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 08, 2016
2016: The Plan
I'd clean up if I could repeat last Christmas right now. Applying the lessons that 2015 taught me 10 months from now will be like a general fighting the last war. I want to emphasize the nine months of the year that aren't Christmas this time around instead of gambling everything on Q4. That plan is off to a lousy start.
Blowing out my December ad budget (see last week's post) hamstringed 2016 right out of the gate. Because I vowed to stop numbing you with numbers, I'll paint with broad strokes: January-February started out more than $4,500 in the hole, and I can expect to rack up at least another $2,000 in unavoidable costs during these months. Last January and February together only brought in $4,600. Back in the day, those months were good for at least $6,000 and as much as $10,000, which would fill the hole that I'm in and cover my operating expenses. Reaching the high end of that range isn't impossible, but even the bottom-end $4,600 revenue expectation already looks rosy.
This December crept past 2013's December by $15, making it the best since 2011. Then my fortunes flipped with the calendar page. One week into the new year, I'm already running $850 behind LY and looking at the worst week since last September. Business has been so poor that I wondered if there was something (technical) wrong -- my "IT Department" periodically gets jargon-filled emails from PayPal and my web host; crossing my fingers and hoping for the best usually works out fine, but one never knows. I turned my Search ads back on, because what choice do I have? The meter is running again. I feel like a taxi driver in an Uber world.
I would love to restock the 21 Metal Earth models that sold out completely. Even better, I'd also back up the dozen that are down to one or two pieces. Better still, I'd bring in some of the new titles that were out-of-stock when I wanted them in November. In an ideal world, I'd add all 82 of the models that I don't yet carry to the 74 that I do. I'd use more debt to do at least some of that if I were confident that it would pay off. Most of December's advertising blowout was spent on stronger-than-expected Metal Earth clicks and those ads still get more hits than I can afford, so I can see the interest. The trick is refining that expensive traffic into profitability. Having the most desirable models would be a great first step, but that takes money, and if you're paying attention you can see my dilemma.
But wait: There's a wild card. Next month I'm going to launch an arrangement with a specialty retailer who will sell a limited selection of models through his store, which I will then dropship. I'm skeptical that there's enough markup there for two retailers to profit from the same item, but if it works it will be like selling the line through a second store at a modest additional cost...but without having to buy the rogue advertising clicks. I can't say anything more about that until after Valentines Day. If it all goes swimmingly, it might be enough to float me back above water by the end of March.
This is where I usually resolve to find some great new products. Even though I barely have the money to keep my existing stuff in stock, I have to find a way to expand, and I can't afford any missteps. Who knows? Maybe Jackite will finally bring back the Create-a-Bird. The $500-1,000 a year that that one item used to bring in would make a nice addition after a two-year absence.
OK, that was still a lot more numbers than I wanted to lay on you, but I'm going to leave you with one more: I've planned 2016 to end just $1 higher than 2015 did. Reversing my years-long slide will be a victory. If I can't do that, then squeezing a profit out of my declining sales will be an acceptable consolation.