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, December 09, 2016
At the risk of sounding like a broken record, I'm still trying to understand why this Christmas is breaking records as the worst ever. Last year this was the busiest week of the year, clocking in at $3,500. Led by Panther beanies and caps, it included a $1,176 day. This year the entire week won't be much better than that. I sold 200+ beanies last year and might have done better if I'd been able to get more. Last month I conservatively bought 96 for starters...and I've sold only 11 of them. Monday's encouraging 14 sales were only worth $366 (vs. $605 LY), but it looked like things were finally normalizing. Nope. It looks like that's going to be this year's high water mark. I haven't had a day with more than 10 sales since then.
Last week I ruled out technical problems with my website. The only substantial change I made last year was switching from "http" to "https" URLs to improve my organic (free) search results, because Google supposedly rewards secure pages. Analytics says that made no difference. Organic search delivered 30% of my traffic over the past 30 days; paid search brought 53%, and the rest was referrals or direct visits. Those numbers are within a percentage of the comparable period last year.
So if it's not the website, it's got to be the products or the advertising, right? You'd think I'd have already bored into this boring stuff, but you'd be giving me too much credit; I was convinced for too long that I had technical issues. Since this year's been running 25% behind LY, I had expected that to carry into Christmas sales. I figured I'd cut advertising by a similar amount. So let's look there first.
Analytics says that paid clicks are down 44% from LY and my spend is down by 43%. You'd expect those two numbers to move in tandem. What wasn't predictable was a 14% drop in my conversion rate, resulting in 53% fewer transactions altogether; that agrees with last month's numbers showing November's total income down by 54%. Does that mean that I could boost sales by 50% if I increased my ad budget by that amount? No. It means that I might expect 50% more clicks for 50% more money, but only 40% more conversions. I can't just spend my way out of this, and because my debt crisis began when I overspent on advertising last Christmas, I am not going to try. Analytics also validates my gut feeling that the average transaction size fell; it's down by 18%, from $48 to less than $40.
This just quantifies what I already knew: Fewer visitors are buying anything, and those who do are buying less. Analytics can't tell me why that's so. I blame my product selection. This post is getting too long and it's too late to affect my product mix, so I'll leave merchandise for next week's post.
Y'know what grinds my gears? All of my beanie keyword bids on Bing are a few cents short of first-page placement. I'd really love to sell some of those 80 beanies that I overbought so I raised the bids to gain a page one toehold. Before I even got to the bottom of the list, the top of the list had already been outbid again. It looks like somebody is running a script to automatically ensure that placement by $.01, effectively freezing me out of page one. This is why we can't have nice things. Oh well, if I can't poach his sales at least I can jack up his costs.
Somebody else is bidding $10.88 per click for the best lighted cap keywords. WTF, man? Your markup is only $10. Even if you convert 100% of your clicks you're losing money. Well, bidding works like this: One need only beat the next-highest bidder. If he's bidding $10.88 and the next-highest guy is bidding $1, Mr. 1088 is really only paying $1.01 (which is still too rich for me; I generally top out around 75 cents). $10.88 is a scary number that guarantees nobody will outbid him, but he's only paying that if somebody does.
If I had deep pockets I'd try to secure second place with a $10.87 bid and make Mr. 1088 cough up the big bucks, but there's always a risk that he's got a script to go instantly to $10.86, and I'd have to buy some crazy expensive clicks to find out. Big companies employ experts dedicated to gaming this stuff in real time. Us little guys have to be content with scraps.