The Sale of the Century!

A friend asked if Curio City will have a big clearance blowout at any point. It hadn't occurred to me. Maybe. If so, it won't be until late summer at the earliest. 

Most merchandise is already reduced to near cost. I don't like to go below cost. If I paid $5 for a thing, I want to get my $5 back. Sometimes I might let it go for $4 or even $3, but not often. Isn’t it better to recover a couple of my five bucks than nothing? Not necessarily. Sometimes reducing Kraken Enterprises' profit by $5 is more valuable than increasing its income by $4. 

The first draft of this post walked through the accounting in mind-numbing detail, but I’ll cut to the end without showing you how I got there. Essentially, if I take $4 for that $5 item, I increase my personal income by $0.80, and at the same time I raise my personal income tax liability by $0.80 (because Kraken’s profit/loss goes directly onto my 1040), for no net gain. If I write off $5 instead, I don’t pocket anything, but I reduce my tax liability by about $1. 

In favor of selling below cost anyway, I’d rather have 80 cents now than save a dollar later on. I’d also rather ship the item to somebody than throw it away, and I usually make a buck on the shipping charge. Blue Hills Editorial Services enters the picture here. 85% of Blue Hills income goes into payroll. The other 15% covers the employer's portion of payroll taxes and leaves a tiny profit toward the $1,500 it costs to be a corporation every year. Apart from that, Blue Hills has almost no expenses to offset its profit -- that's where Curio City’s losses are nice to have. When Curio City is losing money on operations, as it’s doing right now, it offsets Blue Hills' profit without needing to take markdowns. I can sell that $5 thing for $4 and pocket my 80 cents without driving up next spring’s tax bill. But when kite season puts Curio operations back in the black, I need write-offs to make Kraken's profit disappear.

I'll talk more about Blue Hills in my next post. To return to what I opened with: I don't plan to have a big end-of-business blowout sale because the write-offs are usually worth more than the small amount of cash that I can get for them. Between now and closing day, individual prices will slide a little bit here and there, but if you see something you want...don't wait. It probably won't get any cheaper, and it might sell out at any time. 

I keep mentioning kite season. Kites sell year-round because there are people who live in warm places. But it really gets going when spring weather settles in. Ordinarily it opens with Christians buying dove kites for church plays. Dove kites have been out of stock since last October, and the manufacturer will only say that they'll be back "in the spring." So I don’t know if I can count on the Christians to kick things off this year.  

Finally: The same person who asked about a going-out-of-business sale also wondered when Curio City will close. I still don’t know myself. The short answer is “It depends.” At this point I'm only staying open in anticipation of kite season. If it doesn't perk up by the end of March, and the cost of staying open continues to exceed the money coming in, I’ll close earlier than I had intended. 

September – the end of kite season -- is the earliest ending that I foresee; Christmas is the latest. But circumstances can change – for example, PayPal keeps sending me technical emails that I don’t quite understand about PayFlow integration, and a friend identified a problem with my security certificate that will, if I don’t do something about it, blow up in either April or June (I’m not clear), but only on the Chrome browser…maybe. Meanwhile, Turnkey just published another Sunshop update, putting my store software at least three versions behind now. Some technical thing might come along and deep-six my site before I’m ready to sink it myself. OTOH, I keep updating my master Excel file each month, and that’s currently formatted through next February, so there’s a ghost of a chance that I’ll keep going into next year. I don't plan to or want to, but I just got word that my biggest Blue Hills job isn’t going to come through this year, so I still need Curio City’s financial lifeline.  

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Speaking of that, I robbed myself of more than $100 last month by forgetting to reset February's payroll percentage from 10 to 20% of sales. Since Curio City unexpectedly bought me a new computer, though, I’m going to let it off the hook for the difference.