Curious Business

About Stuff (Part One), and January Numbers

2012-01-27T11:59:00.000-05:00

“Find awesome new merchandise” topped last week’s list of goals because when you come right down to it, that’s the foundation of everything else that I do. Last year I didn’t find any new hit products. I’ll confess that I didn’t try very hard because, frankly, I hate shopping. Friends referred both of my two most successful products to me. This year I will try to think like a consumer, and read some product reviews and blogs. I’ll also browse some wholesale sites that have borne fruit in the past.

Notice that I said “find” and not “buy.” I don’t have any money for new products. The numbers at the bottom of this post will make it clear why I can't even come up with $1,200 for my CPA and the Commonwealth right now. For the time being, I can only compile a robust wishlist to consult when my statutory obligations are finally met.

Since this is January numbers week, I’m only going to look at winners today. Next week I’ll examine the mediocre and some notable losers.

One-hit Wonders aren’t part of a larger line. In fact, they’re usually the only item I carry from their vendors. Setting aside things that I can’t get anymore and things that surged once due to some random act of media leaves these:

Mini-briefcase business card holders. SKU 16 means it was one of the first products I ever bought. I’ve sold nearly 1,000 of them at a healthy markup without spending one dime on advertising. That’s a big win all around.

Whisky stones. They did benefit from a Boston Gift Guide mention a couple of Christmases ago, but would have made this list even without that turbocharge. A customer recommended them to me after seeing them elsewhere.

5-LED clip-on cap lights. These are an inexpensive way to achieve the same function as Panther Vision lighted caps. They haven’t sold so well lately, but their history of success rivals the mini briefcases.

Fuzz scarves just barely make the list. I honestly don’t remember what made them so popular a few seasons ago. This year sales died back to mediocrity -- probably because of the mild winter -- but it’s a perennial seller that will undoubtedly endure for as long as the winters remain cold.

DayClock Classic. Another of my very earliest products and my first big hit, this will show up on next week’s list of losers as well. I am down to one left and I won’t be reordering, but it had one helluva good run.

USB Anything. For a year after my first random act of media propelled the USB Computer Fan into sales history, any USB gadget was solid gold. The USB Computer Vacuum and Light are still on the bestseller list today. All of these are cheap Chinese imports of quality that varied from one shipment to the next (only the light was really much good); in fact, half of my last batch of fans was defective. All of them delivered very nice markups. Due to flagging sales and dubious quality, all of them will be discontinued when my current inventory runs out. But, like the DayClocks, they had a long and illustrious run.

Landing two or three more one-hit wonders would go a long way toward boosting the bottom line – or at least preventing its erosion; everything has a limited lifespan. Do they have anything in common? They range from $6 to $40, so price isn’t a great predictor, although inexpensive obviously always outsells expensive. They are all functional in some way. They are all unusual (hard to find), or at least they were when I adopted them. They are all uncomplicated and easily explained. They are all compact and lightweight. And they are all playful. The USB stuff turned out to be a fad, but I didn’t know it at the time. These all contributed to my working definition of what makes a Curio City product.

A few winning product lines are Curio City’s true workhorses. Finding just one more of these would ensure a successful year.

Panther Vision, of course, has long been the goose that lays the golden egg. LED caps define the kind of product I would love to find: Practical, clever, high quality, lightweight, reasonably priced, and with universal appeal. Bulk purchases occasionally spike my numbers. If these ever tank, I'm toast.

Bird kites looked like a mistake at first. The Canada Goose (SKU #1) barely budged at all. That changed when I found some YouTube videos a couple of years ago and figured out how to embed them in my pages. People use bird kites as scarecrows, as decoys, as stage or stadium props, and occasionally as toys. These are a prime example of a product that needs to be demonstrated, and of video’s ability to do that. Bulk sales are rare, but at $25 and $40 the price points are high enough that even single sales make a healthy contribution.

Golf balls are my last unequivocally stellar line. A couple of styles (especially Animal Print golf balls) have cracked the bestseller list, mainly on the strength of institutional sales, but the many slower-selling designs also carry their weight. Having found this vendor at the Boston Gift Show (a.k.a. the Cavalcade of Crap) is the main reason I keep going back year after year.

I’ve tried many other lines. I’ll look at a few of those near-hits and complete misses next week.Now on to the unpleasantness of January’s numbers.

I wanted to say “It’s not that this year was so bad so much as that last year was especially good”…but that’s not even remotely true. It was my worst January since 2007, leaving me $1,100 behind LY and $1,400 behind plan. There’s not much chance of making it up, either. February’s usually the second-slowest month of the year…I’m up against an unusually strong March target...I don't see any weaknesses in LY's numbers until July.

January & Year to Date:

Total income: -24.8%
Total COGS: -17.5%
Payroll: +29.0%
Marketing: +4.1
Net Income (Profit): -788.1%

There’s simply no good news in any of those numbers. Marketing should fall at least as much as income; instead it increased, so I can’t blame the lost sales on advertising cuts. COGS should decrease more than income, so that’s another fail. Payroll is only up because changing paydays from Friday to Monday placed an extra one in this month. I don’t know why January only delivered 86 of the expected 100+ transactions. Tired products? Unidentified new competitors? My increasingly dated website? Or just a run of bad luck? Yeah, I’m going with that one. The economy’s finally pulling out of recession, so I can’t even blame that.

Meet the New Goals

2012-01-20T16:35:00.000-05:00

Same as the old goals...mostly. I added a few new items to last week’s warmed-over list and ranked them by priority and likelihood.

Find awesome new merchandise. This dwarfs everything else. I’ll cover it separately next week.

Control advertising costs: My marketing budget is topped out. I need to get below LY’s overspend without cutting into sales proportionately. Ideally I’ll increase sales on the same ad spend, but if sales won’t cooperate I will have to cut the actual outlay. As a first step, I’m adding Ad Spend to my monthly reports to keep this one front and center. So far this year I’ve gotten the daily outlay down to $20, but traffic has also fallen below 150 visits and sales…well, let’s not go there.

Facelift: Sunshop’s first major overhaul in five years is tentatively scheduled for October. Its true release date will determine whether I can upgrade before Christmas or if I have to delay it for another year. I have to see the new templates before I can do a cosmetic overhaul (although if I were rolling in money I would give the existing version a facelift; I hate the prospect of waiting until early 2013). I can at least mock up a layout and color scheme in the meantime.

More video: Learn how to use my new phone’s video camera. If it’s viable, I will post at least one original product demonstration video to YouTube before the year is out.

Start using LinkedIn. This one’s easy, just pointless and tedious.

Expand Facebook: Facebook is a constant source of frustration and a periodic irritant. But I can’t just ignore it. The goal is to increase my followers from 144 now to 200 by the end of the year. Secondary goal is to update my company page.

Personal incentives: I’ll raise payroll by 0.1% of gross if net sales are up by 7.5% at the end of June. If I finish the year over plan I’ll bump it another 0.1% and buy everyone in the company a new laptop. If the first three weeks of the year are prelude to the rest, there is no danger of this happening.

Insurance? Fnd out if Kraken Enterprises needs separate liability coverage or just a rider on my personal policy, and how much that would cost…without tipping off my agent that I am running a home business or inviting some other agent to solicit me. This is a low priority only because I can’t possibly afford a monthly insurance bill.

Double Reward Points? I could permanently increase my customer Reward Point awards from 5% to 10% of full-priced merchandise sold. Many people earn points; few redeem them. If that’s because of low awareness and interest, doubling the rewards for the tiny minority who do care would just cut income without improving the incentive. If, OTOH, the program is ineffective because the points are too stingy, doubling them might encourage more repeat business at a lower cost than advertising for new business. I offered double points as a promotion once last year with no discernable effect. Personally, I find customer loyalty programs to be a huge incentive (especially in restaurants)…but I’m a famously cheap bastard.

What would really make a difference is being able to email customers a reminder that they have x.xx points. But Sunshop can’t do that. I wonder if Brad could implement it for me. This is another question to put off until Sunshop 5 ships; I suggested the feature for the new version.

Ess-Eee-Oh: It’s been on the list for years; I’d still like to invest in professional optimization should I ever luck into both a financial windfall and a reputable company with a bargain price. Meanwhile I will keep doing the small things that I can understand and affect.

Target the rich: The middle class is shrinking and the poor are getting poorer while the ruling class consolidates the nation’s wealth. Aiming for the people who have all the money is a no-brainer. I have two problems with that: First, I’m dangling from the lowest rung of the middle class myself: I have no idea what the rich buy (Gems? Furs? Apple electronics? Designer fashions?) or how to reach them. Second, their tastes are expensive and I already can’t afford to keep my current low-end inventory in stock. So why’s this even on the list if it’s out of my reach? I can try to carry more products that are $50 and up and fewer that are under $10. Bumping up my average price point hardly takes me into millionaire territory, but it’s a step in that direction.

Target corporate buyers. My biggest scores go to golf courses, resorts, universities, businesses, even churches. Yet these sales are hit-or-miss. Institutions approach me out of the blue, and most of their inquiries come to naught because they expect personalization (imprinting or embroidering), deeper discounts than I can offer, and more pieces than I keep in stock. I can’t address the factors that discourage closure, but I might be able to encourage more inquiries. The obvious question is, How?

Cut the handling fee: Every order invisibly pays 75 cents to cover the cost of boxes, labels, ink, paper, packing tape, etc. I raised that fee last year to slightly overcharge small orders to offset undercharges on larger ones stemming from last year’s postal rate changes. Ultimately, I collected more for shipping than I paid out LY by a comfortable margin. I could afford to cut my fee by at least 10 cents, and possibly as much as 25 cents. That cuts revenue by $10-25 in a typical 100-parcel month. But would customers notice? Maybe those who place the very smallest orders would…but they’re exactly the ones I want to de-emphasize. Anyway, the goal for this list is to reevaluate my handling fee after this year’s postal rate hikes. Would a 10-25 cent price cut make enough difference to justify the foregone revenue?

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Time sure flies when you’re getting old. Every three years, Intuit requires QuickBooks users to upgrade to the newest version. This week’s “version 14 upgrade” notice included “changes to help you with the May 31 service discontinuation.” Would skipping the update prevent them from crippling my software or did it come with a time bomb built in? What happens if I simply continue using the 2009 version beyond their “discontinuation of service”?

I appreciate that developers want to keep their user base current in order to avoid legacy issues. I also know that one buys a license to use software, not the software itself. Intuit is within their rights. It still pisses me off that they can demand upgrades rather than enticing users with actual improvements. Each new version of QuickBooks is more bloated than the last, and some of the changes that they introduce are arbitrary or actively cripple previous functionality. I bought my current laptop when the 2009 QuickBooks upgrade brought my old one to its knees.

I applied the update today. Just bend over and take it.

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A couple of weeks ago the subject line “domain name dispute: curiocityonline” appeared in my mailbox. A young lady named Julia wrote to tell me that

“This email is sent by CN Network Information Center LTD. which is a registration organization in China. Here we have something to confirm with you. We received a formal application on 11th January, 2012. One company called "Aoher Imports, Ltd" was applying to register "curiocityonline" as Network Brand and the following domain names:

(Eight variations on my name with Asian domains followed)

After our initial checking, we found the names were similar to your company's, so we need to check with you whether your company had authorized that company to register these domain names. If you authorized this, we will finish the registration at once. If you did not authorize, please inform us within 7 workdays, so that we will handle this issue better. Out of the time limited we will unconditionally finish the registration for "Aoher Imports, Ltd".”

My first reaction to something like this is panic. My second? To the Internet! Unfortunately CN Network Information Center has a legitimate looking website. Fortunately, this site came up first. Scores of complaints about emails identical to mine confirmed my hunch. Apparently they’re trying to trick me into registering all those unwanted Asian domains through them, and probably sell me other services as well. Lying to frighten someone into buying your service might not technically be a scam, just a sleazy business practice. Or maybe not: The company is not listed on InterNIC’s list of accredited registrars. Anyway, Googlebot take note: Chinese domain name scam!

Retooling Old Goals

2012-01-13T13:29:00.000-05:00

It’s amazing how quickly one can burn through $10,000. I’m down to $500 after paying out my bonus, slaying my December credit card bills, and making all of my various tax deposits. January sales are not replenishing the coffers as fast as expected. I still need to pay the Mass. Secretary of State $456 for the privilege of remaining a corporation and come up with my CPA’s tax prep fee. Meanwhile, I’ve got no means of buying the spring products that are starting to ship already…but that’s not stopping me; my credit card just began a new statement period today so $700 worth of orders went out this morning. Welcome back, cash flow crisis! I’m half tempted to loan the company some of the money it just repaid me. But only half tempted. After six years in business the money should only ever flow one way between us.

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It looks like Congress isn’t going to shut me down this year after all. Even if they get their act sufficiently together to overturn the Supreme Court’s 1992 ruling that exempts online retailers from collecting interstate sales taxes, the bill that they’re considering reportedly exempts businesses with sales under $500,000. Whew. Being forced to charge both sales tax and shipping fees would take a huge bite out of sales and the complexity of becoming a tax collector would crush my spirit, which isn’t all that bubbly to start with. I’ll be keeping an eye on the news reports, though; you never know what kind of crap the 112th Congress is going to pull next, but it's a safe bet you won't like it.

Let’s assume that the government won’t accidentally put me out of business and make some operational plans, starting with a look at 2011’s goals.

Facelift: I shelved last year’s planned cosmetic overhaul when Turnkey announced that Sunshop 5 is development. No point spiffing up templates that will soon be obsolete. The new Sunshop is now scheduled for October; of course, so is Christmas season. I never buy version x.0 of anything until other users have found the inevitable bugs. So even if Turnkey publishes on Oct. 1, I wouldn’t be comfortable upgrading before November. My site needs a new coat of paint almost as badly as my house does, but I’m going to face a hard decision about whether to risk adopting new software while Christmas spools up. This goal therefore stays on the list. At a minimum I should mock up a layout and color scheme that I’d like so that I can move immediately after Christmas.

More video: They stopped making the Flip camera that I wanted to buy. The free iPod that I won at a whiskey tasting takes video, but its camera quality is marginal and it outputs some proprietary Apple file format that I can’t use without a file converter. I haven’t tried to use my new cell phone’s camera yet. I did add a few more manufacturer videos with very minor impact. For 2012, the goal is to learn how to use my phone’s video function and decide whether or not I still need to buy a camera.

Mobile computing: I finally broke down and replaced my old dumb phone with a new dumb phone. The smartphone goal is officially scrapped until the contract expires in two years. My iPod does most of what a smartphone can do, but does it poorly and doesn’t mesh well with the Windows world. My wife got a smartphone that I could use if I feel that I need one for some reason.

Random Acts of Media: The one random media insertion that came my way was a complete flop. Why is this even on the list? It’s random by definition. I’m not carrying it forward.

Ess-Eee-Oh: These three letters are chum that makes spam sharks frenzy, so I dare not type them out. There are too many shady operators eager to take advantage of the gullible and the reputable ones are much too expensive. Still a backburner possibility, though, should I stumble upon both an unexpected fortune and a good company with a great price, so it stays on the list. Meanwhile I will keep reading my email newsletter and doing the small things that I can understand and affect.

Reevaluate newsletters. I’m still putting them out, and they’re still ineffective. I could save $250/year by discontinuing them, but I’d probably lose about as much in sales. Since I’m not planning to change anything it ought to come off the list.

Further Exploit Facebook: Last year’s Valentines Day experiment ruled out Facebook advertising as too expensive and ineffective. Trying to profit from free FB posts is futile. I raised my follower count to 144, only to discover that only 20 or 25 of my 144 FB followers ever see my updates…even my own wife can’t see them…the “Reasons to hate Facebook” tag has more about that. FB is probably a lost cause unless I can scrap my current page, which is a sub-page of an unused personal account, and start over with a proper business page…which I probably can’t do since my store name is tied to the existing personal subpage. FB changes their rules and their technology arbitrarily and without warning, making any investment of effort highly speculative. So, does this stay on my list or not? Just barely, I guess. I can’t ignore any opportunity for free marketing, however frustrating and ineffective.

Start using LinkedIn. No, I did not. I just don’t care about LinkedIn. I probably should. LinkedIn users have more money and influence than Facebook users…so maybe it’s worthwhile in some abstract way. It makes the list.

Focus on Profitability: This would be a clear success had advertising costs not inflated faster than the universe following the Big Bang. This year I’m changing the name of the goal to reflect my focus on controlling advertising expenses. Even after whittling down a lot of keyword bids, I’m still racking up $20 per day on Google without reaping anything near the $200 in sales that would justify it.

Carry More Weight: Accomplished! Kraken Enterprises is paying the Internet portion of our BELD bill now. I could make a case for Curio City picking up some gasoline expenses again – the gods know our household budget needs all the help it can get -- but my company budget is tapped out this year. This comes off the list.

Give myself another raise? Uh, no, I certainly didn't. I’m not a Fortune 500 CEO who gets bonuses for failure. However, I’m dangling it in front of myself again in 2012. If I am running 7.5% ahead of LY in July, I’ll raise payroll by 0.1% of gross. If I finish the year over plan I’ll bump it another 0.1% and buy the company a new laptop.

Insurance? I avoided it again. I need to find a way to ask about options and prices without tipping off my agent that I’m running a home business or inviting some other agent to woo my business. This stays on the list…I can’t afford insurance, obviously, but I’d at least like to find out what my homeowners policy covers (if anything) and whether Kraken Enterprises needs separate liability coverage or just a rider on my personal policy. And I need to do that without letting an inspector see the fire hazard that is Curio City’s warehouse!

Speaking of shipping: I cut my shipping fee collections by 8% and outlays by 9.3% by selling fewer big, bulky items. Assuming that next week’s USPS rate hike goes smoothly, I’m not planning any changes this year, except possibly to cut my handling fee by a dime. This is off the list.

Categorize: Accomplished! I will fiddle with categories more in conjunction with a facelift, if I indeed do that. I've written off enough dead product to close or consolidate some obsolete categories.

Everything else on LY’s list was too picayune to address here. Suffice it to say that I achieved most of it and ceased caring about the rest. Next week I’ll build a new goal list for 2012 so that I can promptly start ignoring it.

Ending 2011...Initializing 2012

2012-01-06T15:28:00.000-05:00

I promise that this will be my last boring numbers post for awhile. My year-end profit-taking was based on these stats as of mid-afternoon on 12/31. Being only slightly different from what I posted last week, they’re just for my own reference. You’re invited to skip down to the forecasting part.

Excel says that I beat LY’s net sales by 4.41%. The year came in $3,100 below plan.

Quickbooks says:

December:

Total income: +0.6%
Total COGS: +4.2%
Payroll: +11.3%
Net Income (Profit): -3.2%

2011 Total:

Total income: +2.3%
Total COGS: +2.5%
Payroll: +2%
Net Income (Profit): -4.8%

My profit was $2,950 (down from $3,100 LY). I withdrew 20.3% for income taxes, or $600. Of the remaining $2,350, I pocketed the traditional 75%, or $1,750 (plus $600 for taxes = $2,350).

My salary was $12,718. My total 2011 compensation (salary + gross profit) was $15,668. That’s $509 below LY’s $16,177. My high water mark was $16,737 in 2009.

Advertising was the killer, up a whopping 27% (or $1,700) over LY. Advertising is now running at more than 11% of gross vs. a budgeted 9.5%. Reducing that expense will be hard when competitors keep bidding up my keywords; I’ve already surrendered Page One placement on a lot of words. I was still getting 200-250 visitors a day last week at a cost of $25-30…which would be marvelous if they were dutifully spending the expected $250-300. They weren’t. In fact, most days this week were in double digits.

This is going to take some finesse. For now, I’m just cutting my bids by a few cents a day, but that’s potentially self-defeating. This year I’m going to add another line to my monthly numbers reports: Advertising Spend.

So…how’s 2012 look?

What economists like to call “headwinds” doomed 2011’s planned double-digit increase from the start. First, USPS’s rate restructuring broke my shipping tables for three days. Mochahost’s always-marginal service gradually deteriorated into no service at all by May. After a promising start, Hostgator shut me down twice due to “excessive” server use (meaning they run overloaded servers). I lost at least $1,000 worth of business to substandard hosting before I finally came to roost at MDD Hosting. I can’t recommend MDD highly enough. If you need reliable, affordable shared hosting with excellent support, use my affiliate link to sign up today. Curio City has not suffered any measurable downtime since mid July.

There was no engine to fight these headwinds. I didn’t have any major new products or any lucky marketing or media events to drive sales, and the economy was stuck in neutral for the first 10 months of the year. I only eked out my 4.41% gain because the American consumer rallied in November and December (and Quickbooks, as we see above, says I only gained 2.3%).

This year I’m planning a 7.5% increase – nearly double last year’s gain, but I believe it’s achievable for five reasons. First, I don’t foresee major technical problems (not that I foresaw them last year, either, but never mind that). Second, I expect a slowly strengthening economy and more confident consumers unless tea party Republicans successfully torpedo the economy or the Republican presidential candidate ruins consumer confidence. Third, I have a whole year to find a killer new product or line. Fourth, I can’t possibly get less free publicity than the one failed media mention that I had last year, so there’s nowhere to go but up from there. And fifth, the percentages don’t involve a lot of dollars. LY’s year-over-year increase was just $2,750. This year I’m looking for $4,850. A $2,100 increase in my increase isn’t trivial, but we aren’t dealing with megabucks here. Two or three big B2B sales, or one major hit product, would do it.

To motivate myself, I will raise my salary from 20% of net sales to 20.1% if Excel says that I am ahead by 7.5% in July, and to 20.2% if I make the year.

Next week I’ll mull over some specific goals. Right now I have grunt work to tackle. I really ought to trash out my office. I’d like to rearrange the cellar to condense some boxes and make some room. I need to issue my W-2. I should place some reorders and small new-product orders with Valentines Day in mind – I’m holding off because tax deposits and payroll have already reduced Curio City’s checking balance from over $10,000 to just $5,100; with $4,900 worth of credit card bills already in front of me, I have to wait until the next statement period starts on the 12th. But if I hold off too long, I’ll miss Valentines Day (not that that holiday has ever shown me any love).

Wrapping Up 2011: First Pass

2011-12-30T12:49:00.000-05:00

A hefty order for 6-LED caps on Monday pushed an otherwise mediocre week into the plus column. The winning customer left me a voicemail on 12/22, and I didn’t hear it until 12/26. Sometimes messages rattle around Verizon’s system for days before coming to roost, but I do need to check my phone more often.

Switchables were so noticeably absent from Christmas this year that I thought I was facing another reevaluation of that red-haired stepchild. Then they came back all by themselves this week. Go figure.

While I appreciate the respite from last month’s insane pace – I cut back to four hours a day this week -- I hope I won’t be back to two-digit bank deposits after this week. As of 11:00 this morning I had 396 sales in December and 210 in November (an average month has 85-100).

The numbers that follow are preliminary, since modest sales over the 1.5 days left in the year could tip a couple of reds into black. I’m going to have to make another pass at them tomorrow afternoon before paying out my year-end bonus, and I’ll post that revised version next week.

Excel reckons that I beat LY by 4.25%, surpassing LY’s 3.19% increase (but falling far short of my 10% goal). The year came in only $3,200 below plan. The gain came entirely in November and December, and a very large fraction of it was from $2,000 worth of sales to the same telephone customer. But let’s just bask in the numbers without fretting about how they were generated.

As usual, Quickbooks is more pessimistic than Excel. I need $126 to tip December’s profit into the black (vs. LY) and $243 for the whole of 2011. Here’s where things stand as of noon today, anyway. A mere $500 in sales would do it.

December:

Total income: -0.3%
Total COGS: +4.8%
Payroll: +11.3%
Net Income (Profit): -12.4%

2011 Total:

Total income: +2.1%
Total COGS: +2.3%
Payroll: +2%
Net Income (Profit): -7.8%

My salary came in $301 ahead of LY at $12,718. It ain’t much but it beats a kick in the teeth (as my dad liked to say). Tomorrow I must take a year-end profit distribution. Using today’s QB numbers, I have a profit of about $2,900 (down from $3,100 LY). As the sole stockholder in an S Corporation, I owe 100% of the income tax on that $2,900, so I have to withdraw at least $600 (15% for the feds and 5.3% for the state). Of the remaining $2,300, I traditionally take 75% as a shareholder loan repayment and leave Kraken Enterprises the remainder to reinvest. That would make my bonus $1,725 (plus $600 for taxes = $2,325). But since I technically own the entire $2,900, my total 2011 compensation was $15,618. That’s a $559 drop from LY’s $16,177, and far short of 2009’s record $16,737.

But I need to go through all of this again before I pay out my bonus tomorrow (I've had two small sales and remembered an expense reimbursement check since I compiled those numbers). And I must mention that $495 of this year’s profit decline came from covering Internet access charges that I previously paid out of pocket. Had I covered that $495 myself rather than charging my company for it, my income would have been $16,113.

On the Eighth Week of Christmas, My Business Gave to Me...

2011-12-23T15:06:00.000-05:00

...An eighth week of Christmas!

Christmas ended on the 21st this year, a full four days later than I had expected. I more than recovered Week 7’s shortfall and averted my first-ever year-over-year sales decline (2011 will finish about 2% over 2010, assuming that next week is merely average). These “extra” days amounted to an unexpected extra week of Christmas. I am incredibly glad that it’s finally over for another year, apart from the enjoyable massaging of numbers. Nice, black numbers. I’m going to miss the big daily bank deposits, though.

Reasons to hate UPS (redux): Yet another Credit Card Billing Adjustment, this time increasing a charge by $11 with no explanation. Ever notice that these adjustments are never downward?

Well, at least I can take some small revenge: I finally discontinued UPS Standard after reading multiple complaints about it being a scam. UPS tempts Canadians with a reasonable-looking rate. Then, after the package crosses the border, UPS holds it hostage for brokerage fees that approach 100% of the shipment’s value. If the recipient declines to pay it, they offer to return it to the shipper – me – if I will pay the fees. When neither party wants to pay the ransom, UPS gets free merchandise. Virtually every international complaint I’ve had over the years has come from a Canadian, and the majority of those were UPS Standard shipments. Customers usually think that I’m in on the scam. No more.

For the time being I’m leaving Worldwide Expedited and Worldwide Express in place because they’re so expensive that nobody ever chooses them. But I might ultimately remove those, too, if they employ the same “brokerage” trick.

Reasons to hate Google (redux): I ended last week not knowing whether or not Google Product Search was going to exempt my site from their item identification requirement. On Monday they suspended my products. On Tuesday they told me that my exemption had been approved, but not whether my items reinstated or not. On Wednesday I was invited to rate their responses. Hee hee.

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Born yesterday? I was not. A suspicious email asking about international shipping led to somebody wanting to buy thousands of dollars worth of stuff to be picked up by his private courier (after he pays with a stolen credit card, obviously). There was some creative aspect involving shipping to Cyprus and prepaying customs duties and whatnot, too. It was probably just meant to confuse me, or maybe to make him look like a legit businessman. Bzzt! Sorry, find another sucker.

On the Seventh Week of Christmas, My Business Gave to Me...

2011-12-16T17:59:00.000-05:00

A seven-day warning/six days of sickness/A five-digit month/four minutes offline/three giveaways/two gorgeous days/and a big rusty pail of fail.

Last Saturday set the YTD record number of sales with 23, but their paltry size led to a merely average day in dollars. Saturdays are historically the slowest day of the week. People bought almost nothing but Whisky Stones and lighted caps, and usually only one. At least that made the weekend’s business easy to process; 50-some packages fit neatly into two big boxes. In past years, before I learned not to sell bulky things, they would have overflowed the living room.

But this make-or-break week started on Sunday, as weeks tend to do. I went into it $1,400 ahead of LY (according to Excel, whose numbers are more dear to me than Quickbooks). Here’s the blow-by-blow for those who wish to recreate the anxiety:

•    Sunday’s paltry 11 sales brought in only $565, blowing $300 of my lead, but at least the average sale was back up where it belongs. Running total: +$1,100;
•    My car’s radio said that Monday was supposed to be “Green Monday”, the second-biggest online day of the year. I was indeed up against a 4-digit day LY. It flopped and set me back another $800. Uh-oh. Running total: +$300;
•    Twenty-seven sales on Tuesday – henceforth to be called “Green Tuesday” – racked up the second-busiest day of the year (and the high point in number of sales) and clawed back $250. Running total: +$550;
•    Wednesday should have been the last four-digit day of Christmas. People made a nice run at it, but I still dropped another $270. Running total: +280;
•    I beat Thursday’s modest target by $40 for +$320 on the year.
•    Today was much stronger than expected; I’m up $170 with the whole evening yet to go. Tomorrow is basically a throwaway.

So Week Seven is going to finish somewhere around $800 behind LY, but that still leaves a YTD surplus of roughly $500. Although I call next week the Eighth Week of Christmas, it’s really just a cooldown period.

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

And what would Christmas be without some new hatred?

Reasons to hate UPS – O UPS, why do you play games with me? When my customer’s 2nd day air package arrived with a big bootprint and crushed merchandise, I was peeved. Because this particular customer is of the variety that will not use email, it took two days to straighten out her complaint over the telephone and generate a $35 loss. When I filed a damage claim and you processed it almost instantly, I forgave you. When you called to tell me that the paperwork had to be resubmitted because I had sought $25 for a $24.99 item, I was peeved all over again. But I understand that computers can’t tolerate discrepancies and the penny difference was my fault, so I forgave you again. Two peeves, two forgivings…that’s a wash. Then you had to go and email me a Credit Card Billing Adjustment report with $12.45 in upcharges. I swear that the address you call residential was a business according to the USPS – yes, I really do check. But adding a rural delivery surcharge to the very same package that you damaged cinched your new Reason to Hate.

Reasons to hate Facebook – Facebook recently changed from reporting each post’s impressions to showing “people reached” – i.e., unique viewers. I used to see over 100 impressions, which jibes with my 138 “likers” pretty well. Now I see that I’m really only reaching 27-32 people, two of whom are me; more than 100 people that I thought were following Curio City are actually blind to my posts. I’m pretty sure that happened when Facebook introduced the “top stories” interface; any “liker” who hadn’t interacted with your page recently got dropped. The 25 or so people that I’m reaching now mostly “liked” Curio City after that change. I don’t know what, if anything, I can do about that…Facebook’s interface is largely impenetrable to me, and it’s constantly changing anyway. All I know is that it’s not nearly the communication tool that I thought it was.

Reasons to hate Google – Back in May, Google Product Search (formerly Google Base) added a requirement that most products include a unique identifier – either the UPC or a manufacturer’s number. Sunshop did not support those fields at that time, so I had exactly zero. I started adding numbers for new products and reorders after I finally upgraded to a version that included them. Well, last Sunday Google spoke: “Your items are at risk of being suspended.” They gave me seven days to supply the missing data, after which they’ll review my items again. Needless to say, I did not have very much time during the busiest week of the year to look up 600 useless numbers. So I petitioned Google for an extension. Their cryptic response, signed with an Indian name, left me unsure whether they’re going to nuke my products or not.

Does it matter? I really have no idea how Google Product Search works or if it sends me any business at all. But I’ve been submitting a data feed every month for years. Between paid search, natural search, and (maybe) Product Search, Google drives over 80% of my business. I must appease the Google gods. It’s their internet, after all.

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

Finally, a friendly tip for marketing people: Email with the subject line “Happy Holidays” always gets deleted unread.

On the Sixth Week of Christmas, My Business Gave to Me...

2011-12-09T16:49:00.000-05:00

...Six days of sickness/A five-digit month/four minutes offline/three giveaways/two gorgeous days/and a big rusty pail of fail.

Last week my wife brought a virus home from New York, as she traditionally does when she travels. This week it jumped into my head and chest. After slogging through long days of processing orders, shipping packages, reordering stock, and ordering supplies, I needed long naps. I couldn’t do anything proactive at all.

Sales were good even without any higher brain functions engaged. It might have made some small difference if I could have worked on a late newsletter, monitored my ad campaigns, put out some facebook tweets, and returned telephone messages promptly. But recent reports that the American consumer is again consuming with gusto are not exaggerated – which is especially good after I had to refund $102 today, making it the first sub-par day of the week.

My “Christmas Lite” strategy of bringing in fewer marginal new products is being vindicated as people buy marginal old products instead. Take, for example, ear buds: I don’t sell more than half a dozen of those all year, and I have 100+ in stock. I was planning to phase them out. But in the past two weeks I’ve moved at least a couple dozen. I also cleared out at least eight old discontinued products. When all the dust settles, I hope that my inventory level will be a thousand bucks lower than it was last year, and with the money more effectively invested.

There are some unexpected casualties. Fuzz scarves have died almost entirely after consistently strong sales for the past three winters. Whisky Stones were very slow coming off the blocks, although they are surging now. Switchables are scarcely participating in Christmas at all. Competitor shenanigans have driven that line down many times before, so I presume that's happening again. I should investigate that when I get time, as there are a crapload of inventory dollars locked up there.

But I won’t start a post-mortem with two more weeks left to go. Next week should be the peak. It’s a good thing the virus has mostly finished with me, because naps won’t be an option if the shoppers frenzy as expected – no matter how bushed I get (and doesn’t that word seem even more apt after the disastrous presidency?).

On the Fifth Week of Christmas, My Business Gave to Me...

2011-12-02T17:38:00.000-05:00

A five-digit month/four minutes offline/three giveaways/two gorgeous days/and a big rusty pail of fail.

I needed a five-digit month just to match LY, so that’s less wonderful than it sounds. More wonderful was an $1,100 lighted cap telephone sale that propelled yesterday to a new one-day sales record. Thieves don’t usually order by phone and the charge passed the fraud screening with flying colors, so I think it’s OK. That not only put November in the bag, but even put me $800 ahead of last year to date. If I can just hit my numbers for the next few weeks I might still avoid my first-ever year-over-year decline.

Look at all the black ink, courtesy of the past two days:

November:

Total income: +23.8%
Total COGS: +32.5%
Payroll: -4.1%
Net Income (Profit): +48.4%

YTD:

Total income: +1.7%
Total COGS: +0.6%
Payroll: -1.1%
Net Income (Profit): +11.3%

Ain't that beautiful? Speaking of sales records, you might like to see them.

•    Biggest day: Yesterday, at $2,202, surpassed the previous record of $2,169 on 12/8/08 (when the New York Times Gift Guide mentioned the LED Motherboard Christmas Tree )
•    Biggest week: $6,344 on 12/13/08 (thanks to the same random act of media)
•    Most sales in one day: 51 on 12/9/09 (Boston Globe Whisky Stone mention)
•    Best paycheck ever (2 weeks): $1,943 on 12/25/10.

Cyber Monday brought in 14 sales, the best single day this season until yesterday. Unfortunately most of them were so small that the day ended up $120 behind LY. Of the 11 new orders facing me on Tuesday morning, 10 were under $20. I don’t mean to be unappreciative, but after PayPal takes 55 cents from an $8 purchase and I stuff it in a 35-cent padded mailer, it’s barely worth the time it takes to generate a label and drive it to the post office. One or two orders like that is just a small nuisance. It becomes a problem when they define a busy day.

On the plus side, I didn’t have any trouble loading them into my Miata.

The weekend’s offer of free shipping on orders over $50 should have prevented exactly that. Only one person redeemed the coupon. Lesson learned: Cyber Monday sales should be one-day only, simple, and highly targeted – just a few specific items prominently on sale. Maybe next year I’ll try creating a temporary category and moving a handful of items into it -- no coupon necessary. This year’s offer was generous, but it took two paragraphs to explain, and if there’s one thing the past five years have taught me, it’s that shoppers don’t read.

BTW, I passed a milestone this week with transaction #7,500. Imagine what that pile of boxes would look like.

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

Here’s a helpful tip for telemarketers: If you call me during the Christmas season, I won’t even take the time to be polite. Bonus tip: If you call me back after I tell you to take my phone number off your list and hang up on you, you will not find that my mind has changed.

On the Fourth Week of Christmas, My Business Gave to Me...

2011-11-25T17:06:00.000-05:00

…Four minutes offline/Three giveaways/Two gorgeous days/And a big rusty pail of fail.

My heart sank at 11:31 pm on Thanksgiving when MDD Hosting warned me of emergency server maintenance. With previous hosts, that might have meant being offline for the rest of this crucial weekend. But MDD had the server back online by 11:46. Kudos to them. OK, 15 minutes isn't four, but I’ve got nothing else for my gimmick this week. Maybe I’ll get a four-digit day.

This was the first real Christmas mega-week. A $750 cap sale on Thanksgiving Day 2010 created a huge holiday hill to climb, and unusually weak days this Sunday and Monday made it look impossible. Then things turned around on Tuesday and Wednesday. I needed to average $350/day this week; right now (in the midst of Black Friday, which is hobbled by all the hardcore shoppers out doing battle in stores) I’m running at $350/day. I started Week 4 neck-and-neck with LY; right now I’m running $19 ahead for the week and $161 behind the month-to-date. I need $528 by the end of tomorrow to catch up. It’s another nail-biter.

Last Saturday was downright depressing. Against a background of weak sales, I had to authorize a big nasty return ($140 worth of Panther caps) from somebody who simply changed his mind. Besides the obvious financial hit, returns are also a processing and inventory-management pain in the ass. I may have to put a restocking fee in place, as most stores do to discourage speculative purchases. On the same day, a Canadian customer claimed that his levitating globe arrived with a cosmetic blemish; he eventually settled for a partial refund, limiting what could have been an $84 refund to just $20. And then, just to ice the cake, somebody submitted a bad product review. It was well-written and -reasoned, so I had to publish it. Even though it’s a minor product that I wasn’t going to reorder anyway, it was another slap in the face that I just didn’t need.

Next week's target requires an insane $495/day. I don't know how I'm going to make that...but I've done it before. No reason it can't happen again.

On the Third Week of Christmas, My Company Gave Me...

2011-11-18T17:04:00.000-05:00

Three giveaways/Two gorgeous days/And a big rusty pail of fail.

I wrote off three relics from the 2005 founding of Curio City and donated them to my wife’s art studio fundraising sale. These products were way out of step with the kind of merchandise that I eventually learned would succeed. Good riddance! I only wish her studio was a registered nonprofit so that I could take a charity deduction.

Quick numbers: This week I need to average $236/day, and the week started out very good before falling into the doldrums on Tuesday. So far I’m running at $267. The moving average that I need for the month to date is $224/day; I’m currently at $218. November began this week down $300 and ended it down $131. So I gained a bit of ground but I’m still a tad behind LY.

You might have noticed that I am merely trying to match LY now. I’ve given up on beating it. Next week brings the first of the really obscene sales targets.

I am reluctantly coming around to the view that this recession is never going to end – or rather that it really did end when economists tell us that it did, and we are now living in the new normal. I am told that this makes me a “Declinist”. Statistically, the economy has been in recovery for years. The wealthy and the big corporations are certainly prospering. But this time the rising tide is only lifting yachts while a sea of dinghies are still bailing.

When’s the last time I wrote about kicking Curio City out of the house (or “taking it to the next level”, as my wife likes to say)? I stopped thinking about Curio City’s future and went into survival mode when the depth of the Great Decline became apparent. But now experts are saying that the job market won’t return to normal until the second half of 2014. It might never recover entirely for the lower classes, so I need to start thinking about how I can cope with that.

Of course, if I knew how to increase sales in a declining economy I’d already be doing it. But I’ll figure something out. That’s what I’ve done since the beginning: Figure stuff out.

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

On this week’s Tuesday in 2010, a big Switchables return wiped out most of the day’s sales. It looked like an easy day to gain some ground this year…until (you guessed it) a big, unauthorized Panther Vision cap return showed up. I was so pissed that I flirted with invoking my published policy of refusing unauthorized returns. Shoppers who buy “on spec” are a pain in the ass and a blight on the bottom line, so I don’t want any repeat business from this lady. I’d have been within my rights to keep the merchandise and her money…but that undoubtedly would have created a bigger headache than it was worth. So I took the path of least resistance. The $17 that she paid in two-way shipping costs is consolation enough.

Ordinarily the Outlook new-message chime makes me happy; yesterday it was just annoying. The six sales that came in are below average for this stage of Christmas. I also had to authorize another $55 return, had someone ask for a large charitable contribution, got the usual spam, and received a bitchy email from a would-be customer who couldn’t figure out how to use the shipping calculator (“Why is it impossible for me to find out your shipping cost? I'm very wary of shipping chgs and cannot get an answer about your's”). Yeah…it’s a big secret. I know that it’s bad form to badmouth customers…but, coming at the end of a lousy day, that extraneous apostrophe sent me over the edge. And since she never did buy anything she’s not a customer anyway, and my integrity is intact.

On the Second Week of Christmas, My Customers Gave Me...

2011-11-11T12:34:00.000-05:00

...Two gorgeous days/And a big rusty pail of fail.

Now I need to rewrite the song since I can’t very well thank my customers for Indian Summer. I took advantage of the first 70-degree day to rake up a bag of leaves. It was a futile gesture with the leaves barely half fallen, but I wanted to get a head start on my least favorite annual chore (and to enjoy the weather, truth be told). Then on Wednesday I ended up unexpectedly taking a long drive. That wasn’t such a bad thing with the top down, the stereo rocking, and bright warm sunshine bathing me, but it, too, cut into my Curio City time.

Naturally, all the leaves finally came down last night and my yard is buried. I need to carve out some serious raking time over the next week or two. We have a lot of big maples and oaks. (I probably complain about this every year, don't I?)

Downtime is OK as long as my hands are temporarily tied. I not only slammed the door on new products last week, but also started delaying reorders until after my credit card statement period closes tomorrow. It’s too bad; there are half a dozen more new products that I’d like to bring in, and I’m going to lose a few Christmas sales to stock outages. But my Mastercard bill is currently pegging $5,000 against a bank balance of $2,400. The total spend is just right to support a planned $10,000 month, and I can close the $2,600 gap before the bill comes due if Week Three makes plan. But it’s going to be a nail-biter.

Now for the numbers. I needed to average $220/day over these first two weeks. Week One only reached $151. Week Two is running at $300/day for a two-week average of $213. Veterans Day is traditionally a lightweight weekend. If the next day and a half merely match LY, I’ll be starting Week Three about $300 in the hole – not too shabby, although I’d obviously rather be up $300 than down.

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

Despite already-bloated advertising costs, I set up campaigns for BugLits on Google Adwords and MS Adcenter. Most of the relevant “flashlight” keywords are selling for $.80 and up to $1.50, which is obviously nutty for a $13 product. I did find a few tangential words in my $.30-.40 price range. The results so far? Thirteen clicks, 0 sales, $3.22 spent. Not enough to draw any conclusions. I had thought that BugLits might be a minor hit this year, but no joy so far.

AdWords alone is running $30 per day now to deliver 100+ clicks. So far, the conversion rate is high enough to keep that big ad spend within budget (a bit less than 10% of gross).

Microsoft Adcenter's relevancy ratings (which determine click pricing) continue to confound me. Why are “switchable nightlight” and “switchable nightlights” only ranked 2/10 when the landing page is clearly 100% accurate and “switchable night light” rates 9/10? Baffling.

I wish I wasn’t so dependent on one product. I’ve had intermittent modest successes – and even brief hits – with other things, but it’s still all about Panther Vision caps. Don’t get me wrong – without this superstar I wouldn’t be in business at all – but I sure do wish that some of my other products would help carry the load. The Mini-Briefcase is out of stock at the importer; I’ll sell out my remaining 50-odd pieces in a couple of weeks. Switchables are going through another one of their periodic dead spots after some competitor jacked his keyword bids to $0.60 (which is simply more than they’re worth, as he'll probably figure out). Whisky Stones seem to be dead in the water. After I brought in 50 sets to cover holiday demand, that’s $500 I wish I could have back.

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

Uh-oh…last night I sold a Science Quiz Clock to someone from New Jersey who clicked “Saw you mentioned in a print article.” The random act of media that I first wrote about on July 29 must have finally hit. The editor never did answer my questions about their magazine’s street date, and I forgot about it after their online guide came out. Now I only have two clocks left. I don’t want to reorder anything from the vendor until they straighten out a $288 shipping error. Their order fulfillment is so incredibly slow that it would take weeks to get a reorder in anyway (if they have them at all and if they don’t screw up the shipment).

If those last two clocks sell out today I’ll know that the game is afoot. The magazine might have hit the streets some time ago, and only now generated a sale.

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

…And just like that, my blog posts started appearing in the Facebook news feed again last week. I’m pleased to be back…at least until the next time FB screws with their interface.Every week is a crapshoot.

On the First Week of Christmas, My Customers Gave Me...

2011-11-04T14:38:00.000-04:00

…A big rusty pail of fail.

I tremble when I turn the calendar page and November’s sales targets look back at me. Yet, every year, the customers somehow materialize. There are still people out there with disposable income, but they were two days late to the party this year and they didn’t bring enough snacks. Thanks to that late start, this week is likely to finish at least $600 behind LY (down 40%)
.
But Christmas is definitely here. People are snapping up some new stock and some old stock in addition to the usual bestsellers. Even at prices at or near cost, selling products that I won’t replace liberates dollars that have been frozen for years. That’s like finding money.

I feel a little like I’m rifling a corpse when I splurge on luxuries like a new laptop battery ($76 for a name-brand 9-cell) and a new mouse ($50 for a deluxe Logitech wireless). But what the hell? I need these things, and the company’s profit doesn’t magically transform into my tax-obliged money until the end of the year. Every now and then Curio City buys me nice things. I’d thought I might buy a new laptop next year, but that’s not going to happen as long as the Great Decline drags on. I can flog this 2-year-old Dell for at least another year if I periodically run Crapcleaner and Defraggler (which I really should make time to do today). If I’m going to keep the Vostro going indefinitely, I get the lavish 9-cell battery instead of a short-lived 6-cell at half the price.

Almost by accident, I found one new item that might make a long-term difference. It turns out that Panther Vision wholesales replacement batteries. The markup on batteries is so obscene that I’m tempted to go into the battery business. The four-pack that I’m selling for $5 goes for $12 at CVS, and their cost is probably lower than mine. Each time a Panther Vision cap customer ticks the box to add replacement batteries, I effectively get a $5 price increase on my top-selling product for a very small incremental cost (and without raising my advertising spend). Boring, yes, but it’s proving to be a very popular add-on.

I’m also encouraged by the new Nite Ize lineup’s performance so far. I quickly sold out of SlapLits and moved a few See ‘Ems and BugLits…all with no advertising beyond my Facebook announcements and newsletter. So I doubled down this week on the whole line. The BugLit in particular deserves to become a good long-term seller. I’ll probably advertise that one.

But the long term is meaningless during Christmas. It's all about the next seven weeks.

Scary October Numbers

2011-10-28T12:03:00.000-04:00

It’s time for the annual leap of faith: I have bought $2,000 more Christmas stock than I can pay for on the assumption that customers will start showering me with money next week. If they don’t, I’m seriously hosed, because that’s a ton of money considering that nothing I’ve bought really stands out. And I’m not done buying yet. It doesn’t help that one of my vendors (who shall remain nameless for now) short-shipped me by $288 and has ignored two inquiries; if my past struggles with this company are any guide, it will take a month to straighten it out, and they'll screw it up a little worse in the process. Meanwhile my credit card statement is unbalanced, and you know how I hate that.

This month’s numbers show that the money shower is a light drizzle at best. I would have loved another double-digit increase in October. I was hoping to break even until this week devolved into a double-digit decrease. Excel says the month finished down $750; Quickbooks calls it $900. Not a good Christmas omen either way.

October:

Total income: -18.1%
Total COGS: -21.4%
Payroll: -0.4%
Net Income (Profit): -177.6%

YTD:

Total income: -4.3%
Total COGS: -7.4%
Payroll: -0.7%
Net Income (Profit): -307.3%

At this time last year I was running a $400 profit. This year I’m $900 in the red. The difference comes out of my bonus at the end of the year. Anything can happen during the eight weeks of Christmas that are just starting now. But to close a $1,300 bottom-line gap I need roughly five times that amount on the top line, and I'm not physically capable of moving that much additional stock.

Advertising is the biggest blot on my bottom line -- $2,000 more than LY. Second-biggest is internet access, which is a new expense this year. Those two items together account for more than the entire deficit…which means I’m doing well with my other expenses. Thanks to Congress's financial reform, credit card processing fees are running 14% behind LY.

Well, with the hand-wringing out of the way all I can do is keep on plugging.

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

Feedback from a couple of friends, combined with today’s newsletter publication, verified my suspicion that anything auto-posted to my Facebook wall by Constant Contact or Networked Blogs won’t appear in Facebook news feeds. That means that only a handful of motivated people will make the effort to read my blog entries or newsletters from now on. The new-product announcements that I post manually do appear as expected, so I’ve not gone completely dark.

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

And just because I’m a statistics junkie, yesterday’s newsletter looks like this:

•    201 emails sent
•    6 bounces (four of them to @mac.com addresses, whatever that is)
•    1 opt-out (from someone in the Netherlands)
•    65 opens (33%, considered very good)
•    19 clicks (29.2%, also very good)
•    1 known sale

Not bad considering there was no coupon offer. The LED Motherboard Christmas Tree was the most-clicked item…people are definitely holiday shopping. I don’t expect that former bestseller to do very well this year after the price rose from $9.99 to $16.99.

One Last Try at Facebook

2011-10-21T16:55:00.001-04:00

I don’t think that last week’s post, in which I lamented the previous post’s non-appearance on Facebook, appeared on Facebook. There’s a toggle on the business page that says “Use FB as Curio City Online” or “Use FB as Ken”, and I accidentally posted as Ken last week. I can see the number of impressions for all of my posts through October 12. That stat disappeared entirely on Oct. 13, and just came back today, confirming that my new-product announcements are being seen normally, but blog posts are not. (I wrestled with the reason for that in my previous three posts.)

From my late teens through my mid 30s, I composed my thoughts about life and the world in general in a handwritten journal that was never meant to be read by anyone. I lost the compulsion to write when I went on antidepressants, and didn’t start writing again until I created this blog to keep a history of my business. The thought that others might read it made me uncomfortable, but maybe other small business owners with similar concerns might share their experience. After all, I work in complete isolation and frequently confront problems that thousands of other people have already solved.

I acquired dozens of readers when I found an app that connects my blog to Facebook (and Twitter, although I don’t pay any attention to that). Now, to my surprise, I find myself frustrated at once again writing for nobody but myself. So I hereby attempt to put my blog before my FB readers one…last…time. Networked Blogs is still installed and superficially appears to work properly, but I don’t think it’s appearing in your News Feed. My posts still appear on my wall, but only show up in your feed if I link to them manually, as I just now did. I’m not going to do that every week because Curious Business is not meant to be a marketing tool. If you want to follow my blog, you'll need to subscribe using one of the services there, or just visit my wall every Friday.

(If I completely misinterpreted FB’s feedback and my posts are appearing in your news feeds as expected, but nobody chooses to read them, then I’m just plain embarrassed.)

In semi-related news, I deleted the Shopbuddy tab this week. I stopped using that Sunshop plugin a few months ago, when Turnkey started charging money for it. AFAIK it never delivered any sales and its absence will not be noticed.

The Invisible Man Puts In an Appearance

2011-10-14T12:18:00.000-04:00

I come before you to pimp my blog today because my posts don't appear in Facebook’s “top stories” after Networked Blogs publishes them to my wall. Whether FB’s last interface overhaul blocked them by design or by accident, I don’t know. Do you think they’re deliberately suppressing auto-posters or hobbling business marketing to sell more ads?

Most likely it was just sloppy development. Never ascribe to malice what incompetence can explain.

I won’t manually link to my new posts like this every Friday. I’ll do it if a particular topic (like this one) seems particularly relevant to FB readers. If you want to follow the weekly ups and downs of Curio City, you’re probably going to have to subscribe to Curious Business outside of Facebook. I would appreciate your “Likes” or recommendations or shares or whatever it is that draws attention here, though.

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

I’m having second thoughts about my “merchandise lite” Christmas strategy. In years past I’ve brought in dozens of items that I thought might sell a few units apiece. All I had to do was sell half of them to recoup my cost. The more stuff I threw at the wall, the more likely one or two things would stick. Although this tactic did more or less break even financially, it’s left my cellar cluttered with small quantities of hundreds of dead products – all of them taking up space, tying up money, and competing for shoppers’ attention.

This year I’m being more selective. That’s been easy since I haven’t found anything that I think has bestseller potential. But I am getting nervous as October slips away with no feeling of Christmas momentum.

I've been on hold anyway while I wait for an $850 payment from a purchase order customer. After three inquiries, they told me this morning that the check is in the mail. I hope so, because…well, because $850 is what we in the business world call "a lot of money". This week I paid my own salary, remitted my payroll and sales taxes, paid my developer for a Sunshop upgrade, and paid my Amex bill, leaving a checking balance of 71 cents versus a $2,222 Mastercard bill that’s due in two weeks. You can see how $850 would come in really handy right now.

Business is decent and cash flow is steady. It could have been better had I not rebuffed somebody who wanted to use a purchase order to spend $1,200. I would’ve had to place a $700 order immediately and I couldn’t do that with an $850 payment already outstanding. The little brouhaha that I explained last week about Sunshop’s image display routine cost me a day’s sales, too, and that didn’t help. I should be able to pay Mastercard in full, and I’m already racking up big charges for my November statement.

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

Speaking of the Sunshop upgrade, Turnkey released another version that restores the rollover images that they removed in the last version. This week I hired my developer again to restore my site to the condition it was in before I paid him to do the last upgrade. At least my software is stable and up to date going into Christmas.

Is There Anybody Out There?

2011-10-07T13:32:00.001-04:00

It looks like Facebook’s latest interface upheaval killed the Networked Blogs app. Last week’s post appeared on my wall and my Twitter feed as usual, but the “number of impressions” fell from 200-ish to 25. A manual wall post made on the same day appeared under “Top Stories” and got the expected exposure, so I have to think that autoposts from Networked Blogs aren’t making the cut, even though they look normal to me.

Sigh. Sometimes I wish the Internet would stop being such a prima donna and be pre-Madonna instead. Should I reinstall Networked Blogs? Look for a new app? Hope it automatically fixes itself? Post blog links manually? I don’t know. Ken White’s Popehat promos often inspire me to click through -- but their posts are inherently more interesting than mine.

So why not make Curious Business more like Popehat? In the first place, I’m not a collective of writers. In the second place, it’s hard to be fresh and witty after writing about the same narrow subject (namely, Curio City) for five years. And in the third place, I’m simply not clever enough to come up with “You Wouldn’t Say That If A Terrorist With An Expired Registration And Six Tons Of Ammonium Nitrate Drove Onto Sesame Street, Killing Big Bird And Elmo, Would You?”

Betcha all 25 of my readers will click on that one.

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

Last week’s Sunshop upgrade didn’t quite rise to disaster status, but it sure stretches the definition of “upgrade.” What should have been the most visible improvement – the Flash image viewer – doesn’t actually work in a typical Internet Explorer install (and Apple products famously don't support Flash at all, but I already knew that). Neither did Turnkey’s fallback routine, at first; I spent a lot of time figuring out why IE8 was being petulant. To my dismay, Sunshop dropped support for the old rollover thumbnails, so my product display took a great leap backwards.

I decided to try the Flash viewer despite these drawbacks, and promptly went 36 hours without a sale. Wednesday became my first shutout since late August; the corresponding day last year was $588. I reluctantly turned it off again on Thursday (sorry, Firefox users) and within five minutes a sale came in. Coincidence? I’m sure not going to test it any further to make sure. This week's shortfall mostly wipes out my gains from the past two months.

The much-delayed random act of media finally yielded exactly one sale…from a New Jersey resident who bought some Switchables. So much for the ravening hordes I greedily anticipated. I never sold a single Science clock. I didn’t know that any publicity could flop so completely, even for a year-old product that had already proven itself a turkey.

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

In the Nobody Cares Department: I have decreed that payday shall fall on the Monday following the close of the pay period, rather than Friday, as before. I originally delayed payday in case the cash flow wasn’t there to support it; that concern has ebbed. Advancing payday by five days should bring in one more paycheck this year than last.

September Wrap-up

2011-09-30T14:08:00.001-04:00

I was ready to give up on the random act of media that I’ve been writing about since late July when their online gift guide finally came out on Wednesday. I haven’t sold any of my three Science Quiz Clocks, or anything else that I can trace to that ad. That was unexpected. Maybe the print version will do better, if and when it comes out; for now, I’m very glad the manufacturer’s stock outage prevented me from ordering a big pile of doomed inventory. I have never seen a media mention fail completely before.

Someone who inquired about $1,000 worth of Switchables fixtures didn’t return as I had expected this week, but she might still come back. It will be a very nice boost for October if so.

September:

Total income: +13.4%
Total COGS: +11.8%
Payroll: +29.6%
Net Income (Profit): +39.8%

YTD:

Total income: -3.4%
Total COGS: -6.3%
Payroll: -0.8%
Net Income (Profit): -253.9%

Two black months in a row set me up for Q4 in decent shape. If the country club that owes me $850 pays up on time, I can pay my payroll taxes without destroying cash flow. The way I count my beans, 2011 is running only $300 behind LY; Quickbooks insists that I’m down by $1,425, and of course QB has the last word. The crucial bottom line is $839 behind LY (I am still slightly in the red, where I should have tipped into the black).
That’s an incredibly long way from the 10% increase I had planned, but given the economy’s return to recession this year I’ll settle for breaking even. Just getting back up to zero makes me feel pretty good.

October's targets are a little more formidable as Christmas starts to ramp up.

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

Sunshop evolved through three version upgrades this morning. That didn’t go as smoothly as one might have hoped -- in fact, it still isn't completely right -- but the worst is over. The new Flash image viewer is probably the only difference most customers will see…and the 15% of my visitors who get here with Apple devices can’t see that. Some good stuff under the hood made the expense worthwhile (especially fixing the bug that limited how many photos I could upload for a single product).

Hurry Up and Wait

2011-09-16T12:11:00.000-04:00

A week after I told Edge magazine's representative that we can’t get any Science Quiz Clocks to support their gift guide insertion, she replied that “it might have been too late” to drop Curio City’s name from the package (implying that she had tried). I don't want that to happen, of course. I should have kept my big yap shut. I assured her that I had a contingency plan in place, then asked her (for the fourth time) for the magazine’s street date. Four days later…no reply.

I still don’t know when, or even if, this is actually going to run. Meanwhile, I’m still postponing things (such as a major software version upgrade and a couple of doctor appointments) that could interfere with the anticipated surge in visitors. I will need to react quickly after selling the three clocks that I have in stock.

You’d think the media would cozy up to Curio City naturally. My wife has worked for newspapers, magazines, and trade publications her entire life. My in-laws work in newspapers and television. Many of my friends are in various facets of journalism, or have retired from it. I myself studied journalism and English; although I never worked in either field, I’m a competent writer who understands old-school publishing. Yet my attempts to solicit media interest over the years always came to naught. I don’t understand the highly fragmented, non-professional 21st century media realm. If there are millions of specialty media outlets today, there are billions of people clamoring for their attention.

I’m not much of a clamorer.

Business was perking right along until it inexplicably hit the wall last Wednesday. Now September is trailing LY. This would be an excellent time for that magazine insertion to appear. I see that their website hasn't changed from last month, so perhaps it's still in the works.

Don't Count Your Chickens Before They Cross the Road

2011-09-09T11:05:00.000-04:00

...because they might get run over by a bus.

On Tuesday I finally got confirmation that the gift guide promoting the Science Quiz Clock (which I first wrote about on July 29) is definitely coming out this month. On Wednesday I tried to place a big order. On Thursday the vendor told me that they’re sold out. And so the big media event that could have kicked my YTD numbers into the black will instead be a big embarrassment. Well, I’ll surely sell the three that I have in stock (if you want one, buy it NOW). A few people will probably come back when I can restock in late October. And at least some fraction of this surge of free visitors will buy something else. September’s off to an average start...the big score that I was hoping for is going to be a small bump at best...and most of those new visitors will be annoyed. But, what can I do?

The Cool Baseball Necklace is my single best jewelry item ever. But my Google pay-per-click ad only delivered three of its 37 total sales at a cost of $64.48 per conversion. Microsoft Adcenter (Bing & Yahoo) accounted for six more sales at a similar outrageous cost. If the other 28 sales came from natural search, then the product should do OK without paying for those overpriced keywords. Since I need to get a grip on burgeoning ad costs, the keyword phrases that were driving lots of clicks with very few sales are history.

As summer laziness slowly yields to autumn guilt, I’m tackling some of the crap I’ve avoided these past few months. This week I bought new batteries for my camera, which has been tethered to a power cord for months now. Next week I’ll replace my laptop’s battery, whose charge life is down to about five minutes. I’ve started the tedium of writing orders and creating pages for new products. Thanks to that $800 golf ball purchase I can’t actually place these orders for another week, but at least I’ll have a few stacked up and ready to go by the time I can afford them. And once the traffic surge from my random act of media is over, I’m going to bring Sunshop up to date with three version upgrades.

It does feel good to move forward again after a summer of spinning wheels.

Goodbye, Summer

2011-09-02T11:35:00.000-04:00

August was a marvelous month. Panther Vision caps, Switchables, bird kites, and golf balls had already propelled it well past average...and then yesterday a country club bought 100 sleeves of golf balls. (Yeah, I know yesterday was September, but my full-week Excel accounting puts it in August.) When's the last time all of my monthly numbers were black?

August:

Total income: +42.8%
Total COGS: +46.3%
Payroll: +51.3%
Net Income (Profit): +4,362.7%

YTD:

Total income: -5.4%
Total COGS: -8.6%
Payroll: -3.9%
Net Income (Profit): -429.9%

Don’t be too mortified by that YTD bottom line: It only represents $405, all of it coming from my new “internet access” expense -- and since that's Curio City directly paying a household bill, that's cool. I’m well positioned to recoup the rest of my YTD deficit in the next four months, which historically deliver 50% of my annual sales. Achieving any growth whatsoever over LY still seems ambitious, though, as I'm starting from negative 5%.

My biggest long-term problem is advertising costs. My ad budget has crept up from 8% of gross to 9.5% over the past few years, and I can’t raise it any higher. YTD advertising is currently running at an unsustainable 14.4% of gross -- a whopping 55% increase over LY. I’m whittling down my pay-per-click bids a little bit, but that can be self-defeating. This might straighten itself out if sales surge while my ad spend remains about the same, as typically happens in the last quarter.

My biggest medium-term problem is lack of anything new for Christmas. None of my usual vendors came up with anything great this year. I will bring in a few halfway decent new products when my budget allows, but I haven’t found any potential blockbusters. This is largely my own fault; I just really hate shopping. I need to start looking harder.

My biggest short-term problem is cash flow again, despite August’s strong receipts. I won’t get paid for that huge golf ball sale until 30 days after the order ships. But I had to charge the merchandise up front. That charge will be due four weeks from today, while I don’t expect payment for five to six weeks; now I can’t place any new product orders until after my statement closes on the 13th. On the plus side, I’ll save $35 since nobody scalps 4% off the top of a check deposit.

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

Constant Contact now lets me link my newsletter through my Facebook page, and one customer redeemed the coupon within an hour of the newsletter going out. It’s always gratifying to see a response, even though the newsletter’s financial value remains dubious. As of this morning, 179 mailings brought 56 opens (yielding 13 clicks), 1 bounce, 1 opt-out, and 1 spam report. Huh? Nobody gets onto my list without signing up, so I guess that’s just somebody unclear on the concept. I’ve only had half a dozen spam reports from 17,000+ emails I’ve sent over the years. They still irritate me, though.

In case you missed it, coupon code WORKING gets you 20% off any order of $25 or more through Sept. 9.

Me, Myself, and Irene

2011-08-26T11:48:00.000-04:00

Maybe the titular movie wasn’t the greatest romcom of all time, but how often do I get an excuse to depict Rene Zellweger's sour face?

Hurricane Irene is coming! Aside from imperiling my vegetable garden, it threatens to flood the cellar again…and that’s Curio City’s warehouse. Yes, all of my merchandise is at least a few inches off the floor. But I don’t have enough room to raise up my shipping supplies, and we have 22 years worth of personal detritus piled up down there. A flood would be a massive inconvenience at the very least. We raised our water heater a few inches off the floor after the last flood, so perhaps that won’t go out again. I’m hoping that most of Irene’s rainfall will run off the surface. Our cellar only floods when the water table rises too high.

Heavy, wind-blown rain eventually saturates our chimney and leaks through my ceiling…and that’s Curio City’s office. Ordinarily that only happens after several days of sustained storms, and Irene should blow through here in 24 hours or less – not enough time to soak through bricks. Capping, lining, and re-pointing the chimney is too expensive to ever happen. So I have a bucket.

I’m mostly worried about power outages. Curio City is hosted elsewhere, so business won’t be interrupted. My ability to monitor and process sales, OTOH, would be. My laptop’s battery is worn out, so I can’t use it at all without a cord…and we wouldn’t have Internet access anyway. The prospect of being housebound without any electronic entertainment is much more frightening than being cut off from Curio City for a short time. The state’s main utility is warning that some areas could be without electricity for up to a week. Fortunately, my town’s nonprofit municipal power company only has a few thousand customers and can respond very quickly. Even if the lights do go out, I don’t expect them to stay out for long.

On Being Small

2011-08-19T11:42:00.000-04:00

The Boston Globe reports that small businesses – historically responsible for creating half of all new jobs -- are not leading the way to recovery from the Great Recession. Most of us are still in survival mode. Huge corporations are investing record profits to expand in rising powers like China and India, or simply buying back their own stock. Small companies are just scraping by, and even the most successful are wary of investing in a declining nation. “The percentage of small-business owners feeling optimistic about the economy fell from 67 percent in a June survey, to 47 percent in July, according to the online payroll service SurePayroll.”

Well, no duh. Knowing that other small companies are struggling as hard as I am is cold comfort. But as I like to say, if it weren’t for schadenfreude I’d have no freud at all.

I’ve been both a manager and an employee often enough to know that employees suck…and the bigger the company, the worse they are. I never wanted Curio City to have more than one or two employees. But I don’t want to be an Old Man Selling Stuff Out of His Cellar forever, either. If you’ve been with me for the long haul, you know that the original idea was for a bricks-and-mortar store with an auxiliary web business. (To relive those heady days of yesteryear, click on the “early history,” “expanding online” and “opening a store” post tags in the list to the right; I’m not going to rehash my history here). My chief objective has always been to generate a decent living for myself, working (mostly) by myself, in a business entirely owned and financed by myself.

The problem is that time is against me. I’m 54 years old and my body is beginning to betray me – it’s difficult to lift my arms over my head, for example. If I’m lucky, I might be able to flog this meat puppet another five years before I lose the ability to lift and carry. I need to outsource the physical part of the job to an order fulfillment service (incidentally supporting one blue-collar job, btw). Sales need to at least double, if not triple, before that becomes feasible.

And in this never-ending recession, that just isn’t happening. Sales grew by 121% from 2006-10. But that rate slowed to 3% last year and this year is in the red so far. That does not make me optimistic about growing another 121% by 2014…and that’s the low end of the growth that I need.

That said, I'm still counting on Q4 to make up the YTD shortfall. August 2010 is when LY’s sales started to slump; this August is comfortably trouncing LY. Switchables came roaring back from the dead after I created subcategories, brought in the new designs, sent a couple of Facebook tweets, and linked them here. Bots love links.

See what I just did there?

WTF, America?

2011-08-12T12:22:00.000-04:00

I’m sorry that my last post panicked the stock market and tanked the economy. I’m flattered that America’s economy hinges on my blog, and I know that I should be building your confidence, not tearing it down. Sales had been humming along pretty nicely until Monday’s freefall set off a roller coaster that tracked the market’s fortunes.

Seriously, America, get it together. Every time I get a little rally going, you pull something like this. The Great Recession may have ended two years ago for big corporations and those whose earnings come from investments, but us working schlubs have been plodding along for nigh on five years now. Maybe Congressional dysfunction is ending the good times for the capitalists, or maybe not. They’re just getting what they paid for when they bought all those tea party Republican seats. It shouldn’t matter greatly to the rest of us who live paycheck to paycheck. We may not be able to buy Congressmen, but we ultimately do control this economy through consumer psychology.

With no FDR in the White House to remind us not to fear, we have to muddle through on our own. Consumer spending drives 70% of the US economy. When we have confidence and spend our money, everybody prospers.

Most voters finally realize that we need to end this tea party nonsense in 2012. But it’s a long slog until then, and it’s too late to dodge the economic damage that’s coming from the federal austerity that’s already locked in. So if we’re going to keep this party going in the meantime, you need to get serious about consuming…and Curio City is an excellent place to start.

To help you out, I sorted Switchables into subcategories. My fortunes with this product line have risen and dropped through the years as it grew from a tiny, almost-exclusive niche to a mainstream gift item with multiple major competitors. I need to goose sales in advance of this season’s new designs, coming next week.

I was delighted when two Switchables orders came in just hours after I reorganized the department, and you’ve bought a couple more since then. You’re getting the message. Don’t disappoint me, people.

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

It’s tax-free weekend in Massachusetts again…not that that ever makes much difference to Curio City, but sales tax will be suspended for the next two days. Come on, Massholes, I’m expecting you.

2011-08-05T12:15:00.002-04:00

In 1937 the US was a few years past the Great Depression. Unemployment was still around 15%, but profits and production had recovered to 1929 pre-crash levels. When some of FDR’s advisors convinced him that it was time to balance the federal budget, the ensuing recession cut industrial production by 30% and raised the unemployment rate back to 19%. Economic growth didn’t resume until FDR sent Congress a massive new spending program 15 months later. Even then, employment didn’t recover until WW2’s epic economic stimulus.

In 2011 the US is technically a couple of years past the Great Recession (although it doesn’t feel that way to the working classes). Unemployment is officially 9.1%, but really closer to 16% if you count “discouraged workers” who’ve dropped out of the workforce or delayed their entry. Corporate profits and production have recovered, big business is flush with cash, and the rich own a record share of the national wealth while paying the lowest taxes ever – income inequality is higher today than it was before the 1929 crash. While the stock market nervously anticipates another recession, Congress caught an irrational deficit fever and passed an ill-timed austerity plan that’s likely to bring about another contraction. Let me be the first to dub it Great Recession II.

Read more about parallels with 1937 here.

This time, instead of an FDR who’ll come to the rescue, our president is a tool of the ruling class; capitulation is his main negotiating technique. The rational policy right now would be to raise taxes on the rich and split the resulting windfall between jobs programs and deficit reduction. Instead, all we can expect – seemingly for the next 10 years -- is more budget cutting. I don’t see what could possibly turbocharge the US like a world war once did, even if we still had industrial might to mobilize. We’re already on a permanent war footing anyway; our obscene military budget is partly what got us into this mess in the first place. Plus world wars have a non-economic downside, what with all that nasty killing.

As hopeless as our situation looks, things can change. In 2012 we might kick the tea partiers to the curb and restore rationality to our national budget. We are not necessarily doomed to permanent decline despite how our fate appears today.

What’s any of this got to do with Curio City? Beats me. My best year for growth was the crash year of 2008. Business has been strong for the past three weeks and that random act of media I told you about last week could save the year. It almost seems like my fortunes run opposite to the economy.
But Curio City was predicated on the reliability of impulsive American shoppers. It won’t earn me a decent living as long as they are fretting and scrimping. And this lousy economy just goes on, and on, and on….

Well. Surrender is not an option. The job market will not kindly welcome a 54-year-old white guy who’s been out of the mainstream workforce for six years. All I can do is keep plugging away.

I've said all this before, haven't I?

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

The Mason Jar Closed Spiral Necklace is sku 1000. It’s not technically my 1,000th product – I’ve had a few junk skus over the years – but close enough. It’s a milestone, anyway.

Hold Your Breath

2011-07-29T15:26:00.000-04:00

July wasn’t the disaster that it looked like a couple of weeks ago. Week 3 was the second-best of the year, erasing Week 2’s dramatic loss. The numbers below show how close I came to beating LY before sales dried up again this week. There’s no doubt why I failed: Tea Party Republicans held the economy hostage all week. Americans are all holding our breath until we find out whether Congress will allow a quick collapse through inaction or actively speed up our long-term decline.

When the rosiest outcome removes trillions of dollars from the economy, the situation is inescapably dire. The Democrats bought into the conservatives’ deficit-reduction butchery months ago, so the conversation is entirely about how to alleviate the inevitable pain. Nobody (except economists) advocates postponing it until the patient is stronger.

It’s fascinating, and a little frightening, to watch the Republican Party splinter.

About 70% of American voters know that Republican radicals are behind today’s political paralysis. What’s wrong with the other 30%? If you subtract the 20% of Americans who are hopelessly ignorant about everything, that leaves only 10% of mentally competent voters who have been either blinded by ideology or hoodwinked by the vaunted Republican propaganda machine.

Surviving another 15 months until we get another chance to throw the bums out will be hard for all of us. So let’s just focus on next week and hope that Washington will get past its self-inflicted crisis and consumers will get back to consuming.

July:

Total income: -3.4%
Total COGS: 1.7%
Payroll: -43.4%
Net Income (Profit): -471.5%

Year to Date:

Total income: -11.6%
Total COGS: -15.6%
Payroll: -11.3%
Net Income (Profit): -1,319.4%

And in the hope of surviving…an 80,000-circulation New Jersey magazine called EDGE plans to feature the Science Quiz wall clock in a gift guide due out in late August or early September. That’s right: it’s another random act of media! I could potentially sell hundreds of these, subject to their availability, my ability to physically move that much bulky stock, and my web host’s tolerance for a big traffic surge. This should solve my cash-flow crisis in time to buy new Christmas products. Better: It might lead to an ongoing relationship with the publication. If they will feature just one or two products a year, it could change my fortunes considerably.

I think I can survive another month. I used half of my emergency reserve to cover operating costs this month. Today’s bank balance is $19.74 against $2,154 in August charge bills. I can just barely stay above water if August sales match LY. Last August is when 2010 started to lose steam, so I have a realistic shot unless the government blows up the economy.

One small help: Host Gator closed my account and refunded $153 of my original $167 charge. And the company that owes me $235 says my check is in the mail. Celebrate the small victories!

And finally, a new reason to hate Blogger: A few weeks ago adding images through their new post editor stopped working. I got around that by going into "edit HTML" and inserting my links that way. Well, as of this week they have screwed up standard HTML tags, too. After way too much effort I figured out that I can upload images in the "edit HTML" view using the old post editor interface, and it does finally insert the picture with a whole paragraph of weird, non-standard HTML formatting. The way things are going, though, they will probably remove that soon, too, and you won't get these amusing little pictures anymore.

When Worse Comes to Worst...and Back Again

2011-07-22T12:18:00.000-04:00

July began with this message from Host Gator:

“I apologize, but I was forced to suspend the script "index.php" as it was causing a high load on the server, and due to it affecting all of the other accounts on the system, I forced to take immediate action for the health of the server.”

A text log that would freeze your brain followed, but all I needed to know was in that sentence: They shut down my store.

Brad the support guy said it’s Turnkey’s problem. Turnkey invited me to file a support ticket, which brought some general advice about optimal server configurations. I shut down all my advertising and threw myself on Host Gator’s mercy. What else could I do on the Fourth of July?

Now, it’s good that Gator monitors their server performance. I’m glad that they shut down scripts that degrade service for everyone else. I’m a lot less glad that they shut me down with no warning on Sunday morning of a holiday weekend -- at the beginning of the week that I’m leaving for vacation, no less. With my anemic cash flow and payroll taxes due by the end of the month, I was dangerously close to insolvency. Downtime could push me over the edge.
I persuaded them that my backup scripts might have been to blame and that they should revive me after I removed them. Curio City was back up by afternoon.

Imagine how my heart sank when I received the same email on July 11, while I was vacationing in the Berkshires. There was no way I could bluff them into changing their minds a second time. I had to demonstrate that I’d taken steps to solve a problem that I couldn’t even analyze without a functioning store and direct access to their server. Either there was something wrong with their server configuration, or there was something wrong with my Sunshop script (possibly introduced during the transfer from Mocha). I had to figure out whether Sunshop or Hostgator was at fault, and I had no idea how to do that. They helpfully suggested that upgrading to a VPS for a mere $105 per month would make it all better.

Switching hosts again was the only way to break the impasse. It took a couple more days to make that happen. So much for vacation.

Curio City finally staggered back up on Saturday, July 16, after five days of downtime. Right now it’s running fine at MDDHosting, a small company that I chose for their personal service and their expertise with PHP scripts. I want to believe that this is all behind me at last. But because I was never able to figure out what went wrong at Gator, I have no confidence that Sunshop won’t go rogue at MDD at any moment and send me right back to oblivion.

If that happens, I will have to upgrade from a shared server to a semi-private one. That would double my hosting cost, but it would also solve the problem without needing to understand it first.

When Hostgator eventually followed up on the dormant support ticket, I tersely informed them that I had moved to another host, and got this: “We are sorry to hear that. Is there anything that I could do that would convice you to change your mind? “

Heh. I answered:

“Well, let’s see…

You locked my store twice in one month, costing me >$1000 in sales…

Then you tried to sell me a plan costing over $100/month…

No, I don’t think you can change my mind. Sorry it didn’t work out.”

The week ending 7/16 was my worst ever, barely topping $100 and sending me deep into the hole vs. LY’s pathetic vacation sales. My cash-flow crisis became a rout. Last year I had managed to stash $2,000 in a savings account earmarked for site improvements and emergencies. Now I expected to need all of that money to cover operating costs, and thanks to payroll taxes coming due it still wouldn’t cover my entire July credit card bill. For the first time ever, I was contemplating going out of business.

And now this week is on track to become my best since March. I’ve made up most of last week’s shortfall and I even have a realistic shot at matching last July (with one less week!). I can probably pay my taxes and pay off my credit card using only half of my emergency reserves – even less if last month’s purchase-order customer sends me a check on time.

There’s life in the old girl yet.

Flush

2011-07-01T12:20:00.002-04:00

June swirled down the drain this week. I needed to average $105 per day to hit the month’s plan. I was running at $102 until this week fell to $67. June 2010 averaged $137/day, with nine days over $200 and three over $300; this year brought just five and one corresponding good days. Curio City covered its end-of-month credit card payment by less than $10, and that was a nail-biter. I nearly had to give it a loan.

June:

Total income: -26.5%
Total COGS: -27.9%
Payroll: -5%
Net Income (Profit): -85.7%

Year to Date:

Total income: -12.8%
Total COGS: -17.8%
Payroll: -7.6%
Net Income (Profit): -368%

July’s going to be craptastic, too. Last July was much better than average. 2010 didn’t waver until August and hit the skids in September, so I won’t have a chance to climb out of the hole until Q4, when my current slump settled in permanently. I will not despair until then. While the top line is probably hopeless, the YTD profit line is only down by $606 – hard to recoup, yes, but it’s not high finance.

I’m nervous that I’m going into a death spiral. Revenues just barely cover the cost of doing business, leaving nothing to invest in site improvements or new products. Payroll taxes are due again in July; I don’t know how I’m going to cover them. Vacation and its resulting income starvation is less than a week away.

Is there any way to put a positive spin on this? At this time LY my YTD sales were up 33%, so being down just 13% from that could be seen as a 20% rise over two years ago. Plus, Cost of Good Sold is down farther than sales, indicating better cost control. How's that for spin? I ought to work for the Democrats.

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

Let us now mark the passing of Paypal’s Money Market Fund. I’ve always kept as much of my short-term cash as possible in PayPal to take advantage of their monthly money market dividend, since my checking account doesn’t pay interest. That brought in a few bucks a month before the economy collapsed. The interest rate gradually fell to its current microscopic 0.05%, yielding no more than a few cents a month. You can see why PayPal finally said “Why bother?”

I still have some emergency money earning 0.85% at ING Direct. The way things are going, that’s a better return than I would get from investing it in Curio City.

But I said I wasn’t going to despair unless Q4 flops. That’s my story and I’m sticking with it. I’ll be “off” for the next two Fridays (not that I ever really take a day entirely off), so you’ll have to amuse yourselves elsewhere.

Where Were You When the Empire Fell?

2011-06-24T17:06:00.000-04:00

That’s not a question you’re going to hear every day. The Great Decline is gradual and uneven. Many of us still can’t see it. Will our ultimate Fall be a singular event like the fall of the Berlin Wall? Was the destruction of the World Trade Center our equivalent to the Visigoth sack of Rome? Or will it go down slowly like a tire with a rim leak? This story won’t be written for decades yet.

I can’t date the beginning of the end that hasn’t arrived yet. Some would name Sept. 11, 2001. Some would blame the election of George W Bush for turning a peaceful nation with a budget surplus into a bankrupt country losing two wars. Some might start it as late as the Great Recession in 2007, while others reach back to Clinton’s bubble economy and the rise of globalization. Some will go back even further, to the revival of conservatism and the empowerment of religious fundamentalists under Reagan. Still others will blame outside influences, such as the rise of China or space aliens.

The end of manned spaceflight was my “aha!” moment. I had hoped that Obama would be a renaissance president after Bush’s dark age, so I was surprised when this milestone came during his watch. After one last shuttle flight in just a few weeks, American astronauts will depend upon our old rival Russia to maintain a presence on a space station that has no purpose and no future. While cut off from low earth orbit indefinitely, NASA is supposed to develop deep-space capability for an undefined mission with no timetable; it might bear fruit in the 2030s if Obama’s successor doesn’t overturn this non-program and restart the development clock yet again. Abandoning this key American capability made it clear to me how far we have fallen, and how unlikely it is to turn around. A comeback is difficult after the talent disperses and the infrastructure decays.

Have you had your epiphany yet? Don’t feel bad if you haven’t. It’s hard to see until it suddenly snaps into focus one day. It’s like global warming: Theoretical until a moment of clarity makes it frightfully obvious. The Decline is not a one-way slide; short bursts of economic growth and military adventures will periodically divert our attention from the ruling class’s steady consolidation of wealth. (Don’t take the global warming analogy too far, btw: Climate change is a measurable and irreversible physical process, whereas nebulous and potentially reversible factors like politics, the economy, mass psychology, and sociology underlie the decline of empire.)

The decline of Western civilization is a little beyond the usual scope of my blog, so let’s take it down a level to economics.

Massive government intervention ended the recession for the rich. Huge deficits bought our current statistical recovery and keep it sputtering along. As both parties quibble over how to impose austerity befitting our declining circumstances, they condemn us to more economic contraction. It’s 1937 all over again. But Americans are ignorant of history, so what can you expect?

Heh. Do you get the impression that somebody’s not making his sales targets? Guilty. Sales this month are running 25% behind LY. Today’s meager paycheck – which I really couldn’t afford, but why else am I in business? – drove Curio City’s projected end-of-month checking balance down to (-$429). I have $379 in pending deposits against $1,233 in outstanding bills, with another $1,200 worth of orders that have been placed but not yet received. It’s looking grim as I prepare to shut down for a week’s vacation.

Well, business can’t be an uninterrupted climb, can it? The year’s only half over; the top line’s probably a lost cause, but an unusually good xmas could still pull the bottom line out…and that’s the bottom line, isn’t it? This perpetually struggling economy makes me pessimistic, though. Curio City was founded in the halcyon days of 2005 on the assumption that Americans would always spend money they don’t have on things they don’t need. Who could have guessed that the party would end a scant two years later? Curio City is doomed unless consumers go back to instant material gratification. Would one more rhetorical question help?

It’s a small consolation that everybody else who isn’t upper class is circling the drain together.

I had hoped that my speedier, more reliable web host might goose sales a little. So far, I don’t see it, but solving Mochahost’s chronic outages would have only a very long-term effect. Did downgrading from an interactive GoDaddy SSL seal to a static Comodo seal hurt my perceived security? Did my new IP address ruin my search engine rankings? Is the economy really sliding back into the crapper for everyone except the rich, as recent statistics indicate? Or are shoppers just on holiday for a few months?

You’d think that slow sales would reduce my cash demands, but I have to keep restocking the same few products. All of my money is going to Panther Vision, Jackite, Switchables, Cool Baseball Necklace, and golf ball reorders; struggling to stay on top of those bills freezes out everything else. It would be a great help if I could liberate some of the dollars locked up in merchandise that isn’t selling…but then it would be selling, wouldn’t it? Yesterday I marked down a couple dozen items by another buck or two; today I sold one and reclaimed $5. Well, at least it’s something.

On the bright side, June’s somniferous start gave me ample time to plant my vegetable garden. I’m going to have a bumper crop of tomatoes this year. Maybe I should sell those. At the $2.50/pound that Stop n Shop gets for inferior tomatoes, I could make thousands.

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Holy Hell, do I ever hate Blogger's new post editor! It's riddled with bugs and much harder to use than the old one. I don't see any improvement from week to week and their last Help blog post on the subject is months old. I would move my blog if I weren't trailing five years of history and 250+ posts.

Just another symptom of the collapse of civilization. They're everywhere when you open your eyes! ;)

The Purge

2011-06-17T13:28:00.000-04:00

Constant Contact’s price doubles when you reach 500 email addresses. My newsletter subscriber list recently passed 400 and was growing by 10-15 per month, while my open rate had dipped to around 20%. It was time to purge.

Email addresses are fragile. People change ISPs, or they lose their jobs, or they sign up for Yahoo and Gmail addresses that they never use. Permanence is rare. When we switched over to BELD.net this year Anne and I opted to pay Earthlink $3 per month to preserve the addresses we’ve had since 1987. But even those will die by the end of this year; we aren’t going to pay that $3 forever.

Constant Contact’s process for cleaning up one’s list is hidden – after all, bloated email lists are lucrative for them. I actually had to email their support department to find the online instructions. The process is pretty convoluted and the results don’t quite match the instructions. Without numbing you with too much detail: You duplicate your main mailing list, then remove everyone who has opened an email in the past 90 days (the past two issues, for me). The remaining “unconfirmed” addresses -- 286 in my case – get an opt-in newsletter. If they click the link therein, they go back on the list; if they don’t, they’re out. Forty-one of those 286 people opened the email and 22 of them clicked the link. In other words, 41 of the 286 addresses that I culled turned out to be valid and 22 were interested subscribers.

In the end I got rid of 245 garbage addresses. I won’t have to worry about hitting that 500-address price increase again for years now.

With the remaining 158 names known to be good, my newsletter open rate ought to approach 100%, right? You’d think so. But only 60 people looked at the Fathers Day free shipping coupon that I sent out this week. Two emails (both sent to friends…Joy, what happened to your hotmail address?) bounced as non-existent. Fathers Day is a poor benchmark because my average customer is too old to care, and my newsletter’s subject line (“3 Days Only: Free Shipping for Fathers Day”) wasn’t cute or clever. But a 38% open rate is disappointing after such a thorough cleanup. The issue did bring in one nice big sale, though, so there’s that.

Incidentally, a Constant Contact telephone support guy told me that what I did was very advanced stuff for their user base. Fewer than 1% of their customers ever try to purge their mailing lists. It’s no wonder I couldn’t find the instructions in their FAQ; the question isn’t asked frequently.
Anyway: If you didn’t get a newsletter this week, please use the Newsletter Signup box on the upper right side of this page to re-join my list.

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I just figured out how to add a Facebook “Like” button to the bottom of my website. I’ve been stuck at 120-123 fans for months now. Maybe this will get that growing again. Just this week I had my first customer answer “How did you find us?” with “Saw your Facebook page.”

I also figured out how to work around Blogger's broken image upload function by simply editing the HTML code. I posted a question on their Help blog last week and never got an answer. So I should be able to amuse you with pictures again.

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Mochahost finally closed my old account on Sunday, six days after I put in the order. No mention of a refund. But that’s OK: the $40 that they’re keeping will buy them a lot of bad publicity. I won’t hesitate to tell the world (via the Googlebot) that Mocha was the worst company I’ve encountered in almost six years in business.

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Overall Fathers Day sales were poor. The week ending 6/11 was pretty good at 122% of LY. But this week, which should have brought the big rush, is running a paltry 69% of LY. Last year’s numbers were inflated by one big sale of Mini Briefcases – not Fathers Day business at all. With a day and a half left, this week could still deliver the $500 that it’s short. But it ain’t likely.

I'll be back in two weeks with June's numbers, assuming nothing interesting happens before then.

Please Kill Me Now

2011-06-10T13:40:00.000-04:00

The server was down when I tried to log into Mochahost to delete my files and request account closure last Monday. Disgusted, amused, and (above all) vindicated, I gave up trying to nuke the old Curio City and just burrowed down through their FAQs until I could find and file their account closure request form. Two days later I got a reply:

“Dear Client,

“We are sorry that you are not satisfied with our service.

“Please give us a chance to improve, and provide you with a better service.

“I am going to escalate this issue to one of our senior managers for further review and feedback. We will get back to you with further information and hopefully a better solution to this issue ASAP.

“If you are still not happy with the result, you can still proceed with your cancellation, and refund based on our terms and conditions.

“We will get back to you as soon as the request is investigated by one of our managers.”

Oh, holy hell. I’m in Support limbo again! I replied that I already have a better solution, so please get cracking. My email bounced: Undeliverable, mailbox full. I have received three subsequent emails from three different Mocha employees with variations on “I am sending your account cancellation request for processing. You will be notified as soon as the hosting package in question has been deleted,” along with a big block of policy text that boils down to “and we are keeping your money, nyah nyah nyah!”

Fine. I expected no less from you. Keep my $36. Just make the pain go away.

(Cute cat picture goes here. It looks like Blogger's latest update broke image insertions)

I really like finding my store reliably awake and perky at its new Gator home every morning. I wish I could say that higher sales ensued, but alas: June is being a tease. Volume has ranged between three and eight sales a day this week, which is pretty good. But those sales were almost all $20 or less, which is pretty bad. Frustrating! (And then an hour after I wrote that a nice fat $180 cap sale saved the week.)

I’m picking away at a column about the impending economic meltdown and collapse of Western civilization, but I think I’ll peg that one for now. I only run my naïve political rants when I don’t have any actual business news. Maybe I’ll spew it out next week. Right now I need to crank out a Fathers Day newsletter.

The Great Migration Continues

2011-05-27T14:25:00.003-04:00

For those who just tuned in: Mochahost is the worst web host ever. Googlebot, I invoke thee!

The new web server that Mocha spent four days moving me into died on Monday morning. I swiftly sprang into action. Just as swiftly, they declared it fixed…but when I went to verify, it was gone entirely. I lost another whole day of business. Repeated emails and Live Chat sessions brought no response until 7 pm, when I finally got:

“The issue was solved.

“I apologize for any inconveniences.

“Have a nice day/evening.”

News flash: You guys need to work on your communication skills. At least I confirmed my longstanding suspicion that Live Chat is just a deflector shield. And I got a new personal tagline out of it: “Have a nice day-slash-evening!”

So a fifth down day from Mocha finally forced my hand. On Wednesday HostGator ran a one-day 50% off sale, and I snapped it up. I committed to two years of hosting (with a free private SSL certificate) for $167.50, which is a little less than I would have paid to Mocha and GoDaddy for the same services over two years. I just finished the migration half an hour ago and reset my domain nameservers to point to the HostGator version of my site. At the moment Curio City exists in a Schroedinger’s Cat state, simultaneously open on the new host and closed on the old one. That should resolve within 48 hours.

The only downside that I can see is that HostGator’s free cert doesn’t provide an animated, interactive seal like GoDaddy does. That little boost to perceived security was a very nice perk of the $30 annual cost. OTOH, reinstalling a third-party cert every year was always a big pain in the ass that required cooperation from Mocha’s support people; it will be very nice to have that automated. And, of course, I expect a noticeable boost to both speed and reliability.

Superficially, May’s sales numbers don’t look like Mocha drove away any business. But if you subtract out one $850 sale at the beginning of the month the top line would’ve ended up $338 behind LY. The five days of business that Mocha stole (plus one lost to the moving process) would have been worth $484 (based on the corresponding days LY). So after those two adjustments, “normalized” May wound up about flat with LY.

Of course, that’s just blowing smoke. The official Quickbooks numbers look like this:

May:

Total income: +22.4%
Total COGS: +30.6%
Payroll: +89.3%
Net Income (Profit): -133.1%

Year to Date:

Total income: -10.2%
Total COGS: -16.3%
Payroll: -2.9%
Net Income (Profit): -2.7%

Paying HostGator for two years hosting up front blew the botton line away – my monthly Net Income was down by $136 because of $167 in “rent”. But that will smooth itself out over time, especially if I can persuade Mocha to refund my unused months (as if!).

June’s targets are a little scary. But who knows? Maybe having a better web host will make a difference.

The Great Migration

2011-05-13T13:11:00.002-04:00

The worst-case scenario that I laid out last week came to pass: Curio City got lost in the move. So much for “You should not experience any technical difficulties with your site after the upgrade.”

Curio City Online went offline at midnight on Friday. I didn’t verify that everything was working properly and restart my advertising until Wednesday morning. Today’s blog post started as a day-by-day (almost hour-by-hour, actually) log of my frustration with MochaHost. I had little else to do except rant at my blog and wait. Now that it’s over and my resolve to nuke their offices from orbit is fading, I can abbreviate this entry considerably.

The culprit turned out to be a custom .ini file on my site. I don’t think it should have taken them four days to figure that out. I still have their email from February 2010 stating (in response to an old complaint) “You can create your own php.ini file which you can include in your main xxxxx folder or any folders within your xxxxx. You can specify any necessary settings which you need to alter within this php.ini file.” I won’t take the blame for this file’s existence after they gave us their blessing and it worked fine on the old server. But I’m backing down from savaging their server setup skills.

Sketchy communication made this the worst customer service I’ve experienced in the 54 years that I have stalked this earth. Apparently the techs can only respond by updating the actual trouble ticket, so most of my email inquiries were ignored. The few answers I did get were in a cryptic, staccato style devoid of information. Forty-eight hours into the ordeal they said “Currently the migration is still in process. In a couple of hours it should be done and then your application should be fixed.” A herd of elk could migrate across North America in the time Mocha was moving data from one server to another. Sixty hours after they killed my store they said “Your site is up and running at our end.” Bully for them! The rest of the world only saw an error page, but it was Mission Accomplished as far as they’re concerned. Two more urgent emails got no response at all.
For two of those four days I didn’t even know if anybody was working on my ticket; I still don’t think they did anything at all on Sunday. Not until I used Live Chat on Monday morning did they escalate my complaint for higher-level investigation, and even then I got no feedback all day. A second chat session Tuesday morning brought the reply “Your ticket has already been escalated,” as if that was all I needed to know. I was in the dark, growing more anxious and depressed with every passing hour, for most of those four days. You see, nobody works on Curio City except me, so when something goes horribly awry I have to take it personally.

The consequences of being offline for four days are surprisingly light. I can only speculate about sales I missed, of course. I only did $210 worth of business on the corresponding days LY. I saved roughly $70 on ads I didn’t run and I didn’t generate $42 worth of payroll (which is nice for Curio City but less nice for me). Having no pending deposits was frightening. But three people somehow managed to place orders on Tuesday despite my store winking in and out of existence all day. Wednesday was better than average. Yesterday was a shutout and I’ve had no sales yet today either. Now I’m nervous again even though everything looks normal; one small sale this afternoon would put me at ease. I had originally deemed this the worst disaster to befall Curio City in its 5.5-year life. Yet unless something unknown is causing my current drought I should easily make my plan this week. All of that drama adds up to a minor blip that won’t even register, statistically.

On Tuesday I was desperate to move to a new web host ASAP. But I’m getting cold feet now that Mocha’s stable again. Moving is perilous. A new IP address would destroy my site’s search engine rankings, for starters (if the Mocha move didn’t already do that). It would require more downtime for at least part of a day. And one never knows what one is getting into until the first time one actually needs support from the new host. The host that I’m courting has a free transfer service and gets stellar reviews for support, so I’ll likely engage their services to test their expertise (while avoiding paying my developer to do it). After the ordeal of getting Curio City back up on Mocha, I’m inclined to leave it alone until we go on vacation in July.

BTW, this is my 250th post. There are 249 others like it, but this one is unique.

Moving In Place

2011-05-06T11:19:00.004-04:00

A tiny Mothers Day bounce came much later than expected. Sales surged to eight on Monday, fell to four on Tuesday, then dropped to background levels on Wednesday. One of those eight Monday sales was to a business that cleaned out most of my remaining unstructured 3-LED caps. I discounted them heavily and I threw in free freight and the credit card processor took its usual punishing fee, so it wasn't especially profitable and my cash flow crisis isn’t solved. But the infusion of dollars bought me some breathing room and I gained a little space in the overstuffed cellar. Best of all, this customer will probably come back. Gaining a happy new customer is always more valuable than any single sale.

I corked my Bottled Up Facebook ads after just five days. It cost $60.48 to convince myself that what didn’t work for Valentines Day wouldn’t work for Mothers Day, either. After 104 fruitless clicks the ad couldn’t possibly recoup its cost. Fool that I am, I might try it one last time with a different product for Fathers Day. FB ads are wicked expensive but they draw heavy traffic; I just can’t seem to convert it to sales. The one thing I learned this time is to hold off on advertising until the final few days.

This week was the best since my big spike in early March and one of the top three of the year to date. May should generate healthy numbers unless my web host kills me tonight, when they transfer Curio City from the boxster server to a new home “which will provide you with the following benefits (free of charge):

1. Upgrade to our latest hosting plans and latest cPanel control panel
2. Upgraded server hardware which will provide you with more reliable and faster server architecture
3. Improved server software
4. Improved network performance and network DoS/DDoS protection

“The account transfer is completely automated and no action is required on your end. You should not experience any technical difficulties with your site after the upgrade.”

That sounds reassuring. Several paragraphs of worrisome gobbledygook about IP addresses and DNS servers and SSL ensue. My developer (Brad, whom I’ve not actually hired for anything in nearly a year) assured me that it ought to be routine. Pray that he is right, for he shall be offline all next week, leaving me at the mercy of my web host if Curio City isn’t there when I wake up tomorrow. The worst case – which I always expect – would be a full week lost until Brad gets back.

Crunching April

2011-04-29T11:15:00.002-04:00

April was a slightly better-than-average month. It finished a very satisfying 27% over April 2009. Unfortunately I’m not up against 2009, and April 2010 was an excellent month. Consequently I “bent the curve” (as the kids say) farther in the wrong direction.

April:

Total income: -29.3%
Total COGS: -32.8%
Payroll: +47.4%
Net Income (Profit): -66.8%

Year to Date:

Total income: -15.4%
Total COGS: -23.2%
Payroll: -6.1%
Net Income (Profit): -211.4%

I don't understand the weird jump in payroll. Excel shows my salary properly lagging LY. Sometimes I think Quickbooks is on drugs.

I tried to exploit Mothers Day by running some temporary alternate ads on Google and Bing. I changed my welcome message to reflect the “holiday,” implemented same-day shipping, and updated my News page daily. I announced a lot of new products in a newsletter with a Mothers Day subject line. The latest newsletter stats: 15 new subscribers brought the total to 422 emails sent. There were 5 bounces, 3 opt-outs, and 1 spam report -- wtf? It’s a 100% opt-in list! It set new lows with just 79 opens, 18 clicks, and 0 purchases. I’m guessing that the Mothers Day subject line suppressed interest. Mothers Day is useless unless you sell flowers or own a restaurant.

This is just more evidence that my newsletter is a waste of digital postage (and my time). Logic says I should kill it. But I have no other way of announcing new products. Yes, I do post them on Facebook, and yes, I do supposedly have 121 fans there. But I have no indication that any of them actually see my posts – no comments, no “likes”, no response to coupon offers. At least Constant Contact tracks opens and clicks. Facebook posts just go into the void.

Easter weekend brought an anemic Saturday and a shut-out Sunday. But we lose one random Sunday to Easter every spring, so that ought not to matter in the big scheme.

Cash flow is still my ball and chain. I covered my April Mastercard payment just yesterday, two days before it was due. The paycheck that I should’ve drawn today is postponed until Monday or Tuesday, which is an appropriate punishment for the brain fart that caused this money shortage. Needless to say, that smart phone that I was thinking about buying is on hold until I can break these shackles, probably in September.

I screwed up cash flow when I obliviously spent my payroll tax money on new products. None of that new stuff is selling. I was convinced that the Cool Baseball Necklace was a slam-dunk (err, I mean home run). Number sold to date: Two. I had planned to give those the Facebook ad treatment, but the vendor (who’s a scant 10 miles away from me) still has not entirely filled my tiny opening order from a month ago. So much for churning a small inventory frequently.

Against my better judgment, I reprised my Valentines Day strategy of running Facebook ads for Bottled Up jewelry; this time, I’ll pull the plug after one week (next Monday). Total expense so far: $45.11; Total clicks: 76; Total sales: 0. Statistically, I expect one sale per 50 clicks, so this is already a disappointment. I’ll never repeat this effort with that product.

For some bizarre reason, the mini-briefcase business card holder is blowing out of here right now. Maybe somebody somewhere linked to it, or maybe Google raised its page rank. This golden oldie (sku 16) has been a bestseller since Curio City opened. It's not my favorite product. Due to a historically high defect rate, I have to open and inspect every single piece before I ship it. Customers constantly inquire about imprinting, which of course I don’t do. Its vendor requires a minimum order of 200 pieces costing nearly $1,000 – half a month’s open-to-buy -- and they're out of stock as often as not. Their outrageous shipping prices require me to game their semi-regular free-shipping offers, meaning I have to order at their convenience, not mine. And every time I do reorder, they start harassing me with followup marketing phone calls and emails. I’ve never advertised it, yet I’ve sold 660 of them (worth $6,600). And now I need another damned reorder.

I shouldn’t bitch about something that sells without any effort from me. Advertising costs are way up across the board. I stumbled across a spreadsheet view in AdWords that lets me set custom landing page URLs per keyword. So instead of just advertising “3D building puzzles” and dumping everyone on the Puzzles category page, I can use specific keywords like “Big ben puzzle” and send them directly to the product page while still using a catchall ad. The resulting profusion of new, low-volume keywords will raise my costs somewhat, but theoretically these cheaper, narrower keywords should have better conversion rates. Generic “ear buds” keywords, for example, are all priced at 40 cents and up (which is way too much for a $12 product), whereas specifics like “gem ear buds” can be had for as little as 12 cents. To help offset the new costs, I zapped a few of my keywords with the worst conversion costs ($15 or more per sale).

I don’t use Twitter, but I did open an account when that was all the rage and set it up to automatically twit my Facebook posts (including blog entries). Somehow I’ve attracted 10 “followers.” I found out through a new Constant Contact message aggregator called Nutshell that a blog called Preppy Picks featured the Dove of Peace kite as a spring product pick for preppy children. Google Analytics says it hasn’t produced a single visit, but links are always valuable in and of themselves, and so I hereby reciprocate.

On the bright side, May’s targets look attainable. On the dark side, May is the first month of the long summer sleep. There just aren’t enough dollars on the table between now and September to matter very much.

I’ve got no more blog topics “on the hook” and I’m sick of wringing my hands over shitty sales, so I won’t be posting again until I have good news or something interesting to say.

Taxing the Golden Goose

2011-04-22T10:43:00.002-04:00

With state budgets still wracked by the Great Decline, Massachusetts lawmakers are now entertaining bricks & mortar (b&m) retailers’ demands to capture sales tax from Internet purchases.

Curio City already collects sales tax from Massholes; last year we fattened the state’s coffers by $106. The current proposal targets out-of-state behemoths like Amazon and Overstock by defining affiliates as being an in-state presence. (If you have an Amazon link on your website and you collect a commission when a buyer clicks through, you’re an affiliate.)

Theoretically, that means that the big online retailers would have to collect sales tax from Massholes. In reality, Amazon simply curtails its affiliate programs when states enact this boneheaded legislation. The orphaned affiliates have to cope with the lost revenue. If it was core to their business strategy, some affiliates move to a friendlier state. Either way, the state loses revenue from the businesses that shrink or leave, and does not collect one dime of additional sales tax. Everybody loses except the politicians who score points with the local b&m retail industry.

It would actually benefit Curio City to a tiny degree if the megasites really did start collecting sales tax in order to preserve their affiliate programs. But the odds of that happening are approximately zero.

Far more worrisome is a national effort to kill the goose that lays the golden egg. The Supreme Court’s ruling that states can’t tax sellers outside their borders was fine in 1992, when it only affected mail-order catalogs and home shopping channels. It remained fine when online retail was a curiosity. It’s less fine now that big money is at stake ($23 billion in uncaptured taxes by one estimate, but only $4 billion by another) while state budgets are in shambles. Internet sales won’t eclipse b&m for some years yet, but they’re growing much faster. The states want a piece of the action and b&m retailers (understandably) want to stave off their creeping obsolescence for as long as possible.

Some years ago a coalition of states banded together to work out a uniform sales tax collection policy administered by a central collection agent. Rather than face thousands of jurisdictions with varying rates and exemptions, retailers would simply track sales by state and send a lump sum to this agency. Presumably the simplified collection mechanism circumvents the Supremes’ chief objection and paves the way for an internet sales tax to be ruled constitutional. Once this structure is ironed out, the states will ask Congress to open the spigots of billions of new tax dollars. About half of the states are playing along with this, so it’s got to be taken seriously.

OK, so what? I’d just be collecting and remitting tax from consumers, not paying it myself. Americans’ overall tax bills are at a historic low and all levels of government are hemorrhaging money. All serious economists agree that taxes need to go up. Isn’t it better to enforce existing consumption taxes than to raise income taxes? Why should I help shoppers dodge taxes that they already owe?

First, business don’t exist to be tax collectors (or insurance providers either, for that matter, but that’s a whole different rant). As a Massachusetts-based business, I don’t have a problem with collecting tax from my fellow Massholes and turning it over to my own state’s government. Curio City indirectly benefits from state services. I do have a problem with being a tax collector for 49 other states. But that’s just a philosophical objection.

Second – and more practically – being tax exempt partially offsets the competitive disadvantage of shipping fees. I’m not Amazon. Businesses that ship fewer than 100,000 packages a year – nearly 100 times my size -- have to pay retail for postage. Shipping is my second-largest expense item (behind payroll), running 16% of gross sales. I obviously can’t just abolish shipping fees. Customers accept them because they’re saving time and money for gasoline, parking, and sales tax. But how many people are willing to pay both tax and shipping? Very few, if my small number of Masshole customers is an indicator. If all online retailers start charging sales tax, a lot of shoppers will only buy from the free freight megasites.

Third, I expect that the mechanics of compliance would be expensive and time-consuming. I’d need new versions of Sunshop and Quickbooks just for starters. One can only hope that very small companies like mine would remain exempt.

Kabuki

2011-04-15T11:35:00.002-04:00

When no other topic suggests itself, I dip into politics. Brace yourself; I'll keep it short.

The recent budget showdown was a loss in that right-wing extremists defined the debate, but a victory in that they got less than they demanded. The cuts that passed yesterday are unlikely to measurably affect the economy or my business, so there’s nothing more to say about that here. It sucks to be poor and powerless.

Bigger battles loom.

I just passed my 54th birthday. I’ll be eligible for Medicare in 4,015 days unless the Republicans realize their dream of ending the Great Society for everyone born in 1957 or later. I don’t think that they really have the power to sell my shot at retirement for more millionaire tax cuts, but since they drew a line that runs right through me I’m acutely interested in how it turns out. But the 2012 budget is still months away and both parties are just making opening gambits, so enough on that.

Raising the debt ceiling is the next crisis. This political kabuki will turn into seppuku if the Republicans let the US default on its debt, as their wingnuts would like. All economists agree that doing so would provoke an epic economic debacle, so that certainly concerns Curio City – and everybody else.

I predict that they will lay down a list of outrageous demands, and that Obama will accede to half of them at the 11th hour. You read it first in Curious Business.

Smart Phones for Dumb People

2011-04-08T11:43:00.004-04:00

Anne dragged me kicking and screaming into the 21st century this week -- or at least its showroom. Verizon Wireless stores sell the 21st century in the form of pocket computers that can access the Internet, take photographs and movies, play music, show TV programs, play lame little games, and (incidentally) make telephone calls. For as little as $50 (or $150 with a “protection plan”) plus another $50 in must-have accessories plus another $29 per month for at least two years, I too could live in the 21st century.

I’m pretty sure I won’t like it there. It’s expensive, complicated, conservative, grim, and joyless. Everybody has tattoos.

But the future does at least have dazzling entertainment gadgets and I really do need a new telephone. Getting an ordinary “dumb” phone would shame my supposedly high-tech business. I need to learn about mobile computing whether I care about it or not. So now I’m weighing the advantages and disadvantages of various Android phones. I’m likely to settle on either the HTC Incredible or the Droid X.

Quarterly tax deposits just drained almost $1,000 that I had already spent on inventory because I plumb forgot that my payroll taxes were due. At the moment I’ve got $1,800 on hand to cover $3,800 in obligations. That puts the brakes on 11 reorders that I need immediately and postpones the telephone decision.
If customers obligingly cough up the expected $2,000 in the next two weeks I’ll be time traveling into the future before the month is out.

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

Minor milestone: It took nearly five years to make my first 5,000 sales at the end of April 2010. At that time I set a goal of reaching 10,000 before 2012 ends. This week I passed number 6,666. And yes, I filled every one of those boxes myself.

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

It’s still unclear at this writing if the Republicans are going to shut down the federal government tonight. If they don’t back down from their extremist demands by midnight (and if the spineless Democrats don’t roll over as usual), 800,000 federal workers will be lose their paychecks for an unknown time. If the teabaggers get all of their fantasy cuts, 125,000 civil servants will lose their jobs permanently. Either outcome is bad for business.

Blowing Off Steam

2011-04-01T11:39:00.003-04:00

One night a few weeks ago over dinner and drinks I filled in my wife (who doesn’t read my blog) on just how badly Curio City is doing. My bottled up frustration and self-doubt unexpectedly came uncorked. I don’t ordinarily allow emotions into my life or display weakness, but sometimes I have to release steam to keep from blowing up my containment building. Unfortunately, steam can be radioactive. Anne takes my company’s failures personally due to foregone income and wasted lifespan, and I don’t have anyone else to talk to.

After a heated discussion I decided to give Curio City one more Christmas. If I don’t achieve my modest 10% year-over-year growth plan, I’ll be looking for a way out in 2012. I won’t dwell on that possibility this early in the year, but it does give the monthly numbers more urgency.

March:

Total income: +38.8%
Total COGS: +17.3%
Payroll: +67.7%
Net Income (Profit): +136.1%

Year to Date:

Total income: -12.4%
Total COGS: -22.1%
Payroll: -2.9%
Net Income (Profit): -23.9%

March was a weird month. Eight really good days hid a lot of really poor ones. The annual numbers improved, but there’s still a big gulf between the -12.4% that I’m at now and the +10% that I need by year’s end. I’m $2,800 – a slow month’s entire sales -- below plan; basically, I need an extra July this year.

The percentage drop in YTD Net Income only represents $156 and my new “Internet access” expense item accounts for $90 of that. Curio City’s loss is our gain since that payment goes directly to our household budget.

I lost last Sunday entirely when my server went down and Mocha took all day to fix it.

Last April was so strong that I’m likely to lose ground again this month. Well, goals are supposed to be challenging, right? News flash: Life is a struggle that we all lose in the end.

I could shave expenses a little by killing my email newsletter. Three or four of the 400+ emails that go out each time will bounce because people mistype their email addresses or die or something. A couple more people will unsubscribe (or more than a couple when I refer to a “controversial” product like Pot Holders or any smoking accessory). Only 85-100 of my 400 subscribers will actually open the email, and they’ll only click 15-20 times. Those clicks only ever produce a sale once every three or four issues. (Those percentages are better than the industry average, btw.) For this I’m paying $18 per month, or a buck per click.

Is there any value in simply putting my name in customers’ mailboxes each month? Probably. Is it worth $18? Dubious.

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

The Boston Gift Show was not a complete loss: one of my existing vendors gave me permission to return $57 worth of dead stock, which justified the $15 it cost me to attend. I didn’t find any unexpected new products. They ought to rename it the Boston Jewelry & Souvenir Show. The amount of dreck that our economy still generates is truly impressive.

When Is a Package Not a Package?

2011-03-25T11:33:00.002-04:00

Last week I promised (threatened?) not to post again unless I had either good news or something interesting to say. So which one brought me back again the very next week?

Both.

Maybe my aggressive advertising for the new 4-LED Panther caps is finally bearing fruit. Or maybe other companies’ publicity is driving consumers to look for them. Or maybe it’s just cap season again and people are stumbling upon them. Whatever the reason, three fat juicy cap orders and a smattering of small ones made this a very good week. March is already ahead of plan with nine days left to chip away at February’s huge deficit. I’m going into Monday’s Boston Gift Show with some fragile optimism. I’m surprised that people aren’t snapping up the discounted 3-LED caps, but I guess I’ve convinced them that the new ones are really better.

I’ve used the USPS for at least 90% of my shipping for five and a half years now. This week they sent me a “Dear Customer” letter (on paper – how quaint!).

“It has come to our attention many of the pieces of mail we received from you are NOT classified properly.

“Large envelopes are being classified as 1st class parcel, when they do not meet the criteria for this class, these pieces are not eligible for delivery confirmation, but are eligible for certification.

“This is a courtesy notice; your pieces have been dispatched. But future pieces that are incorrectly classified will either be returned or forwarded Postage due at our discretion.

“To ensure no delay in your mailings please classify your mail correctly.”

They included a photocopy of one of my packages with this scrawl: “3/4” or less is a Lg flat env.”

It always irritates me when people who earn five times my pittance can’t write a proper sentence…but that’s just me. This quasi-government agency needs to capture all the income that they’re due; Large Flat Envelope rates are higher than First Class Parcel rates, and Certified Mail is much more expensive than Delivery Confirmation (which is free when postage is purchased electronically), so cha-ching! right? Well, no. Rather than pay for Large Flat Envelopes, I’m now enclosing a scrap of bubble wrap in all of my formerly-flat packages. I have two trash bags full of it because I never throw packing material away. If mailing trash to my customers reduces my cost, who am I to question the post office? Maybe their machinery requires a minimum thickness to properly sort packages from envelopes.

A Flood of Memory

2011-03-18T12:00:00.003-04:00

Pause with me for a moment’s reflection on Curio City’s disaster days. Several days of historically heavy rains flooded our cellar last March 14 and destroyed hundreds of dollars worth of merchandise and supplies. At the same time I was unknowingly racking up big fees by challenging the unfair chargebacks generated by three fraudulent sales; the bank would ultimately get more than the thieves did. A week later a smaller flood drowned the month’s bottom line. This March should look a little better simply by virtue of holding no disasters.

“Disasters?” I use the word deliberately. Curio City’s trials pale in comparison to Japan’s earthquake, tsunami, volcanic eruption, nuclear meltdowns, and the return of Godzilla. But Curio City doesn’t have a powerhouse economy and the sympathy of the world on its side. All it has is me, and that ain't much.
Still, I'm essential enough that I didn’t lay myself off last year (although I did put a stern “Needs Improvement” review in my permanent record). Massachusetts rewarded my largess by cutting my unemployment tax rate by nearly 1% of payroll. That will add a (very) few more bucks to the Net Income line.

While I’m nickel-and-diming…has anybody in the history of the world ever really used a “.biz” internet address? Why do I keep paying $16 a year to renew mine? Well, to prevent anyone else from buying it, of course. But who would do that, given that I own the US service mark?

Nickels and dimes are all that I’m bringing in as yet another sales disaster unfolds. I only broke three digits once in the past 10 days. I’m paying more for traffic than I’m making in sales. In hopes of liberating some of the dollars imprisoned in the cellar, I cut the prices of all of my old marked-down stuff this week, but most of that dead stock will never move at any price. I wrote off $138 worth and might wipe out a bit more before the month ends, since it doesn’t cost me any cash. Of course, it doesn’t free up cash, either. I’m flogging the Panther Vision cap changeover as hard as I know how to do with new ads, new keywords, and increased bids. It's not making much difference.

This month’s early sales spike made me hope that I could revive two spending priorities: Buy a video camera and buy a smart phone, in that order. The camera might be a small revenue-booster, but it’s also a time sink that comes with a learning curve, and I probably won’t be any good at using it. The smart phone, being expensive and of no practical use, is just one of those things I feel like I ought to have; it’s only on the list because my old flip phone barely works. But both of those are back on hold now.

Hmm, I wonder if smart phones have acceptable-quality video cameras these days.

I almost wrote that “It couldn’t be much worse,” but just like life, business can always get worse. In fact, zero isn’t even rock bottom: A damage claim and a lost shipment turned this week briefly negative on Monday. It’s on track to set another record low.

You must be tired of reading the same lament week after week, if anybody’s even still reading this blog. I’m sure sick of writing it. Other than month-end numbers, I’m not going to post anymore unless I have either good news or something interesting to complain about. All I've said for the past six months is “sales suck,” and I am out of ways to phrase that.

The Science of Trademarks

2011-03-11T10:41:00.003-05:00

My wife’s Internet meanderings brought her into a Canadian Curio City. It’s a science education resource site. No link here for obvious reasons, but you can find it easily enough if you’re so inclined.

Years ago I had a trademark challenge against some sleazebag who was using the Curio City name to sell one of those worthless gasoline additives that’s supposed to miraculously boost your gas mileage. I found him out when his customers started calling me with complaints. A cease-and-desist letter quickly convinced him to go bilk the gullible under some other name.

Should I go the cease-and-desist route again this time? My attorney friend explained that

Generally, US trademark rights are effective only in the US, which is why multinational companies spend huge amounts to protect brand names in foreign countries. The situation with Canada is a bit different because of NAFTA, which includes provisions for mutual protection of intellectual property rights. Basically, Canada is required to protect a US trademark owner against use of a substantially similar mark for substantially similar goods or services where the use is likely to cause confusion in the marketplace. Your initial impression is that there isn’t much overlap with the Canadian user, but that might become less true in the future. For example, you sell products that have scientific educational value. The Canadian site might start selling T-shirts or educational toys to support its mission. So there might be a chance of confusion down the road.

I don’t currently have a legal argument against them. Even if I did, I am a gnat compared to their well-funded and prestigious backers (including the Ontario government). Besides, I believe strongly in science education. So many Americans don’t believe in evolution and deny global warming precisely because education has failed in entire regions of the US. I don’t think that willful ignorance has much traction in Canada, but one must never be complacent – once superstition gains primacy, it’s nearly impossible to unseat. The Canadian Curio City site is a credit to our mutual name. I wouldn’t want to smack them down even if I could.

Still, I’m obliged to protect my commercial interest. I should at least politely inform the Canucks of my existence. Maybe we can work out a mutually beneficial understanding, like cross-links. This goes onto my list of “Things I ought to do someday”.

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

This week finally delivered the new 4-LED Panther caps that I’ve been hinting at for the past month or more. The amount of work and money spent to change over my biggest product line made this a milestone. The deluge of orders from people clamoring for new caps and snapping up discounted old ones has not materialized. In fact, another dramatically dead week erased fully half of last week’s big spike. The Switchables surge ended and bird kites haven’t taken wing yet. A few people bought a handful of golf balls at $10 a pop, and not much else. The week is on track to set another record low.

Curio City is back in the toilet, baby. Somebody please flush.

No, I don’t mean that. I must persevere. Maybe the Boston Gift Show will reveal some fabulous new product this year. Maybe those Panther caps will be a late bloomer.

At least I had time this week to finish preparing my portion of our personal tax return and hand it off to Anne. I don’t care much about our foundering personal finances anymore, either. I am tired of struggling to slow down decline and postpone collapse everywhere I look.

That's a great segue for another political rant. But the news breaking right now about a devastating tsunami in Japan has sapped my will to pursue it. Life could be a whole lot worse.

Back In the Saddle Again

2011-03-04T13:02:00.003-05:00

Hey! This week’s newsletter produced a sale! And not to a friend, either. I can’t remember the last time that happened.

Not only that, but I got another small sale from a Facebook tweet the previous day. This week was trending my way for a change.

And I opened my email on Wednesday morning to find an $800 lighted cap order waiting. A $200 Switchables sale later that day and another $500 worth of caps yesterday went a long way toward erasing February’s epic suckitude.

It’s funny: Every year brings one -- and only one -- big sales spike. Last year, it was the first week in February. In 2009 it came in April. In 2008 it was July. (My sales records for previous years aren’t easily accessible). Of course I can’t know when to expect it, or even expect it at all…but my annual numbers depend on at least one big boost like this.

The timing of this year’s spike was perfect. Getting those next-generation 4-LED caps in the pipeline broke the bank. Freeing up so much cash just days before the new inventory arrives, and before the bill comes due, couldn’t have worked out better.

What a difference $1,500 makes. Spring is almost here and I’m feeling optimistic for the first time in months. I barely remembered to worry about my over-dependence on two product lines or how I’m going to match this spike next year. If the new caps that are due on Monday give me another shot in the arm, March could be a seriously good month.

Curio City is back, baby.

So Far, Yet So Close

2011-02-25T10:51:00.003-05:00

Tomorrow closes out yet another monumentally bad month. February broke all kinds of records for suckage (or is it suckitude?). A couple of huge lighted cap sales propelled last February to my best non-Christmas month ever, so without a comparable lightning strike this month was all about trimming the inevitable shortfall. Coming within $2,000 of LY would have been good. Finishing down by more than $3,000 was most definitely not. Oh well, at least I surpassed February 2009, my most recent normal benchmark.

It almost didn’t end like this. Yesterday someone inquired about buying 200 caps. I quickly determined that I could get what she wanted from Panther if we moved quickly; they’re closing out their old 3-LED caps and stock is very low. I offered her a good price on the colors that she wanted and she promised to get back to me early today with exact numbers.

Nine out of ten inquiries like this go nowhere, so I don’t get too excited. In spite of myself I was thrilled when her email was waiting for me this morning. This stroke of luck would not only erase my massive deficit…it would actually set a new high water mark for me to worry about next year.

Alas. Her message read: “After a quick conversation with our executives, I was told to check with one of our field Managers to see if we have a vendor that we have a contract with. We have to stay compliant to our contracts. I will contact you when I find out.”

(Moan)

Executives…field managers…vendor contracts. Big companies suck. While it could still come through and invalidate the following numbers, I’m not holding my breath. Behold the latest sea of red!

February:

Total income: -52.4%
Total COGS: -46.8%
Payroll: -26.7%
Net Income (Profit): -381.4%

Year to Date:

Total income: -31.3%
Total COGS: -38.2%
Payroll: -24.2%
Net Income (Profit): -472.7%

Breathtaking, huh? When can I expect my government bailout? The post mortem:

At this time last year, the new 3-LED lighted caps were blowing out of here so fast that they set sales records. This year their sales just plain blow. A competitor is offering free custom embroidery with no minimum quantities plus free shipping, for a dollar less than my delivered price. I would need to cut my retail by a buck just to match them, and of course I don’t have an embroidery machine or the space to get one. Should I cede the market to them or become that most reprehensible of creatures, the discounter? The only thing I really have going for me right now is my quantity discount schedule.

There’s no point in tweaking my own variables before the equation changes, and yesterday’s frenzy of lighted cap activity revealed that the first of the new 4-LED Panther caps are now available. I will spend this afternoon working up an order on the gamble that blowing my entire cash reserve on their revitalized lineup will goose the March numbers.

A new blockbuster product line would solve everything. I wish finding one were easy. Maybe next month’s Cavalcade of Crap (aka Boston Gift Show) will reveal something good for a change. Meanwhile, thank the gods for the power of Switchables to drive repeat sales. Regular readers might recall that I've nearly pulled the plug on that line twice before, but I persisted and they came back.

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

The more I thought about the shipping-charge idea that I outlined last week, the better I liked it. So I ended my experiment early and restored Parcel Post rates. I raised the handling fee from 50 cents to 75 cents to offset the lost margin on bigger packages. If I ship five First Class orders for every Parcel Post order, the extra $1.50 in handling fees will cover the cost of upgrading to Priority mail. Parcel Post/Priority Mail customers won’t notice the extra quarter. First Class customers might, but if I have to gouge somebody, they’re the ones to hit. And since I can print stealth postage through Endicia but not through Click-n-Ship, First Class customers can’t even see the spread.

This month’s sales slump did begin when I removed Parcel Post. Sales did revive when I reinstated it two weeks later. Association is not causation, of course, but I can’t really afford to run a lengthier trial. Did it work? It’s hard to say. I choose to believe that my Parcel Post experiment was partly to blame for February’s failure.

Now begins the year-long uphill slog just to match LY’s mediocre sales numbers. At least there are no more dramatic spikes in my sales targets for the rest of the year. At least February ended stronger than it began. At least that huge cap sale is technically still in play. At least Switchables are still lively. I’m not quite ready to slit my wrists yet.

I remembered to file my annual report despite not receiving a bill or reminder from the Secretary of State this year. O, what a good boy am I! With that $109 deposited to the state’s coffers, I am finally done paying last year’s taxes and accounting…and I’ve still got $88 in the bank!

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

Republican shenanigans that I previously shrugged off as showboating have crossed the line from annoying to worrisome. The GOP’s wingnuts are focused on union busting, environmental degradation, and devastating cuts to lower- and middle-class programs to restore that halcyon Bush budget of 2008 that brought us such prosperity. Meanwhile, their leadership practices its core competency: Frightening voters into backing oligarchs and generals over their own interests. Obama’s poll-driven march to conservatism offers no hope until after 2012. Teabaggers threaten to shut down the government if they don’t get budget cuts that would reduce economic growth by 2% over the next half year (according to Goldman-Sachs), yet 25% of Americans polled support them, and 37% want even deeper cuts. You have to admire Republican skill at selling misinformation (or Democratic incompetence at rebutting it). People simply don't understand why a government budget doesn't have to follow the same rules as their household budget does.

Together with spiking oil prices, these stifling Republican budget cuts pretty much guarantee a new recession. Which very well might be their intention, given their announced priority of defeating Obama at any cost. Paradoxically, that might be good for Curio City; my best growth ever came during those desperate days of 2008 that the conservatives are pining for.

The Incredible Shrinking Profit

2011-02-18T16:18:00.002-05:00

I got my tax return back, so here’s a little statistical trivia: At the end of last year I estimated my annual profit at $3,760. The actual final bottom line was $3,256. The return is much too complex to understand the $500 discrepancy between my guess and reality, and Schedule K-1 has a couple of little adjustments that bring my share down to $3,192. The bad news is that my total compensation for 2010 was only $15,609, not the $16,177 that I had thought. The good news is that I set aside a little more for taxes than I’ll really need. The bad news is that the $2,800 that I took out was really 86% of my profit, not the 75% that I meant to take; the $350 difference explains why my company is having so much trouble making ends meet right now.

Well, that plus the sales collapse.

February is running way below half of LY after recording the worst week since last July. My expectations were low this month, but not that low. Traffic is within normal parameters. My conversion percentage is slowly recovering from the burst of low-quality visits that I bought from Facebook. The average order value has slipped below $37 ($45 is normal). Sales this week averaged $47 per day, vs. $175 needed for success. I’d almost rather have no business at all than these little nuisance sales.

Next week’s monthly sales report is going to be grim.

The consolation for making no money is having ample time. This morning a test drive unexpectedly turned into the full-blown ordeal of buying a new Honda Fit. I’m finally just sitting down to Curio City at 3 pm. The consequences of missing most of a day? None, apart from trading our whole savings account for a new car.

I’m going to give my Parcel Post experiment one more week before I blame this slump on eliminating those cheap rates. My latest thinking goes like this: If I reinstate Parcel Post, I will again have to pay more than I collect to ship some of my larger orders (because I always ship Priority Mail). But suppose that I raise my handling fee 20 cents instead of cutting it by 10 cents, as I did last week. People placing larger orders won’t notice the 30-cent difference if they’re offered the cheapest rate class again. The real impact will be on low-end First Class orders. Because they’re more numerous, they should make up for the lost margin on bigger orders.

I like the idea of the small sales subsidizing the bigger ones. I’m just not sure yet that shipping costs are the root of my current problem.

And Then, Nothing Happened

2011-02-11T10:08:00.002-05:00

Nothing happened this week. There were no disasters. The weather was quiet. I didn’t have any brilliant insights or tragic setbacks. No vendors screwed me over. Republicans did nothing to harm the economy (assuming that the $60 billion worth of misguided budget cuts that the House proposed this week are dead on arrival). There was one minor Stupid Customer Trick: some guy stomped away when I wouldn’t let him order by mail and pay with a check. The 1980s are over, dude.

I’m not unsympathetic. I resisted using credit cards myself throughout the ‘90s because they encourage the undisciplined to spend impulsively and accrue debt. I only started using my debit card last year when Citizens Bank started paying 10 cents per transaction. But becoming a merchant changed all that. Electronic payment is faster, easier, and more secure than paper. After setting up my business, I moved all of my personal banking online, too. Bills that I used to spend hours processing every month are now automated. Some habits die hard, though: I still maintain paper checkbook registers and balance them every month. Some people think that’s quaint.

A telephone call from a satisfied customer made me feel better about turning away Mr Mail-Order. She loves her Panther Vision cap and was really impressed with my fast order fulfillment. “And…?” I kept thinking, because most phone calls are bad news. But no other shoe dropped. “You should tell everyone in your company what a great job they’re doing,” she said. So I sent everybody home early.

In spite of our magnificence, sales were abysmal. Is the elimination of cheap Parcel Post rates turning people away? Or did they just blow their money on pink lovey crap for Valentines Day? This Hallmark holiday ordinarily doesn’t affect me one way or the other, but theoretically shoppers aren’t here if they’re somewhere else. If that’s the case then things should bounce back to normal next week. Either way, I can’t spend money when I don’t have money coming in. Maybe I should’ve taken that guy’s check.

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

I ordinarily trash snail mail from VistaPrint unopened. This local company already gets my printing business because they do quality work at fair prices online, where I don’t have to interact with humans. But their marketing is a relentless spammy barrage of sales and promotions. This particular envelope brought a $100 coupon for Google AdWords. It was obviously meant for new AdWords customers, but what the hell -- when I tried it anyway my account was credited $105. Cha-ching! I reckon Google can afford a little generosity after I spent $1,500 on ads in December. I also reckon Google didn’t take over the Internet by being generous to puny schmucks like me, however wonderful and deserving we might be.

Well, look at that. I filled a whole screen writing about nothing. I should be writing television sitcoms.

Snowmageddon!

2011-02-04T10:52:00.002-05:00

Weather is local and my business is international. The Internet doesn’t get snowed in. But everybody lives somewhere. When storms afflict 2/3 of the country for two days there are bound to be consequences.

This week’s back-to-back snowstorms made me wonder how weather affects a virtual business. Boston is having a horrendous winter. Local snowfall to date is 70 inches, with more due tomorrow. A normal winter is just 40”. We’re running a little behind the record 102” in 1995-96, but the absence of our usual thaws between storms has created a deeper snowpack than I’ve seen in the 25 years that I’ve lived here. Side streets are down to one lane, there are no sidewalks, and drivers – especially Miata drivers -- can’t see over the snow banks.

When snow keeps me from driving to the post office, I post a “shipping delays” notice on my News page and remove expedited shipping options (because someone will inevitably spend the big bucks on Next Day Air when I can’t get out of my driveway). That doesn’t noticeably affect sales because so few shoppers ever read the News page, but it does cover my ass. I can’t receive shipments, either – vendors will only ship to my commercial UPS Store address, not my residence. That hurts if I’m waiting for an important reorder in the run-up to Christmas. I’ve had four days this year when no merchandise could come in or go out.

There’s a small productivity hit, too. It can take me anywhere from two to four hours to shovel us out, depending on each storm’s nasty factor. That eats up most of a workday. Being tired and sore harms my stamina for days afterwards and being depressed saps my motivation.

Sometimes blizzards shut down my suppliers. Switchables were selling beyond expectations – so much so, in fact, that I ran out of the most popular designs. I put off reordering for several days to take advantage of Switchables’ February special. I finally dropped my big reorder on Tuesday the 1st with the expectation that this local company would deliver by today. But the massive storm that shut down New England on Tuesday and Wednesday screwed that up, so the $75 I saved probably cost me more than that in missed sales.

Sales were on the high side of normal this week. Was that because of the storm, in spite of it, or unrelated? Some people who would have been in stores undoubtedly shopped online instead. But office workers who ordinarily shop from work weren't there. Those factors probably canceled each other out. On the whole, I think the relentless winter encourages people to stay home whenever they can, and that probably works in my favor.

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

After I posted last week’s jewelry lamentation, an order for two necklaces landed on Saturday. My resolve to continue advertising Bottled Up jewelry for another week was validated. I did get one more small jewelry order this week. Altogether, though, $200 worth of ads brought in $200 in sales. Rather than throw good money after bad I declared the effort a failure and shut down my ads today. The only winner was Facebook.

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

Malaysian pirates sailed in again almost exactly a year after they robbed me the first time. Fraud control repelled them this time. I’ve had legitimate sales to Malaysia before, and I might have rejected a real customer who was trying to place a valid order. But I doubt it. I have added Malaysia to my blacklisted countries.

Heartbreaker

2011-01-28T13:33:00.003-05:00

Business died off immediately after I made last week’s celebratory post. Sales fell from nine on Thursday to two on Friday and one on Saturday. Switchables kicked off a surprisingly nice rally on Monday and the month ended up just a little below LY – which sucks, obviously, but is better than January’s stumbling start had led me to expect. A few good sales in the next day and a half could still push it over the hump, relative to LY. Plan is just a pipe dream.

January (and YTD):

Total income: -3.6%
Total COGS: -16.4%
Payroll: -18.2%
Net Income (Profit): +134.4%

We like to see the Cost of Goods Sold fall farther than sales do (or, better, rise by less), but that’s only because I didn’t write off $250 worth of dead merchandise this January as I did last year. The same thing accounts for the big jump in profit. December’s lame sales depressed January’s first paycheck and dragged payroll down (payroll should track total income for the rest of the year). The jump in net income would be wonderful if it represented more than $195.

February is going to bomb. Last February’s first Monday was my second-best day of all time at $2,100; that week is the tallest non-Christmas spike on my sales graph. For perspective, the entire month of February ’09 brought in just $2,800. Unless someone miraculously delivers a month’s worth of business in a single day again this year, I am sure to take a huge hit.

On the bright side, that’s my last major hurdle for 2011. Although my overall targets remain very challenging through August, there are no more huge spikes ahead. Come March, the healing can begin.

Two things prevent me from doing much to flog sales right now. First: I can’t buy any new products until I scrape together another $1,100 for tax preparation and payments. Second: Panther Vision is going to upend the lighted cap market again. I don’t have details yet, but a substantial fraction of my total inventory will soon become outdated, and the price of admission to their new lineup is high enough to freeze everything else out.

Ideally, this will play out like November-December 2010 did: Excitement over the new product will revive full-price sales while bargain hunters snap up the slightly discounted old product. It will be costly, and without Christmas to drive traffic it might not happen. But if it works March could be good.

So in the meantime I just putter around and wait. I’m stacking up new product orders against the day that money becomes available. I temporarily killed golf ball sales by moving them to a top-level category (if you’re going to yank the search engine rankings out from under a warm-weather product, February’s the time to do it). I created my Rock n Roll theme category, for what that’s worth. I filed my 940 and created my W-2. After losing money on shipping four out of six orders last weekend, I finally made good my threat to withdraw the Parcel Post option. Turnkey released new USPS modules and I restored international shipping (grumble). I uploaded my company file to my CPA and made some little accounting tweaks that he required. I might take some markdowns next week, since the month is doomed anyway…might as well consolidate the pain.

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

My Valentines Day jewelry gambit flopped. I expanded some existing lines, added the royal ruby glass, cut a few prices, and then sent a newsletter with a 10% off coupon to 400 people. Only 82 of them even opened the email, and they only clicked 28 times. One friend bought a necklace at a generous discount. Nobody else used the coupon code at all. Three Facebook ads delivered 220 clicks last week costing $75. I doubled my Adwords bids and wrote two holiday-specific ads with no results (barely one click a day). The same treatment at Microsoft Adcenter (Bing & Yahoo) brought even less. Altogether, I spent about $80 for 230 clicks and no sales. I expected eight sales worth $400-450 at my normal 3.5% conversion rate. Even with Facebook’s low-quality traffic dragging conversions down to 1% I should have had two or three sales and recouped the cost of the ads. I wasn’t expecting to take a loss on the effort.

As idiotic as this sounds, I’m going to keep it going until the Valentines sales crest next week. Maybe I just started too early. I hate burning money, but I don’t have anything else going on.

I don’t know if Bottled Up jewelry is a bad fit for Curio City, if it’s just overpriced, or if my marketing sucks. Romantic love is not something that I understand. Valentines Day is supposed to make young men buy young women commercial aphrodisiacs like chocolates, flowers, and naughty underwear. I think that jewelry should fall into that seductive class, but my jewelry customers are always women buying for themselves. I will probably try this same strategy once more for Mothers Day (another “holiday” for which I have little to offer) before I draw conclusions. But jewelry has been weak for me ever since I lost typewriter key jewelry years ago. I persist because it costs me nothing beyond advertising and because I sell just enough to whet my appetite for more.

Switch On, Switch Off

2011-01-21T18:13:00.003-05:00

This week started inauspiciously. On Sunday morning both my store and my admin site were replaced by a blank white page with the message “There seems to have been a slight problem with the database. Please contact the server admin to report this problem.”

Fabulous. The same thing happened last Sunday, too. Mocha didn’t restore my site until mid-afternoon. Losing half a day presaged yet another failed week.
So I’m especially delighted that this week’s sales – propelled by Switchables, two hefty lighted cap orders, and an unexpected large bird kite order (to someone in Minnesota…in January) – broke my losing streak. I not only trounced an anemic weekly plan, but recouped January’s entire shortfall versus LY. A slightly better-than-average final week would save this month versus LY. Making plan isn’t even out of the question. That would be nice, because February is doomed to be an epic fail. But let's leave that for next week.

Switchables damage claims are surging faster than sales. The company recently weakened their paperboard packaging to make a prettier retail display. Now their boxes are easily crushed. So far Switchables has been very good about replacing damaged items without requiring their return, meaning that I don’t have to ask (and reimburse) my customers to mail me broken glass. But the breakage rate is so high that I need to replace the bubble envelopes I’ve used for the past five years with something sturdier (and heavier and more expensive). The flimsy packaging shouldn’t affect bricks-and-mortar stores very much, so I doubt that they’ll revert to better packaging anytime soon.

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

The USPS rate lookup bug that I complained of last week has effectively killed international sales. When someone in Spain paid $12.55 for shipping that actually costs $28 I learned that the lookup routine is only finding flat-rate charges. Although people can theoretically still pay UPS’s bloated international rates – and one Canadian has already done so – I had to pull the plug on USPS service, probably until USPS releases developer support in May. Of course, I’ve been cool toward foreign business for years anyway, so although I don’t like having the decision taken away from me, I’m not entirely unhappy with the outcome. I should probably deactivate the UPS module and kill it once and for all. Still, I hesitate to take that step.

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

I had another Random Act of Media: Some blog somewhere picked up the Polluted drinking glasses last Friday and somebody else must have twitted it or something. This product had previously sold only one full-priced unit in two years, plus a single 48-piece special order at a deep discount. On that one day 3,115 people came looking for the seven units I had in stock. The aborted Spanish sale that I mentioned above locked down two of those units. By the time I cleared that up the wave had passed, and I still have one piece left.

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

Is taking on a new monthly bill ever good news? Curio City is now paying $45 a month for Internet access -- one-third of our monthly BELD bill (BELD = Braintree Electric Light Department, the nonprofit, taxpayer-owned municipal utility that provides our cable TV and Internet service.) I felt sleazy shifting a personal bill to my company until I found out that BELD’s rate for business internet alone is $65. So our household budget gets some welcome relief and Curio City gets below-market Internet – everybody wins. Except me, of course, since that new $540 annual expense comes off my bottom line.

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

In the Miracles do Happen department: UPS paid my claim for a lost 2nd Day Air package. This is miraculous because I had no proof of ever putting the package into the stream, other than printing a label. Should I start a "Reasons not to hate UPS" tag with this post? Nah. Where's the fun in that?

It's the Products, Stupid

2011-01-14T10:35:00.004-05:00

Five years of trial and error have finally defined the characteristics of a successful Curio City product:

unusual, useful and/or fun and/or creative
of reliable quality
dollar-dense but not overpriced
easy and cheap to ship; not too fragile
not prone to mechanical breakdown or electrical failure.

Rare indeed is the product that fits all of those criteria. Whisky Stones and lighted caps – both of them suggested to me by customers – are my best examples. Buckyballs didn’t take off because they were too widely available. I must resist buying tangential things that dilute my brand even though they'll sell a few units, and I need to shun things that are too ubiquitous even if their sales potential seems good.

Too much cheap stuff: “Dollar dense” means that my typical small box should be worth at least $20, and ideally closer to $50. Too many of my packages are scarcely worth $10. Cheap little things like Crime Scene Bandages and pirate flags are supposed to be impulse buys that people will add to larger orders. Shipping charges approaching 50% of their price should discourage people from buying those items alone. But it’s surprising how many people will pay $2.50 to ship a $5 product. It takes just as much time and effort to fulfill a $5 order as it does a $20 order. Such sales are better than nothing when business is slow, but they’re a maddening distraction in good times. Now that the Bush Recession is finally moving off and taking Americans’ newfound frugality with it, I have little reason to carry anything worth less than $10.

Not enough cheap stuff: Do I contradict myself? Very well then I contradict myself. Some of my most reliable bestsellers are cheap imports that I buy from wholesalers. Products like the Mini Briefcase (600 sold) and the 5-LED Cap Light (1,400 sold) are pure gold. Similar products are definitely hit-or-miss, but the hits tend to be really big, and they carry generous markups that further my profitability goal. I should spend more time shopping my second-tier vendors to find such novelties…never forgetting the cautionary tale of the USB Ionizer (exactly one sold at a miserable 20% markup).

Product lines vs. one-offs: A good product line is a cash cow even when none of its components sell dramatically. The best of my novelty golf balls has sold only 132 units, yet the product line has moved nearly 1,000 sets altogether (at $10 each). The best bird kite has only sold 47 pieces, yet I’ve shipped 360 kites altogether at $25 and $40 price points. The #1 Switchables, with 450 sales, is the basic $5 light fixture, but those support a line that’s moved 1,100 pieces worth $10-24 each. An unsuccessful line, OTOH, can tie up a lot of inventory dollars. Pursehooks were extremely hot for about a year until cheap imitations ruined that market, stranding me with $800 worth. 3D Puzzles haven't reached their potential, although I have some ideas why and haven’t given up on them yet). I really wish the Fluxx games would do better, but because their publisher favors bricks-and-mortar game stores over online retailers their marketing actually works against me. (I keep them because I want a Games department and because I like Fluxx; they humor me because my money is green). Keyboard stickers are an interesting case: they carry a good markup and sell pretty well, but I’ve had several complaints about their quality, and they are not nearly dollar-dense enough. (Of course, at times like the present when nothing is selling, I’m glad to have them).

All of this analysis is useless unless cash starts flowing again. So far 2011 is running at less than 50% of LY’s unusually strong January. Depositing my payroll taxes drained Curio City’s coffers this week. I have to scrape up another $1,000 to pay my corporate excise tax and hire my CPA to prepare the tax returns and I have $2,700 in revolving credit card charges, against a total of $4,100 on hand from all sources (including reserves). Subtract my next paycheck and I’m down to less than $100 in liquidity. More businesses die from miscalculating cash flow than from any other cause, and so I cannot buy the new products that tease me from my growing pile of catalogs. I absolutely will not invest any more of my own money in this business.

Advertising costs are still running at Christmas-season levels. Yesterday I spent $45 at Google alone; $24 of that bought 100 clicks on keyboard sticker keywords. Total sales yesterday? $35. Keyboard stickers contributed $16 of that. For perspective, advertising is budgeted at 9.5% of net sales. I reduced my daily AdWords spending limit and cut some bids today, but reining in advertising is ultimately self-defeating.

The coup de grace, though, is coming from Panther Vision (which is fitting, I suppose). Today I received $1,500 worth of caps that should have carried me into summer. Instead they will become obsolete in just a few weeks, and I have no money to invest in their successors. I’m grateful to the person who tipped me off that this is coming – Panther sure didn’t; they want to clear out their old product. But the tip came too late to preserve that big pool of cash, and now the pipeline is dry.

Pulling the plug now to save $1,000 on taxes has crossed my mind, but that’s just my old reliable seasonal depression talking. I can only keep on slogging. I have no alternatives.

Ideas Great and Small

2011-01-07T10:50:00.004-05:00

I felt hopeful on the first day of my new accounting year. Really, I did. An unexpected Switchables spurt had put some momentum into the weekend and Sunday’s sales plan was a modest $122. It sure would be nice to start 2011 in the plus column.

Sunday was also the first day of the USPS’s new rate structure. I discovered halfway through the afternoon that Sunshop’s postal rate lookup function wasn’t functioning. Shoppers could only access UPS’s always-overpriced rates. I spent the rest of the day slapping together a rate table to replace real-time shipping, but by the time I finished the momentum had fizzled. Sunday finished with one $5 sale.

Happy New Year indeed.

Monday brought more of the same. It turned out that shopping carts all over the Internet were blindsided because the USPS never released new API specs or development docs. Turnkey dodged a “Reasons to hate” tag this week by emailing me fixed files on Monday night. Everything was hunky-dory again by Tuesday morning…and then a refund for a missing shipment dragged my total sales for the year down to $40 out of a planned $427. Total salary earned in three days: $8.

The week was doomed by the time normality returned on Wednesday. Repeat after me: This is a blip. This is not an omen. Let’s move along.

I wonder if I’ve passed the zenith of my current glide path. The ideas that follow should boost me a little higher on this trajectory, but I might need a new course entirely. Of course if I knew of a better route, I’d already be on it. That subject will occasion a whole lot of future hand-wringing. If I can hammer out a reasonable, carefully calculated new direction in the coming months, I will try to overcome my natural risk aversion and my fear of change and my pathological abhorrence of debt. After all, I did beat the first two handicaps to get as far as I have now.

Big Ideas

Facelift: Choose a new Sunshop template, play with the layout and graphics, and pay my developer to customize it for me. Brad is willing and able. I’d like a fresh, clean new look without departing so far from the standard template that future version upgrades get overcomplicated. This is likely to be 2011’s biggest investment.

More video: I need to buy one of those little Flip cameras so that I can post simple product demos on Youtube. The videos that I embedded in my bird kite pages made a huge difference in sales, and I can think of a few products that would benefit from demonstrations. This is one investment that's sure to pay for itself.

Mobile computing: “Smart phones” are supposedly where it’s at. I’ve never used one and I don’t really want one, but my flip phone is more than five years old and its second battery is shot. It’s overdue for replacement and I need to learn how the new gadgets work. Curio City will pay for both the device and the data plan, so I’m eyeing one of those fancy Androids, or possibly the new Windows 7 phone that’s getting such rave reviews. They’re apparently the best phones on the market today, but I’m not sure that Verizon has them yet.

Marketing Ideas

Random Acts of Media: 2006 had the USB Fan’s airline magazine appearance. 2008 had the Recycled Mobo Christmas Tree in the NY Times gift guide. 2009 had Whisky Stones in the Boston Globe (pure coincidence). 2010 had…nothing. I need to make something like that happen this year. If I can’t pull off an al-Qaeda scale spectacular, maybe I can at least manage a CIA-style hit or two. Anne knows of a company that will distribute PR releases to their list for as little as $80…I will probably start there.

SEO: This has probably been on my list every year; every year I back down. It’s expensive and there are a lot of fly-by-night operators. Sunshop’s template construction limits my ability to make technical (non-content) changes without paying a developer and complicating future version upgrades. And the payoff for proper SEO is gradual and long-term, not quick and dramatic. Despite my reservations, I could still be talked into it by somebody with good credentials and a solid offer.

Reevaluate newsletters. They seldom generate enough sales to cover my Constant Contact subscription and they take a lot of time. I need to rethink how I use them, possibly integrating them more closely with Facebook. My blog and FB work together to drive a good deal of traffic, but my newsletter usually lands with a thud.

Further Exploit Facebook: I shut down my FB ads after Christmas. They were effective but expensive. I’m sure I can get more bang for the buck based on what I learned – starting with Valentines Day. FB surpassed Google as the Internet's most-visited site last month, and its users cheerfully sort themselves into nicely targeted marketing demographics.

Start using LinkedIn. A few people have contacted me that way, so I ought to fill in my bare-bones account there.

Financial Ideas

Focus on Profitability: I need to avoid whittling away the bottom line while I try to pump up the top line. Most of what I’m talking about in this post costs money and reduces net income. I could be a little less cavalier about small expenses, I suppose, but I’m already a tightwad.

Carry More Weight: It’s time for Kraken Enterprises to pay us for Internet access and landline phone service, which we only keep for the Fax capability. If 2/3 of our BELD bill goes for those services, Curio City ought to pay 1/3 of that amount (Anne’s business already deducts a portion of that). Doing this will reduce our household budget’s monthly deficit. Of course, it directly contradicts the profitability goal above. But paying household bills with pre-tax dollars is just a good idea.

Give myself another raise? I would eventually like payroll to reach 25% of net sales (it's currently 20%). If I’m meeting my 10% sales plan in July I’ll bump myself up 0.25%. If I make it for the year, I’ll take another 0.25% next January. This, too, comes off the bottom line…but I'm OK with money going into my pocket.

Insurance? This could be a huge drag on the bottom line, but being without it is risky. One frivolous lawsuit or big casualty loss would destroy me. I have to find a way to investigate the cost without tipping off my agent that I’ve been doing it for five years already. This being a home business, it must mesh with our homeowner’s insurance somehow. If it runs $200 a month it will wipe out my annual profit.

Picayune Ideas

Speaking of shipping: The latest USPS rate hike widened the gap between Priority Mail and Parcel Post rates. Since I can’t implement my preferred solution, I will either have to discontinue Parcel Post or actually start shipping that way – probably the former. Keeping fees collected higher than postage purchased is probably the easiest way to improve the bottom line, but ending the cheapest postage rates will drive some business away.

Categorize: Turn golf balls into a top-level category, get rid of travel. Revisit category names in general and discontinue the smallest ones.

Add “Light source sold separately” text to all Switchables photos. My product descriptions make that crystal clear, but many customers don’t read them, and I’m sick of taking returns from the confused. (See “Concentrate on profitability”)

Try to cash in on Valentines Day by putting some effort into jewelry, my only pertinent category. It will probably flop but it’s worth trying. I also need to milk Mothers Day and Fathers Day somehow.

Write something off. I wanted to do this immediately after New Years, but now I’m waiting to see if business is going to come back. The object is to close out one or more defunct categories, and/or reduce the bulk in my cellar.

Create a Rock n Roll subcategory under Themes.

Purge the Constant Contact list again; it is getting near the 500 threshold that raises my monthly charge. Purge old customer accounts that haven’t seen any activity in 3+ years. Should I purge old orders, too? My database still has every transaction going back to November 2005, and sentimentality is the only reason to keep it. I wonder if shrinking the database would have any benefit on site speed.

Polish the new shipping table so that I’m ready the next time rate lookups go offline. The current table’s numbers were pulled out of thin air.

Next week’s post will be about product focus, which nearly took over this post before I peeled it off.

Thank Janus It's Over

2010-12-31T11:30:00.003-05:00

I should’ve known 2010 would end with a mini-disaster: Sunday’s blizzard took out our Internet access. For most people that means being deprived of funny cat pictures and Facebook chatter. It’s a little more serious for an online business.

I shoveled for three hours on Monday to excavate Anne’s car for the short drive to Panera Bread to pay too much for coffee and free WiFi. But I couldn’t print postage (thank Janus nobody bought expedited shipping!) and therefore couldn’t ship the weekend orders. Tuesday morning, still no Internet. I couldn’t let the weekend go unshipped for another day. Anne figured out that I could at least create my Priority Mail labels at the FedEx/Kinkos shop; I wasn’t sure how I was going to handle First Class labels (USPS doesn’t sell those online). Our cable finally revived shortly after lunch on Tuesday and spared me that effort and expense, but not the anxiety.

Hmm…that’s a micro disaster at best and a boring story at worst. In fact, this post doesn't even merit a "Disasters" tag. It seemed like a fitting end for 2010, though. I was reminded how completely I rely, both professionally and personally, on technology that scarcely mattered 10 years ago. I am a lost soul without the Internet.

Here are the grim (Quickbooks) numbers:

December:

Total income: -9.0%
Total COGS: -14.1%
Payroll: +2.5%
Net Income (Profit): -17.0%

2010 (almost) Complete:

Total income: +6.3%
Total COGS: +12.4%
Payroll: +13.5%
Net Income (Profit): -38.1%

Now it’s time to set 2011’s plan. Ignore discrepancies with the official numbers shown above; I use Excel for planning, and those numbers are typically a little grimmer than Quickbooks.

Sales have more than doubled since 2006, yielding a long-term annual growth rate of about 50%. But as you can see, most of that growth came all at once:

2006-07: 14.8% (^ $4,142)
2007-08: 61.5% (^ $19,722)
2008-09: 15.6% (^ $8,102)
2009-10: 2.9% (^ $1,714)

I need to sustain double-digit growth if this business is going to earn me a real living by the time I reach retirement age. But the rate is slowing as the dollars involved increase, my business matures, and both technology and popular culture leave me farther and farther behind. Needing and wanting 20% growth isn’t exactly a sound reason to plan for it. What’s a reasonable compromise between the number that I need and the number that I consider likely on my current glide path?

First, let's consider outside forces: The economy is noticeably quickening. Benighted states like Michigan and Nevada and California probably don’t see it yet, but progress is obvious here in Massachusetts. The $660 billion of new economic stimulus that Obama bought with his millionaire tax bribe will surely fuel the trend. Barring any shocks, the economy will exceed expectations in 2011 as even the worst state economies finally turn around, employment picks up, and consumers get back to consuming.

Counterbalancing that, the activist 111th Congress yields to renewed Republican obstruction and backsliding next week. Blocking new progressive legislation won't actively harm the economy. Real (not symbolic) spending cuts certainly will, though. Mainstream Republicans don’t have the stomach for cuts of sufficient magnitude to start another recession; they eat from the same trough as Democrats, after all. But the battle for control over their party in the 2012 election cycle makes the Republicans a wild card; they could do real damage if their newly energized fringe acquires serious policy influence while the party leadership is focused on destroying Obama (as it has vowed to do).

Does the national economy even matter? If there’s any relationship at all with Curio City, it’s inverse. The deepest year of the Bush Recession (2008) brought my best growth ever. The second half of 2010, when the economy gained real traction, is when my business started to slump.

So let’s set the economy aside and focus instead on my own history. If you throw out the outlier years then 15% is a reasonable growth expectation. Given 2010’s weak ending after a robust first half – as of August I was still running 30% ahead of LY -- I’m pessimistic about 2011’s chances. But 3% growth (or 6% by Quickbooks reckoning) is unacceptable. If that’s to become my new standard, I should pull the plug on this endeavor right now; I’d make a lot more money bagging groceries. So I’m going to split the difference between the 15% that is my birthright and the 3% of recent experience. Halfway between 3 and 15 lies number 9. Being unwilling to embrace a single digit, though, I’m going with a 10% plan this year.

My hunch says that I’ll fall short during the first half of the year and make it up during the all-important Q4, when 2010 unraveled.

Christmas 2010 is probably an accurate baseline. Both 2008 and 2009 enjoyed unexpected stimuli. In 2008, the NYT Gift Guide drove many of the sales records that still stand today. In 2009, the Boston Globe gift guide mentioned Whisky Stones on the same day that my last reorder happened to arrive, while Panther Vision introduced a new cap line. Supply problems created pent-up post-holiday demand for their new 3-LED caps, bringing surprisingly strong numbers during the last two weeks of December.

This past Christmas shows what happens when lightning doesn’t strike.

To bring these numbers down to the pocketbook level: I raised my salary from $10,870 to $12,417 this year. But my raw profit fell from $5,900 to $3,760. That adds up to just $16,177 of the $20,000 that I was looking for and falls slightly below last year’s $16,737 compensation. If I worked 40 hours a week for 52 weeks I earned $7.77 per hour – better than the “20 cents an hour” that Anne thinks I earn, but still a little below minimum wage. Using a more realistic 35-hour workweek brings me up to $8.88/hr. That makes me feel a little better.

Of course Kraken Enterprises can’t really pay out its entire profit. My rule of thumb has always been to take out 75% and leave in 25%. This morning I took the $750 needed to cover the personal income taxes due on $3,760, plus an additional $2,050 in free and clear bonus money to get me through next year’s slow months. That leaves $960 in retained earnings. And although it fell short of expectations, pocketing $2,050 makes me feel better, too.

Officially, this is a stockholder loan repayment, not a shareholder distribution. There’s some obscure advantage to repaying my investment and letting the company keep its whole profit, but I don’t remember what it is. I think it improves the company’s worth despite giving me $2,800. Kraken Enterprises still owes me $17,475 of the $28,500 that I invested in it so there’s still plenty of room for profits in that bucket…for whatever reason it is that I do that.

Next week: Ideas for restoring double-digit growth

Good Riddance to Bad Elves

2010-12-24T12:01:00.003-05:00

Christmas finally died last Tuesday after a long illness. It will not be missed. After a second consecutive December decline, I’d love to hibernate until Valentines Day…but when the self-employed rest, we lose. I am already pondering how to better cash in on next year’s spending orgy.

Since my past few posts were so number-heavy, and since I'll have the year-end wrap-up next week, and since I’m currently suffering yet another lousy week, I’ll spare you the nitty-gritty today.

I only lost one Christmas shipment this year, sending a $10 item to West instead of East (Whatever) Street in NYC. UPS apparently lost a 2nd-Day Air shipment this week, although I haven’t confirmed that yet because the customer fell silent after her initial complaint (she’s traveling). Otherwise everybody’s packages got where they were supposed to go. That’s 235 packages in November and 410 (so far) in December. With one more crappy week left in this crappy month, I should end up very close to LY’s 705 shipments – the monetary decline reflects the Curse of the Small Orders that I identified a couple of weeks ago, not an absence of customers. (I’m sorry, I said I was going to skip the statistics!)

The three thefts and two cellar floods that washed more than $1,000 off my bottom line were this year’s lows. New fraud control will prevent those scams from being repeated, albeit at the cost of rejecting some legitimate sales – APO addresses in particular usually fail the metrics (sorry, soldiers). Pray to Neptune that global warming won’t raise the waters again next year.

At the beginning of 2010 I had set myself the goal of acquiring 100 Facebook “fans” by the end of the year. As of today I’m at 112. FB changed “become a fan” to “Like” midway through the year because “liking” something is a lesser commitment than “becoming a fan” of it. The effect is the same, but the goal was easier to reach. FB seems to be spreading of its own accord now – not that I don’t still need the active support of my FB “likers”.

Other items on my 2010 agenda were:

Drop international shipping: Nope, didn’t do it. I was sorely tempted after this year’s thefts (all of them by foreigners), but I’m still reluctant to cut 1-2% off my top line. I'll reconsider if sales recover beyond expectations.

Drop Google Checkout: Nope. In fact, my GC business grew slightly last year. That’s fine; their processing fees are slightly lower than the competition. I hate to see so many of those customers drastically overpay for shipping because of Sunshop's flawed GC integration, but I’m not going to lose sleep if it doesn’t bother them.

Drop Giftwrapping: Nope. In fact, I sold $8 more worth of giftwrap this year than last despite lowering the fee and removing the option from many products. The $124.50 that it brought in is trivial when merged into general sales…less so when committed directly to payroll. Unfortunately, the floods forced me to replace $94 worth of destroyed paper, so the company barely broke even on the deal. I am dropping it from everything that’s bulky or odd-shaped, though.

Cosmetic Facelift: Nope, the unexpected expenses torpedoed that. It's probably for the best, since Turnkey seems to have abandoned the Sunshop template that I was going to adopt. It’s still on my wishlist for next year.

Discontinue Greeting Cards: Yup, wrote those suckers off and folded the department. I might not have done so if I’d known about the other losses 2010 had in store…but I’m glad they’re gone.

Another Raise: Yup, I increased payroll in two steps from 19 to 20% of net. That’s why my paycheck set a record this year despite lackluster sales.

In a couple of weeks I’ll publish a similar punch list for 2011.

Although I don’t celebrate Christmas myself, neither do I fight it like I used to. Why try to harsh everybody else’s buzz? In observance of the holiday (and the impossibility of accomplishing anything this weekend anyway) I’m taking this afternoon off. I’m finally going to finish moving into the new computer that arrived just before Thanksgiving. I might even treat myself to a new game next week...it would be my first in years.

Next week: Counting the money and planning the plan.

If I Only Had the Stones

2010-12-17T15:44:00.004-05:00

Week 6 finished at 91% of LY. Not bad. It would’ve topped LY had it not been for the 2009’s Boston Gift Guide stroke of luck. I only foresee setting one new record this year, but it's a doozy. Here are some milestones from Google Analytics and my accounting spreadsheet.

Most visits in one day was 2,012 on 12/8/08 (New York Times gift guide mention); this year, 514 on 12/8.
Most sales in one day was 51 on 12/9/09; this year, 39.
Biggest day ever was $2,168.69 on 12/9/08; this year, $2,099.65 on 2/1 (two huge cap sales on one day).
Biggest week ever was $6,344 on 12/13/08; this week is going to top $5,000. It ain’t $6,300, but ain’t bad.
Best 2-week paycheck ever is the one I’ll collect next Friday: $1,900 and still counting. That’s almost as much as I used to make with a real job! Previous record was $1,692.39 on 12/27/08.

Week 7 – the last week of Christmas – opened with the month staggering along at 75% of LY. I feared that Christmas had already died when I had only three paltry sales before I left for Sunday’s 5 pm grocery run…then a rush on Whisky Stones pushed the day to 22 sales, including a few juicy orders for Panther caps (why do these things always happen in clusters?). Being low on stones and with the calendar running down, I killed my Facebook ad and placed a hail-Mary reorder…only to learn on Monday morning that the manufacturer was out. You’d think there’d be enough stone in Vermont, but apparently not. I shipped my last nine Recycled Motherboard Christmas Trees – the product that drove those 2008 records -- to Italy Monday morning.

Monday brought 32 whisky-fueled sales. Tuesday was this year’s high water mark with 39. Where were all these people during Weeks 5 and 6, when I expected them? I gradually lost control of my business and started making dumb (but so far minor) packing and shipping errors as I scrambled to beat the post office’s 5 pm daily close. I stopped answering the telephone entirely and spent many hours in our dark, cold, dungeon-like stone cellar. Wednesday started out downright sedate. And then lighted caps rallied unexpectedly for 25 healthy sales. Sweet.

Financially speaking, it's a good thing I didn't kill myself when it seemed prudent. The week made up all of last week’s shortfall and put a sizable dent in Week 5’s disaster. With 50 more stones I could have recovered completely. Quickbooks, whose word trumps Excel’s, says that sales are currently within a few hundred dollars of LY, so the official numbers I’ll report at the end of the month won’t look nearly as dire as my more useful planning numbers do. Although the Seven Weeks of Christmas are effectively over, sales should remain elevated until Presidents Day, and we’re down to where fewer dollars can change the year-to-year comparisons.

The mouth-breathing knuckle draggers came out this week, too. You know who they are: The customers who overpay for the slowest and least reliable shipping method (UPS Ground), send two frantic emails at 2 AM asking when their order will arrive…and mistype their email address so that I can’t reply. Or they are looking for an order that they never actually completed because the internet is just too complicated (“I’m checking on an order I placed last week to be billed later” Yeah, right…how did you do that exactly?). Or they want to phone in their credit card number and make me place their order because it’s too scary to do it themselves. Or they want pick it up locally and get pissed when I won’t let them come to the house to save $3.

Yeah, those people. I know this is indiscrete – I genuinely appreciate my customers and I am unfailingly polite to them -- but I can’t resist sharing this message from somebody who bought a $10 business card holder:

ATTENTION PLEASE! I am purchasing this as a Christmas gift for a prominent leader in science/academia. Overall, I have been impressed with the reviews but there was a review that I found on amazon regarding this particular product that I found VERY DISTURBING. He had said that the latches did not work and that it was an inconvenience just to open and shut because it would not open properly and would not close properly. He went onto say that the gold latches and such did not appear as nice like the one with the silver latches he had seen from another picture. I think it was because the gold was not bright in color but rather discolored. PLEASE DO CHECK ALL THE LATCHES FOR EASE OF OPENING AND CLOSING AND FOR NICE GOLD LATCHES AND SUCH. Also for SYMMETRY in the apperance of the case outside and inside. The person I am purchasing this for has a Type A personality and is very particular, QUITE PARTICULAR. I believe in customers' reviews and it seems like you take great pride in showing highlighted reviews of highly satisfied customers. Sincerely, xxxxx, PhD Candidate

I talked her off the ledge and assured her that she would get her $10 worth. Don’t take this the wrong way; it’s a great little item that’s sold nearly 600 pieces...but how much can you expect of something that Chinese slaves stamp out by the millions? I genuinely hope that her Curio City purchase will raise this PhD candidate’s status in the eyes of her Type A eminence.

Rant over. Thank you, I feel better now. Venting like this is one of the perks of being self-employed. Yes I’m an asshole, but you can’t fire me!

The Christmas Curse

2010-12-10T12:05:00.002-05:00

Week 5 staggered to its knees with 19 sales on Friday, but could still only reach 60% of last year’s corresponding day. Saturday finally broke the small-purchase curse with a whopping 26 sales amounting to 115% of LY. One stellar day couldn’t staunch the bleeding and Week Five ended up at only 60% of LY.

Week 6 took off like a rocket with 27 sales on Sunday; I’d already beaten LY’s total by 5 pm. I spent five hours boxing and labeling shipments and completely failed at my normal Sunday priority: Planning the week’s menu, clipping coupons, returning bottles, buying groceries, and making dinner. This was obviously no normal Sunday. Was the panicked desperation of Christmas finally here?

Sadly, no. I’ll spare you the daily blow-by-blow, but Christmas gradually sputtered out as the curse of the small orders returned. I’m working flat out to ship about 20 orders a day, but the boxes are too small and the dollars too few. Last year, Panther Vision ran out of caps in Week 5 and I sold out in Week 6. With no corresponding inventory shortages yet this year, I had hoped that Week 6 would recoup some of Week 5’s epic loss. Until today I did indeed have a tiny lead over LY. But on this day in 2009 the Boston Globe Gift Guide unexpectedly featured Whisky Stones on the same day that my last reorder arrived; I sold all 36 sets in one day. This year’s Globe guide had only typical mainstream crap. Today’s target number is impossible – I’m currently at $160 vs. $1200+ LY -- so this week will surely finish behind LY again, although not as dramatically as Week 5 did.

In another one of those random acts of media that I mentioned last week, Fuzz Scarves mounted a bizarre run of 13 sales in one hour on Sunday. I had no idea why until one customer added a note explaining that a character in some football game wore one on television.

Just one more week to go before Christmas sputters out. Maybe Week 7 will surprise me…it was comparatively slow LY. This year hasn’t been any fun at all – it went from frenzied buying to whining and complaining in just days, rather than the usual two weeks. Ordinarily people don’t sink into bad humor until next week.

You're a Mean One

2010-12-03T12:43:00.003-05:00

Week Five of the Seven Weeks of Christmas was the high water mark of 2009. This year’s Week Five is breathtakingly bad. Superlatives cannot convey just how bad things are going. 2010 is almost certain to see my first-ever year-over-year decrease as this week single-handedly wiped out the gains of the previous 11 months.

On “Cyber Monday” I spent about $70 to lure an astonishing 474 visitors who placed 17 orders, yet sales still didn’t reach half of LY. Tuesday delivered a still-respectable 13 sales, but they were only worth $299 versus a benchmark of $650 – again below 50%. And so it goes, with each day finishing at a third to half of LY’s sales. Today I’m already at nine sales by lunchtime (which rocks) worth $161 (which sucks).

I am not quite ready to open a vein yet. Divorced of context, those wouldn’t be bad sales numbers. Money’s coming in, product’s going out, and I’m busily taking things out of big boxes and putting them in small boxes. Christmas isn’t over for two more weeks and it’s supposed to be a time for miracles, right? What’s lacking is the usual sense of panicked urgency. I am not as frantic as I should be.

So…who stole Christmas? I’m too busy for nuanced hand-wringing, so these thoughts are raw and unsorted.

Too many small sales – or rather, too few big ones. While the problem really is this simple, the solution eludes me. Where are all the people who should be putting half a dozen things in their shopping carts? I don’t think bottom feeders are the problem; I’m not selling more discounted merchandise than usual. I wonder if it’s cell phone shoppers. People’s IQ drops at least 25 points when they use smart phones. They are distracted and rushed and their reading comprehension nosedives. It stands to reason that they would only buy the one item that led them here, especially on a text-centered site like mine. Whatever the cause, this dearth of big orders is my big downfall. In a few minutes I’ll take 15 orders downstairs to pick, box, and ship. If those 15 orders averaged $50 I’d be feeling smug. Fifteen orders averaging less than $20 is unambiguous failure.

I can’t blame the economy unless there’s an inverse relationship at work. My sales were strong while the economy was in the dumper and they’ve been fading ever since it started to revive in September. Maybe big-ticket mass-market items are crowding out the cheap novelties that people contented themselves with when times were harder? It would be comforting to believe that forces beyond my control are to blame…which probably makes it wrong.

I did make some bad product gambles. I’ve written about the infamous Buckyballs several times, but at least those are selling a little bit and I can understand why they’re disappointing. Why is nobody at all going for Jumbo Magic Christmas Trees or Christmas Boots? People ordinarily love holiday novelties. I haven’t even sold a single set of Peace Sign Ornaments, which did pretty well last year. But I always bring in some turkeys every season; it’s just part of the game.

Old standbys are disappointing me, too. Panther Vision caps are doing OK, but not nearly as well as they should be given my advertising spend. Fuzz Scarfs are moving at about 25% of the pace I expected. These things should be sure bets. Are they just too old and familiar now?

Thank the gods for Whisky Stones. At least one product is approaching my sales expectations.

My bush-league marketing efforts are failing – pay-per-click ads have grown too expensive, the competition is too crowded, and – for the first time ever – I didn’t get any serendipitous media this year. Usually at least one product enjoys a gift guide recommendation or a review with a link. This year the media has passed me by.

Trying to milk “Small Business Saturday” instead of Cyber Monday was a really idiotic tactical blunder. Nobody ever heard of Small Business Saturday and it’s meant for B&M stores anyway, whereas Cyber Monday has gained traction in the popular mind. Two shoppers contacted me on Cyber Monday (a first) to ask about sales or discounts, and I had nothing to offer. Even if it was the same shopper twice, that’s an opportunity foregone.

I don’t have the time to work through these thoughts methodically. I’ve just got to get through the next two weeks. I’ll try to make sense of it later.

The Turkey Month

2010-11-26T11:49:00.002-05:00

First there was Black Friday, and it affected me not at all. Then there was Cyber Monday, and it affected me not at all. Now, courtesy of American Express, there is Small Business Saturday. Anne told me about it last Sunday morning. I signed up for a free $100 Facebook ad even though the promotion supposedly ended three days prior. These geo-targeted ads hawk physical stores, so it should affect me not at all. Even though the “official” promotion is a non-starter, I sent out a newsletter with a coupon that I still hope will spur more than the one sale it has garnered so far.

When we last saw Week Three, it was dragging behind LY by $850 with a day and a half left on the clock. I had hoped to narrow down that gap by the $450 that I racked up during the corresponding two days last year. But a good Saturday couldn’t make up for Friday’s embarrassing $40 total and the week ended down $600 – my biggest Christmas shortfall yet this year. It would’ve been a weak week even without that $160 customer return blowing a hole in the middle.

Last year a single $1,000 day pushed the otherwise lackluster Week Four (Thanksgiving week) over the top. This year a surprise $750 lighted cap order placed on Thanksgiving morning kept Week Four in the game. Now I just need average November sales on Black Friday and Small Business Saturday to finish the month very close to LY. (My weird accounting calendar puts Sunday the 28th in December).

November:

Total income: -3.7%
Total COGS: +3%
Payroll: -7.8%
Net Income (Profit): -3.9%

Year to Date:

Total income: +12.1%
Total COGS: +23.2%
Payroll: +29.4%
Net Income (Profit): -59.3%

UPS plumped up my COGS last week by losing an incoming shipment worth $124. I’ve filed a claim for reimbursement, but even if it goes through I don’t have that merchandise to sell and I’m carrying a $124 inventory shortage on my books. This year has thrown me one such curve after another.

Inventory shortages made December '09 weaker than expected. That means there’s still a chance that this December will repair the damage of the past few months and get Total Income back to my +15% goal.

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

The 900-pound gorilla who’s paying obscene bids for lighted cap keywords turns out to be an amazon.com seller pushing the cheap 2-LED version that Panther Vision created for the promotional market. Although he must be doing amazing volume, he can’t be making much money between his bargain prices and ridiculous advertising costs. Since I don’t carry that inferior product line he’s not a direct competitor at all. He can have his $2.00 clicks. In fact, I gave him a few clicks just for fun.

The manufacturer of Buckyballs is freezing out competition with an absurd $4.00 per click bid for that keyword. The maximum financially justifiable bid for that product belongs in the 50-60 cent range, and 40-45 cents is more realistic. They solicited retailers, required us to sign a price maintenance pledge (no discounting), and then kept us little guys from advertising – pretty slick! I’ve sold a few sets, but it’s nowhere near the star product that it should have been. I’m not going to need a single reorder. I should have believed the instinct that told me it was too mainstream.

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

And now I have a personal confession: My attention is not 100 percent focused on Curio City right now (shocking, I know).

My sole hobby is PC gaming – specifically strategy and epic-scale wargames, not the action games that kids play on consoles. When I worked in the industry, I needed to replace or upgrade my gaming PCs every couple of years. But when I traded the lucrative world of game development for the impoverished life of a self-employed shopkeeper, I lost both the compulsion and the means to keep my gaming machine up to date. My current 7.5-year-old gaming rig hasn’t been able to run anything new in the past three years.

Civilization 4 and Galactic Civilizations II are both wonderful games, but even with mods one can only squeeze so much gameplay from them. And so, despite my busy season (and biggest paychecks) being hard upon me (and with the tragically flawed but still compelling new Civilization 5 enticing me) I raided my ever-shrinking savings account to buy a new PC two weeks ago. My screaming new machine arrived from Cyberpower Tuesday night.

To say that both Thanksgiving and Curio City are distractions from what I really care about is putting it mildly. In the three and a half days that I’ve had the machine I’ve only managed to devote a few hours to setting it up…with almost all of that time troubleshooting its network connection. Getting a Win 7 machine onto an XP network is turning out to be trickier than I expected since I’m a newbie with the latest OS and not very good at networking in the first place.

Anyway, as soon as I get today’s orders on their way I’m spending the rest of the weekend doing what I want to do, rather than what I should be doing. I hope that I’ll have the new beast fully up to speed and ready for gaming by Cyber Monday.

On the Third Week of Christmas, Some Shoppers Gave to Me...

2010-11-19T11:28:00.002-05:00

Blog entries will be terse between now and New Years as I focus exclusively on sales. I’m largely repeating last year’s posts anyway, right down to griping about leaf removal. The nine or 10 sales per day (16 yesterday!) that I’m averaging now is healthy, but not quite as robust as LY, when the discounted 2-LED caps were flying out of here.

Week Two ended up a little short of LY. O Veterans Day, why did you have to fall on a Thursday? You encouraged the Normals to take 5-day weekends, and you know that sales plummet when office workers are trapped at home with their idled children instead of happily shopping on the job. Together with Week One’s tiny surplus, the month was flat going into this week.

Week Three (ending now) is also falling short. The large customer return that I authorized last week sent Tuesday deeply into the red. It barely clawed its way back out of the grave (yeah, I’m watching Walking Dead) but the week never recovered from that setback (barring a miraculous resurrection in the remaining day and a half).

Last year’s Week Four included a negotiated $450 cap sale. There’s nothing like that on the horizon this year, although one company has been playing coy for weeks about buying a dozen caps. Next week’s prospects look grim with that big holiday squatting in the middle, and the Christmas season is half over.

Credit card sales seized up completely at one point. PayPal ordinarily makes up no more than 15-20% of my transactions…and usually the smallest ones, as people tend to use PayPal as a spare-change account. Last weekend PayPal suddenly accounted for 90% of my sales. Even perennial also-ran Google Checkout picked up a bit of share. I feared that credit card processing was broken.

My batch didn’t settle last Wednesday night. No biggie; it’s happened before. I batched out manually on Thursday morning and sent them an email, to which they replied that they’d done some routine maintenance and my account was overlooked in the cleanup. That’s when charge sales fell to nothing. My test transactions were fine, and I still got one or two real charges on Friday and Saturday – just enough to assure me that nothing was actually broken.

Small sales could partly explain the over-abundance of PayPal transactions. But I think Americans are trying harder to park their credit cards this year. I suspect that if I could distinguish debit from credit sales, the former would prevail. I would applaud my countrymen’s worthy efforts if Curio City didn’t depend upon them impulsively buying unnecessary stuff.

Credit cards came back from that dramatic fade, but I’m actually seeing more Discover charges as people try to maximize their cash back. Seeing my PayPal balance surge past my checking balance is creepy. PayPal has the advantage of paying instantly, and they pay a token interest rate on balances each month (just a few cents)...but their processing fees are the highest.

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

People are splurging on giftwrapping. I used to hate how it slows me down while the trivial amount collected (all of $51.50 last year) gets lost in the bottom line. I’m much more kindly disposed toward giftwrapping since I started diverting those fees to payroll this year. So far it’s put $95 directly into my pocket.

Here We Go Again

2010-11-12T11:48:00.002-05:00

Every fall, I tremble before my November and December sales targets. I don’t care for Christmas personally, but professionally it’s everything. Right now we’re still in that relaxed phase when holiday sales are building steadily, but shoppers’ sense of urgency is still two weeks away and their desperation is farther out still.
Where on earth do people get all the money?

My paycheck today – the first of four healthy ones that I earn each year – works out to $7.75/hour based on two 35-hour weeks – higher than the federal minimum wage and only slightly below that of Massachusetts. Not bad! I’m going to raise payroll from 20% to 20.25% of net sales if I achieve my 15% planned sales increase in this difficult year. Of course, every dollar that goes into payroll is a dollar that doesn’t go into my profit payout at the end of the year. Without sales growth it’s a zero-sum game.

Week One just barely beat LY, but a large customer return that I authorized yesterday will wipe out that small gain (and then some). This week petered out after a very strong start; it’s still achievable, but it’s another nail-biter.

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

Four customers have selected “I clicked an ad on Facebook” since I added that choice to my optional “How did you find us?” dropdown list. Absent tracking code from FB, that’s my only ironclad evidence that FB advertising works. It’s certainly driving traffic; the “referring sites” category has gone from 15 visitors a day to 100, and Facebook is the single biggest referrer. What I can’t measure directly is sales conversions. I did get this message from somebody who saw my FB Switchables ad:

This is an extremely good idea. I am sharing this on Facebook. This is genius :-) The ad caught my eye. This is an EXCELLENT CHRISTMAS IDEA as well, to new home owners, people with new babies (or even old babies :-) (…) I shared your weblink with my FB friends (about 300) and will do so again because the idea is awesome, and your prices are very, very good for the quality and detail.

That alone is worth FB’s sky-high ad rates.

My biggest current worry is spending obscene amounts on advertising while just barely eking out my sales numbers. Keyword bids have gone insane – some genius is bidding $2.50 per click – not per conversion, per click -- on Buckyballs. Even an unrealistically high 5% conversion rate would mean paying $50 per sale of a $30 product. Nobody can compete with that…which is how it works. Astronomical bids ensure you top placement, but your actual charge is what it costs to beat the next-highest bidder. In other words, if the second-place bidder is “only” offering 75 cents a click, then our 900-pound gorilla’s $2.50 bid really costs him “only” 76 cents. If the number-two bidder calls his bluff and goes to $5.00 then suddenly the original gorilla is actually paying $2.50 for second place, while the usurper gets the top for $2.51. It’s a high-priced game of chicken that I can’t begin to play. Keyword inflation is happening across the board. Every time I go into my accounts to pare back my bids, I end up raising them instead just to maintain my positions.

Buckyballs are this year’s biggest disappointment, btw. I was sure that they were this year’s Big Thing before I found out that I can’t afford to advertise them. They’re getting some clicks, but nobody’s buying.

Actually, scratch what I said above; my biggest current worry is raking the yard. Every year I vow that I will hire someone to do it for me next fall; every year, I can’t afford that. So I’ll lose 2-3 hours each afternoon for most of next week (getting dark at 5 pm doesn't help). We have a tiny lot, but a lot of huge old trees. And now I need to eat lunch, box and ship orders, and start raking. What a smegging waste of time.

I Fought the Web (And the Web Won)

2010-11-05T11:23:00.004-04:00

Technology seldom beats me outright. Oh sure: constant change, complexity, and expense bedevil me as much as the next guy. I don’t understand smart phones at all, for example, or why we need to pay $110 a month for dumb cell
phones on top of $120 for normal phone/cable TV/internet. I know only the rudiments of using the DVR. I don’t own a MP3 player and I rarely take my cell phone out of my office. I haven’t been able to run a new game on my 7.5-year-old gaming PC for at least three years now. I have never seen a Blu-ray disk. I am, in short, permanently stuck circa 2005.

And yet, the years that I worked in software development equipped me with the basic skills to muddle through this whole internet thing. When I can’t solve a problem myself, I know where to seek help. Persistence and money usually bend technology to my will. Usually. Some problems can’t be solved.

The PayPal Checkout Loop goes back to at least 2007, but that’s a Sunshop bug – there’s nothing I can do about it. Turnkey can’t fix it because I can’t reproduce it, and since nobody but me has ever reported it it is likely to endure forever.

The Admin timeout bug has plagued me ever since I moved to MochaHost. It’s caused by an operating system setting on my shared server that they refuse to change – unless I upgrade to a dedicated server or change hosting companies, I must continue logging in every 24 minutes for the rest of eternity, like Desmond pushing his button. At least the island doesn’t move when I blow it off, Brother.

Now we can add USPS shipping times to that short list. Here’s the background that I wrote back in February:

In January the USPS raised rates on Priority Mail and Express Mail; First Class and Parcel Post rates stayed the same. Customers usually choose the least-expensive Parcel Post option, and I've always upgraded those orders to either UPS Ground or Priority Mail. The upgraded price is still at or below my actual cost, the customer gets better service than they paid for, and everybody’s happy.

Or was until now. Priority Mail rates went up and Parcel Post did not. That means that my shipping costs rose while the fees I collect – which come from rate table lookups -- didn’t. The advent of zoned pricing sometimes makes West Coast upgrades a losing proposition. Shrinking the small spread between fees collected and costs paid out is harming my bottom line.

To rectify that, I could:
1. Raise my handling fee. But that penalizes my First Class, UPS, and east coast customers.
2. Increase product weights. But that punishes my most desirable customers – those who buy multiple products at once.
3. Eliminate Parcel Post. But taking away the lowest-priced option would make my shipping charges visibly higher and harm a competitive advantage.
4. Leave everything unchanged and accept the smaller spread. But that makes it more difficult to reach my sales plan (which I calculate based on net sales after shipping costs) and ultimately comes out of my pocket.
5. Actually ship via Parcel Post more often. But shipments that now take 2-3 days would take 7-10 days. Customers won’t like that.

An attentive reader suggested a sixth solution: Show customers the transit times. If they see “Priority Mail: 2-3 Days” and “Parcel Post: 4-10 Days”, most will pay the incremental cost for Priority, my rate spread will be covered, and profitability will improve. Brilliant! I just need to edit the shipping method dropdown list that appears in the shipping estimator and at checkout. That’s, like, five minutes’ work at the most, right?

Yeah, about that. USPS domestic, USPS international, and UPS each have a shipping module consisting of a single small file. When I edit them in Textpad my UPS text shows up immediately. USPS text never does. So is it stored somewhere else? The independent developers in Turnkey’s Modifications forum keep referring me back to the same USPS.php file that’s not working. Turnkey itself remains silent; they’re not obliged to support user mods. In one last shot at ending the stalemate, I prevailed upon my developer to investigate. His verdict:

Usps.php has an install method that clearly writes this stuff to the database when the module is "installed" and it looks like checkout is calling a function in global.php called "get_shipping" which really looks like it's reading from the database to generate dropdown options... but I don't know how any of this stuff ties together... so I could be way off base.

I do see something that looks like it might be setting up a http call and parsing a response in usps.php as well... so maybe it's a web call. *shrug*

I'm fairly confident it's not reading values from USPS.php (that would be... extremely idiotic)

Turnkey hasn't made this very straightforward... so it’s not trivial to figure out how that's being generated.

If you want me to figure this out I will, but you're going to have to give me a few weeks to find time to do some hardcore reverse engineering and put up with me hacking up (and very likely breaking) your shipping functionality for a bit while I troubleshoot.

Higher shipping charge receipts would eventually recoup the cost of hiring Brad to reverse-engineer this function – assuming that he can “fix” it at all; if the text is being passed from the USPS server along with the rates, I’m just screwed. And “eventually” is a long time; I can’t afford any more unplanned expenses in a year that’s already been hammered by them.

So I am back to Square One. Right now I’m still absorbing the increased costs. If sales were running anywhere near plan I might remove the cheap Parcel Post option; very few other shops offer it. But sales have still not crawled out of the crapper that I plumbed last week; I can’t risk doing anything that might flush them deeper.

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

Speaking of last week…Forget everything I said about Facebook advertising. Turns out that I can advertise products directly, so I started with an ad for my old warhorse, Panther Vision caps. After a week my exhorbitant 75-cent bid bought 5,555 impressions without one single click. Crap. On Monday I added Switchables and Buckyballs to my campaign. On Tuesday I reordered golf balls and started advertising them. As of this morning Switchables has racked up 54 clicks, golf balls have 45, Buckyballs have only six, and Panther caps remain stuck at 0. FB’s tracking code is in beta, so I can’t be sure, but I don’t think that the $27.75 I spent this week brought in a single sale. Click-through rates are abysmal on FB, and the cost to buy impressions is very high. As nice as it is to see overall traffic spike past 300 daily visits (!), I can’t afford this for very long.

FB’s infamous intrusion on its members’ privacy is its main appeal to advertisers: I can target my ads very narrowly based on the interests that users willingly reveal. I’ve decided to cough up $50 of my own to prolong this experiment for another week; if I can figure out how to use this precise targeting to reduce my cost, it's worth flogging through Christmas.

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

Speaking of the crapper…Christmas is finally starting to crawl out of it. For the rest of this year I’m throwing plan out the window; I just need to match LY. At the moment sales are running 22% behind last year with a day and a half (21% of the week) left to go. It’s going to be tight, but I might just barely make my nut for this important first week of November. It’s a fairly big nut.

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

Now that the voting is over I can get back to being my usual level-headed, moderate self. After one parting shot at politics, that is.

After spending $250 million on midterm campaigns, corporate America has got the Congress it paid for. I’ve cut next year’s planned sales increase by 50% to reflect the two additional years of economic stagnation that voters just ratified. There will be no second stimulus package. There will be no more unemployment benefit extensions. The economy has been cut loose.

Americans did not vote the Republicans in so much as they voted the Democrats out. Republicans owe their gains to two factions (apart from the Tea Party’s billionaire backers), and the fate of their party depends on which one they reward. Their main support in 2010 came from the same independent, moderate voters who flocked to Obama in 2008. These swing voters expect them to work with the Democrats on solving this country’s real problems, and they will desert in 2012 if they don’t see tangible progress. Republicans would be wise to deliver it. The other faction -- Tea Party extremists – promised conflict and confrontation. Their uncompromising ideological purity, if indulged, will ensure that nothing gets done. Republicans certainly owe them some grand symbolic gestures, like introducing a doomed health care repeal bill, but they would be unwise to give them anything substantial. Tea Partiers have no alternative to voting Republican so the party need not kowtow to them.

This struggle for control over the Republican Party is fascinating fallout from their recent victory. I’d actually feel sorry for Republicans if the poor and middle class weren’t going to be the main casualties of this power struggle.

My home state of Massachusetts successfully fought off the Republican wave entirely. They did not win a single position of consequence here. Our Commonwealth remains solidly blue and unashamedly liberal after roundly rejecting budget cutters and tax cutters. So I’m somewhat insulated from whatever shenanigans they pull in Congress – except inasmuch as the harm that they do to the national economy drags Massachusetts down with everyone else. Nobody’s going to take away our universal health care or gut social programs or repeal our rights here, so I can be sanguine about developments that are alarming progressives elsewhere.

From Curio City’s point of view, two more years of tepid economic growth are the most chilling result of last Tuesday’s election. This business was predicated on rapid growth to bootstrap from zero to a living wage. The Great Recession already trimmed my sails; Republican-induced stagnation could ultimately sink the ship. It just depends on how much longer I’m willing to keep bailing.

October Numbers, November Politics

2010-10-29T13:59:00.004-04:00

The slowdown in growth that began in July and intensified in August and September has turned negative. This October wasn’t the first month ever to finish behind last year, but it is the biggest decline ever. This week started out strong. Then yesterday came in at $10.66 and a return drove today (so far) $13.68 into the red. Net sales for the past two days: (-$3.02). Total for the corresponding two days last year: $363.66. Every time I think I’m cruising toward a decent paycheck, a lull like this one takes the wind out of my sails. These blips smooth out over time, but they’re downright frightening as they occur.

October:

Total income: -18.2%
Total COGS: -10%
Payroll: +52.9%
Net Income (Profit): -19.8%

Year to Date:

Total income: +14.8%
Total COGS: +27%
Payroll: +31.9%
Net Income (Profit): -66.6%

Year-to-date sales are now running a smidgeon below plan as we go into the most critical months. November’s targets are intimidating. Increased costs have cut my YTD profit by more than half. At least I’m in the black -- many stores don’t see that until November. In light of current trends I’ll be content if 2010 can just finish even with last year (which was lackluster).

My Google AdWords spend, which historically has hovered around $10/day, is routinely exceeding $20 as the page-one placement price of many keywords skyrockets. Words that for years have cost me 20 or 25 cents now start at 65 cents and range well over a dollar a click. I raise my bids by a nickel one day and find the threshold a dime higher the next. Someone’s using the 900-pound gorilla tactic that Wal-mart uses to destroy local businesses: Use your deep pockets to run at a loss while you overwhelm a market, then establish profitability only after all of your competitors are dead. That’s the only way I can fathom someone paying $1.25 a click for a $20 product.

Despite losing page-one placement to these bid bombers, my $20 still buys 80-100 clicks a day. Traffic hovers a bit over 150 daily visitors. Conversions are steady at around 2.3% and the occasional large sale keeps the average purchase in the $40 range. I’m starting to get a little traffic from Microsoft’s AdCenter now. Tuesday’s newsletter to 372 subscribers got 96 opens (26%) and 24 clicks (25%)…yielding zero sales despite a free shipping coupon. In other words, all of my metrics look pretty good…so what gives?

I turned off Firefox’s AdBlock in order to see Facebook ads after they sent me another $50 coupon. Most retailers run product-specific ads linked to a dedicated product tab on their FB page. That’s predictable; targeted traffic always converts best. But I can’t figure out how to create that product tab. Maybe it’s because my Curio City page is a subpage of a personal account that I don’t use, rather than a top-level page itself. Or maybe the big players have developers customizing their FB interface for them.

Well, I do have my ShopBuddy tab and I can edit that product feed. Should I list (a) just a handful of top products; or (b) most of my catalog with the worst junk stripped out; or (c) my entire inventory? Is my goal selling products through ShopBuddy, or using it to drive traffic to my site? Should I focus people on a few likely sellers or draw them in with variety? I have to decide and write my ad this afternoon if I’m going to use that $50 credit.

OK then, decision time: People use FB primarily to kill time. Therefore, they’d rather browse a large inventory than be shown just a few things. I’m going to go with option (b) above – show them everything except the crap that I’d write off if I could afford to.

This is one of those times that I wish I had coworkers to blame when I make the wrong decision. Well, at least that $50 credit makes it a cheap education.

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I’m indulging in a last political ramble before the midterm elections. Next week I’ll probably permit myself a little hand-wringing, and then I’ll banish politics from my business again.

When politicians say “small business” they mean firms with fewer than 500 employees. That’s a big business in my book. None of the federal initiatives offered to date affects a one-man, owner-operated concern; in fact, as we sank into our health insurance crisis I discovered that owner-employees are explicitly excluded from those subsidies. Tax policy is irrelevant to an operation as small as mine, hence a political platform centered upon tax cuts is spurious at my scale of existence.

On the large scale, tax cuts are stimulative if taxes are too high to begin with. Federal income tax rates are now at historic lows thanks to Bush’s huge unfunded cuts (which gave us a bubble, not a boom). Raising or lowering taxes on the working poor makes little difference because we don’t pay very much to begin with. The rich, who benefit greatly from tax cuts, squander their marginal income on exotic vacations, luxury cars, yachts, political contributions, and other extravagances like the rest of us can scarcely imagine – when they spend it at all, that is. Mostly they invest it in esoteric ways to make even more money.

What my company needs is not lower taxes, but more demand. You don’t get that by taking a few bucks less each week from a struggling person’s paycheck. You get it by instilling confidence in consumers. In the short term, that means creating jobs, and you do that with government spending. Corporations are already sitting on $1.5 trillion in cash reserves; they’re obviously not inclined to buy employees with it. Meanwhile this country’s transportation, water, and power systems are crumbling. Not only is the era of epic public works behind us…we can’t even maintain those that our forebears built.

Today’s obsession with jobs drowns out the long-term conversation we should be having about the emerging post-employment economy. Traditional jobs, where you work for somebody else at a place of employment and collect a regular paycheck, are dying out. More and more workers find ourselves permanently sidelined. A few of us manage to start businesses or invent self-employment…a few more of us can retrain for the specialized job openings that still exist…still more of us turn to the black market economy…but most of us just sink into chronic poverty. The poverty rate in America is at an all-time high. We should be asking what happens to those who will never have jobs again, as well as the undereducated youngsters who will never hold one. Jobs that have been automated or exported do not come back, and the industries that will create new jobs require higher literacy and numeracy skills than high schools impart. Even the armed forces, our historical employer of last resort, no longer accept uneducated cannon fodder.

Neither party will ever start that conversation, but the Democrats are tacitly addressing it with a more robust role for government. We need a bigger public sector, dramatically higher taxes on the rich, and a livable guaranteed minimum income for the dispossessed. Social Security and Medicare must be fully funded and expanded. Nobody should face a Dickensian doom after losing their job and their health insurance, yet that is exactly the past that Tea Partiers pine for.

To restore demand and revive the economy, let's redistribute the obscene wealth concentrated at the top to the working classes, who will spend it of necessity. The superrich hold more wealth than at any time since 1928 while the middle class's purchasing power steadily erodes. Let's emulate the social democracies of Scandinavia and Europe that consistently rate the best quality of life. (Yes, I know that France took the #1 ranking this year; and no, nobody admires France!)

How we'll pay for that is beyond the scope of this post, but it's not as hard as you'd think when you put our $700 billion military budget on the block.

Kraken Enterprises will never create a single job other than my own. Employees are parasites – I know: I was one for 35 years. I do create jobs indirectly when I buy from wholesalers and manufacturers. Someday I will outsource my shipping to a fulfillment company and contribute to someone’s job that way. I’ll probably hire marketing and SEO expertise at some point. I’ll contract for developer support more often. I might even leave Sunshop behind and build a custom website someday. All of this creates income for others without burdening me with employees. I’d only need to rent an office and hire helpers if Curio City grows much larger than I expect, and even in that worst-case (best-case?) scenario I can’t imagine employing more than one or two people – certainly never enough to trigger the health insurance mandate, which is 10 employees in Massachusetts and will be 25 (or is it 50?) under federal law. Health insurance should be delivered by the government, not by employers.

Ah, well. All indicators say that Americans are going to go in exactly the wrong direction on Tuesday. Unfettered capitalism and under-taxation got us into this mess; surely they will get us back out, right? So here comes my futile exhortation to vote against the Tea Party know-nothings “where truth and science and facts don’t weigh in”. Despite knowing full well that I won’t change any minds I at least feel better for getting it out of my system.

Progressives can only grin and bear it. The Senate minority leader says “The single most important thing we want to achieve is for President Obama to be a one-term president.... Our single biggest political goal is to give our nominee for president the maximum opportunity to be successful." Yep, that’s their agenda: destroy Obama at all costs, even if that means hobbling the economy for two more years. If there’s any justice, the blind obstructionism that's bringing them to power now should set up a backlash in 2012.

Should You Sit Out This Election?

2010-10-22T14:54:00.005-04:00

“If voting changed anything, they’d make it illegal.” –Emma Goldman

This election cycle finds me wearing the halo of the small businessman. As the improbable economic hero of the hour I claim the right to preach politics. These few short paragraphs won't change your party affiliation or your core political beliefs, so don't be afraid.

Pundits say that voters are about to sweep away the people who failed to restore prosperity in the past two years and replace them with the ones who ruined it in the first place. I see little evidence of anti-incumbent fever here; Massachusetts is better off than most states. But Americans have short memories, shorter attention spans, and even less patience. They just might be foolish enough to throw the bums out and reinstall thieves and cutthroats.

Over the decades my economic philosophy has spanned the spectrum from socialist to libertarian; morally, I’ve been consistently licentious and anti-religious. I voted for third parties and independents in every election except for Gerald Ford and Barack Obama. I voted for Ford because he was a friend of my dad’s, and how often do you get to elect someone with whom you’ve had coffee? I voted for Obama because I trusted him to sweep away the last eight years of Republican misrule that destroyed our economy.

The Great Recession pushed me back to the left. Our epic struggles with health insurance, as documented in this blog (see “health insurance” in the Labels list at right), made us staunch supporters of reform. Unemployment benefit extensions, the federal COBRA subsidy (and COBRA itself), and our state Medical Security Program kept us clinging to the bottom rung of the middle class; without them we’d have joined the ever-growing ranks of the poor. Thank the gods we live in the most liberal state with the most generous unemployment benefits in the US! Republicans tried time after time to eviscerate these lifelines; time after time, Democrats fought to preserve them. It’s obvious which party was on our side.

Today I am more sympathetic to the Democratic Party – or, more accurately, more hostile to the Republicans -- than I’ve ever been. This is not to say I’m a Democrat, though. I’m still independent and plan to vote for at least one liberal Republican in our state contests.

With my biases laid out for all to see, let’s get down to it. We have four choices on Election Day:

The old-line forces of evil that got us into this mess (a.k.a. Republicans);
The incompetent sellouts that failed to get us out of it (a.k.a. Democrats);
The anti-government extremists who are financed by the old-line forces of evil (a.k.a. Tea Partiers); and
None of the above (i.e., stay home).

Conservatives face an interesting dilemma. Your long-entrenched powers are losing control over the party to well-bankrolled ignorant and misinformed media darlings. A party agenda shaped by Tea Partiers would consign the Republicans to the fringe for many years to come, and I find that tempting. But the American political system works best when two evenly-matched parties fight over the middle and temper one another’s worst impulses. Conservatives should shun the Bush-era veterans who destroyed our economy, because they’re unashamedly promising more of the same. You should also shun the fundamentalists who will destroy your party if they gain power. That leaves you with supporting moderate Republicans where you have that option or staying home where you do not.

I mostly want to talk to progressives. We’re disappointed with the Obama administration and its Congress. They have so ceded the political narrative to the right-wing hate-and-fear machine that even their successes are twisted into political liabilities – a strange failing for such a mediagenic figure. The stimulus package is reviled even though economists agree that it averted economic collapse and should have been larger. George Bush’s TARP has been painted as a Democratic giveaway to greedy bankers, even though most of the money has been paid back – with $25 billion in interest. While the voters expected bold, New Deal-scale jobs programs we instead got a Republican-designed healthcare giveaway to the entrenched interests. Rather than fight for the single-payer “Medicare for All” system that we really need Congress enshrined private insurance coverage in law and condemned employers to forever deliver it. Extending coverage to 30 million Americans while reining in the insurers’ worst abuses is a laudable achievement, but we all know that it doesn’t address the crisis of rising prices.

So we have little enthusiasm for the Democrats (if indeed the pundits are right about that; early balloting suggests otherwise). They compromised repeatedly to evoke bipartisanship that never materialized while the Republicans somehow made a virtue of blind obstructionism. Who wants to vote for sellouts and cowards? We have no left-wing insurgency comparable to the Tea Party, but if we don’t support beleaguered Democrats the progressive agenda will be overrun by flag-waving fundamentalists. From global warming to energy policy to rebuilding infrastructure and creating jobs, there is still much to be done. You should only skip this election if your choices are limited to conservatives or turncoat Democrats. Obama isn't on the ballot; don't throw away your vote to express displeasure with him.

I have nothing to say to Tea Partiers. As a mercy to my readers I deleted six futile paragraphs of facts and logic because ideologues are impervious to those. They embrace that which supports their beliefs and reject everything else. It’s up to the rest of us to ensure that the Christine O’Donnells and Sharron Angles and Sarah Palins and their ilk remain amusing entertainers on the fringe.

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By the way, my new Facebook blogcaster displays a thumbnail of my blog itself when it doesn’t find any graphics in the post. Since that’s boring, I’ll be embedding pictures more often than not. Sometimes they’ll be more relevant and interesting than others.

I rather like this one.

Flow My Cash, the Merchant Said

2010-10-15T11:15:00.004-04:00

Eighteen months of unemployment honed my skill at redlining budgets. I used to preserve generous margins for error, even though I rarely err financially. Now those comfy cushions are gone. I often drain my accounts down to their last $5.

That’s safe with my meager personal finances. It’s more chancy with our household finances. It’s downright dangerous when applied to Curio City. For the first time in five years, I may have frakked up.

If September sales were worrisome, October is downright frightening. Only five days have beaten last year and I haven’t hit my plan even once. The income that I was pre-spending isn’t coming in, but the bills are. I’m averaging a decent five sales a day but too many of them are in the $10-15 range. Five sales a day at $40 is about where October should be. Five sales at $10…well.

And yet, spend I must. This compulsion could be a sign of the apocalypse, so alien it is to my nature. Skyrocketing keyword prices have doubled my advertising spend even as sales decrease…but cutting back on advertising would be suicide. After waiting literally for months for the supplier of my bestselling 5-LED Cap Light to restock, I finally gave up on them and found an alternate source – one who also sells a color version. Woo! This will be a surefire hit. But, of course, I had to spend money to bring them in. (Those links won’t work until the products arrive next week).

So I’ve deflated my cushion (I keep reminding myself that investing it in Christmas merchandise could pay off better than the $2 it’s earning in monthly interest). As of this morning, bills are outpacing cash by $1,600. Receipts between now and the end of the month might or might not cover that gap. I might carry a small credit card balance for the first time ever. That wouldn't be the end of the world, but it would feel like a frakup.

Well. October’s only halfway over and I have one good-sized sale in the pipeline (I’m waiting for a paper check to arrive for a deal struck a month ago). Lighted cap sales revived after I bid up my keywords and hopped up the page text to seduce Google. The next two weeks probably won’t reverse the damage from the first two, but they could at least stop the slide.

Curio City isn’t the only one who needs cash. Anne’s birthday is two weeks away, my packie’s huge fall beer tasting is almost upon us, the Boston Globe bill is due again, and I’ve got all of $17.74 in my checking account.

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Weird footnote: More than half of this week’s orders came from Texas, California, and Florida. I don’t know why. Under the “How did you find us?” dropdown one customer chose “You were linked in a blog or online article”. Really? Another said “Heard about you on radio or TV.” Wow. She probably saw Panther Vision caps on TV – one of the shopping channels used to sell them…if that’s begun again it would explain the cap revival better than my feeble efforts does. Believe it or not, most consumers don’t understand that retailers and manufacturers are different entities; many of my customers think I’m Panther Vision. I don't care if they think I'm Satan Claus as long as they place those orders.

The Good and the Bad

2010-10-08T12:10:00.003-04:00

As much as I fret and complain, you might wonder why I do this for a living. I’m not a risk-taker or a capitalist or even a consumer. I don’t care about buying and selling. I don’t follow popular culture or keep up with technology.

I do it because it’s the only thing I know how to do without any education or training. It uses skills I picked up haphazardly over the decades. I need to pass the years productively until I retire or (more likely) die in harness. So what consolations does Curio City offer me?

Things I Like

I love being in control of my schedule. Freedom is the single biggest tradeoff for living in poverty. I don’t need anyone’s permission to spend a day tending to my garden or household chores. Business is slow? This week I cleaned the oven and mopped the floor. Living la vida loca!

I love being responsible only to and for myself. I never do busy work for appearances sake. My labor doesn’t further enrich some rich guy. Although I might fail, I can’t be laid off and if I’m not at the mercy of somebody else’s competence. Nobody else's fate depends on my performance.

I like statistics. I enjoy the accounting aspects when the numbers are good.

I like order. My wife, who was raised by wolves, lives in perpetual chaos and upheaval. Curio City is a tiny oasis of order. Plans are made, budgets are followed, accounts are balanced, bills are paid on time, loose ends are tied up, and trash doesn’t become clutter.

I like the way my paycheck tracks my results. I make more when sales are good and less when they’re poor. I get nice big checks when I’m working flat-out in November and December. I earn next to nothing during the summer drought, but I don’t have to work very much.

It has potential. If everything breaks my way, I could earn enough money to survive on and own a salable business by the time I’m eligible for Medicare. That’s my pipe dream, anyway: By the time I turn 65 (in 12 years), either hire someone else to run Curio City while I just skim off the profits, or sell it and live off the proceeds. Unfortunately it needs to be an order of magnitude larger for that to happen. The Great Recession was a major setback and I'm moving in reverse at the moment.

Things I Don’t Like

Uncertainty. Half of my annual income comes in November and December. Spreading the other 50% over the other 10 months yields laughable little paychecks. I’m thinking about level-funding my payroll next year. That is, I’d figure out my average weekly pay based on this year’s paychecks and then parcel that out evenly through the year, keeping enough of Curio City’s holiday windfall in the bank to subsidize the slow months. Of course, doing this would break the workload/reward mechanism that I listed under “likes”, and it doesn’t affect the next point:

Low pay. If I did level-fund my salary, the bi-weekly check would be uniformly disappointing with nothing to look forward to during my busy season. I do get tired of being chronically broke.

Slavery. I can never go home from work. I can never take a true vacation. I can never call in sick. There is no such thing as a holiday or a day off.

I’m on my own. Nothing ever gets done unless I do it. Nobody else ever has insights or initiates anything. When I suspect that something might be wrong, I have to figure it out myself. For example, the sales decline that began in July is still gathering speed. I blame lighted caps. Last fall they were blowing out at record speed as Panther Vision rolled out the new 3-LED Power Caps while I discounted my old 2-LED caps. This year they aren’t selling at all. Why not? I don’t see any formidable new competitors or discounters. My ads are still generating 30-40 clicks a day, so the interest is there. Is there something wrong with my site? Did Google change their mysterious algorithms and knock my pages out of contention? Are customers just being fickle? I don’t know and nobody’s going to tell me.

Another example: The Simplaris Blogcast application that spews my blog entries onto Facebook stopped working last week. If it weren’t for my Facebook readers I wouldn’t have any readers at all – even my own wife doesn’t read my blog. Eventually I found and installed a similar app. Does it work? I’ll find out in a few minutes, after I post today’s essay. If it doesn’t show up on my Facebook wall, it’s back to the drawing board.

Another example: An astute blog reader (hi Andrew!) encountered my admin password popup when he clicked last week’s link to Buckyballs. Gosh, do you think that might be why Buckyballs weren’t selling? It turned out that a graphic that I’d uploaded through Sunshop’s text editor was calling a path through /admin, and a layer of security that I added last week won’t let you in there without a password. Moved the graphic, changed the link, and all was well. Buckyballs still aren’t selling, though.

Another example: I want to add the transit times to the shipping options dropdown list that appears when you check out. I’ve been trying to make this simple change ever since postal rates went up last February. Adding that text to the UPS options was easy, but changing the corresponding USPS text doesn’t work. It is not being drawn from the appropriate source file. The Sunshop support forum is no help. I finally gave up and asked my developer to solve it for me.

That’s just one typical week’s pitfalls. I confront crap like that constantly.

Constant change. Whenever I think I’ve got things figured out, the rules change. Technology moves faster than I can follow, especially with the spread of smart phones (which I neither own nor want). Fashions in silly stuff like website colors and layout evolves; my five-year-old Sunshop template looks archaic. Technologies like Flash go in and out of favor. Search engine algorithms change constantly. Customer whims are unpredictable. Today’s hot product is likely to end up on the discount table next year.

Boredom. You wouldn’t think I could get bored given the constant state of change and endless mysterious problems. But I don’t care about my work on a personal level. It doesn’t make the world a better place. It’s not enriching in any sense of the word. It’s unimportant. All it does is earn me a living, and it’s not very good at that. Yet.

Isolation. When Anne’s out of town I can go for days without speaking to anybody or leaving the house. As a misanthrope that suits me just fine, but I get weird when I withdraw too completely for too long.

On balance, the good outweighs the bad. I don’t want to return to conventional employment (despite its higher pay) even if I thought that I could get a halfway decent job. Which I’m pretty sure I could not do anyway in the current market.

And so I soldier on.

It's Not Me. It's You. or, Buy Stuff, Dammit!

2010-10-01T10:59:00.004-04:00

Year-over-year growth slowed in July and turned slightly negative in August. In September, it crashed. Let’s cut straight to the grim numbers:

Total income: -20.3%
Total COGS: -12.7%
Payroll: +34.8%
Net Income (Profit): -112.3%

Year to Date:

Total income: +21.2%
Total COGS: +35.2%
Payroll: +40.3%
Net Income (Profit): -103.8%

How can I sugar-coat that? September 2009 kicked ass. September 2010 was on the weak side of normal. This month was doomed before it even started. Last September brought a $1,100 lighted cap sale from Staples and another $500 cap sale to a business in Texas. Three other days during the month broke $300. This September delivered only one day over $300 with no big institutional sales.

If you remove those two big lucky strikes from last year’s sales, this month was about flat with LY. It’s a very healthy increase from the more typical September of 2008. As reassuring as that is, September still came in $1,500 behind last year. At least (the ultimate in sour grapes) I’ve set a more realistic target to beat next year!

My own pay is still 40% ahead of LY. Sounds great, huh? Yeah, but big percentage swings often mask small dollar amounts...and the "extra" pay comes directly out of my year-end profit-taking bonus. The bottom line is slightly negative right now when it should be solidly in the black. Cost of Goods Sold is running way too high due to bad luck and bad judgment: Two floods, two thefts, and two write-offs of dead merchandise (greeting cards and magnets, gone forever at last).

At this time last year, Panther Vision’s third-generation Power Cap arrived, forcing me to discount my old 2-LED caps. This year, my old mainstay is drifting nowhere. The wind has gone out of kite sales, too. With no hit product driving business this year and no capapalooza, October’s prospects look dim. BuckyBalls are languishing so far; so many competitors are bidding up keywords so high (a buck a click? Come on) that I effectively can’t advertise them. Incidentally, some manufacturers and specialty retailers buy keywords at a loss to freeze competitors out; Looney Labs does that with their Fluxx games because they favor b&m stores over web retailers. You can't possibly make money paying $1 per click for a $15 product.

My comfortable lead over LY is almost gone and I have no confidence going into these critical last three months, but at least I’m still (barely) ahead of my 15% planned increase. There’s little I can do. My buying frenzy is over for now; I’m well-stocked on everything that ought to sell and my OTB is more than spent. Like, WAY more. Cash flow – including the money that I had squirreled away for a rainy day -- is $120 in the red right now with $1,000 in payroll taxes due in two weeks. Today I added about 100 new keywords to Google AdWords, deleted some badly overpriced ones, and raised my daily budget. I’m flogging the new Microsoft adCenter, too, but that won't amount to much until they finish digesting Yahoo next month.

Come on, shoppers, are you even listening to me? Another weak consumer confidence report implies that you’re not. Consumers won’t consume until the job market brightens and businesses won’t hire until demand picks up. I’ve already explained this: Somebody’s got to blink, and it’s not going to be the corporations.

Dirty Words

2010-09-24T16:56:00.002-04:00

Here’s a funny: For the first time ever I used the “Notes” box on the USPS click-n-ship site to explain that I changed a customer’s chosen carrier because UPS won’t ship to his PO box. Click-n-ship returned an error. That usually means that the address is invalid or I forgot to tick the stupid return address checkbox that ought to be ticked by default. Nope, this time the reason was “Profanity detected”.

O RLY? I scoured my short sentence for any combination of letters that could be construed as a cuss word. Nothing. On a hunch I changed “UPS” to “your chosen carrier.” Success! Turns out that “UPS” is a dirty word at the post office.

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The Mini-Briefcase Business Card Holder – one of my flagship products with SKU 16 -- came perilously close to selling out when my wholesaler unexpectedly went out of stock. This is the product that I sold to Lord Yabinghoo in last week’s post. Demand really picked up after I exchanged links with The Corporate Gifts Company UK, now my #1 referring site (ahead of Facebook). You’d think the “UK” part would be a deal-breaker, but apparently not. Anyway, they send me a lot of traffic so show them some love.

Speaking of link exchanges, I’m always happy to swap with anyone who has a legitimate site (not a link farm) that doesn’t compete with mine. Such swaps are more about raising your search engine ranking than getting referrals, but any traffic they generate is always a welcome surprise. Email me if you’d like to promote your site here, and tell me where you’ll list Curio City in return. Google loves links.

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My wireless HP Officejet printer suffered a terminal paper jam last Saturday. After removing the accursed paper – in pieces – the printer would not come back. Hours of troubleshooting and more than a few dirty words eventually squared things away except for one detail: It won’t print in black. I think the print head was damaged in the jam.

The printer was exactly four days past one year old, and technically off warranty. I tried anyway. Hunting down HP’s online/email customer service contact was a trial in itself, but I eventually filed my claim.

On Monday a customer service representative named Garret phoned (why do they always phone when the initial contact is online?). After some back-and-forth he promised to FedEx me a replacement print head. On Wednesday FedEx delivered an envelope containing an empty box, packing material, a return label, instructions for returning the defective part, and a packing list enumerating an empty box, packing material, a label, and an instruction letter. You’ll notice that there is no print head in that list.

I emailed Garret again to see if I should expect the print head under separate cover. On Thursday he phoned to offer me a whole new printer, with no need to return the old one. It arrived today. Setting up a new wireless printer is not trivial; it took 90 minutes. But hey: New $90 printer! Kudos to HP. You really can offer excellent customer service when you have deep enough pockets.

Lord Yabinghoo

2010-09-17T11:17:00.004-04:00

First, an anecdote for those who won’t reach the end of today’s post:

A lady with a proper British accent called to inquire about a quantity of mini-briefcase business card holders. I was relieved that she wasn’t angling for a discount; processing fees and the hassle of preparing the shipment already cut my margin on international sales. No, she just needed help because Sunshop’s shipping estimator was being fussy about accepting her postal code. Rather than work it out over the phone, I asked for her order information so that I could process it offline. Name, please?

“The Earl of A____”

Um. The What of Who now? Yes, I heard correctly: She was the secretary for an English noble. In fact, Lord Arthur A_____ himself picked up the phone to ask some questions about the product and emphasize the need for speedy shipping. He intends to present the mini-briefcases to some visiting members of the House of Lords. “That’s our upper house of Parliament, similar to your Senate”, he explained to this dumb provincial.

I'm ordinarily cold toward the famous and fortunate and especially unimpressed by unearned privilege. I have zero interest in heredity or genealogy. But Lord A_____’s ancestor came over with William the Freaking Conqueror in 1066, for crying out loud – that's just plain interesting. I’d link to his estate’s website if I weren’t uncomfortable with the breach of privacy.

I’ve sold nearly 500 of this flagship product (SKU #16) and am running low again. Every time I reorder them the wholesale price goes up, and a minimum order quantity of 200 pieces makes them a hefty investment. It’s worth it, though. I'll bet I can get another buck for them after their brush with nobility.

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Microsoft is assimilating Yahoo Search Marketing into its own lackluster adCenter, which serves their Bing search engine with ads. I know this because Yahoo’s been emailing me about it twice a month with increasing breathlessness. Together, paid and organic Yahoo searches deliver about 10% of my visitors – not a lot, but nothing to walk away from, either. I guess Yahoo will still be a search engine. I think it will be technologically identical to MS’s Bing. But MS will start calling the advertising shots next month. Presumably capitalists behind the scenes have this all figured out. For me, the name on my charge bill will change and I need to learn a new interface to manage my little campaigns.

Dismayed by my foot-dragging, Yahoo started robo-calling me. I hate to admit it, but it worked. I finally tackled the 85 compatibility problems on their list just to stop those irritating calls. First I deleted such esoteric line items as “Geo-targeting, Network Distribution, Demographic Bidding, and Ad Scheduling will not be transition to adCenter. You need to set these up in your adCenter account” and “This attribute will not be imported into adCenter. In adCenter, the concept of Alt text more accurately corresponds to {Param2}.” By the gods, this is pure boredom.

Forty remaining warnings were about ads that don’t fit adCenter’s tighter size limit. I deleted a few old keyword groups and truncated a few ads. The drudgery finally out of the way, I hit some minor snags when I went to adCenter to complete the migration. Nothing worth relating here, though.

Can the merged Bing/Yahoo (Yahbing? Binghoo?) give Google a run for its money (or rather, for my money and yours)? It’s hard to imagine them denting Google’s 75% market share, but one dismisses MS at one’s peril. Maybe this merger of numbers two and three will threaten Google’s near-monopoly.

Now I just sit back and wait for new hordes of shoppers to storm the castle.

Exploring the Amazon

2010-09-10T17:51:00.003-04:00

A pitchman from an online retailer called Amazon.com tried to sell me on listing my products there. If I bit by the end of last week, they’d have waived the $40 subscription fee for the first month.

Forty bucks a month to reach millions of potential customers? What could possibly go wrong? I watched their tutorials to find out.

The monthly fee is trivial compared to the 15% they skim from the top of every sale. My budget line items – payroll, advertising, bank fees, shipping supplies, etc. – are based on a 50% overall markup after discounts and incoming freight charges. Most of my products are in the 45-50% range. I won’t go below 40%. A few standout items bring in 60% or better, but those tend to be low-priced products of dubious quality. I’ve managed to achieve an average 48.62% markup, meaning that I spend $5.138 out of every $10 to buy merchandise (that’s the “COGS” in my monthly sales reports).

Forking over 15% to Amazon would blow everything away. My company might survive on a 33% margin if sales quadruple; many high-volume operations get by on less. High-volume, low-markup business is so far outside my experience that I’d have to morph into something very different from the one-man, home-based operation that I’m comfortable with now.

I could stock an Amazon storefront only with high-markup products and raise prices on other merchandise that doesn’t have many competitors. Amazon’s 15% cut includes the payment processing fees that currently devour 4% of my sales, so I’d really “only” need to cover the 11% difference. Either keeping my markup where it needs to be, or living onless, would be difficult with Amazon sapping it, but it’s not impossible.

The lack of integration between my Amazon storefront and my Sunshop store is a harder challenge. Their salesman didn’t know anything about third-party shopping cart integration. He vaguely suggested that I google it. Wow, I never would’ve thought of that!

How can two web stores share the same inventory if they don’t communicate? Trying to keep the two in balance manually would surely create out-of-stock situations and increase inventory errors. To get around that, I’d have to allocate separate inventory numbers to each store: That is, if I have 100 widgets, Sunshop and Amazon each get 50. Firewalling my inventory would require keeping more pieces on hand than I do now – my many items with only 3 or 4 pieces in stock wouldn't appear in both stores. Running two separate stores that happen to share a name and some products – Amazon for high-markup, high volume stuff and Sunshop for everything else – also raises some thorny accounting/budgeting challenges that I won’t bore you with here.

Setting up the Amazon storefront is not trivial, either. Their listings require UPCs, for example; I currently don’t use those at all. Curio City's shipping charges use realtime carrier rate lookups based on product weights and shipping destinations; I’ve honed that system over the past five years to cover my costs without overcharging customers. Amazon uses fixed shipping tables. One must set a base rate plus increments for either the number of items purchased or their value. Making Amazon’s shipping charges line up with Curio City’s would take a lot of finagling…or require Curio City to use fixed rate tables, too. Some customers might prefer that, but it's less fair.

The biggest objection, though, is this: Amazon is the very definition of mass market retail, and Curio City is its antithesis. I don’t think of Amazon as a competitor so much as an unrelated entity. People shop there for consumer electronics, small appliances, software, and…um…well, I’m not sure what else, not being a shopper myself; that’s all I’ve ever bought on Amazon. I’m reasonably sure, though, that they aren’t looking for offbeat gifts or impulse items. The concepts might be inherently incompatible; I might wind up running two different stores with little crossover.

I tried a similar path years ago with an eBay store. That was more expense and hassle than it was worth. Dealing with combative eBay bargain-hunters was not at all pleasant. Amazon probably gets a better-quality customer, so I probably ought not to let my eBay experience cloud my judgment.

The prospect of reaching a huge audience and potentially moving large numbers of at least a few products is tempting enough to make me ponder these hurdles. Just putting Curio City’s name out there might be worth $40 a month even if the storefront flops. As I told their salesman, though, I can’t try it while my own store is gearing up for Christmas. Two months from now I’ll be struggling to keep up with the business I already have.

I’ll revisit this idea going into next summer’s doldrums.