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.