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, February 25, 2011
So Far, Yet So Close
Tomorrow closes out yet another monumentally bad month. February broke all kinds of records for suckage (or is it suckitude?). A couple of huge lighted cap sales propelled last February to my best non-Christmas month ever, so without a comparable lightning strike this month was all about trimming the inevitable shortfall. Coming within $2,000 of LY would have been good. Finishing down by more than $3,000 was most definitely not. Oh well, at least I surpassed February 2009, my most recent normal benchmark.
It almost didn’t end like this. Yesterday someone inquired about buying 200 caps. I quickly determined that I could get what she wanted from Panther if we moved quickly; they’re closing out their old 3-LED caps and stock is very low. I offered her a good price on the colors that she wanted and she promised to get back to me early today with exact numbers.
Nine out of ten inquiries like this go nowhere, so I don’t get too excited. In spite of myself I was thrilled when her email was waiting for me this morning. This stroke of luck would not only erase my massive deficit…it would actually set a new high water mark for me to worry about next year.
Alas. Her message read: “After a quick conversation with our executives, I was told to check with one of our field Managers to see if we have a vendor that we have a contract with. We have to stay compliant to our contracts. I will contact you when I find out.”
Executives…field managers…vendor contracts. Big companies suck. While it could still come through and invalidate the following numbers, I’m not holding my breath. Behold the latest sea of red!
Total income: -52.4%
Total COGS: -46.8%
Net Income (Profit): -381.4%
Year to Date:
Total income: -31.3%
Total COGS: -38.2%
Net Income (Profit): -472.7%
Breathtaking, huh? When can I expect my government bailout? The post mortem:
At this time last year, the new 3-LED lighted caps were blowing out of here so fast that they set sales records. This year their sales just plain blow. A competitor is offering free custom embroidery with no minimum quantities plus free shipping, for a dollar less than my delivered price. I would need to cut my retail by a buck just to match them, and of course I don’t have an embroidery machine or the space to get one. Should I cede the market to them or become that most reprehensible of creatures, the discounter? The only thing I really have going for me right now is my quantity discount schedule.
There’s no point in tweaking my own variables before the equation changes, and yesterday’s frenzy of lighted cap activity revealed that the first of the new 4-LED Panther caps are now available. I will spend this afternoon working up an order on the gamble that blowing my entire cash reserve on their revitalized lineup will goose the March numbers.
A new blockbuster product line would solve everything. I wish finding one were easy. Maybe next month’s Cavalcade of Crap (aka Boston Gift Show) will reveal something good for a change. Meanwhile, thank the gods for the power of Switchables to drive repeat sales. Regular readers might recall that I've nearly pulled the plug on that line twice before, but I persisted and they came back.
The more I thought about the shipping-charge idea that I outlined last week, the better I liked it. So I ended my experiment early and restored Parcel Post rates. I raised the handling fee from 50 cents to 75 cents to offset the lost margin on bigger packages. If I ship five First Class orders for every Parcel Post order, the extra $1.50 in handling fees will cover the cost of upgrading to Priority mail. Parcel Post/Priority Mail customers won’t notice the extra quarter. First Class customers might, but if I have to gouge somebody, they’re the ones to hit. And since I can print stealth postage through Endicia but not through Click-n-Ship, First Class customers can’t even see the spread.
This month’s sales slump did begin when I removed Parcel Post. Sales did revive when I reinstated it two weeks later. Association is not causation, of course, but I can’t really afford to run a lengthier trial. Did it work? It’s hard to say. I choose to believe that my Parcel Post experiment was partly to blame for February’s failure.
Now begins the year-long uphill slog just to match LY’s mediocre sales numbers. At least there are no more dramatic spikes in my sales targets for the rest of the year. At least February ended stronger than it began. At least that huge cap sale is technically still in play. At least Switchables are still lively. I’m not quite ready to slit my wrists yet.
I remembered to file my annual report despite not receiving a bill or reminder from the Secretary of State this year. O, what a good boy am I! With that $109 deposited to the state’s coffers, I am finally done paying last year’s taxes and accounting…and I’ve still got $88 in the bank!
Republican shenanigans that I previously shrugged off as showboating have crossed the line from annoying to worrisome. The GOP’s wingnuts are focused on union busting, environmental degradation, and devastating cuts to lower- and middle-class programs to restore that halcyon Bush budget of 2008 that brought us such prosperity. Meanwhile, their leadership practices its core competency: Frightening voters into backing oligarchs and generals over their own interests. Obama’s poll-driven march to conservatism offers no hope until after 2012. Teabaggers threaten to shut down the government if they don’t get budget cuts that would reduce economic growth by 2% over the next half year (according to Goldman-Sachs), yet 25% of Americans polled support them, and 37% want even deeper cuts. You have to admire Republican skill at selling misinformation (or Democratic incompetence at rebutting it). People simply don't understand why a government budget doesn't have to follow the same rules as their household budget does.
Together with spiking oil prices, these stifling Republican budget cuts pretty much guarantee a new recession. Which very well might be their intention, given their announced priority of defeating Obama at any cost. Paradoxically, that might be good for Curio City; my best growth ever came during those desperate days of 2008 that the conservatives are pining for.