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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, November 12, 2010

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.


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.

1 comment:

  1. Those Buckyballs are awesome. I linked to them (your product window) on my facebook status and maybe someone will buy me some :)


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