Wrapping Up 2011: First Pass

A hefty order for 6-LED caps on Monday pushed an otherwise mediocre week into the plus column. The winning customer left me a voicemail on 12/22, and I didn’t hear it until 12/26. Sometimes messages rattle around Verizon’s system for days before coming to roost, but I do need to check my phone more often. 

Switchables were so noticeably absent from Christmas this year that I thought I was facing another reevaluation of that red-haired stepchild. Then they came back all by themselves this week. Go figure.

While I appreciate the respite from last month’s insane pace – I cut back to four hours a day this week -- I hope I won’t be back to two-digit bank deposits after this week. As of 11:00 this morning I had 396 sales in December and 210 in November (an average month has 85-100).

The numbers that follow are preliminary, since modest sales over the 1.5 days left in the year could tip a couple of reds into black. I’m going to have to make another pass at them tomorrow afternoon before paying out my year-end bonus, and I’ll post that revised version next week.

Excel reckons that I beat LY by 4.25%, surpassing LY’s 3.19% increase (but falling far short of my 10% goal). The year came in only $3,200 below plan. The gain came entirely in November and December, and a very large fraction of it was from $2,000 worth of sales to the same telephone customer. But let’s just bask in the numbers without fretting about how they were generated.

As usual, Quickbooks is more pessimistic than Excel. I need $126 to tip December’s profit into the black (vs. LY) and $243 for the whole of 2011. Here’s where things stand as of noon today, anyway. A mere $500 in sales would do it.

December: 

Total income: -0.3%
Total COGS: +4.8%
Payroll: +11.3%
Net Income (Profit): -12.4%

2011 Total:

Total income: +2.1%
Total COGS: +2.3%
Payroll: +2%
Net Income (Profit): -7.8%

My salary came in $301 ahead of LY at $12,718. It ain’t much but it beats a kick in the teeth (as my dad liked to say). Tomorrow I must take a year-end profit distribution. Using today’s QB numbers, I have a profit of about $2,900 (down from $3,100 LY). As the sole stockholder in an S Corporation, I owe 100% of the income tax on that $2,900, so I have to withdraw at least $600 (15% for the feds and 5.3% for the state). Of the remaining $2,300, I traditionally take 75% as a shareholder loan repayment and leave Kraken Enterprises the remainder to reinvest. That would make my bonus $1,725 (plus $600 for taxes = $2,325). But since I technically own the entire $2,900, my total 2011 compensation was $15,618. That’s a $559 drop from LY’s $16,177, and far short of 2009’s record $16,737.

But I need to go through all of this again before I pay out my bonus tomorrow (I've had two small sales and remembered an expense reimbursement check since I compiled those numbers). And I must mention that $495 of this year’s profit decline came from covering Internet access charges that I previously paid out of pocket. Had I covered that $495 myself rather than charging my company for it, my income would have been $16,113.

On the Eighth Week of Christmas, My Business Gave to Me...

...An eighth week of Christmas!

Christmas ended on the 21st this year, a full four days later than I had expected. I more than recovered Week 7’s shortfall and averted my first-ever year-over-year sales decline (2011 will finish about 2% over 2010, assuming that next week is merely average). These “extra” days amounted to an unexpected extra week of Christmas. I am incredibly glad that it’s finally over for another year, apart from the enjoyable massaging of numbers. Nice, black numbers. I’m going to miss the big daily bank deposits, though.

Reasons to hate UPS (redux): Yet another Credit Card Billing Adjustment, this time increasing a charge by $11 with no explanation. Ever notice that these adjustments are never downward? 

Well, at least I can take some small revenge: I finally discontinued UPS Standard after reading multiple complaints about it being a scam. UPS tempts Canadians with a reasonable-looking rate. Then, after the package crosses the border, UPS holds it hostage for brokerage fees that approach 100% of the shipment’s value. If the recipient declines to pay it, they offer to return it to the shipper – me – if I will pay the fees. When neither party wants to pay the ransom, UPS gets free merchandise. Virtually every international complaint I’ve had over the years has come from a Canadian, and the majority of those were UPS Standard shipments. Customers usually think that I’m in on the scam. No more.

For the time being I’m leaving Worldwide Expedited and Worldwide Express in place because they’re so expensive that nobody ever chooses them. But I might ultimately remove those, too, if they employ the same “brokerage” trick.

Reasons to hate Google (redux): I ended last week not knowing whether or not Google Product Search was going to exempt my site from their item identification requirement. On Monday they suspended my products. On Tuesday they told me that my exemption had been approved, but not whether my items reinstated or not. On Wednesday I was invited to rate their responses. Hee hee.


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Born yesterday? I was not. A suspicious email asking about international shipping led to somebody wanting to buy thousands of dollars worth of stuff to be picked up by his private courier (after he pays with a stolen credit card, obviously). There was some creative aspect involving shipping to Cyprus and prepaying customs duties and whatnot, too. It was probably just meant to confuse me, or maybe to make him look like a legit businessman. Bzzt! Sorry, find another sucker. 

On the Seventh Week of Christmas, My Business Gave to Me...

A seven-day warning/six days of sickness/A five-digit month/four minutes offline/three giveaways/two gorgeous days/and a big rusty pail of fail.

Last Saturday set the YTD record number of sales with 23, but their paltry size led to a merely average day in dollars. Saturdays are historically the slowest day of the week. People bought almost nothing but Whisky Stones and lighted caps, and usually only one. At least that made the weekend’s business easy to process; 50-some packages fit neatly into two big boxes. In past years, before I learned not to sell bulky things, they would have overflowed the living room.

But this make-or-break week started on Sunday, as weeks tend to do. I went into it $1,400 ahead of LY (according to Excel, whose numbers are more dear to me than Quickbooks). Here’s the blow-by-blow for those who wish to recreate the anxiety:

•    Sunday’s paltry 11 sales brought in only $565, blowing $300 of my lead, but at least the average sale was back up where it belongs. Running total: +$1,100;
•    My car’s radio said that Monday was supposed to be “Green Monday”, the second-biggest online day of the year. I was indeed up against a 4-digit day LY. It flopped and set me back another $800. Uh-oh. Running total: +$300;
•    Twenty-seven sales on Tuesday – henceforth to be called “Green Tuesday” – racked up the second-busiest day of the year (and the high point in number of sales) and clawed back $250. Running total: +$550;
•    Wednesday should have been the last four-digit day of Christmas. People made a nice run at it, but I still dropped another $270. Running total: +280;
•    I beat Thursday’s modest target by $40 for +$320 on the year.
•    Today was much stronger than expected; I’m up $170 with the whole evening yet to go. Tomorrow is basically a throwaway.

So Week Seven is going to finish somewhere around $800 behind LY, but that still leaves a YTD surplus of roughly $500. Although I call next week the Eighth Week of Christmas, it’s really just a cooldown period.


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And what would Christmas be without some new hatred?

Reasons to hate UPS – O UPS, why do you play games with me? When my customer’s 2nd day air package arrived with a big bootprint and crushed merchandise, I was peeved. Because this particular customer is of the variety that will not use email, it took two days to straighten out her complaint over the telephone and generate a $35 loss. When I filed a damage claim and you processed it almost instantly, I forgave you. When you called to tell me that the paperwork had to be resubmitted because I had sought $25 for a $24.99 item, I was peeved all over again. But I understand that computers can’t tolerate discrepancies and the penny difference was my fault, so I forgave you again. Two peeves, two forgivings…that’s a wash. Then you had to go and email me a Credit Card Billing Adjustment report with $12.45 in upcharges. I swear that the address you call residential was a business according to the USPS – yes, I really do check. But adding a rural delivery surcharge to the very same package that you damaged cinched your new Reason to Hate.

Reasons to hate Facebook – Facebook recently changed from reporting each post’s impressions to showing “people reached” – i.e., unique viewers. I used to see over 100 impressions, which jibes with my 138 “likers” pretty well. Now I see that I’m really only reaching 27-32 people, two of whom are me; more than 100 people that I thought were following Curio City are actually blind to my posts. I’m pretty sure that happened when Facebook introduced the “top stories” interface; any “liker” who hadn’t interacted with your page recently got dropped. The 25 or so people that I’m reaching now mostly “liked” Curio City after that change. I don’t know what, if anything, I can do about that…Facebook’s interface is largely impenetrable to me, and it’s constantly changing anyway. All I know is that it’s not nearly the communication tool that I thought it was.

Reasons to hate Google – Back in May, Google Product Search (formerly Google Base) added a requirement that most products include a unique identifier – either the UPC or a manufacturer’s number. Sunshop did not support those fields at that time, so I had exactly zero. I started adding numbers for new products and reorders after I finally upgraded to a version that included them. Well, last Sunday Google spoke: “Your items are at risk of being suspended.” They gave me seven days to supply the missing data, after which they’ll review my items again. Needless to say, I did not have very much time during the busiest week of the year to look up 600 useless numbers. So I petitioned Google for an extension. Their cryptic response, signed with an Indian name, left me unsure whether they’re going to nuke my products or not.


Does it matter? I really have no idea how Google Product Search works or if it sends me any business at all. But I’ve been submitting a data feed every month for years. Between paid search, natural search, and (maybe) Product Search, Google drives over 80% of my business. I must appease the Google gods. It’s their internet, after all.

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Finally, a friendly tip for marketing people: Email with the subject line “Happy Holidays” always gets deleted unread.

On the Sixth Week of Christmas, My Business Gave to Me...

...Six days of sickness/A five-digit month/four minutes offline/three giveaways/two gorgeous days/and a big rusty pail of fail.

Last week my wife brought a virus home from New York, as she traditionally does when she travels. This week it jumped into my head and chest. After slogging through long days of processing orders, shipping packages, reordering stock, and ordering supplies, I needed long naps. I couldn’t do anything proactive at all.

Sales were good even without any higher brain functions engaged. It might have made some small difference if I could have worked on a late newsletter, monitored my ad campaigns, put out some facebook tweets, and returned telephone messages promptly. But recent reports that the American consumer is again consuming with gusto are not exaggerated – which is especially good after I had to refund $102 today, making it the first sub-par day of the week.

My “Christmas Lite” strategy of bringing in fewer marginal new products is being vindicated as people buy marginal old products instead. Take, for example, ear buds: I don’t sell more than half a dozen of those all year, and I have 100+ in stock. I was planning to phase them out. But in the past two weeks I’ve moved at least a couple dozen. I also cleared out at least eight old discontinued products. When all the dust settles, I hope that my inventory level will be a thousand bucks lower than it was last year, and with the money more effectively invested.

There are some unexpected casualties. Fuzz scarves have died almost entirely after consistently strong sales for the past three winters. Whisky Stones were very slow coming off the blocks, although they are surging now. Switchables are scarcely participating in Christmas at all. Competitor shenanigans have driven that line down many times before, so I presume that's happening again. I should investigate that when I get time, as there are a crapload of inventory dollars locked up there.

But I won’t start a post-mortem with two more weeks left to go. Next week should be the peak. It’s a good thing the virus has mostly finished with me, because naps won’t be an option if the shoppers frenzy as expected – no matter how bushed I get (and doesn’t that word seem even more apt after the disastrous presidency?).

On the Fifth Week of Christmas, My Business Gave to Me...

A five-digit month/four minutes offline/three giveaways/two gorgeous days/and a big rusty pail of fail.

I needed a five-digit month just to match LY, so that’s less wonderful than it sounds. More wonderful was an $1,100 lighted cap telephone sale that propelled yesterday to a new one-day sales record. Thieves don’t usually order by phone and the charge passed the fraud screening with flying colors, so I think it’s OK. That not only put November in the bag, but even put me $800 ahead of last year to date. If I can just hit my numbers for the next few weeks I might still avoid my first-ever year-over-year decline.

Look at all the black ink, courtesy of the past two days:

November: 

Total income: +23.8%
Total COGS: +32.5%
Payroll: -4.1%
Net Income (Profit): +48.4%

YTD:

Total income: +1.7%
Total COGS: +0.6%
Payroll: -1.1%
Net Income (Profit): +11.3%

Ain't that beautiful? Speaking of sales records, you might like to see them. 

•    Biggest day: Yesterday, at $2,202, surpassed the previous record of $2,169 on 12/8/08 (when the New York Times Gift Guide mentioned the LED Motherboard Christmas Tree  )
•    Biggest week: $6,344 on 12/13/08 (thanks to the same random act of media)
•    Most sales in one day: 51 on 12/9/09 (Boston Globe Whisky Stone mention)
•    Best paycheck ever (2 weeks): $1,943 on 12/25/10.

Cyber Monday brought in 14 sales, the best single day this season until yesterday. Unfortunately most of them were so small that the day ended up $120 behind LY. Of the 11 new orders facing me on Tuesday morning, 10 were under $20. I don’t mean to be unappreciative, but after PayPal takes 55 cents from an $8 purchase and I stuff it in a 35-cent padded mailer, it’s barely worth the time it takes to generate a label and drive it to the post office. One or two orders like that is just a small nuisance. It becomes a problem when they define a busy day.

On the plus side, I didn’t have any trouble loading them into my Miata. 

The weekend’s offer of free shipping on orders over $50 should have prevented exactly that. Only one person redeemed the coupon. Lesson learned: Cyber Monday sales should be one-day only, simple, and highly targeted – just a few specific items prominently on sale. Maybe next year I’ll try creating a temporary category and moving a handful of items into it -- no coupon necessary. This year’s offer was generous, but it took two paragraphs to explain, and if there’s one thing the past five years have taught me, it’s that shoppers don’t read. 

BTW, I passed a milestone this week with transaction #7,500. Imagine what that pile of boxes would look like.

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Here’s a helpful tip for telemarketers: If you call me during the Christmas season, I won’t even take the time to be polite. Bonus tip: If you call me back after I tell you to take my phone number off your list and hang up on you, you will not find that my mind has changed.

On the Fourth Week of Christmas, My Business Gave to Me...

…Four minutes offline/Three giveaways/Two gorgeous days/And a big rusty pail of fail.

My heart sank at 11:31 pm on Thanksgiving when MDD Hosting warned me of emergency server maintenance. With previous hosts, that might have meant being offline for the rest of this crucial weekend. But MDD had the server back online by 11:46. Kudos to them. OK, 15 minutes isn't four, but I’ve got nothing else for my gimmick this week. Maybe I’ll get a four-digit day.

This was the first real Christmas mega-week. A $750 cap sale on Thanksgiving Day 2010 created a huge holiday hill to climb, and unusually weak days this Sunday and Monday made it look impossible. Then things turned around on Tuesday and Wednesday. I needed to average $350/day this week; right now (in the midst of Black Friday, which is hobbled by all the hardcore shoppers out doing battle in stores) I’m running at $350/day. I started Week 4 neck-and-neck with LY; right now I’m running $19 ahead for the week and $161 behind the month-to-date. I need $528 by the end of tomorrow to catch up. It’s another nail-biter.

Last Saturday was downright depressing. Against a background of weak sales, I had to authorize a big nasty return ($140 worth of Panther caps) from somebody who simply changed his mind. Besides the obvious financial hit, returns are also a processing and inventory-management pain in the ass. I may have to put a restocking fee in place, as most stores do to discourage speculative purchases. On the same day, a Canadian customer claimed that his levitating globe arrived with a cosmetic blemish; he eventually settled for a partial refund, limiting what could have been an $84 refund to just $20. And then, just to ice the cake, somebody submitted a bad product review. It was well-written and -reasoned, so I had to publish it. Even though it’s a minor product that I wasn’t going to reorder anyway, it was another slap in the face that I just didn’t need.

Next week's target requires an insane $495/day. I don't know how I'm going to make that...but I've done it before. No reason it can't happen again.

On the Third Week of Christmas, My Company Gave Me...

Three giveaways/Two gorgeous days/And a big rusty pail of fail.

I wrote off three relics from the 2005 founding of Curio City and donated them to my wife’s art studio fundraising sale. These products were way out of step with the kind of merchandise that I eventually learned would succeed. Good riddance! I only wish her studio was a registered nonprofit so that I could take a charity deduction.

Quick numbers: This week I need to average $236/day, and the week started out very good before falling into the doldrums on Tuesday. So far I’m running at $267. The moving average that I need for the month to date is $224/day; I’m currently at $218. November began this week down $300 and ended it down $131. So I gained a bit of ground but I’m still a tad behind LY.

You might have noticed that I am merely trying to match LY now. I’ve given up on beating it. Next week brings the first of the really obscene sales targets.

I am reluctantly coming around to the view that this recession is never going to end – or rather that it really did end when economists tell us that it did, and we are now living in the new normal. I am told that this makes me a “Declinist”. Statistically, the economy has been in recovery for years. The wealthy and the big corporations are certainly prospering. But this time the rising tide is only lifting yachts while a sea of dinghies are still bailing.

When’s the last time I wrote about kicking Curio City out of the house (or “taking it to the next level”, as my wife likes to say)? I stopped thinking about Curio City’s future and went into survival mode when the depth of the Great Decline became apparent. But now experts are saying that the job market won’t return to normal until the second half of 2014. It might never recover entirely for the lower classes, so I need to start thinking about how I can cope with that.

Of course, if I knew how to increase sales in a declining economy I’d already be doing it. But I’ll figure something out. That’s what I’ve done since the beginning: Figure stuff out. 

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On this week’s Tuesday in 2010, a big Switchables return wiped out most of the day’s sales. It looked like an easy day to gain some ground this year…until (you guessed it) a big, unauthorized Panther Vision cap  return showed up. I was so pissed that I flirted with invoking my published policy of refusing unauthorized returns. Shoppers who buy “on spec” are a pain in the ass and a blight on the bottom line, so I don’t want any repeat business from this lady. I’d have been within my rights to keep the merchandise and her money…but that undoubtedly would have created a bigger headache than it was worth. So I took the path of least resistance. The $17 that she paid in two-way shipping costs is consolation enough.

Ordinarily the Outlook new-message chime makes me happy; yesterday it was just annoying. The six sales that came in are below average for this stage of Christmas. I also had to authorize another $55 return, had someone ask for a large charitable contribution, got the usual spam, and received a bitchy email from a would-be customer who couldn’t figure out how to use the shipping calculator (“Why is it impossible for me to find out your shipping cost?  I'm very wary of shipping chgs and cannot get an answer about your's”). Yeah…it’s a big secret. I know that it’s bad form to badmouth customers…but, coming at the end of a lousy day, that extraneous apostrophe sent me over the edge. And since she never did buy anything she’s not a customer anyway, and my integrity is intact.

On the Second Week of Christmas, My Customers Gave Me...

...Two gorgeous days/And a big rusty pail of fail.

Now I need to rewrite the song since I can’t very well thank my customers for Indian Summer. I took advantage of the first 70-degree day to rake up a bag of leaves. It was a futile gesture with the leaves barely half fallen, but I wanted to get a head start on my least favorite annual chore (and to enjoy the weather, truth be told). Then on Wednesday I ended up unexpectedly taking a long drive. That wasn’t such a bad thing with the top down, the stereo rocking, and bright warm sunshine bathing me, but it, too, cut into my Curio City time. 

Naturally, all the leaves finally came down last night and my yard is buried. I need to carve out some serious raking time over the next week or two. We have a lot of big maples and oaks. (I probably complain about this every year, don't I?)

Downtime is OK as long as my hands are temporarily tied. I not only slammed the door on new products last week, but also started delaying reorders until after my credit card statement period closes tomorrow. It’s too bad; there are half a dozen more new products that I’d like to bring in, and I’m going to lose a few Christmas sales to stock outages. But my Mastercard bill is currently pegging $5,000 against a bank balance of $2,400. The total spend is just right to support a planned $10,000 month, and I can close the $2,600 gap before the bill comes due if Week Three makes plan. But it’s going to be a nail-biter.

Now for the numbers. I needed to average $220/day over these first two weeks. Week One only reached $151. Week Two is running at $300/day for a two-week average of $213. Veterans Day is traditionally a lightweight weekend. If the next day and a half merely match LY, I’ll be starting Week Three about $300 in the hole – not too shabby, although I’d obviously rather be up $300 than down.

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Despite already-bloated advertising costs, I set up campaigns for BugLits on Google Adwords and MS Adcenter. Most of the relevant “flashlight” keywords are selling for $.80 and up to $1.50, which is obviously nutty for a $13 product. I did find a few tangential words in my $.30-.40 price range. The results so far? Thirteen clicks, 0 sales, $3.22 spent. Not enough to draw any conclusions. I had thought that BugLits might be a minor hit this year, but no joy so far.

AdWords alone is running $30 per day now to deliver 100+ clicks. So far, the conversion rate is high enough to keep that big ad spend within budget (a bit less than 10% of gross).

Microsoft Adcenter's relevancy ratings (which determine click pricing) continue to confound me. Why are “switchable nightlight” and “switchable nightlights” only ranked 2/10 when the landing page is clearly 100% accurate and “switchable night light” rates 9/10? Baffling.

I wish I wasn’t so dependent on one product. I’ve had intermittent modest successes – and even brief hits – with other things, but it’s still all about Panther Vision caps. Don’t get me wrong – without this superstar I wouldn’t be in business at all – but I sure do wish that some of my other products would help carry the load. The Mini-Briefcase is out of stock at the importer; I’ll sell out my remaining 50-odd pieces in a couple of weeks. Switchables are going through another one of their periodic dead spots after some competitor jacked his keyword bids to $0.60 (which is simply more than they’re worth, as he'll probably figure out). Whisky Stones seem to be dead in the water. After I brought in 50 sets to cover holiday demand, that’s $500 I wish I could have back.

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Uh-oh…last night I sold a Science Quiz Clock to someone from New Jersey who clicked “Saw you mentioned in a print article.” The random act of media that I first wrote about on July 29 must have finally hit. The editor never did answer my questions about their magazine’s street date, and I forgot about it after their online guide came out. Now I only have two clocks left. I don’t want to reorder anything from the vendor until they straighten out a $288 shipping error. Their order fulfillment is so incredibly slow that it would take weeks to get a reorder in anyway (if they have them at all and if they don’t screw up the shipment).

If those last two clocks sell out today I’ll know that the game is afoot. The magazine might have hit the streets some time ago, and only now generated a sale.

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…And just like that, my blog posts started appearing in the Facebook news feed again last week. I’m pleased to be back…at least until the next time FB screws with their interface.Every week is a crapshoot.

On the First Week of Christmas, My Customers Gave Me...

…A big rusty pail of fail.

I tremble when I turn the calendar page and November’s sales targets look back at me. Yet, every year, the customers somehow materialize. There are still people out there with disposable income, but they were two days late to the party this year and they didn’t bring enough snacks. Thanks to that late start, this week is likely to finish at least $600 behind LY (down 40%)
.
But Christmas is definitely here. People are snapping up some new stock and some old stock in addition to the usual bestsellers. Even at prices at or near cost, selling products that I won’t replace liberates dollars that have been frozen for years. That’s like finding money.

I feel a little like I’m rifling a corpse when I splurge on luxuries like a new laptop battery ($76 for a name-brand 9-cell) and a new mouse ($50 for a deluxe Logitech wireless). But what the hell? I need these things, and the company’s profit doesn’t magically transform into my tax-obliged money until the end of the year. Every now and then Curio City buys me nice things. I’d thought I might buy a new laptop next year, but that’s not going to happen as long as the Great Decline drags on. I can flog this 2-year-old Dell for at least another year if I periodically run Crapcleaner and Defraggler (which I really should make time to do today).  If I’m going to keep the Vostro going indefinitely, I get the lavish 9-cell battery instead of a short-lived 6-cell at half the price.

Almost by accident, I found one new item that might make a long-term difference. It turns out that Panther Vision wholesales replacement batteries. The markup on batteries is so obscene that I’m tempted to go into the battery business. The four-pack that I’m selling for $5 goes for $12 at CVS, and their cost is probably lower than mine. Each time a Panther Vision cap customer ticks the box to add replacement batteries, I effectively get a $5 price increase on my top-selling product for a very small incremental cost (and without raising my advertising spend). Boring, yes, but it’s proving to be a very popular add-on.  

I’m also encouraged by the new Nite Ize lineup’s performance so far. I quickly sold out of SlapLits and moved a few See ‘Ems and BugLits…all with no advertising beyond my Facebook announcements and newsletter. So I doubled down this week on the whole line. The BugLit in particular deserves to become a good long-term seller. I’ll probably advertise that one.

But the long term is meaningless during Christmas. It's all about the next seven weeks.

Scary October Numbers

It’s time for the annual leap of faith: I have bought $2,000 more Christmas stock than I can pay for on the assumption that customers will start showering me with money next week. If they don’t, I’m seriously hosed, because that’s a ton of money considering that nothing I’ve bought really stands out. And I’m not done buying yet. It doesn’t help that one of my vendors (who shall remain nameless for now) short-shipped me by $288 and has ignored two inquiries; if my past struggles with this company are any guide, it will take a month to straighten it out, and they'll screw it up a little worse in the process. Meanwhile my credit card statement is unbalanced, and you know how I hate that.

This month’s numbers show that the money shower is a light drizzle at best. I would have loved another double-digit increase in October. I was hoping to break even until this week devolved into a double-digit decrease. Excel says the month finished down $750; Quickbooks calls it $900. Not a good Christmas omen either way. 

October: 

Total income: -18.1%
Total COGS: -21.4%
Payroll: -0.4%
Net Income (Profit): -177.6%

YTD:

Total income: -4.3%
Total COGS: -7.4%
Payroll: -0.7%
Net Income (Profit): -307.3%

At this time last year I was running a $400 profit. This year I’m $900 in the red. The difference comes out of my bonus at the end of the year. Anything can happen during the eight weeks of Christmas that are just starting now. But to close a $1,300 bottom-line gap I need roughly five times that amount on the top line, and I'm not physically capable of moving that much additional stock. 

Advertising is the biggest blot on my bottom line -- $2,000 more than LY. Second-biggest is internet access, which is a new expense this year. Those two items together account for more than the entire deficit…which means I’m doing well with my other expenses. Thanks to Congress's financial reform, credit card processing fees are running 14% behind LY. 

Well, with the hand-wringing out of the way all I can do is keep on plugging.

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Feedback from a couple of friends, combined with today’s newsletter publication, verified my suspicion that anything auto-posted to my Facebook wall by Constant Contact or Networked Blogs won’t appear in Facebook news feeds. That means that only a handful of motivated people will make the effort to read my blog entries or newsletters from now on. The new-product announcements that I post manually do appear as expected, so I’ve not gone completely dark.

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And just because I’m a statistics junkie, yesterday’s newsletter looks like this: 

•    201 emails sent
•    6 bounces (four of them to @mac.com addresses, whatever that is)
•    1 opt-out (from someone in the Netherlands)
•    65 opens (33%, considered very good)
•    19 clicks (29.2%, also very good)
•    1 known sale
 
Not bad considering there was no coupon offer. The LED Motherboard Christmas Tree was the most-clicked item…people are definitely holiday shopping. I don’t expect that former bestseller to do very well this year after the price rose from $9.99 to $16.99.

One Last Try at Facebook

I don’t think that last week’s post, in which I lamented the previous post’s non-appearance on Facebook, appeared on Facebook. There’s a toggle on the business page that says “Use FB as Curio City Online” or “Use FB as Ken”, and I accidentally posted as Ken last week. I can see the number of impressions for all of my posts through October 12. That stat disappeared entirely on Oct. 13, and just came back today, confirming that my new-product announcements are being seen normally, but blog posts are not. (I wrestled with the reason for that in my previous three posts.)

From my late teens through my mid 30s, I composed my thoughts about life and the world in general in a handwritten journal that was never meant to be read by anyone. I lost the compulsion to write when I went on antidepressants, and didn’t start writing again until I created this blog to keep a history of my business. The thought that others might read it made me uncomfortable, but maybe other small business owners with similar concerns might share their experience. After all, I work in complete isolation and frequently confront problems that thousands of other people have already solved.

I acquired dozens of readers when I found an app that connects my blog to Facebook (and Twitter, although I don’t pay any attention to that). Now, to my surprise, I find myself frustrated at once again writing for nobody but myself. So I hereby attempt to put my blog before my FB readers one…last…time. Networked Blogs is still installed and superficially appears to work properly, but I don’t think it’s appearing in your News Feed. My posts still appear on my wall, but only show up in your feed if I link to them manually, as I just now did. I’m not going to do that every week because Curious Business is not meant to be a marketing tool. If you want to follow my blog, you'll need to subscribe using one of the services there, or just visit my wall every Friday.

(If I completely misinterpreted FB’s feedback and my posts are appearing in your news feeds as expected, but nobody chooses to read them, then I’m just plain embarrassed.)

In semi-related news, I deleted the Shopbuddy tab this week. I stopped using that Sunshop plugin a few months ago, when Turnkey started charging money for it. AFAIK it never delivered any sales and its absence will not be noticed.

The Invisible Man Puts In an Appearance

I come before you to pimp my blog today because my posts don't appear in Facebook’s “top stories” after Networked Blogs publishes them to my wall. Whether FB’s last interface overhaul blocked them by design or by accident, I don’t know. Do you think they’re deliberately suppressing auto-posters or hobbling business marketing to sell more ads?

Most likely it was just sloppy development. Never ascribe to malice what incompetence can explain.

I won’t manually link to my new posts like this every Friday. I’ll do it if a particular topic (like this one) seems particularly relevant to FB readers. If you want to follow the weekly ups and downs of Curio City, you’re probably going to have to subscribe to Curious Business outside of Facebook. I would appreciate your “Likes” or recommendations or shares or whatever it is that draws attention here, though.

*******************

I’m having second thoughts about my “merchandise lite” Christmas strategy. In years past I’ve brought in dozens of items that I thought might sell a few units apiece. All I had to do was sell half of them to recoup my cost. The more stuff I threw at the wall, the more likely one or two things would stick. Although this tactic did more or less break even financially, it’s left my cellar cluttered with small quantities of hundreds of dead products – all of them taking up space, tying up money, and competing for shoppers’ attention.

This year I’m being more selective. That’s been easy since I haven’t found anything that I think has bestseller potential. But I am getting nervous as October slips away with no feeling of Christmas momentum.
 
I've been on hold anyway while I wait for an $850 payment from a purchase order customer. After three inquiries, they told me this morning that the check is in the mail. I hope so, because…well, because $850 is what we in the business world call "a lot of money". This week I paid my own salary, remitted my payroll and sales taxes, paid my developer for a Sunshop upgrade, and paid my Amex bill, leaving a checking balance of 71 cents versus a $2,222 Mastercard bill that’s due in two weeks. You can see how $850 would come in really handy right now.

Business is decent and cash flow is steady. It could have been better had I not rebuffed somebody who wanted to use a purchase order to spend $1,200. I would’ve had to place a $700 order immediately and I couldn’t do that with an $850 payment already outstanding. The little brouhaha that I explained last week about Sunshop’s image display routine cost me a day’s sales, too, and that didn’t help. I should be able to pay Mastercard in full, and I’m already racking up big charges for my November statement.

******************

Speaking of the Sunshop upgrade, Turnkey released another version that restores the rollover images that they removed in the last version. This week I hired my developer again to restore my site to the condition it was in before I paid him to do the last upgrade. At least my software is stable and up to date going into Christmas.

Is There Anybody Out There?

It looks like Facebook’s latest interface upheaval killed the Networked Blogs app. Last week’s post appeared on my wall and my Twitter feed as usual, but the “number of impressions” fell from 200-ish to 25.  A manual wall post made on the same day appeared under “Top Stories” and got the expected exposure, so I have to think that autoposts from Networked Blogs aren’t making the cut, even though they look normal to me.

Sigh. Sometimes I wish the Internet would stop being such a prima donna and be pre-Madonna instead. Should I reinstall Networked Blogs? Look for a new app? Hope it automatically fixes itself? Post blog links manually? I don’t know. Ken White’s Popehat promos often inspire me to click through -- but their posts are inherently more interesting than mine. 

So why not make Curious Business more like Popehat? In the first place, I’m not a collective of writers. In the second place, it’s hard to be fresh and witty after writing about the same narrow subject (namely, Curio City) for five years. And in the third place, I’m simply not clever enough to come up with “You Wouldn’t Say That If A Terrorist With An Expired Registration And Six Tons Of Ammonium Nitrate Drove Onto Sesame Street, Killing Big Bird And Elmo, Would You?”

Betcha all 25 of my readers will click on that one.

********************

Last week’s Sunshop upgrade didn’t quite rise to disaster status, but it sure stretches the definition of “upgrade.” What should have been the most visible improvement – the Flash image viewer – doesn’t actually work in a typical Internet Explorer install (and Apple products famously don't support Flash at all, but I already knew that). Neither did Turnkey’s fallback routine, at first; I spent a lot of time figuring out why IE8 was being petulant. To my dismay, Sunshop dropped support for the old rollover thumbnails, so my product display took a great leap backwards. 

I decided to try the Flash viewer despite these drawbacks, and promptly went 36 hours without a sale. Wednesday became my first shutout since late August; the corresponding day last year was $588. I reluctantly turned it off again on Thursday (sorry, Firefox users) and within five minutes a sale came in. Coincidence? I’m sure not going to test it any further to make sure. This week's shortfall mostly wipes out my gains from the past two months.

The much-delayed random act of media finally yielded exactly one sale…from a New Jersey resident who bought some Switchables. So much for the ravening hordes I greedily anticipated. I never sold a single Science clock. I didn’t know that any publicity could flop so completely, even for a year-old product that had already proven itself a turkey.

*************

In the Nobody Cares Department: I have decreed that payday shall fall on the Monday following the close of the pay period, rather than Friday, as before. I originally delayed payday in case the cash flow wasn’t there to support it; that concern has ebbed. Advancing payday by five days should bring in one more paycheck this year than last.

September Wrap-up

I was ready to give up on the random act of media that I’ve been writing about since late July when their online gift guide finally came out on Wednesday. I haven’t sold any of my three Science Quiz Clocks, or anything else that I can trace to that ad. That was unexpected. Maybe the print version will do better, if and when it comes out; for now, I’m very glad the manufacturer’s stock outage prevented me from ordering a big pile of doomed inventory. I have never seen a media mention fail completely before.

Someone who inquired about $1,000 worth of Switchables fixtures didn’t return as I had expected this week, but she might still come back. It will be a very nice boost for October if so.

September:

Total income: +13.4%
Total COGS: +11.8%
Payroll: +29.6%
Net Income (Profit): +39.8%

YTD:

Total income: -3.4%
Total COGS: -6.3%
Payroll: -0.8%
Net Income (Profit): -253.9%

Two black months in a row set me up for Q4 in decent shape. If the country club that owes me $850 pays up on time, I can pay my payroll taxes without destroying cash flow. The way I count my beans, 2011 is running only $300 behind LY; Quickbooks insists that I’m down by $1,425, and of course QB has the last word. The crucial bottom line is $839 behind LY (I am still slightly in the red, where I should have tipped into the black).
That’s an incredibly long way from the 10% increase I had planned, but given the economy’s return to recession this year I’ll settle for breaking even. Just getting back up to zero makes me feel pretty good.

October's targets are a little more formidable as Christmas starts to ramp up.


**************

Sunshop evolved through three version upgrades this morning. That didn’t go as smoothly as one might have hoped -- in fact, it still isn't completely right -- but the worst is over. The new Flash image viewer is probably the only difference most customers will see…and the 15% of my visitors who get here with Apple devices can’t see that. Some good stuff under the hood made the expense worthwhile (especially fixing the bug that limited how many photos I could upload for a single product).

Hurry Up and Wait

A week after I told Edge magazine's representative that we can’t get any Science Quiz Clocks to support their gift guide insertion, she replied that “it might have been too late” to drop Curio City’s name from the package (implying that she had tried). I don't want that to happen, of course. I should have kept my big yap shut. I assured her that I had a contingency plan in place, then asked her (for the fourth time) for the magazine’s street date. Four days later…no reply.

I still don’t know when, or even if, this is actually going to run. Meanwhile, I’m still postponing things (such as a major software version upgrade and a couple of doctor appointments) that could interfere with the anticipated surge in visitors. I will need to react quickly after selling the three clocks that I have in stock. 

You’d think the media would cozy up to Curio City naturally. My wife has worked for newspapers, magazines, and trade publications her entire life. My in-laws work in newspapers and television. Many of my friends are in various facets of journalism, or have retired from it. I myself studied journalism and English; although I never worked in either field, I’m a competent writer who understands old-school publishing. Yet my attempts to solicit media interest over the years always came to naught. I don’t understand the highly fragmented, non-professional 21st century media realm. If there are millions of specialty media outlets today, there are billions of people clamoring for their attention.

I’m not much of a clamorer. 

Business was perking right along until it inexplicably hit the wall last Wednesday. Now September is trailing LY. This would be an excellent time for that magazine insertion to appear. I see that their website hasn't changed from last month, so perhaps it's still in the works.

Don't Count Your Chickens Before They Cross the Road

...because they might get run over by a bus.
 
On Tuesday I finally got confirmation that the gift guide promoting the Science Quiz Clock (which I first wrote about on July 29) is definitely coming out this month. On Wednesday I tried to place a big order. On Thursday the vendor told me that they’re sold out. And so the big media event that could have kicked my YTD numbers into the black will instead be a big embarrassment. Well, I’ll surely sell the three that I have in stock (if you want one, buy it NOW). A few people will probably come back when I can restock in late October. And at least some fraction of this surge of free visitors will buy something else. September’s off to an average start...the big score that I was hoping for is going to be a small bump at best...and most of those new visitors will be annoyed. But, what can I do?

The Cool Baseball Necklace is my single best jewelry item ever. But my Google pay-per-click ad only delivered three of its 37 total sales at a cost of $64.48 per conversion. Microsoft Adcenter (Bing & Yahoo) accounted for six more sales at a similar outrageous cost. If the other 28 sales came from natural search, then the product should do OK without paying for those overpriced keywords. Since I need to get a grip on burgeoning ad costs, the keyword phrases that were driving lots of clicks with very few sales are history.

As summer laziness slowly yields to autumn guilt, I’m tackling some of the crap I’ve avoided these past few months. This week I bought new batteries for my camera, which has been tethered to a power cord for months now. Next week I’ll replace my laptop’s battery, whose charge life is down to about five minutes. I’ve started the tedium of writing orders and creating pages for new products. Thanks to that $800 golf ball purchase I can’t actually place these orders for another week, but at least I’ll have a few stacked up and ready to go by the time I can afford them. And once the traffic surge from my random act of media is over, I’m going to bring Sunshop up to date with three version upgrades.

It does feel good to move forward again after a summer of spinning wheels.

Goodbye, Summer

August was a marvelous month. Panther Vision caps, Switchables, bird kites, and golf balls had already propelled it well past average...and then yesterday a country club bought 100 sleeves of golf balls. (Yeah, I know yesterday was September, but my full-week Excel accounting puts it in August.) When's the last time all of my monthly numbers were black?

August:

Total income: +42.8%
Total COGS: +46.3%
Payroll: +51.3%
Net Income (Profit): +4,362.7%

YTD:

Total income: -5.4%
Total COGS: -8.6%
Payroll: -3.9%
Net Income (Profit): -429.9%


Don’t be too mortified by that YTD bottom line: It only represents $405, all of it coming from my new “internet access” expense -- and since that's Curio City directly paying a household bill, that's cool. I’m well positioned to recoup the rest of my YTD deficit in the next four months, which historically deliver 50% of my annual sales. Achieving any growth whatsoever over LY still seems ambitious, though, as I'm starting from negative 5%.

My biggest long-term problem is advertising costs. My ad budget has crept up from 8% of gross to 9.5% over the past few years, and I can’t raise it any higher. YTD advertising is currently running at an unsustainable 14.4% of gross -- a whopping 55% increase over LY. I’m whittling down my pay-per-click bids a little bit, but that can be self-defeating. This might straighten itself out if sales surge while my ad spend remains about the same, as typically happens in the last quarter.

My biggest medium-term problem is lack of anything new for Christmas. None of my usual vendors came up with anything great this year. I will bring in a few halfway decent new products when my budget allows, but I haven’t found any potential blockbusters. This is largely my own fault; I just really hate shopping. I need to start looking harder.

My biggest short-term problem is cash flow again, despite August’s strong receipts. I won’t get paid for that huge golf ball sale until 30 days after the order ships. But I had to charge the merchandise up front. That charge will be due four weeks from today, while I don’t expect payment for five to six weeks; now I can’t place any new product orders until after my statement closes on the 13th. On the plus side, I’ll save $35 since nobody scalps 4% off the top of a check deposit.

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Constant Contact now lets me link my newsletter through my Facebook page, and one customer redeemed the coupon within an hour of the newsletter going out. It’s always gratifying to see a response, even though the newsletter’s financial value remains dubious. As of this morning, 179 mailings brought 56 opens (yielding 13 clicks), 1 bounce, 1 opt-out, and 1 spam report. Huh? Nobody gets onto my list without signing up, so I guess that’s just somebody unclear on the concept. I’ve only had half a dozen spam reports from 17,000+ emails I’ve sent over the years. They still irritate me, though.

In case you missed it, coupon code WORKING gets you 20% off any order of $25 or more through Sept. 9.

Me, Myself, and Irene

Maybe the titular movie wasn’t the greatest romcom of all time, but how often do I get an excuse to depict Rene Zellweger's sour face?

Hurricane Irene is coming! Aside from imperiling my vegetable garden, it threatens to flood the cellar again…and that’s Curio City’s warehouse. Yes, all of my merchandise is at least a few inches off the floor. But I don’t have enough room to raise up my shipping supplies, and we have 22 years worth of personal detritus piled up down there. A flood would be a massive inconvenience at the very least. We raised our water heater a few inches off the floor after the last flood, so perhaps that won’t go out again. I’m hoping that most of Irene’s rainfall will run off the surface. Our cellar only floods when the water table rises too high.

Heavy, wind-blown rain eventually saturates our chimney and leaks through my ceiling…and that’s Curio City’s office. Ordinarily that only happens after several days of sustained storms, and Irene should blow through here in 24 hours or less – not enough time to soak through bricks. Capping, lining, and re-pointing the chimney is too expensive to ever happen. So I have a bucket.

I’m mostly worried about power outages. Curio City is hosted elsewhere, so business won’t be interrupted. My ability to monitor and process sales, OTOH, would be. My laptop’s battery is worn out, so I can’t use it at all without a cord…and we wouldn’t have Internet access anyway. The prospect of being housebound without any electronic entertainment is much more frightening than being cut off from Curio City for a short time. The state’s main utility is warning that some areas could be without electricity for up to a week. Fortunately, my town’s nonprofit municipal power company only has a few thousand customers and can respond very quickly. Even if the lights do go out, I don’t expect them to stay out for long.

On Being Small

The Boston Globe reports that small businesses – historically responsible for creating half of all new jobs -- are not leading the way to recovery from the Great Recession. Most of us are still in survival mode. Huge corporations are investing record profits to expand in rising powers like China and India, or simply buying back their own stock. Small companies are just scraping by, and even the most successful are wary of investing in a declining nation. “The percentage of small-business owners feeling optimistic about the economy fell from 67 percent in a June survey, to 47 percent in July, according to the online payroll service SurePayroll.”

Well, no duh. Knowing that other small companies are struggling as hard as I am is cold comfort. But as I like to say, if it weren’t for schadenfreude I’d have no freud at all.

I’ve been both a manager and an employee often enough to know that employees suck…and the bigger the company, the worse they are. I never wanted Curio City to have more than one or two employees. But I don’t want to be an Old Man Selling Stuff Out of His Cellar forever, either. If you’ve been with me for the long haul, you know that the original idea was for a bricks-and-mortar store with an auxiliary web business. (To relive those heady days of yesteryear, click on the “early history,” “expanding online” and “opening a store” post tags in the list to the right; I’m not going to rehash my history here). My chief objective has always been to generate a decent living for myself, working (mostly) by myself, in a business entirely owned and financed by myself.

The problem is that time is against me. I’m 54 years old and my body is beginning to betray me – it’s difficult to lift my arms over my head, for example. If I’m lucky, I might be able to flog this meat puppet another five years before I lose the ability to lift and carry. I need to outsource the physical part of the job to an order fulfillment service (incidentally supporting one blue-collar job, btw). Sales need to at least double, if not triple, before that becomes feasible. 

And in this never-ending recession, that just isn’t happening. Sales grew by 121% from 2006-10. But that rate slowed to 3% last year and this year is in the red so far. That does not make me optimistic about growing another 121% by 2014…and that’s the low end of the growth that I need.

That said, I'm still counting on Q4 to make up the YTD shortfall. August 2010 is when LY’s sales started to slump; this August is comfortably trouncing LY. Switchables came roaring back from the dead after I created subcategories, brought in the new designs, sent a couple of Facebook tweets, and linked them here. Bots love links.

See what I just did there?

WTF, America?

I’m sorry that my last post panicked the stock market and tanked the economy. I’m flattered that America’s economy hinges on my blog, and I know that I should be building your confidence, not tearing it down. Sales had been humming along pretty nicely until Monday’s freefall set off a roller coaster that tracked the market’s fortunes.
 
Seriously, America, get it together. Every time I get a little rally going, you pull something like this. The Great Recession may have ended two years ago for big corporations and those whose earnings come from investments, but us working schlubs have been plodding along for nigh on five years now. Maybe Congressional dysfunction is ending the good times for the capitalists, or maybe not. They’re just getting what they paid for when they bought all those tea party Republican seats. It shouldn’t matter greatly to the rest of us who live paycheck to paycheck. We may not be able to buy Congressmen, but we ultimately do control this economy through consumer psychology.

With no FDR in the White House to remind us not to fear, we have to muddle through on our own. Consumer spending drives 70% of the US economy. When we have confidence and spend our money, everybody prospers.

Most voters finally realize that we need to end this tea party nonsense in 2012. But it’s a long slog until then, and it’s too late to dodge the economic damage that’s coming from the federal austerity that’s already locked in. So if we’re going to keep this party going in the meantime, you need to get serious about consuming…and Curio City is an excellent place to start.

To help you out, I sorted Switchables into subcategories. My fortunes with this product line have risen and dropped through the years as it grew from a tiny, almost-exclusive niche to a mainstream gift item with multiple major competitors. I need to goose sales in advance of this season’s new designs, coming next week.

I was delighted when two Switchables orders came in just hours after I reorganized the department, and you’ve bought a couple more since then. You’re getting the message. Don’t disappoint me, people.

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It’s tax-free weekend in Massachusetts again…not that that ever makes much difference to Curio City, but sales tax will be suspended for the next two days. Come on, Massholes, I’m expecting you.

In 1937 the US was a few years past the Great Depression. Unemployment was still around 15%, but profits and production had recovered to 1929 pre-crash levels. When some of FDR’s advisors convinced him that it was time to balance the federal budget, the ensuing recession cut industrial production by 30% and raised the unemployment rate back to 19%. Economic growth didn’t resume until FDR sent Congress a massive new spending program 15 months later. Even then, employment didn’t recover until WW2’s epic economic stimulus.

In 2011 the US is technically a couple of years past the Great Recession (although it doesn’t feel that way to the working classes). Unemployment is officially 9.1%, but really closer to 16% if you count “discouraged workers” who’ve dropped out of the workforce or delayed their entry. Corporate profits and production have recovered, big business is flush with cash, and the rich own a record share of the national wealth while paying the lowest taxes ever – income inequality is higher today than it was before the 1929 crash. While the stock market nervously anticipates another recession, Congress caught an irrational deficit fever and passed an ill-timed austerity plan that’s likely to bring about another contraction. Let me be the first to dub it Great Recession II.

Read more about parallels with 1937 here. 

This time, instead of an FDR who’ll come to the rescue, our president is a tool of the ruling class; capitulation is his main negotiating technique. The rational policy right now would be to raise taxes on the rich and split the resulting windfall between jobs programs and deficit reduction. Instead, all we can expect – seemingly for the next 10 years -- is more budget cutting. I don’t see what could possibly turbocharge the US like a world war once did, even if we still had industrial might to mobilize. We’re already on a permanent war footing anyway; our obscene military budget is partly what got us into this mess in the first place. Plus world wars have a non-economic downside, what with all that nasty killing. 

As hopeless as our situation looks, things can change. In 2012 we might kick the tea partiers to the curb and restore rationality to our national budget. We are not necessarily doomed to permanent decline despite how our fate appears today.

What’s any of this got to do with Curio City? Beats me. My best year for growth was the crash year of 2008. Business has been strong for the past three weeks and that random act of media I told you about last week could save the year. It almost seems like my fortunes run opposite to the economy.
But Curio City was predicated on the reliability of impulsive American shoppers. It won’t earn me a decent living as long as they are fretting and scrimping. And this lousy economy just goes on, and on, and on….

Well. Surrender is not an option. The job market will not kindly welcome a 54-year-old white guy who’s been out of the mainstream workforce for six years. All I can do is keep plugging away.

I've said all this before, haven't I?

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The Mason Jar Closed Spiral Necklace is sku 1000. It’s not technically my 1,000th product – I’ve had a few junk skus over the years – but close enough. It’s a milestone, anyway.

Hold Your Breath

July wasn’t the disaster that it looked like a couple of weeks ago. Week 3 was the second-best of the year, erasing Week 2’s dramatic loss. The numbers below show how close I came to beating LY before sales dried up again this week. There’s no doubt why I failed: Tea Party Republicans held the economy hostage all week. Americans are all holding our breath until we find out whether Congress will allow a quick collapse through inaction or actively speed up our long-term decline. 

When the rosiest outcome removes trillions of dollars from the economy, the situation is inescapably dire. The Democrats bought into the conservatives’ deficit-reduction butchery months ago, so the conversation is entirely about how to alleviate the inevitable pain. Nobody (except economists) advocates postponing it until the patient is stronger.


It’s fascinating, and a little frightening, to watch the Republican Party splinter.

About 70% of American voters know that Republican radicals are behind today’s political paralysis. What’s wrong with the other 30%? If you subtract the 20% of Americans who are hopelessly ignorant about everything, that leaves only 10% of mentally competent voters who have been either blinded by ideology or hoodwinked by the vaunted Republican propaganda machine.

Surviving another 15 months until we get another chance to throw the bums out will be hard for all of us. So let’s just focus on next week and hope that Washington will get past its self-inflicted crisis and consumers will get back to consuming.

July: 

Total income: -3.4%
Total COGS: 1.7%
Payroll: -43.4%
Net Income (Profit): -471.5%


Year to Date:

Total income: -11.6%
Total COGS: -15.6%
Payroll: -11.3%
Net Income (Profit): -1,319.4%

And in the hope of surviving…an 80,000-circulation New Jersey magazine called EDGE plans to feature the Science Quiz wall clock in a gift guide due out in late August or early September. That’s right: it’s another random act of media! I could potentially sell hundreds of these, subject to their availability, my ability to physically move that much bulky stock, and my web host’s tolerance for a big traffic surge. This should solve my cash-flow crisis in time to buy new Christmas products. Better: It might lead to an ongoing relationship with the publication. If they will feature just one or two products a year, it could change my fortunes considerably.

I think I can survive another month. I used half of my emergency reserve to cover operating costs this month. Today’s bank balance is $19.74 against $2,154 in August charge bills. I can just barely stay above water if August sales match LY. Last August is when 2010 started to lose steam, so I have a realistic shot unless the government blows up the economy.

One small help: Host Gator closed my account and refunded $153 of my original $167 charge. And the company that owes me $235 says my check is in the mail. Celebrate the small victories!

And finally, a new reason to hate Blogger: A few weeks ago adding images through their new post editor stopped working. I got around that by going into "edit HTML" and inserting my links that way. Well, as of this week they have screwed up standard HTML tags, too. After way too much effort I figured out that I can upload images in the "edit HTML" view using the old post editor interface, and it does finally insert the picture with a whole paragraph of weird, non-standard HTML formatting. The way things are going, though, they will probably remove that soon, too, and you won't get these amusing little pictures anymore.

When Worse Comes to Worst...and Back Again

July began with this message from Host Gator:

“I apologize, but I was forced to suspend the script "index.php" as it was causing a high load on the server, and due to it affecting all of the other accounts on the system, I forced to take immediate action for the health of the server.”

A text log that would freeze your brain followed, but all I needed to know was in that sentence: They shut down my store.

Brad the support guy said it’s Turnkey’s problem. Turnkey invited me to file a support ticket, which brought some general advice about optimal server configurations. I shut down all my advertising and threw myself on Host Gator’s mercy. What else could I do on the Fourth of July?

Now, it’s good that Gator monitors their server performance. I’m glad that they shut down scripts that degrade service for everyone else. I’m a lot less glad that they shut me down with no warning on Sunday morning of a holiday weekend -- at the beginning of the week that I’m leaving for vacation, no less. With my anemic cash flow and payroll taxes due by the end of the month, I was dangerously close to insolvency. Downtime could push me over the edge.
I persuaded them that my backup scripts might have been to blame and that they should revive me after I removed them. Curio City was back up by afternoon.

Imagine how my heart sank when I received the same email on July 11, while I was vacationing in the Berkshires. There was no way I could bluff them into changing their minds a second time. I had to demonstrate that I’d taken steps to solve a problem that I couldn’t even analyze without a functioning store and direct access to their server. Either there was something wrong with their server configuration, or there was something wrong with my Sunshop script (possibly introduced during the transfer from Mocha). I had to figure out whether Sunshop or Hostgator was at fault, and I had no idea how to do that. They helpfully suggested that upgrading to a VPS for a mere $105 per month would make it all better.

Switching hosts again was the only way to break the impasse. It took a couple more days to make that happen. So much for vacation.

Curio City finally staggered back up on Saturday, July 16, after five days of downtime. Right now it’s running fine at MDDHosting, a small company that I chose for their personal service and their expertise with PHP scripts. I want to believe that this is all behind me at last. But because I was never able to figure out what went wrong at Gator, I have no confidence that Sunshop won’t go rogue at MDD at any moment and send me right back to oblivion.

If that happens, I will have to upgrade from a shared server to a semi-private one. That would double my hosting cost, but it would also solve the problem without needing to understand it first.

When Hostgator eventually followed up on the dormant support ticket, I tersely informed them that I had moved to another host, and got this: “We are sorry to hear that. Is there anything that I could do that would convice you to change your mind? “

Heh. I answered:

“Well, let’s see…

You locked my store twice in one month, costing me >$1000 in sales…

Then you tried to sell me a plan costing over $100/month…

No, I don’t think you can change my mind. Sorry it didn’t work out.”

The week ending 7/16 was my worst ever, barely topping $100 and sending me deep into the hole vs. LY’s pathetic vacation sales. My cash-flow crisis became a rout. Last year I had managed to stash $2,000 in a savings account earmarked for site improvements and emergencies. Now I expected to need all of that money to cover operating costs, and thanks to payroll taxes coming due it still wouldn’t cover my entire July credit card bill. For the first time ever, I was contemplating going out of business.

And now this week is on track to become my best since March. I’ve made up most of last week’s shortfall and I even have a realistic shot at matching last July (with one less week!). I can probably pay my taxes and pay off my credit card using only half of my emergency reserves – even less if last month’s purchase-order customer sends me a check on time.

There’s life in the old girl yet.

Flush

June swirled down the drain this week. I needed to average $105 per day to hit the month’s plan. I was running at $102 until this week fell to $67. June 2010 averaged $137/day, with nine days over $200 and three over $300; this year brought just five and one corresponding good days. Curio City covered its end-of-month credit card payment by less than $10, and that was a nail-biter. I nearly had to give it a loan.

June:

Total income: -26.5%
Total COGS: -27.9%
Payroll: -5%
Net Income (Profit): -85.7%


Year to Date:

Total income: -12.8%
Total COGS: -17.8%
Payroll: -7.6%
Net Income (Profit): -368%



July’s going to be craptastic, too. Last July was much better than average. 2010 didn’t waver until August and hit the skids in September, so I won’t have a chance to climb out of the hole until Q4, when my current slump settled in permanently. I will not despair until then. While the top line is probably hopeless, the YTD profit line is only down by $606 – hard to recoup, yes, but it’s not high finance.

I’m nervous that I’m going into a death spiral. Revenues just barely cover the cost of doing business, leaving nothing to invest in site improvements or new products. Payroll taxes are due again in July; I don’t know how I’m going to cover them. Vacation and its resulting income starvation is less than a week away.

Is there any way to put a positive spin on this? At this time LY my YTD sales were up 33%, so being down just 13% from that could be seen as a 20% rise over two years ago. Plus, Cost of Good Sold is down farther than sales, indicating better cost control. How's that for spin? I ought to work for the Democrats.


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Let us now mark the passing of Paypal’s Money Market Fund. I’ve always kept as much of my short-term cash as possible in PayPal to take advantage of their monthly money market dividend, since my checking account doesn’t pay interest. That brought in a few bucks a month before the economy collapsed. The interest rate gradually fell to its current microscopic 0.05%, yielding no more than a few cents a month. You can see why PayPal finally said “Why bother?”

I still have some emergency money earning 0.85% at ING Direct. The way things are going, that’s a better return than I would get from investing it in Curio City.

But I said I wasn’t going to despair unless Q4 flops. That’s my story and I’m sticking with it. I’ll be “off” for the next two Fridays (not that I ever really take a day entirely off), so you’ll have to amuse yourselves elsewhere.

Where Were You When the Empire Fell?

That’s not a question you’re going to hear every day. The Great Decline is gradual and uneven. Many of us still can’t see it. Will our ultimate Fall be a singular event like the fall of the Berlin Wall? Was the destruction of the World Trade Center our equivalent to the Visigoth sack of Rome? Or will it go down slowly like a tire with a rim leak? This story won’t be written for decades yet.

I can’t date the beginning of the end that hasn’t arrived yet. Some would name Sept. 11, 2001. Some would blame the election of George W Bush for turning a peaceful nation with a budget surplus into a bankrupt country losing two wars. Some might start it as late as the Great Recession in 2007, while others reach back to Clinton’s bubble economy and the rise of globalization. Some will go back even further, to the revival of conservatism and the empowerment of religious fundamentalists under Reagan. Still others will blame outside influences, such as the rise of China or space aliens.

The end of manned spaceflight was my “aha!” moment. I had hoped that Obama would be a renaissance president after Bush’s dark age, so I was surprised when this milestone came during his watch. After one last shuttle flight in just a few weeks, American astronauts will depend upon our old rival Russia to maintain a presence on a space station that has no purpose and no future. While cut off from low earth orbit indefinitely, NASA is supposed to develop deep-space capability for an undefined mission with no timetable; it might bear fruit in the 2030s if Obama’s successor doesn’t overturn this non-program and restart the development clock yet again. Abandoning this key American capability made it clear to me how far we have fallen, and how unlikely it is to turn around. A comeback is difficult after the talent disperses and the infrastructure decays.

Have you had your epiphany yet? Don’t feel bad if you haven’t. It’s hard to see until it suddenly snaps into focus one day. It’s like global warming: Theoretical until a moment of clarity makes it frightfully obvious. The Decline is not a one-way slide; short bursts of economic growth and military adventures will periodically divert our attention from the ruling class’s steady consolidation of wealth. (Don’t take the global warming analogy too far, btw: Climate change is a measurable and irreversible physical process, whereas nebulous and potentially reversible factors like politics, the economy, mass psychology, and sociology underlie the decline of empire.)

The decline of Western civilization is a little beyond the usual scope of my blog, so let’s take it down a level to economics.

Massive government intervention ended the recession for the rich. Huge deficits bought our current statistical recovery and keep it sputtering along. As both parties quibble over how to impose austerity befitting our declining circumstances, they condemn us to more economic contraction. It’s 1937 all over again. But Americans are ignorant of history, so what can you expect?

Heh. Do you get the impression that somebody’s not making his sales targets? Guilty. Sales this month are running 25% behind LY. Today’s meager paycheck – which I really couldn’t afford, but why else am I in business? – drove Curio City’s projected end-of-month checking balance down to (-$429). I have $379 in pending deposits against $1,233 in outstanding bills, with another $1,200 worth of orders that have been placed but not yet received. It’s looking grim as I prepare to shut down for a week’s vacation. 

Well, business can’t be an uninterrupted climb, can it? The year’s only half over; the top line’s probably a lost cause, but an unusually good xmas could still pull the bottom line out…and that’s the bottom line, isn’t it? This perpetually struggling economy makes me pessimistic, though. Curio City was founded in the halcyon days of 2005 on the assumption that Americans would always spend money they don’t have on things they don’t need. Who could have guessed that the party would end a scant two years later? Curio City is doomed unless consumers go back to instant material gratification. Would one more rhetorical question help?

It’s a small consolation that everybody else who isn’t upper class is circling the drain together.  

I had hoped that my speedier, more reliable web host might goose sales a little. So far, I don’t see it, but solving Mochahost’s chronic outages would have only a very long-term effect. Did downgrading from an interactive GoDaddy SSL seal to a static Comodo seal hurt my perceived security? Did my new IP address ruin my search engine rankings? Is the economy really sliding back into the crapper for everyone except the rich, as recent statistics indicate? Or are shoppers just on holiday for a few months?

You’d think that slow sales would reduce my cash demands, but I have to keep restocking the same few products. All of my money is going to Panther Vision, Jackite, Switchables, Cool Baseball Necklace, and golf ball reorders; struggling to stay on top of those bills freezes out everything else. It would be a great help if I could liberate some of the dollars locked up in merchandise that isn’t selling…but then it would be selling, wouldn’t it? Yesterday I marked down a couple dozen items by another buck or two; today I sold one and reclaimed $5. Well, at least it’s something.

On the bright side, June’s somniferous start gave me ample time to plant my vegetable garden. I’m going to have a bumper crop of tomatoes this year. Maybe I should sell those. At the $2.50/pound that Stop n Shop gets for inferior tomatoes, I could make thousands. 

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Holy Hell, do I ever hate Blogger's new post editor! It's riddled with bugs and much harder to use than the old one. I don't see any improvement from week to week and their last Help blog post on the subject is months old. I would move my blog if I weren't trailing five years of history and 250+ posts.

Just another symptom of the collapse of civilization. They're everywhere when you open your eyes! ;)