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, March 25, 2016

PayPal Is Still Trying to Kill Me

PayPal is threatening to cut me off again -- Not for the first time, or even the second time. I think their issue is the same as it was last May. 

We recently announced several security upgrades planned for this year, some of which may require you to make changes to your integration. You’re receiving this email because we’ve identified areas of your integration that may need to be upgraded.
What you’re about to read is very technical in nature – we understand that. Please contact the parties responsible for your PayPal integration, or your third party vendor (for example, shopping cart provider, and so on) to review this email.

They helpfully included a table showing action items flagged "Yes" if you need to make a change or "No" if you don't. Mine looked like this:

·         SSL Certificate Upgrade to SHA-256: YES
·         TLS 1.2 and HTTP/1.1 Upgrade: YES
·         IPN Verification Postback to HTTPS: NO
·         IP Address Update for PayPal Secure FTP Servers: NO
·         Merchant API Certificate Credential Upgrade: NO
·         Discontinue Use of GET Method for Classic NVP/SOAP APIs: NO

The two items flagged as deficient are something I understand in a general, non-technical way, because they're the same thing that they panicked me over last May. I double-checked with my web host anyway; MDD Hosting verified that their server and my SSL certificate both meet PayPal's encryption standards. I wonder if they reversed their YES/NO flags -- what if "NO" means "No, you aren't compliant" instead of "No, you don't need to do anything"? I hope that isn't so because I don't understand those last four items at all, beyond knowing that they are shopping-cart specific (and hence Turnkey's problem).

Since the email didn't include any way to respond, I logged into my PayPal business page and used their Help contact form to ask for clarity. After a few hours I received an automated reply with some boilerplate that didn't come anywhere near my question, but it did say " If the following information doesn't answer all of your questions, please reply to this email and one of our customer service representatives will be happy to assist you. ". I hit Reply, pasted in the same question, and sent it off again. 

No response at all. So much for clarity. 

In case you've forgotten, PayPal is my credit card processor. If it breaks I won't be able to accept any payments at all. I choose to assume that their email is right -- that the first two items are the ones that supposedly need attention, and that I already addressed these so-called problems last summer. Either my website is going to break or it isn't, and I won't know for sure until June. 


As long as I'm hating on PayPal...I got my first chargeback this week. A customer reported an unauthorized charge to her credit card company instead of asking me about it. The USPS showed her package as undeliverable and being returned to sender. Refunding her money is annoying, but as long as I get my merchandise back I'm only out the transaction fee ($0.90) and the shipping charge ($2.60). But because she initiated a chargeback instead, PayPal skinned me an additional $20. Should I have disputed the chargeback rather than accepting liability? Other banks have charged me as much as $25 at each stage of the dispute process, and then invariably decided against me anyway, so I decided to cut my loss rather than risk more penalties. I couldn't refund the money without accepting liability so there was probably no avoiding that $20 penalty. 

Based on the item that she bought (Glovin' It), the "unauthorized charge" was probably made by a child (assuming it was really unauthorized in the first place). A real thief would have spent more than $20...although the undeliverable address is suspicious. Maybe it was a real child thief.


The annual Cavalcade of Crap is coming up again next weekend. Pretty sure I'm not going to bother attending since (a) I'm already $4,600 in debt, and (b) jury duty is going to pull me away from work for at least one day next week, and potentially longer. Maybe I'll change my mind at the last minute and slog through that sad little trade show yet again, but that debt is going to be with me well into the summer. It's kind of pointless if I can't buy anything.

Friday, March 18, 2016

Go Fly a Kite

Thanks to global warming and El Nino, kite season took off a little early this year -- climate change does have some sliver linings. For the past couple of years Bird kites have been my bread and butter from April through October, or six of the year's 10 non-Christmas months. They're my most important product overall.

When I had just one eagle kite left I went to Jackite to order more. Alas, the bald eagle has joined the long-lamented Create-a-bird and the Blue Jay (two left in stock as of this morning, folks) in the "There are no products to list in this category" category. How could they run out of eagles? I have sold 172 of them at $70 a pop, and many of those orders included poles worth up to $75 more. Orders for two or three eagles with poles worth $300 or more are not terribly unusual. 

Jackite took them offline because their stock had run low. Yesterday the falcon kite (265 sold at $40) went off-sale, too. I bought as much stock as I could afford, and they were still filling dropships as of yesterday. My contact explained that "We're waiting for our Tyvek to come in." That's worrisome; they were "waiting for Tyvek" when Create-a-bird went out of stock at least two years ago. I said I hoped they'd make more of those, too (571 sold at $10 each). No comment. I asked again for an expected restock date on eagles; no reply. 

Those three kites alone have brought in at least $28,000 over the  years. Add-ons like poles (at least 136 sold) and line rigs (675 sold) easily bring that over $30,000. I have enough stock to cripple my way through a week, maybe two. After that I'm going to start bleeding. If they're gone forever I'm probably out of business -- I just don't sell anything else in any quantity during the summer months, and it's not like I can switch suppliers; AFAIK there are no other companies making an equivalent product. However much this shortage hurts me, it's got to be exponentially more damaging to Jackite, so I'm sure they'll remedy it ASAP unless my darker fears are realized -- it looks suspiciously like a company that's clearing inventory preparatory to selling or dissolving itself, and I've noticed other, more subtle signs of a company potentially in distress. I can only hope that I'm wrong and this is just a blip.

This morning I learned that eagles won't be back for "3-4 weeks, at least." No word on falcons but it's probably the same story. I've stopped advertising kites for as long as the top two sellers are unavailable.    


Remember last week I said I was going to set up a Bing Shopping campaign? I was pleased to see that Bing has a function to import my Google campaign directly. Surely it couldn't really be that easy, could it?

Nope. " CampaignInvalidShoppingCampaignProviderId" Uh, excuse me? " Fix this issue directly in your import file, and try importing again." Well alrighty then. I have no idea what issue you're talking about or where my import file is. Let's try setting it up from scratch, then, shall we? 

After a couple of hours I think I got it right. After a few days my product feed was apparently accepted. As far as I can tell the campaign just started running yesterday. Four impressions and no clicks is underwhelming, but it does indicate that it's working.If I'm not going to have kites to sell, I need to step up my advertising for everything else, and I need to do it as cheaply as I can.

Friday, March 11, 2016

Meet the New Code, Same As the Old Code

Microsoft AdCenter, a.k.a. Bing Ads (formerly Yahoo), is identical to Google AdWords in every way except cost and effectiveness. Bing's keywords are slightly cheaper because there's less bidding competition, but since I get fewer conversions each one costs a little more than a Google conversion. Consequently I only turn on my Bing ads when search traffic is abnormally high, as before a major holiday, and then I turn them off again when the holiday passes. They have been dormant since Christmas.

A Bing representative told me in a phone consultation a few weeks ago that they had changed their tracking code. If the old code had stopped working while my ads were running last December I might have missed some conversions that would have improved Bing's performance statistics. The new script is harder to implement than the old one and I didn't get the help that I needed from Turnkey's forums until this week, but it's finally in place and I didn't break anything. I turned my Switchables ads back on in hopes of getting a conversion or two to verify that it's really working. (Switchables are the only thing that's selling right now.) But after racking up $12 worth of clicks with no reported conversions, I decided that the test was getting too expensive and pulled the plug again. I'll take Microsoft's word that the code is working.

Now I can explore some of the other things we talked about.  Their new "shopping campaign" is so identical to Google Shopping that it accepts the same product feed; since that's my most profitable section of Google, it's worth trying on Bing. I'm going to try to set that up this afternoon. I'm not sure what "native ads" might be but I wrote that down twice, so I need to find out why. I probably won't do "remarketing" at all because it's just too creepy. "Remarketing" makes a company's ads follow you around the Internet and re-display whenever you go to a related website. It's said to be very effective, but it's too much like stalking so I won't do it. I don't need more ways to spend money anyway. As you know if you've been following along, buying more advertising is the last thing I want to do unless it's more cost-effective than it used to be...and it's going to cost me some money to find out.


I finally paid my CPA and cleared the tax hurdle for another year. I hate to say it, because he's been my accountant from the beginning and he does fine work...but I don't think I can afford him anymore. His fee has gradually crept up even as my revenue has crept slowly downward over the years. Much as I'd rather not, I'm going to have to shop around next year. I strongly suspect that I could find someone to prepare the return for my little nanobusiness for half of what I'm paying now and the savings would go directly to my bottom line. 

Now I can start whittling down debt. I don't expect to claw my way back up to zero until July. 

March 2015 was the third-best March in my 10-year history, and this week was the high point of that strong month. This year March is running on the weak side of average and this week was weak. Adding this week's expected shortfall to last week's sets me back by $1,000 versus LY in just two weeks. And the week after next sets another high bar. It will take an Easter miracle to keep March's numbers from bleeding copious red ink...and miracles only happen in fairy tales.   

Friday, March 04, 2016

Google Ate My Profit (with Bonus February Revision)

My tax return officially closed 2015 with a nice $2,465 loss (versus the $3,227 loss in the raw numbers). What's nice about a loss? Since S Corporations really are people, my friend, it gets deducted from income on my personal 1040. Profit/loss is mostly an accounting technicality -- functionally speaking, it's all about cash flow -- and at tax time I'd rather get a fat deduction than a fictional boost to income with no corresponding payout, as happened last year. 
What good are profits, apart from being a capitalist fetish? A business that consistently loses money year after year can't eke out a positive cash flow and will eventually starve to death -- unless it's a chain that can grow cash by opening new locations. Chains need to be profitable by the time they run out of expansion potential, but that's a secondary concern while they're growing aggressively. And, like losses, profits belong to the shareholders (me). If the company has enough cash to distribute its profit then I get a fat check at the end of the year and a correspondingly higher tax bill. If the payout is big enough to cover the taxes due, I break even. If Kraken Enterprises can actually give me more than enough to cover the tax, that's...well, profitable. But it's been several years since that happened. If it can't afford to pay me the profit, I much prefer the deduction.

Every year Kraken Enterprises owes $456 to the Mass. DOR and $109 to the Secretary of State, regardless of profit or loss. The tax return mainly determines Curio City's impact on our personal taxes.

So where did I lose $2,465 this year? That's easy. Sales were down by $1,200 and Cost of Goods Sold was up by $1,812, of which $1,764 was advertising. I can't blame Google for the sales decrease, but they snarfed down nearly every dollar of the COGS increase.

That's what makes this year's goal so simple: Maintain sales at last year's level (halt the slide) and restore profitability (cut advertising).

The last day and a half of February were unexpectedly strong. After last week's public hand-wringing, I figured I should show the revised monthly numbers. Beating LY by $11.80 is consistent with my goal for the year.  

Total income: +0.5%
Total COGS: +0.9%
Payroll: -21.2%
Marketing: -4.8%
Net Income (Profit) vs LY: +14.5% (+$13)
Actual Profit/Loss: -$74

Advertising was down, sales were up. That's a win. It's going to be much harder to do that in March. To stay on track, I needed week one to be a little better than average and week two to be much better than average. Barring another unexpectedly strong finish, week one will be on the low side of average, so now week two has to be downright stellar...and I'm not going to crank my advertising back into high gear.

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