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, May 12, 2017
After torturing the proclamation of Curio City's eventual end from myself last week, I got a nasty case of the flu that confined me to bed for two days and kept me dragging through the rest of the week. Curio City used my sick-out to deliver its best two-week performance of the year. Jackite's long-anticipated pole shipment finally hit and a dozen backorders shipped all at once. The record-keeping was...delicate...and my head was not in a good state to handle it.
That ought to take a big bite out of the ol' debt, huh? Yes and no. All of those dropships have to be paid for next month, and most of them came in below the 50% margin that I need to eke out a profit. I've whittled it below $7,000, and I hope to break the $6,000 barrier next month. Remember that, whatever else I decide about my store's future, nothing can happen until the debt is gone.
I half-wonder if I should keep Curio City going just as Kite City. That's essentially all I sell now anyway. But Jackite has a chronic history of supply problems, and when they run out of something, they're often out for months (or even years) at a time. Formally slaving my fate entirely to theirs would be frustrating, at best.
Next week I'll take a first pass at defining some milestone decision dates. Closing my store will be a long, delicate process that has to be done in the right order to squeeze out as much money as possible while curtailing costs. Fortunately, that's the kind of management challenge that I'm good at.
In 2009 I hit on the idea of escrowing my payroll taxes in a little savings account. Earning a few pennies in interest is fine, but socking the money away for my quarterly payments is the real point. Now I need to do the same thing for Blue Hills. After mulling it over I decided to open a second account to keep things neatly organized, rather than transferring Blue Hills taxes in and out of the Curio City savings account. It's all just Kraken Enterprises as far as the IRS is concerned, but I'm compulsive.
Wrong decision! Capital One not only declined to activate my new account, they also froze my seven-year-old account. They did not bother telling me this; I only found out when the transfer that I had ordered two weeks ago didn't take place. When I followed up yesterday, their website told me that my accounts would be activated as soon as they received the "necessary documents"; as you might guess, they didn't tell me what those documents might be. Since there's no way to email them a question, I finally concluded that they want their own authorized signer form filled out, plus a "certificate of existence" from the state...which Massachusetts will email for the low low price of $10. After the requisite printing, signing, and scanning, I emailed those two pointless forms yesterday. Naturally, I have received no response. It would not surprise me to find out that they'll want some other random forms.
These accounts will never earn even enough interest to recoup that $10 fee, but at least now I have a certificate that I exist. That's oddly validating. I wonder how I got through 12 years without one.
Capital One used to be ING Direct, one of the earliest web-only banks. I liked ING. I have never liked Cap One. But inertia keeps my Roth IRAs and household savings there, so they'd have to really, really piss me off to make me move my tiny business escrow accounts. They're off to a good start, but they aren't quite there yet.
Labels: Reasons to hate banks
Friday, May 05, 2017
Pressure to decide Curio City's future is growing. I had said that I don't need to make the call about investing in another Christmas until September, but some optional expenses are already starting to pile up. For example, the USPTO wants $400 if I'm going to own the name for another 10 years. Turnkey has put out two Sunshop updates: One that specifically addresses the scammers and thieves who hijacked my checkout page, and one that adds new templates that could update my site's look and feel. Turnkey will install those for just $75, but in reality I need to pay my developer $200 to preserve all of the customizations I've accumulated over the years. Should I reorder merchandise that sells out? Replenish shipping supplies? Try any new merchandise? These questions come up regularly.
So let's run through some pros and cons, shall we?
People: Curio City faces the public in a way that Blue Hills does not. A typical month might bring 75 sales, each representing one customer. Most of them are faceless and routine, but if even 5% have problems and complaints, that's three or four people that I have to mollify or avoid each month. Blue Hills involves only a few people, and they're professionals. So far (and it's early, I know) I've gotten only praise and encouragement from my few clients.
The Phone: Because my customer demographic skews older, I get a disproportionate number of people who just don't trust the Internet or know how to use email and insist on phoning me, despite my Contact page's attempt to gently discourage them. Putting one's phone number on the Internet generates a huge volume of junk calls, and removing it isn't an option because Google punishes businesses without phone numbers. I shudder every time I see the blinking blue LED that means I missed a call (I never answer the phone anymore). I cringe when notified that I have a new voicemail. One of the only ways I identify with young people is that they neither leave nor listen to voicemails. I ranted at great length about hating the telephone in the first draft of this post, but you get the idea. So far, Blue Hills has required exactly one phone call.
Products: I'm not a consumer and I have never cared about buying and selling. Once I thought that viewing the marketplace with skeptical and disinterested eyes was an advantage. Not really. Trying to figure out what people will buy -- and, more importantly, what I can conveniently and profitably advertise and ship -- was an interesting challenge for the first few years. Gradually, I learned that it's an ever-moving target, and every time tastes change (or I just read them wrong), I end up with more unsalable stuff in my cellar. Once upon a time anything with USB was hot. Then it was LEDs. Before the Great Recession, when online retail was still something of a novelty, people would buy damned near anything. Now they're smarter about comparison shopping, and not so fast and loose with their money.
Sometimes, even vendors let me down. They become unreliable, or they cut me off because they don't like online sellers, or they sell to discounters who undercut me. Losing Switchables (my second-best product line) while sales are already contracting was a hard blow to take. And I just don't have the fire in my belly to seek out a replacement.
Promotion: The topic labels to the right show that I've written 48 posts about marketing, so today I'll just say that it's been my weak spot since the beginning, and it will ultimately be my downfall. I don't like it, I'm not good at it, and I can't afford to hire somebody who does and is.
Prospects: Sales have declined every year since 2012. Unless I invest in some new inventory pretty soon, they'll go down again this year, too...and I can't do that until I get out of debt. Without a major infusion of time and money, even just bumping along at my current depressed level is ambitious; continuing a long slow slide is more likely. That feels pretty pointless.
Perils: Our cellar, a.k.a. Curio City's warehouse, floods every few years. All of my stock is raised a couple inches off the floor, and that's usually enough to spare it...but I invariably lose some packing supplies and face a multiday cleanup. A bit of water on the floor this week ruined some old (empty) boxes and hinted that the heavy rain coming this weekend might bring a full-scale flood. With that warning, I've picked up everything that I can, but there's still going to be a mess. Insurance is a luxury that I've never been able to afford, if I could even get it -- applying would almost surely reveal that my home business is "illegal" on some level.
Technology: Like products, this is an ever-moving target, and one that I lack the expertise to follow. I used to care about it. I don't anymore.
Scammers & Thieves: The Russians who hacked my checkout page last month were kind of the last straw. Even though they did no actual damage, they pissed me off and reminded me that Curio City is always vulnerable. Blue Hills doesn't collect money, so it's immune to this kind of crap.
Workload: Blue Hills is brain work. Despite having a lot of facets, Curio City's routine is comparatively mindless...but it's "always on." It can demand my attention at any time, 24/7/365. Blue Hills will demand more time and intellectual involvement when it gets going, but it will happen mostly on my own timetable. Curio City also forces me to take on roles from management to marketing to shipping/receiving to accounting to IT, and more. I'm competent at some of those things, but not others. I enjoy, or at least tolerate, some of them, but not others.
Perhaps more to the point...I just turned 60. I can retire in six and a half years. Either Blue Hills or Curio City can scale down to a retirement job -- and everybody needs a retirement job, right? But Curio City is physically demanding and less portable. As my lifespan ebbs, I don't want to keep running two marginal businesses. Curio City has been shrinking for years, while Blue Hills is just getting started. Curio City is tied to inventory and shipping/receiving facilities; Blue Hills works wherever I have a laptop and an internet connection.
Financial: It might not bring in very much money, but Curio City consistently brings in at least something every week, and customers pay in advance. Blue Hills is still highly irregular, and payment can come months after I do the work -- I'm sitting on one invoice for work completed in February, waiting to hit the company's minimum billing threshold. Every couple of weeks, they dangle an assignment in front of me, but it never comes. Blue Hills pays me $50 an hour or more when I pays me at all; Curio City works out to around $2-3 per hour. Blue Hills will obviously win hands-down when I develop a few more clients, but in the meantime, advantage Curio City.
There are also some benefits beyond the paycheck. Curio City currently contributes $90 a month to our phone and internet bills; without it, I'd have to replace that money somehow. In better times, it bought me a smartphone and two laptops, not to mention consumable office supplies.
Systems & Statistics: I'm not much of an entrepreneur, but I am a pretty good manager. I enjoy running a well-designed system and crunching the numbers it generates.
Taxes: For the past five years, Curio City has reliably lost money, and that makes a nice deduction. Even though it threatens to show an operating profit this year in the wake of my 50% pay cut, I can write off enough old merchandise to push it comfortably back into the red. Blue Hills, OTOH, has almost zero expenses, so I need Curio City to offset some of its pure profit.
Workload: Curio City's chores aren't enjoyable or rewarding, but they do get me up and moving every day, which keeps me in good physical condition for a 60-year-old. Also, Curio City's task list is highly diverse, whereas writing and editing are just sitting and typing. Blue Hills has more potential for boredom.
Writing this post made me realize that I just don't care enough about Curio City to want to keep doing it. I dedicated 12 years of my life to it, and it's sliding. Best-case scenario is that I get out of debt, put major time and effort into rebuilding, and eventually recover to the glory days of 2009-12. Even if I did manage to pull it off, the most money I ever made in one year was $16,700 -- that's a fortune compared to the $4,000 that it will pay me this year, but it's not a huge motivator. I can comfortably afford beer and smokes and occasional meals out on $10,000 a year. I think Blue Hills has the potential to pay me more than that, but getting Curio City back up there would be a long, hard slog.
It's not a question of whether I'll close Curio City or not, but how and when. Now I need to work through those questions and come up with some kind of timetable.
Labels: Winding down
Friday, April 28, 2017
This will be the last month that QuickBooks gives me good year-over-year numbers. Because there was no "Curio City" class LY, I can only get numbers for Kraken Enterprises as a whole until next February, when the separate classes came into being. As soon as Blue Hills revenue starts coming in, general Kraken numbers will be ridiculously skewed -- I expect Blue Hills to book five figures in May. From an accounting standpoint, the two companies are not remotely similar. Whereas >90% of Curio City's revenue goes to costs, 90% of Blue Hills income will go to payroll.
Does that make you wonder why I still even bother with Curio City? There are a lot of reasons. None of them are very convincing alone, but taken together they make a good case for Curio City's continued existence...for now. For one thing, Curio City reliably delivers at least a small paycheck every other week. Even though Blue Hills formally launched in February, it hasn't actually landed a single dime yet, and it's going to remain erratic for at least the next several months. That five-figure project that I alluded to above was a one-time thing that might or might not be repeated next spring. But this is grist for another post.
Total income: +10.9%
Total COGS: +11.2%
Total COGS: +11.2%
Net Income (Profit) vs LY: +699% (+$630)
Net Income (Profit) vs LY: +699% (+$630)
Actual Profit/Loss: +$540
Total income: +0.6%
Total COGS: +2.2%
Total COGS: +2.2%
Net Income (Profit) vs LY: +109.8% (+$2,120)
Net Income (Profit) vs LY: +109.8% (+$2,120)
Actual Profit/Loss: +$189
Last Tuesday I got a flurry of Metal Earth orders amounting to $182, almost all of them for Star Wars models. As I've lamented over and over, Metal Earth never sells outside of Christmas. A cluster like that means that there's got to be a random act of media involved. One customer used the "how did you find us?" pulldown to say "You were linked in a blog post or online article," while another one said "Searching for something on Google." IDK if a post about Metal Earth sent people running to Google, or if it directly linked to my store. My best guess is that it was a Star Wars fan site.
Also, Dove kites started to move this week, so I presume the Christians are having another holiday -- Pentecost, maybe?
May should come in more-or-less flat to LY. I just signed my first contract for ongoing work as Blue Hills, so I expect more writing work next month, and I know there's at least one editing job coming.
Friday, April 14, 2017
A few weeks ago my nephew asked if Curio City had thought about selling fidget toys. It was the first I'd heard of them. Apparently they're the current rage among brainier Millennials and their children, the Marshmallows. Some people claim that they are therapeutic for some autistic types, and there might be something to that. Last Saturday they even garnered a Boston Globe story -- the kind of mainstream media attention that usually means that a trend is peaking or on its way out.
Some of my best-selling products over the years were recommended by people I know, so I always take their suggestions seriously. Googling "fidget toys" turns up a huge range of sizes, shapes, and materials selling for $5 up to $40 or more. These odd assemblages of gears, buttons, ball bearings, and switches that don't do anything are being sold everywhere right now. I don't know how to tell a "good" fidget from a "bad" fidget; wholesalers' descriptions generally provide little to no detail. One of my existing vendors is hawking some cheap ones, so it would be easy enough to test demand. If I had any cash on hand I'd place a few small orders with a few different vendors to figure out what my customers do and don't like (or if indeed I have any customers for these). Then I'd buy bigtime for Christmas when I think I've nailed the market. Since the fad is either cresting or still rising right now, selling the test orders is a reasonably safe bet.
Fidget spinners and cubes violate most of the guidelines that define a Curio City product. They aren't useful, leaving aside the dubious claims about their therapeutic value. As a ubiquitous trend, they aren't unusual; I'd be competing with Walmart, Amazon, and eBay, among others. If you buy one, you're unlikely to "need" another, so they'd generate little to no repeat business. The cheap ones look breakable and, well, cheap. At a $10 retail, they wouldn't bring in much money. The target demographic (Millennials and below) skews lower than my usual customer base (Gen-Xers and above). There aren't any batteries to expire, but fads are time-limited by nature, and this is the greatest unknown -- is this a six-month fad or a three-year fad? These are all warning bells.
Mostly, though, instead of cash on hand I have a mountain of debt. So I really can't afford to experiment. Sorry, Aaron. You did motivate me to look for my old 1970s-vintage worry stone, though. I know I still have that somewhere.