Go to Bed, 2013, You're Drunk

Yes, I’m working on Christmas Day so that I can take the rest of the week off. I’m closing the books early because I’m shutting down my advertising on Thursday and Friday for a quick vacation. The numbers will improve fractionally from this snapshot, but not enough to be worth correcting. (No post this Friday, in other words.)

December

Total income: -29.6%
Total COGS: -24.9%
Payroll: -34.1%

Marketing: +31.1%
Net Income (Profit): -74.2% (-$1,478)

2013 Totals 

Total income: -20.3%
Total COGS: -20.8%
Payroll: -20.0%

Marketing: +5.7%
Net Income (Relative to LY): -136.1% (-$4,091)

Net Income (Absolute): -$1,085

This was my first losing year since 2007, my second consecutive sales decline, and my biggest decline ever. Relative to LY, the bottom line fell by $4,000 on a top-line decrease of $14,823. More than half of the shortfall went to Google for advertising. $600 of the remainder came from inbound freight charges and stock writeoffs and the rest is spread around.

At least no profit means no K-1 income and no income tax. It also means no year-end bonus for me, alas. 2014 will be a very lean year for both me and Curio City.

The good news is that I can cover next Monday’s paycheck and tip my salary into five figures, neither of which was a sure thing. The bad news is that my next Amex bill is so bloated with advertising and postage costs that all of January’s cash flow has to go there. I can forget about the new computer, desk chair, smartphone, and software updates that I wishlisted a couple of months ago. All I can do now is stash cash. 

I think the new computer has to be non-negotiable even if that means going into debt. Microsoft will discontinue Windows XP support in April. Running an unsupported OS is dangerous. I like to buy $750-900 machines and keep them in service for 3-5 years. Unless Microsoft extends XP’s life so that I can flog this old Vostro through one more year, I might need to go with a sub-$500 Dell and replace it in a year or two.  

Christmas Week 7: Another One Bites the Dust

It’s finally over! Christmas bit the dust on Thursday. I wish a soft landing were possible, but it never works that way. The few last-gasp orders with next-day shipping that laggards might place over the weekend won’t add up to much. I’m always simultaneously elated at having survived and sad that the money’s stopped flowing. The elation’s on the weak side since this year never galloped out of control. I don’t think that one can be mildly elated, so I’m going to downgrade that to merely relieved.

Monday tied this year’s record of 20 sales and set the daily dollar high at $700 – mediocre by historical standards, but still nice to see. After I got those orders boxed and on their way, Tuesday finally gave me a little time to start paring back my $55-60 daily advertising bill. Google did very well indeed this year. As of today I’ve knocked that expense down to $45 on the way to its eventual rock-bottom $30. 

I peeked at my YTD profit-and-loss statement to see if I could afford to write off more stock for my wife’s holiday party favors. Quickbooks says I’m heading for a $750 loss…so: No, as much as I’d like to clear out more junk, I’m struggling to claw my way up to zero. Markdowns already account for half of that loss. But I’m getting ahead of myself; next week’s post will wrap up December and lay out the annual numbers.

In the disappointments department:

·         My 51-piece opening chrome auto emblems order found just three takers. I had hoped that this line might become a new gold mine.

·         Corn-n-Tater bags were supposed to ride a wave of media attention to stardom. When that tanked they died off completely – I sold all of two during the holiday season. Will they revive now that the holidays are over? The 117 that I still have in stock certainly hope so.

·         Over the past few years the Fuzz Scarf sold 155 pieces at $17; this year I sold exactly one at the new $21 retail.

·         I’ve mentioned Whiskey Stones before; that former wunderkind brought in over $14,000 in Christmases past. This year I didn’t sell a single set. It was killed by discounters and too many me-too competitors.

·         The LED Motherboard Christmas Tree blew out of here in the hundreds when it debuted at $10 a few years ago; they killed it stone cold dead by raising the price to $17 last year, and dropping it back to $15 this year didn’t revive it – I moved maybe half a dozen. At that pace the 24 that I’ve got left will last me another four years.

·         There’s a funny story behind the LED Peace Sign Tree Topper: Its notoriously error-prone vendor short-shipped my huge and bulky order during its heyday a few years ago. Then they double-shipped the replacement order, and now it’s out of production. The 21 out of the 24 free pieces that I’ve still got will trickle out of here in the next year or two. It’s a stretch to call this one disappointing since each sale is pure profit, but it did slow way down.  

Christmas Week 6: Gone, Baby, Gone

All the good stuff is selling out.
 
I left a lot of money on the table by misjudging Metal Earth. First, I forgot all about these models until I got a paper catalog very late in the season (mid November). Then, already facing a big pile of debt, I dithered for a week. Then their screwy online order form tricked me into ordering four times as many pieces as I wanted. I called them up and cut the quantities – I wish now that I hadn’t done that, but it seemed prudent at the time and I figured that I’d reorder quickly if they took off. They did, so I reordered on 11/30, scarcely a week after getting my initial shipment. That little reorder didn’t even ship until 12/9 and won’t arrive until next Monday…so much for just-in-time inventory management. I might’ve sold 100 more pieces if I’d had them. If last year is a good precedent, I won’t sell another one of these things until next November. One customer answered the optional “How did you find us?” checkout question with “You were linked in an online article or blog,” so Metal Earth might have been a random act of media that won’t repeat. But I’m going to restock anyway if my open-to-buy (currently $4,000 in the red) ever sees black ink again.

What else? All 12 Manatea Infusers sold out, probably because somebody pinned it on Pinterest. That was a surprise, especially since I didn't sell a single Teatanic (which I like better). I just sold my last three Pizza Pros this morning. The Buddha Butter Dish is gone after a quick surge that must have been driven by some gift guide somewhere. The Krampus ornament sold out weeks ago. I’ve sold 22 of the 60 Panther Vision Winter Beanies that I brought in.   

Christmas should have hammered me hard this week. Sunday’s 20 transactions, a level that should have persisted through the whole first half of December, made it look like things were finally taking off, but I didn’t touch 20 again until yesterday, almost surely for the last time this year. The pace has been brisk but manageable, if disappointing by historical standards. I’m breaking a sweat every day without getting overwhelmed. That’s good from a mental health standpoint, anyway.

I expect to rack up another pile of small sales through the weekend, and then a lot of nothing next week. I should get peppered with desperate people paying for fast shipping, but I have never sensed the usual desperation this year at all.

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The huge dropship that I mentioned last week goosed this week’s sales into Christmas territory, as I had hoped, but it left both me and my customer with hard feelings. He was dithering between the 4-LED camouflage caps that Panther had in stock and the 6-LED caps that were due to arrive today. The last time I talked to him, he was going to find out if his embroiderer’s turnaround time would allow him to wait for Panther’s container to arrive. I said “So you’ll call me in the next couple of days when you’re ready to commit,” or at least that’s how I remember it. His recollection is a little different. When he didn’t call for two days I decided to get a status update from Panther before calling him to press for a decision, and it’s good that I did: It turned out that they pre-sold the entire container. So I left him a message saying “I have good news and bad news. The bad news is that the 6-LED caps are no longer an option – they’re gone before they even arrived. The good news is that that makes your decision easy. They still have the 4-LED caps and I can get them on their way as soon as you give me the go-ahead.” 

He was seething when he finally called the next day. I expected him to be pissed at himself or at Panther, but his sights were set squarely on me. He thought that I had backordered the 6-LED caps with the understanding that I’d cancel if his embroiderers couldn’t turn them around in time. I don’t know how he got that impression. I never intended to do anything of the kind; it would have tied up $2,000 on my credit card for merchandise that he hadn’t paid for yet (although he did give me his payment info), and Panther would not have been amused by a last-minute switcheroo – they would have had to refund that $2,000 and process another $1,800 order, incurring bank fees at each step. As I see it, the customer lost out because he waited too long to commit. He thought that he had committed when he gave me his credit card info, even though I chose not to use it yet (to avoid $160 in bank fees for two orders and a refund). Maybe I misled him, or maybe didn’t express his intention, or maybe I simply misunderstood him. There’s no way to pinpoint the miscommunication because it was all verbal. 

This is why I always prefer to work through email. I’m not good on the telephone and there’s no record of what was said.  

In the end he ordered his 4-LED caps and I got my big sale (albeit for the cheaper caps), but neither of us are happy and I stand to lose a good repeat customer. I should send him a contrite email after he gets his caps and has some time to cool down. He’s the customer, so this is my fault whatever the actual facts. 

I wonder if Panther’s container arrived today as they expected.    

Christmas Week 5: Where Is Everybody?

What if they threw a Christmas and nobody came? The December crowd that I hoped for after November’s no-shows isn’t showing up. Last year three enormous lighted cap sales led this week to my all-time sales record of $6,400. This year it’s struggling to crack $2,000. I didn’t expect to break the record…but $2,000? Really? My email chime ought to be dinging every half hour to announce 15 or 20 sales a day; I didn’t even break a dozen until Wednesday. Everything is still running a week behind where we should be. I’m busy, but I’m not flat-out, stressed-out busy.

I do have one ace up my sleeve in the form of a very large lighted-cap dropship. The customer is trying to decide between the bird in the hand (4-LED caps that Panther has in stock now) and one in the bush (6-LED caps not due to arrive until Dec. 13); either decision will deliver the big spike I’ve been waiting for. But that’s bittersweet since I’ll be selling merchandise that I haven’t bought yet; I really need to sell down the mountain of paid-for stuff that came in last month.

Unfortunately, darkness is also gathering. Somebody who bought $400 worth of loose golf balls last month is convinced that they have a production defect. Her photos don’t show any flaws that I can see and her description is vague; I’m waiting for her to mail me a sample with the alleged defect marked. I honestly don’t know how this will play out until I can see whether the balls are really defective or if she just doesn’t like them. A $400 refund at the same time that Christmas is winding down would be a big shock to the old cash flow.

With two weeks left (less, really; online sales start to fizzle by 12/15) it’s too early to start the post mortem. I have a couple of theories that I’ll keep to myself for now. I’ll just mention for the umpteenth time that this December really needs one more week.

My radio told me that Amazon.com recorded 300 sales per second on Cyber Monday. The mind boggles. I averaged one sale every two hours.

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Metal Earth models are beating expectations, incidentally. I now regret ordering them late and conservatively because it’s too late to replenish. They remind me of Bicycle Chain Bottle Openers in that they only ever sell at all during Christmas, but they’re quite strong for a few weeks. (In a strange footnote, the workshop that makes bicycle chain products burned down last week. The company will recover, thanks to insurance, but they have no inventory for Christmas orders this year.)