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.
Add to Technorati Favorites

Friday, December 08, 2017

Taxing Circumstances




Seven orders awaited my ministrations on Tuesday morning. Seven would be fine and dandy if they were $100 orders, or even $50 orders. It's considerably less dandy when they're all $10-15 orders, and that pattern held up all week. When last I checked*, this week stood at 32 orders (fair) worth just $375 (awful). Small orders usually indicate that people are done with their Christmas shopping and down to filling in gaps. It seems early for that, but I don't celebrate holidays myself and I don't know much about how ordinary people do. Television leads me to believe that they're furiously buying up smartphones, cars, and prescription drugs.

As I merrily marked down most of my old stock, I forgot a lesson that I'd learned years ago: bargain hunters are also bottom feeders. They won't load up big boxes of low-priced goods; they're just going to buy one thing, and they're probably going to complain about it. Now that almost everything I sell has been reduced to $15 or less, the tiny average order should not surprise me.

*I said "when last I checked" because I couldn't update that this morning. My website is down. Remember how I downgraded my IP address from dedicated to shared? Turns out that my Sunshop license is keyed to my IP -- Turnkey has to update that to get me back online. Ticket opened; waiting for response....

My IP address changed on 12/2 and my license renewed on 11/29, so I have no idea why it waited until 12/8 to fail. It's always something.

************************

The constant stream of bad news out of Washington probably isn't affecting sales; the tax debacle won't take effect until next year, it's mostly benign in the beginning, and nobody really understands it yet anyway. From what I can tell, the initial damage will hit home businesses, 1099 income, and the working poor.

We're going to lose our home office deduction and a lot of related Schedule C expenses related to my wife's teaching jobs. Curio City and Blue Hills should be okay because they're under Kraken Enterprises. As I understand it, corporations can still deduct most of the costs of doing business -- only individual small businesses are getting reamed. I don't understand the "pass-through entities" provisions yet. As an S corporation, Kraken's profit goes onto our personal 1040 and gets taxed as ordinary income (albeit without payroll taxes), so I guess that makes me a pass-through. That might turn out to be a reason to keep Kraken going even if I kill Curio. But my understanding is that the new tax system was written primarily to benefit C corps, so I honestly have no idea. 

I do know that losing the deductions for state income tax, charitable contributions, medical expenses, tax preparation, and especially Anne's home business expenses is going to hurt us, and probably everybody else who runs a home business. I'm tentatively expecting a modest tax increase next year. Buying TurboTax instead of hiring a CPA to do our personal returns will save a few hundred bucks, so maybe that will neutralize the tax hike for the first year or two.   

The damage to the economy stemming from middle-class tax increases should be two to three years out -- I think I read that the tax hikes snowball in 2021, conveniently after the next presidential election -- so it shouldn't be depressing sales this Christmas except insofar as uncertainty is always bad for business. In fact, holiday sales will probably be robust as people mistake the stock market's performance for the economy.

The middle class has been stagnant or shrinking since the Reagan administration; the Republicans are merely accelerating a decline that they set in motion in the 1980s.

It's definitely a good time to get out of retail, though. Retail depends on middle-class spending. Billionaires aren't going to use their newfound millions to buy more of my stuff. 

********************

Minor milestone: I passed order number 115000. That means that 15,000 transactions have gone through Sunshop over the past 12 years. Some of those were tests and some were canceled orders, so the number of actual sales is something lower (QuickBooks is on order 14,685, and even that number isn't entirely accurate).

Friday, December 01, 2017

Let's Get This Show On the Road

November sales were lackluster. Lackluster is good, considering that I've done nothing to support Christmas.  At this time last year, I was $8,000 in debt and ramping up my ad spend. This year I'm not taking on any expenses at all. Well, I did make good on my threat to return payroll back up to 20% of sales after getting out of debt, so I should get a couple of slightly less laughable paychecks in December, and that will increase costs a wee bit.

Here's what Quickbooks says:

November

Total income: -38.9%
Payroll: +53.7%
Marketing: -79.8%
Net Income (Profit) vs LY: -108.6% (-$412)
Actual Profit/Loss: -$992

2017 YTD

Total income: +57.3%
Total COGS: +8.4%
Payroll: +240.1%
Marketing: -38.4%
Net Income (Profit) vs LY: +243.4% (+$6,375)

QB says revenue was down by $1,984, while Excel says it only came up short by $864. I don't know why the discrepancy is so huge.

December should come in way below LY, but again, without any expenses. LY's anemic sales came at great cost.

***************************  

Remember that Sunshop support renewal bill that I mentioned in my last post? The $125 payment was due on 11/29. I was leaning toward downloading the current version and then canceling the contract, since the odds that I will actually upgrade next year are low. Then Turnkey made the decision for me by charging my card on 11/24. I was displeased. I was even more displeased when I got a "Cyber Monday" discount offer on 11/27. I asked for a $25 refund. They gave it. So I've decided to keep the contract for another year.

Meanwhile, MDD Hosting decided that the price of my dedicated IP address is going up to $60/year unless I want a "free downgrade" to a shared IP. Yes, please. I don't even remember why I bought the dedicated IP in the first place.

*********************

I spent four hours on MailChimp remembering how to make and send a newsletter. It went to 231 contacts on Tuesday. One bounced and two unsubscribed. 64 recipients (27.8%, vs. 13.3% industry average) opened the email. It got 19 clicks (8.3% vs. 1.6% industry average) and one conversion.

How can I afford to absorb the cost of shipping, which is my largest single expense? Well, I can't, especially when nearly everything is priced at break-even at best. The single coupon redemption (so far) cost me $20.69 to bring in $51, all for products that were priced below profitability. I did convert a big box of dead stock into dollars, so that's nice, but I'd go broke if all of my customers did that.

Newsletters transcend the mailing list. MailChimp was supposed to autopost it to my Facebook page. That didn't work, so I did it manually, and 24 more people (out of Curio City's 223 followers) saw it -- if you want to reach your whole list, you have to pay Facebook a bribe. The key is that Facebook then autoposts it to the bottom of my store's front page, where the people who see the offer should be highly motivated to use it.


It showed up there two days ago. Nobody has used it yet, but at least I have an offer linked on my front page now. There's no other good way to do that.

Friday, November 17, 2017

Burning Bridges...Too Soon?

Getting out of debt was the only thing on my mind for so long that I'm a little lost now that it's done. The next order of business is deciding whether or not to stay in business. Christmas sales will play a role in that decision.

Christmas might go one of two ways: Either I'll enjoy the usual spike in overall traffic and people will snap up boxes full of bargain-priced merchandise; or few shoppers will find me, and those who do will pass up buying leftovers. The first scenario frees up some space in the cellar and parks some bucks in the bank, giving me options and encouragement. The second scenario leaves me broke and sitting on piles of picked-over stuff, changing nothing.

So far, it looks like a bust. Today I'm starting on my first email newsletter since last January -- I don't think there's any point in sending it out until the hoopla of Black Friday is over. The last thing I paid my developer to do was implement a newsletter signup dialog to replace a plugin that Turnkey dropped from Sunshop. Over the past 10 months, only 10 people subscribed via the conventional method (ticking a box on the checkout page) while a whopping 39 (plus one obvious spambot) used my new custom dialog. That's impressive. I stopped writing newsletters when I stopped ordering new products, but it will be valuable if I decide to start again.  

Meanwhile, Turnkey wants $125 to renew my Sunshop license. Failure to do so cuts me off from updates and support. My software will still work just fine, but it will be frozen in time, two versions behind the present. If I do revive Curio City next year, updating my shopping cart will be a high priority. So I can spend $125 now, just in case, or I can spend $250 on a new license when I'm sure that I'll need support.   

I am inclined to save the cash now, especially since it looks like Christmas is not going to bring a windfall. I have until the 29th to decide, and I can download the current version before then. I wish I had another month.

On a brighter note, I found out that I can renew my UPS box for six months. Doing that is more expensive than the yearly rate, but it would bump a point-of-no-return decision from spring to fall. Changing Kraken Enterprises' address after 13 years would be a very big deal, and forfeiting the mail drop will also sacrifice my ability to receive shipments. Vendors won't ship to residences.  

******************

Blue Hills Editorial Services is the keystone. Will it ever provide a regular paycheck, or enough irregular paychecks to bridge the gaps between them? 

A web publisher has been teasing me about a regular copy editing gig for a year now. It would be 15 reliable hours per week, plus occasional "overtime" on weekends. While that income would make closing Curio City an easy decision, I have some misgivings about the job itself. First, the volume of copy that this guy wants to push through in three hours each day is sweatshop-level work: 10,000 words in three hours is more than twice as fast as the 1,500 words per hour that most editors consider reasonable, and I'm not sure that I can do it at all, much less want to do it. Second, I don't like the idea of being "on call" every weekend. Third, after having controlled my own schedule for the past 13 years, the idea of working fixed hours for somebody else chafes. I don't mind working 15 hours a week if I can pick the hours and work at a realistic pace. Asking advance permission to take a day off? That feels like going back to elementary school. Fourth, it would compromise my ability to take on other large projects. I only had two of those last year, but they were both quite lucrative, and they both monopolized my time for a couple of weeks.

It would be a lot of money -- at least double what I made in Curio City's best year -- and that's tempting. And I'd regain the hours per day that Curio City sucks down even in its worst doldrums. 

The point is probably moot: the publisher hasn't responded since I told him that I can't start until after the first of the year. But he does have a habit of long silences between contacts, so he could still come back. I need to be ready with a decision if he does. If I were pressed to decide right now, I'd give it a try. But first let's see how Christmas treats Curio City.

Friday, November 10, 2017

Another Non-Christmas Isn't Starting

November is being weird. Last week I issued a $300 refund (explained in my previous post) that turned a break-even week into a big loser. Yesterday the vendor's credit for that dropship return came through and set off a bit of a Quickbooks crisis. I had already received the merchandise into inventory, which created a charge. Jackite never processed that charge -- their internal credit merely canceled out their invoice as if it had never happened. But Quickbooks never forgets. I tried to explain that the merchandise was never received and the bill didn't exist. There is no method to un-receive a purchase order; the internet advised me to simply delete it. Unfortunately, that didn't delete the bill or remove the phantom merchandise from inventory. I used what an accountant would consider brute force to accomplish that. It's all good now as far as I'm concerned, but I'm afraid my actuarial act of violence will give my poor CPA a fit. 

Yesterday I finally got that $934 payment from the vendor who bought back all of their merchandise, which flipped this week from a loser to a big winner. Only 15% of that money will find its way into my pocket; the rest goes to debt payment. It won't distort this month's Quickbooks report because the income was booked into Accounts Receivable last month, but it sure will make Excel happy. This month's payment might finally retire the $8,800 debt that I larded on one year ago to finance the Christmas That Wasn't. It will come close, at least.

I'll pause a moment to let that sink in. It took me a year, but I (tentatively) filled an $8,800 hole. December should actually build up enough cash, I hope, to pay my CPA and the Commonwealth, with a little left over to cover my personal taxes on Kraken Enterprises' profit. Ideally I'll cover all my costs and start the year clean.

Speaking of Christmas...sales should start to perk up next week. I'm only trying to match last year's Christmas That Wasn't, so the targets are quite modest by historical standards, but still daunting when you consider that I'm not going to waste any money advertising the new products that I didn't buy. I'll send out a newsletter to hawk my "clearance sale" and see how much of it I can liquidate. But I really don't know whether people will swoop in and obligingly clean out my cellar, or if Christmas will reward me with the same lack of effort that I'm giving it. Next week will be my first hint at how that's going to go.  

Friday, October 27, 2017

2,000 Steps Forward, 500 Steps Back



October was shaping up as another decent month, especially given that I've ceased all marketing efforts and cut advertising to the bone. And then stuff happened. The numbers (which include some Blue Hills income) look fine:

October

Total income: +82.3%
Payroll: +1,132%
Marketing: -69.4%
Net Income (Profit) vs LY: -1,889.1% (-$1,849)
Actual Profit/Loss: -$1,751

2017 YTD

Total income: +72.3%
Total COGS: +15.6%
Payroll: +267.6%
Marketing: -33.9%
Net Income (Profit) vs LY: +307.9% (+$6,897)
Actual Profit/Loss: +$4,656

Excel says that Curio City by itself beat LY by $34. Those big red numbers are there because I somehow screwed up my accounting. Blue Hills payroll is being reported differently than Curio City payroll. I pay my CPA the big bucks to fix stuff like that. 

Whenever I'm idly tempted to rethink my store closing plans, I remember that virtually everything that's selling now is steeply discounted, it's still a lot more work than it's worth, and I have to deal with the public:

A lady ordered $162 worth of Switchables and provided an invalid shipping address. Even though I could take a Google-informed guess at her correct address, I'm not going to ship $162 worth of stuff into the void, so I emailed her for clarification. Days passed, and I ultimately re-sent the email six times. Days became weeks, and now it's been a month...still nothing. She didn't leave a phone number.

Speaking as someone who only pockets about $300 in a good month, I find it hard to imagine spending $162 on something that one doesn't need, and even harder to imagine not missing the order when it doesn't show up. Even if this lady doesn't know how email works, she could leave me a voicemail (yes, this is one of those extremely rare instances where I would welcome a phone call).  

Her order is still boxed up and ready to ship. At some point I'll have to unpack it, return all the stuff to inventory, and refund her credit card, but I'm kind of morbidly curious to see how long this can go. I'll give her another month. Maybe she'll contact me when she sees the charge on her credit card statement, if she's still alive and mentally competent.

Then there's this other Switchables customer who leaves an angry voicemail because she can't figure out how to use the cover that she bought. Every single Switchables product page includes this text:

This is not a self-contained night light. Switchables stained glass night light covers are designed to be used with the Switchables Nightlight Fixture (sold separately). Switchables are "switchable" because you can easily swap any one of our covers onto the same simple fixture.

...and yet 25% of Switchables customers either don't read it or can't understand it, because they buy a cover or two and then come back to get a fixture separately later on. The lady in question returned her cover, so that's another $17 refund. I fully expect it to arrive in unsalable condition.

And then there's the guy who ordered two lighted caps without specifying which color he wants. A lot of my cap customers screw that up, and I have to email them. This particular fellow responded promptly with his choice, which is always nice; often it takes several attempts over a week or more. Then I discovered that he also gave me an invalid shipping address. I'm still waiting for him to fix that.

Come on, folks. The internet isn't that hard.

Then there's the guy who placed a $300 dropship order. After a week he emails to ask where it is. Tracking shows no activity. Turns out the vendor never shipped it; they apologize and send it out that day. The customer is silent until it reaches him a week later. Then he asks how he can return it because it arrived too late for his hunt. Three emails asking the vendor to issue a call tag are still unanswered after three days. Ultimately I'm going to have to refund the guy his $300 and then nag the vendor to refund my purchase.

$500 worth of refunds on $2,000 in sales remind me why I hate this job.   

Google Search

Google