Welcome to Curious Business
Every Friday, I post a small insight into running Curio City and/or Blue Hills Editorial Services. My most recent posts are directly below. You can also start with the first post, or use the subject labels to the right to home in on particular topics. Feel free to comment on anything that interests you.
Friday, January 28, 2011
Business died off immediately after I made last week’s celebratory post. Sales fell from nine on Thursday to two on Friday and one on Saturday. Switchables kicked off a surprisingly nice rally on Monday and the month ended up just a little below LY – which sucks, obviously, but is better than January’s stumbling start had led me to expect. A few good sales in the next day and a half could still push it over the hump, relative to LY. Plan is just a pipe dream.
January (and YTD):
Total income: -3.6%
Total COGS: -16.4%
Net Income (Profit): +134.4%
We like to see the Cost of Goods Sold fall farther than sales do (or, better, rise by less), but that’s only because I didn’t write off $250 worth of dead merchandise this January as I did last year. The same thing accounts for the big jump in profit. December’s lame sales depressed January’s first paycheck and dragged payroll down (payroll should track total income for the rest of the year). The jump in net income would be wonderful if it represented more than $195.
February is going to bomb. Last February’s first Monday was my second-best day of all time at $2,100; that week is the tallest non-Christmas spike on my sales graph. For perspective, the entire month of February ’09 brought in just $2,800. Unless someone miraculously delivers a month’s worth of business in a single day again this year, I am sure to take a huge hit.
On the bright side, that’s my last major hurdle for 2011. Although my overall targets remain very challenging through August, there are no more huge spikes ahead. Come March, the healing can begin.
Two things prevent me from doing much to flog sales right now. First: I can’t buy any new products until I scrape together another $1,100 for tax preparation and payments. Second: Panther Vision is going to upend the lighted cap market again. I don’t have details yet, but a substantial fraction of my total inventory will soon become outdated, and the price of admission to their new lineup is high enough to freeze everything else out.
Ideally, this will play out like November-December 2010 did: Excitement over the new product will revive full-price sales while bargain hunters snap up the slightly discounted old product. It will be costly, and without Christmas to drive traffic it might not happen. But if it works March could be good.
So in the meantime I just putter around and wait. I’m stacking up new product orders against the day that money becomes available. I temporarily killed golf ball sales by moving them to a top-level category (if you’re going to yank the search engine rankings out from under a warm-weather product, February’s the time to do it). I created my Rock n Roll theme category, for what that’s worth. I filed my 940 and created my W-2. After losing money on shipping four out of six orders last weekend, I finally made good my threat to withdraw the Parcel Post option. Turnkey released new USPS modules and I restored international shipping (grumble). I uploaded my company file to my CPA and made some little accounting tweaks that he required. I might take some markdowns next week, since the month is doomed anyway…might as well consolidate the pain.
My Valentines Day jewelry gambit flopped. I expanded some existing lines, added the royal ruby glass, cut a few prices, and then sent a newsletter with a 10% off coupon to 400 people. Only 82 of them even opened the email, and they only clicked 28 times. One friend bought a necklace at a generous discount. Nobody else used the coupon code at all. Three Facebook ads delivered 220 clicks last week costing $75. I doubled my Adwords bids and wrote two holiday-specific ads with no results (barely one click a day). The same treatment at Microsoft Adcenter (Bing & Yahoo) brought even less. Altogether, I spent about $80 for 230 clicks and no sales. I expected eight sales worth $400-450 at my normal 3.5% conversion rate. Even with Facebook’s low-quality traffic dragging conversions down to 1% I should have had two or three sales and recouped the cost of the ads. I wasn’t expecting to take a loss on the effort.
As idiotic as this sounds, I’m going to keep it going until the Valentines sales crest next week. Maybe I just started too early. I hate burning money, but I don’t have anything else going on.
I don’t know if Bottled Up jewelry is a bad fit for Curio City, if it’s just overpriced, or if my marketing sucks. Romantic love is not something that I understand. Valentines Day is supposed to make young men buy young women commercial aphrodisiacs like chocolates, flowers, and naughty underwear. I think that jewelry should fall into that seductive class, but my jewelry customers are always women buying for themselves. I will probably try this same strategy once more for Mothers Day (another “holiday” for which I have little to offer) before I draw conclusions. But jewelry has been weak for me ever since I lost typewriter key jewelry years ago. I persist because it costs me nothing beyond advertising and because I sell just enough to whet my appetite for more.