blowing out at record speed as Panther Vision rolled out the new 3-LED Power Caps while I discounted my old 2-LED caps. This year they aren’t selling at all. Why not? I don’t see any formidable new competitors or discounters. My ads are still generating 30-40 clicks a day, so the interest is there. Is there something wrong with my site? Did Google change their mysterious algorithms and knock my pages out of contention? Are customers just being fickle? I don’t know and nobody’s going to tell me.

Another example: The Simplaris Blogcast application that spews my blog entries onto Facebook stopped working last week. If it weren’t for my Facebook readers I wouldn’t have any readers at all – even my own wife doesn’t read my blog. Eventually I found and installed a similar app. Does it work? I’ll find out in a few minutes, after I post today’s essay. If it doesn’t show up on my Facebook wall, it’s back to the drawing board.

Another example: An astute blog reader (hi Andrew!) encountered my admin password popup when he clicked last week’s link to Buckyballs. Gosh, do you think that might be why Buckyballs weren’t selling? It turned out that a graphic that I’d uploaded through Sunshop’s text editor was calling a path through /admin, and a layer of security that I added last week won’t let you in there without a password. Moved the graphic, changed the link, and all was well. Buckyballs still aren’t selling, though.

Another example: I want to add the transit times to the shipping options dropdown list that appears when you check out. I’ve been trying to make this simple change ever since postal rates went up last February. Adding that text to the UPS options was easy, but changing the corresponding USPS text doesn’t work. It is not being drawn from the appropriate source file. The Sunshop support forum is no help. I finally gave up and asked my developer to solve it for me.

That’s just one typical week’s pitfalls. I confront crap like that constantly.

Constant change. Whenever I think I’ve got things figured out, the rules change. Technology moves faster than I can follow, especially with the spread of smart phones (which I neither own nor want). Fashions in silly stuff like website colors and layout evolves; my five-year-old Sunshop template looks archaic. Technologies like Flash go in and out of favor. Search engine algorithms change constantly. Customer whims are unpredictable. Today’s hot product is likely to end up on the discount table next year.

Boredom. You wouldn’t think I could get bored given the constant state of change and endless mysterious problems. But I don’t care about my work on a personal level. It doesn’t make the world a better place. It’s not enriching in any sense of the word. It’s unimportant. All it does is earn me a living, and it’s not very good at that. Yet.

Isolation. When Anne’s out of town I can go for days without speaking to anybody or leaving the house. As a misanthrope that suits me just fine, but I get weird when I withdraw too completely for too long.

On balance, the good outweighs the bad. I don’t want to return to conventional employment (despite its higher pay) even if I thought that I could get a halfway decent job. Which I’m pretty sure I could not do anyway in the current market.

And so I soldier on.

It's Not Me. It's You. or, Buy Stuff, Dammit!

Year-over-year growth slowed in July and turned slightly negative in August. In September, it crashed. Let’s cut straight to the grim numbers:

Total income: -20.3%
Total COGS: -12.7%
Payroll: +34.8%
Net Income (Profit): -112.3%


Year to Date:

Total income: +21.2%
Total COGS: +35.2%
Payroll: +40.3%
Net Income (Profit): -103.8%

How can I sugar-coat that? September 2009 kicked ass. September 2010 was on the weak side of normal. This month was doomed before it even started. Last September brought a $1,100 lighted cap sale from Staples and another $500 cap sale to a business in Texas. Three other days during the month broke $300. This September delivered only one day over $300 with no big institutional sales.

If you remove those two big lucky strikes from last year’s sales, this month was about flat with LY. It’s a very healthy increase from the more typical September of 2008. As reassuring as that is, September still came in $1,500 behind last year. At least (the ultimate in sour grapes) I’ve set a more realistic target to beat next year!

My own pay is still 40% ahead of LY. Sounds great, huh? Yeah, but big percentage swings often mask small dollar amounts...and the "extra" pay comes directly out of my year-end profit-taking bonus. The bottom line is slightly negative right now when it should be solidly in the black. Cost of Goods Sold is running way too high due to bad luck and bad judgment: Two floods, two thefts, and two write-offs of dead merchandise (greeting cards and magnets, gone forever at last).

At this time last year, Panther Vision’s third-generation Power Cap arrived, forcing me to discount my old 2-LED caps. This year, my old mainstay is drifting nowhere. The wind has gone out of kite sales, too. With no hit product driving business this year and no capapalooza, October’s prospects look dim. BuckyBalls are languishing so far; so many competitors are bidding up keywords so high (a buck a click? Come on) that I effectively can’t advertise them. Incidentally, some manufacturers and specialty retailers buy keywords at a loss to freeze competitors out; Looney Labs does that with their Fluxx games because they favor b&m stores over web retailers. You can't possibly make money paying $1 per click for a $15 product.

My comfortable lead over LY is almost gone and I have no confidence going into these critical last three months, but at least I’m still (barely) ahead of my 15% planned increase. There’s little I can do. My buying frenzy is over for now; I’m well-stocked on everything that ought to sell and my OTB is more than spent. Like, WAY more. Cash flow – including the money that I had squirreled away for a rainy day -- is $120 in the red right now with $1,000 in payroll taxes due in two weeks. Today I added about 100 new keywords to Google AdWords, deleted some badly overpriced ones, and raised my daily budget. I’m flogging the new Microsoft adCenter, too, but that won't amount to much until they finish digesting Yahoo next month.

Come on, shoppers, are you even listening to me? Another weak consumer confidence report implies that you’re not. Consumers won’t consume until the job market brightens and businesses won’t hire until demand picks up. I’ve already explained this: Somebody’s got to blink, and it’s not going to be the corporations.

Dirty Words

Here’s a funny: For the first time ever I used the “Notes” box on the USPS click-n-ship site to explain that I changed a customer’s chosen carrier because UPS won’t ship to his PO box. Click-n-ship returned an error. That usually means that the address is invalid or I forgot to tick the stupid return address checkbox that ought to be ticked by default. Nope, this time the reason was “Profanity detected”.

O RLY? I scoured my short sentence for any combination of letters that could be construed as a cuss word. Nothing. On a hunch I changed “UPS” to “your chosen carrier.” Success! Turns out that “UPS” is a dirty word at the post office.

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The Mini-Briefcase Business Card Holder – one of my flagship products with SKU 16 -- came perilously close to selling out when my wholesaler unexpectedly went out of stock. This is the product that I sold to Lord Yabinghoo in last week’s post. Demand really picked up after I exchanged links with The Corporate Gifts Company UK, now my #1 referring site (ahead of Facebook). You’d think the “UK” part would be a deal-breaker, but apparently not. Anyway, they send me a lot of traffic so show them some love.

Speaking of link exchanges, I’m always happy to swap with anyone who has a legitimate site (not a link farm) that doesn’t compete with mine. Such swaps are more about raising your search engine ranking than getting referrals, but any traffic they generate is always a welcome surprise. Email me if you’d like to promote your site here, and tell me where you’ll list Curio City in return. Google loves links.

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My wireless HP Officejet printer suffered a terminal paper jam last Saturday. After removing the accursed paper – in pieces – the printer would not come back. Hours of troubleshooting and more than a few dirty words eventually squared things away except for one detail: It won’t print in black. I think the print head was damaged in the jam.

The printer was exactly four days past one year old, and technically off warranty. I tried anyway. Hunting down HP’s online/email customer service contact was a trial in itself, but I eventually filed my claim.

On Monday a customer service representative named Garret phoned (why do they always phone when the initial contact is online?). After some back-and-forth he promised to FedEx me a replacement print head. On Wednesday FedEx delivered an envelope containing an empty box, packing material, a return label, instructions for returning the defective part, and a packing list enumerating an empty box, packing material, a label, and an instruction letter. You’ll notice that there is no print head in that list.

I emailed Garret again to see if I should expect the print head under separate cover. On Thursday he phoned to offer me a whole new printer, with no need to return the old one. It arrived today. Setting up a new wireless printer is not trivial; it took 90 minutes. But hey: New $90 printer! Kudos to HP. You really can offer excellent customer service when you have deep enough pockets.