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, January 20, 2017
Down to (Metal) Earth
I've written about Metal Earth before, and I'm going to keep coming back to it until I reach a useful conclusion.
From my point of view, Metal Earth is the perfect product. The models are all one of two standard sizes, and they weigh next to nothing. They take up virtually no storage space and cost very little packaging and postage. They're unbreakable. They don't have batteries to wear out and they don't become outdated. An ample supply of new designs keeps the line fresh while targeting a wide range of interests. I can create new product pages by simply cloning and editing old ones. The vendor supplies good images and doesn't screw up their billing or shipping. Their website is easy to order from. In theory, they should be as collectible as Switchables and hence drive repeat business; in practice, I rarely see a customer come back for a second order.
Those are all good reasons to pour money into making this line succeed. And yet, it stubbornly doesn't. I have several ideas about why that is so.
So many new models come out so frequently that it costs a fortune to even try to keep up. Shoppers will naturally gravitate to the site with the biggest selection, and that's never going to be me.
They only ever sell for Christmas. I typically move $1,000 worth in four weeks, and then never sell another one all year. Apparently lots of people think they're great gifts for someone else, but very few people ever buy their own. Advertising trends support that conjecture: During the holiday rush, Metal Earth keywords go for at least 40 cents a click, and even lowball bids draw 25+ clicks a day. Then the competition for keywords crashes immediately after Christmas. This month I spent $22 to buy 136 clicks (just 16 cents a click) that brought exactly zero conversions. Cheap clicks and steady traffic...what's not to like? Well, paying $22 for no return, that's what. I assume that the rest of the retail world sees the same thing, which is why a click is going for just 14 cents this week. If nobody ever buys, those clicks aren't worth anything.
Competition is probably the real killer. Other retailers can surely see the same appeal that I do, and big-name, deep-pocket sellers like Target can afford to Hoover up all the business. The only advantage I might have is staying power. A mainstream store like Target won't give shelf space indefinitely to something that only sells four weeks out of 52. (I wonder if they sell year-round in bricks & mortar stores.) Curio City is supposed to be about unusual products that one doesn't see everywhere, so maybe Metal Earth is fatally flawed that way.
Shipments can be "dollar-dense," meaning that very small packages can easily bring in $100 or more. Yet my shipping charge for multi-piece orders is too damned high. Models weigh 0.15 lb. on average. But if I set a weight below 0.25 lb the USPS server returns first-class letter rates instead of the higher first-class package schedule, forcing me to overcharge by .1 lb per piece. That discrepancy doesn't matter much for one- or two-piece orders, but it adds up rapidly when you get to four or more pieces (1 lb). I can ship 10 models in a flat rate box for $6.20, but my software sees 2.5 lb going to the West Coast and charges $13. Without going any deeper into these weeds, there's no good solution. I can either optimize shipping for the vast majority of tiny orders, or for the much smaller number of more desirable large orders, but configuring for one end screws up the other. It's probably not as big a factor as the ones I mentioned previously, but shipping overcharges are certainly another competitive handicap.
Metal Earth is never going to be the next Switchables, despite their many similarities. Over the past three years I've put a lot of money into building a 125-model lineup. I can't afford to throw good money after bad, obviously, but neither can I abandon something I've cultivated so carefully for so long. Instead, I need to acknowledge that these things are only ever going to sell during the Christmas season and I'm only ever going to sell about $1,000 worth. Ideally, I'd scale back my advertising and inventory buys so that I can eke out a profit as a niche player without falling so far behind in selection that I can't compete at all.
There must be a just-right balance there. I haven't found it yet.