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.
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Friday, December 25, 2015

Christmas Post-Mortem

This week (unofficially Week 8) only needed to average $132 per day. So far, it's at $154 thanks to a strong Sunday. December only needs another $201 to equal LY as far as Excel is concerned. 

Is it too early for the annual After Action Report? Nah, let's do this while it's fresh. These are mostly notes to my future self, should he deign to look back next fall.

·         I filled 437 orders in November and December with two known packing errors. There were 1,174 orders all year (with enough time left to hit a nice round 1,200). 37% of my sales came in November and December. September was 2015's low point with 53 orders. I've always thought as September as the month that fall begins, but for the past couple of years it's been the month that summer dies.

·         Panther beanies reached the point where lighted caps were five or six years ago, when they crossed over from novelty to mainstream but before competitors ate my lunch. Panther starts to run out of beanies by early November, so I need to stock up as heavily as possible as soon as the Oct. 13 credit card statement period starts. I did that this year, but not aggressively enough. I sold at least 100 black beanies alone this year.

·         The $1,833 that I invested in Metal Earth ultimately returned $2,167 before I turned off the ads and stopped counting. Disregarding the stock that I already owned, the theoretical perfect score at their average markup would have been $2,700...so that's a winner. Vehicles (especially military, and especially aircraft) outsell landmarks by at least 20:1. Next year, I should order new models first because those start disappearing by Nov. 1; then reorder my bestsellers; and then do a general fill-in if there's any money left. I should limit my initial spend to $1,500, tops, and try to squeeze in a $500 reorder in early December.  

Metal Earth is going to get its own post in the near future. I want to make it a year-round line, but regardless of what I do in terms of advertising and presentation, they don't sell until the 2nd week of November and they die right after Christmas. When other products aren't competing for advertising dollars, Metal Earth can generate 60-70 clicks a day at a cost of $30+, often without any conversions. The interest is obviously there, but I can't afford to court it unless I'm amply stocked.

·         Speaking of marketing: as few as three people ever see my Facebook posts about products and coupons. Newsletters reach 100 or so people and can bring in as many as two or three sales, but no more than that; they're only worth the time that I spend writing them because my time is worth so little. Bing ads draw a lot of clicks but don't convert often enough to justify their price; Only Google AdWords is cost-effective, and it gets more expensive every year. From Nov. 1  to Dec. 17 I spent $732 on Bing ads that landed 41 sales, or $17.85 per conversion. During the same period Google pocketed $2,550 to deliver 238 sales, or $10.72 per conversion. If you remove the "Google Shopping" part of the account and only look at my Search ads, the cost rises to $17.56...so Google's advantage over Bing owes entirely to their automated Shopping feature. Unsurprisingly, Bing is rolling out a clone next year.   

·         Ordering early and carrying a credit card balance seemed to pay off in robust November sales. Did the "extra" business justify $200 in interest charges? Hard to say, but I did learn this much: I mustn't carry more than $5,000 of debt into December, because operating expenses and payroll (yay me!) make it hard to pay off any more than that. I brought a $7,400 debt into the month this year and it took everything I had to slay it, leaving me limping into January.

·         "Gifty" stuff adds interest to my product mix but it only ever brings in minor sales, and this year it barely even managed to do that, apart from ornaments and similar Christmas tie-ins. Kitchen gadgets are dead, dead, dead. I ought to cut a couple of vendors entirely next year. I also need to refrain from restocking everything that sells out -- novelties should be one-offs, not as core stock. Take the Pizza Boss, for example. I sold 24 of them over the past two or three years so six per year looks like a safe bet. This year I sold none. Why did it suddenly die? Shoppers are fickle. Odds are that I'll wind up selling them at cost. Obsessive Chef had a very similar trajectory; after dribbling 15 of them out over the past few Christmases, the five that I'm stuck with now are likely to be with me for a long, long time.

·         I have done an excellent job of reducing my average package size. In the early years a pile of 25 orders was too big for my Miata; this year, I could fit 25 orders into my carrying tote. Bird kites are the glaring exception, and those scarcely sell during Christmas. I'd like to see people fill bigger boxes with assorted piles of random stuff, but this year very few looked at anything beyond my bestselling lines. I blame smartphones for people's unwillingness to browse.

·         I need some more expensive products. Some people want to spend big on gifts and most of my stuff tops out at $20. Also, small packages are less likely to be stolen but more likely to get lost in transit.

·         I've been wasting money buying insurance from USPS. Most actual losses are from people who claim they didn't get a package that was confirmed delivered, but insurance only covers packages that are lost before delivery or that arrive damaged. Although my stated policy emphatically disavows responsibility for theft and misdelivery, it costs me customers, and sometimes money when they threaten me with a chargeback. Signature confirmation should eliminate those losses, and it's cheaper than insurance, too. So far nobody has complained about the hassle. New policy! 

In spite of a good November and an acceptable December, the annual numbers are going to look kind of grim next week. I am beginning to wonder if my cost structure makes profit impossible. But let's leave that thought for next week's post. 

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