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, July 01, 2016

Fly with the Ospreys

June was shaping up to be a few eagles short of LY when an order for 15 ospreys with poles and all the trimmings swooped down to make this the second-best June ever and just a few eagles short of 2008's record. After I called to verify validity I actually did my happy dance...and I hadn't even known that I had a happy dance. I'm ordinarily not a happy sort of person and I'm not sure I like that feeling. I reminded myself that it ain't all sunshine and lollipops; as a dropship, I need to pay for the merchandise. 

Jackite still doesn't have any eagles and they're nearly out of poles, too. Falcons are finally back, but that won't make a big difference because they're more or less interchangeable with ospreys. I don't know if their problem is cash flow, inventory control, understaffing, management, or some combination thereof, but it's small consolation that running out of so much inventory during their peak season must hurt them a lot worse than it hurts me.


Total income: +32.1%
Total COGS: +38%
Payroll: +27.7%
Marketing: -20.4%
Net Income (Profit) vs LY: +134.8% (+$1,008)
Actual Profit/Loss: +$260


Total income: -9.3%
Total COGS: -8.4%
Payroll: -12%
Marketing: -0.9%
Net Income (Profit) vs LY: -27.4% (-$443)
Actual Profit/Loss: -$2,059

So a $1,453 sale ought to take a bite out of the debt, no? Well, no. Watch me make it go away: $742 buys and ships the merchandise. $291 goes into my pocket. PayPal skims $51 off the top. Advertising consumes a budget-busting 20% of gross (the same percentage as payroll); while this sale did not in itself cost me $291, that's how it has to be allocated. Miscellaneous overhead like taxes, web hosting, telephone, internet access, professional services, etc. sucks down another 6% of gross (very roughly; I pulled that number out of my ...hat), or $87 of this sale, leaving a negative $9 profit. Yup: statistically speaking, I lost $9 on the sale. (June's advertising spend actually came in at just 10.5% of the unusually high gross, which changes this sale's bottom line to a positive $129 -- that's how much it will contribute to debt reduction.)  
You can see how the game is rigged. Payroll and advertising are the only two expense items I can really control. I won't cut payroll because (a) paying myself is the whole point of Curio City, and (b) I refuse to pay Google more money than I pay myself. I'm always whittling away at advertising, but that's a battle of nickels and dimes, and too many of those cut into income. 

On the income side, you can also see why that extra discount/free freight offer that tempted me last week was so tempting. Alas, caution won and I passed it up. The Internet is too competitive to allow raising prices. My 50-cent handling fee brings in $500 a year. Some of my product weights are set an ounce or two too high to yield small shipping overcharges.  It's all about the nickels and dimes.    

All of that spin aside, June was a great month. Two more huge sales like that one would turn the year around. It could happen.

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