Sometimes I Can Have Nice Things

This is not a post I had planned to make. In fact, all planning crashed with my laptop's hard drive on Friday the 16th. I had suspected that it was dying, as I'd already had to run CHKDSK on it a month earlier, so my most critical files were backed up. After spending all day Friday and part of Saturday trying to revive Windows, I finally performed last rites. Curio City itself is a shopping cart on a remote server, so it wasn’t injured in the crash. But everything that I need to manage the business – a couple of Excel files, a couple of Word files, my QuickBooks company file, my Outlook database, and my browser settings and bookmarks -- was on that hard drive. I was paralyzed without that handful of files and programs. I decided to close the store.

I recovered my backup from Jungle Disk – a service that I’ve been running for years, but had never before needed or tested -- and brought my desktop computer up to the minimum functionality required to tend to both of my businesses. Ordinarily I keep my personal life on my gaming desktop and my work life on my business laptop with no crosstalk between them, but now my desktop would have to step up to cover my Blue Hills workload. I could safely put Curio City in stasis, but I couldn’t freeze Blue Hills.  

You might remember me musing that Curio City might buy me a new laptop this year. Suddenly that thought turned to how quickly I get one and how much I could spend, so I spent all day Sunday shopping. My last three laptops were all cheap, utilitarian Dells. Because Curio City’s days are numbered, and because I'm optimistic about Blue Hills' future, I decided to splurge on a low-end gaming laptop instead of getting another unwanted boring business machine. Even though I couldn’t access QuickBooks to see exactly what my balance sheet looked like, I had a pretty good idea that I might barely stretch to afford it. 

That complicated things. High performance isn't cheap and Curio City isn’t rolling in money. After two days of intensive research and shopping, I bought a Dell Inspiron 15 7000 with a very good GeForce video card for under $1,000. Of course, that deal was online-only. That meant waiting up to five business days for delivery. Well, February is slow in Curio City anyway. It could stay closed, and I could keep pecking away at Blue Hills from my desktop in the meantime.

The box from Costco arrived on Thursday, and I had the store open again last Friday. Business has returned to normal (which isn’t saying much, but it’s something). I had neglected to back up a few files, such as the database for my postage program and my browser bookmarks. I lost all of my web graphics. Once upon a time, a file with thousands of verified postal addresses would have been a salable asset; nowadays, not so much…and my published privacy policy prohibits selling customer info anyway. Not that anybody else would have known…but I would have. 

After the financial dust settles I need to find the money for a game that will show off my screaming new GTX 1060. So far, loading QuickBooks is the most challenging thing it’s done. It does that admirably, I might add. 

Missing a week in a weak month left February’s numbers incredibly anemic. Let’s put it this way: Curio City only paid me $117.29 for the entire month – before taxes. I need to pocket $600 a month to support my lavish lifestyle. I’m finally getting year-over-year Blue Hills numbers, but they don’t mean anything yet, so let’s just look at the customary Kraken Enterprises as a whole:

February

Total income: -40.5%
Payroll: +46.3%

Marketing: +100%
Net Income (Profit) vs LY: -435.8% (-$1,536)

Actual Profit/Loss: -$1,222

YTD

Total income: -36.1%
Payroll: +43.4%

Marketing: -57.6%
Net Income (Profit) vs LY: -388.5% (-$1,757)

Actual Profit/Loss: -$1,305

A nice big loss bodes well for next year’s taxes, and means that I don’t need to take any write-offs yet. Payroll is up while revenue is down because 85% of Blue Hills income goes to payroll. Sales are down because...well, have you been paying attention or not?

Taxing Circumstances

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

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

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

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

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

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

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

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

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

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

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

Broken Apples?

Another caller complained about being unable to check out because my site delivered an error message instead of postage rates. As usual, I placed her order myself without incident. It still reinforced that nagging hunch that something might be wrong, though. This woman offered that she's using a Macintosh with Safari, which might explain why I can't reproduce the bug. I neglected to ask if she's using an iPhone or a proper computer...I'm always suspicious of mobile devices, but a Mac is a computer.

AFAIK my checkout page doesn't use any scripts that aren't ubiquitous across the Net. Analytics shows Apple devices still contributing sales, so it's not a general Apple incompatibility.

Over the past 30 days, Safari users made 33% of my visits but placed just 24% of my orders...which might or might not mean anything; a general technical error should lead to zero sales. In the PC/Android universe one might suspect that a specific hardware/software configuration isn't working right, but Apple's walled garden is supposed to eliminate such variations. I don't own any Apple devices so I can't conduct any testing. I have a feeling it would be fruitless anyway. 

More fun from Google Analytics: Chrome is the most popular browser with 40% of visits/54% of sales, Safari was second, Internet Explorer third at 14%/12%, and my own favorite Firefox had just 7% of both visits and sales. Microsoft Edge, the Windows 10 version of IE, barely registered. Mobile devices accounted for 29% of all sales despite my efforts to discourage those paid clicks, with iPhones and iPads together accounting for 49% of mobile sales. 

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The Blue Hills website is about 90% done. I have a few fiddly graphical and layout details to clean up and some placeholders to swap out, and the content needs my wife's input. I won't announce it to the world until those things happen...probably this weekend. But you could click the link in my banner if you want a sneak preview.  

I Do Not Think It Means What You Think It Means

Well, I didn't see this coming: I was able to pay off my Amex card in full, including the new $550 computer. One big kite sale and one big golf ball order made all the difference (in fact, this week has a good shot at being the best of this year to date). Cash is still a little tighter than usual but I'm not in debt.
The last financial hurdle for this year is paying my CPA's tax prep fee. Since he hasn't completed my return yet, I might be able to sock away the money before it's due and get a little bit ahead of the game. Once that's covered I can finally invest in that long-delayed website update and some new products.

The new Inspiron is working out fine, btw, except for one stupid quirk. Dell's power management scheme has a neat battery-preservation feature that continuously drains your battery to 85% and recharges it. However, the same scheme turns off the wireless card after 10 minutes on battery. You can forget about persistent wifi if you want to use the battery saver. In fact, it seems that you can forget about wifi on battery power altogether even when you set Power Settings/Wireless Adapter Settings/On Battery to "Maximum performance." Apparently that doesn't mean "never turn it off."

It's a good thing I very rarely have to unplug my computer.

End of the Line for XP

Security warnings grew increasingly shrill as Windows XP rode into the sunset. Wasting $100 to upgrade my five-year-old Dell Vostro to Windows 7 would have been dumb. I knew that this was coming and a new computer was in the plan for 2014 all along -- just not yet. Then Microsoft upped the stakes by disabling Security Essentials – they’re still updating virus definitions, but they rendered the program unreliable by turning the detection permanently red. I reinstalled Avast to get around that (and quickly remembered why I had uninstalled it in the first place; what a whiny program!).  

Last week’s Heartbleed scare pushed me from anxiety to action. With two major vulnerabilities I had to replace my Vostro, and quickly.

“Quickly” took most of a week as I shopped the Dell Outlet, Newegg, Best Buy, Staples, Tigerdirect, Lenovo, and a smattering of smaller vendors for sweet deals on Dell, Lenovo, or HP laptops. It quickly became apparent that I was not going to get very much new computer within my budget, so I focused on refurbished and scratch-and-dent machines. The options narrowed drastically when I limited results to Win7 machines with at least 6 gig of RAM for under $800.  

The finalists were a new Inspiron from Staples for $550, a refurbished Latitude for $429, and a refurb Precision for $599 (both from Newegg). The Latitude was the best deal and the Precision was the best machine. After a couple days of hand-wringing I reluctantly decided not to take a chance on a refurb with a 90-day warranty from a third-party seller – I lack the technical chops to solve potential problems myself...the potential for problems was too high...and my confidence in the limited warranty was too limited. 

The full-year warranty from Dell persuaded me, without enthusiasm, to buy the boring Inspiron. It has twice as much RAM as my Vostro, so I can at least expect slightly faster performance. The display and keyboard are nicer, too. Redeeming my Staples rewards covered the sales tax and brought the delivered cost to $552. American Express will rebate 5% of that, and I’ll earn another 5% in further Staples rewards.  

Of course, I still can’t afford it. Without an unexpected sales surge I’m going to have to pay some credit card interest for a few months. 

Windows XP still powers hundreds of millions of computers worldwide. It's still a fine operating system that works simply and reliably. Win7 is a good OS, too, but frankly I always liked XP's interface better. If tens of millions of those XP users go through the same hassle that I just did, the PC industry should register a noticeable bump in sales this spring. 

That Precision was a really nice computer, btw. Maybe in a few years I’ll be able to replace this Inspiron with something that I actually want. 

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As long as I was making hard decisions, I discontinued Bottled Up Jewelry. Despite being beautiful and eco-friendly it didn’t fit in with Curio City’s overall emphasis on practical, clever things. The jeweler dropshipped quickly and accurately, but sales never amounted to more than a nuisance. I was able to delete 110 product pages, four categories, and more than 400 images. I hated to flush away all that work, but having it cleaned out feels good now that it’s done.

Will I ever bring in another jewelry line? Maybe, if I happen upon something unique and clever, not too expensive, and drop-shippable.  

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As I should have foreseen, business completely hit the wall the minute I put the computer on my Amex card. As of Friday afternoon this is shaping up as the worst week ever, with just four sales totaling $78. I don't know why. The coincidence with switching to PayPal is suspicious, but that should be invisible to customers. I don't see any technical flaws of any kind. AdWords could use a refresh and Google is screwing with Product Listing Ads again, but that doesn't explain the sudden dramatic collapse. A formidable new competitor wouldn't kill everything across the board. Maybe it's got something to do with Easter. Sometimes dry spells just happen. Eventually they end as mysteriously as they began (although this one has already lasted much longer than expected and shows no sign of fading). Whatever the cause, this week is going to drag April into the dumpster.