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 23, 2016
A couple of weeks ago I fingered my product assortment as the primary suspect in this year's Christmas massacre, so let's look at the evidence.
Beanies and lighted caps: Panther Vision lighted caps were Curio City's first sustained hit. The days when I used to sell them by the caseload ended four or five years ago; nowadays they only dribble out slowly and singly. All good products eventually die (usually killed by discounters) -- in fact, the better a product is, the more competitors it draws and the faster it dies. The retailers' loss is the consumers' gain.
Beanies revived the brand two years ago. Last Christmas I sold more than 200, and could have moved more had they not run out by early December. To head off shortages this year I brought in 96 right up front and stood ready to back them up as soon as the six- and 12-piece orders started popping up. Well, they never did, and I ultimately only sold 15 of those 96. Discounters are selling a shoddy knockoff product for as little as $4, and reputable sellers of the genuine article abandoned ship with two-for-one clearance sales. I spent $1,000 and earned back only $300. My remaining stock will last me for years, assuming it revives at all. Unfortunately, the batteries won't last that long, so I might need to join the discount race to the bottom. On the plus side, I'm already well-stocked for next Christmas. (Yes, I still intend to live through another Christmas...and yes, I'm already thinking about it!)
Metal Earth needs a deeper look, so I'll just relate the lowlights today. Over the fullness of 2016 I spent $1,000 replacing last year's bestsellers, $1,000 adding older models that I had skipped before, and $500 on the newest stuff -- making this my bet-the-company move. Well, I lost that bet, and it might indeed cost me the company. I had expected to just recoup the $2,500 that I spent. Their actual $949 in revenue makes them the biggest loser. They also suck down an inordinate share of my ad dollars -- over the past 30 days I spent $392 on clicks that brought $430 worth of sales, for a whopping return of $1.10 on each dollar spent. In fact, Metal Earth accounted for half of my entire ad buy. One could argue that their sales doubled this year, since they just about matched LY's revenue even while overall sales fell by 50%.
This much is true: I have invested too much money in these to walk away from them, and this subject is going to come up again.
Christmas ornaments should have been a slam-dunk because I had good data going back several years. Instead I sold barely a third of what I expected. I don't know why. On the bright side, I have a lot left for next Christmas, and they won't spoil or go obsolete.
Switchables have been a reliable seller for 10 years. I overbought when I learned that they are going out of business. Despite very disappointing Christmas sales, I'm still reasonably confident that most of that stock will trickle out over the next year as the supply chain gradually runs dry, but that's another big pile of lost dollars in the near term.
Golf balls were big before the manufacturer set up their own retail sales site, beating me on price, selection, and shipping. Now they're a footnote.
Bird kites are my last really successful product line. If anything is going to get me through next year, it's kites...and that vendor has seemed a little wobbly for the past year or so. If they let me down I'm just dead.
Everything else: Leftovers were one of my better non-categories this year. It's gratifying to liberate money that has been locked up in these products for as long as 10 years, even when I'm just recovering my cost. Pot Holders did well in 2011 and '12, so I brought in 36 pieces for '13...and they've sat in the cellar ever since. Suddenly they started to move again this year, finishing with just seven left (total lifetime sales: 125 units). Maybe they got some random media attention somewhere, or maybe I'm just the last store on the internet that still has any.
New products: Year after year, I order low-priced novelty items from the same three or four vendors. Year after year, I sell about half of them and more or less break even. This year I skipped those vendors and searched for something more expensive and less usual. (Because people like to spend more money on Christmas gifts). Somewhere, the Dinosaur Bottle Opener caught my eye and drove me to SuckUK, who also sold me the G-Clamp Bottle Opener, the Skeleton Hand Jewelry Holder, the Rechargeable Bottle Light, and the Skull Tidy. The dinosaur was my biggest gamble. Going into last weekend I had sold exactly zero of my 18 pieces...and then, inexplicably, I moved 11 in two days. Again, that's either a random act of media or me being the last store on the internet that still has them in stock. The Skeleton Hand sold 5/6 for another win but the Skull Tidy sold only one, even marked down to slightly over cost. As for the G-Clamp...
The first dozen went quickly enough to know that I needed more. I doubled down when my sales rep told me that they were available for immediate shipment. Since they were supposed to ship on 12/10 and the transit time from Maryland is only two days, I decided to accept customer backorders -- something I never do because of the potential for screwups. Long story short, they screwed up. After selling almost all of the 24 pieces that I didn't have, my reorder never came. On Tuesday I finally had to refund $245. This would have been the only week of Christmas to beat LY if it hadn't been for that.
Never again. You always get burned when you trust other people.
Conclusion: One can only flog the same old, same old for so long, and my assortment is feeling its age. At a bare minimum, I need to find a solid new line to replace Switchables. Ideally, I'd like a major hit like Panther Vision was 10 years ago. That alone would turn around the company.
Even though I'm not a consumer myself (how could I possibly be on my $7,000 yearly income?), I still have a fairly good instinct for what my customers will and won't buy. What I lack are the tenacity to go out and find it, the money to actually bring it in and try it, and the optimism to do either of those things. I hate shopping in general and I fear another Metal Earth miscalculation, so I get paralyzed. Then it's suddenly Christmas again and I've got nothing.
What am I going to do? Stay tuned next week.