First America, and Now Curio City

How's that whole "getting out of debt" thing working out? About as well as could be expected, thank you for asking. So far I've paid off slightly more than I added each month despite the $100 interest charge, and I did that while my biggest annual expenses (taxes and tax preparation) took a bite out of cash flow. My balance went from a high of $8,800 in January to $8,400 last month and will dip a little below $8,000 next month. With the biggest bills out of the way, I should be able to reduce it by close to $1,000 per month for the rest of the year, leading to break-even in October or November. 

That's too late to finance next Christmas, so I'll have to decide whether to take on more debt to buy enough stuff to match LY's anemic holiday sales, or just hunker down, expect another big decline, and sell off whatever I can, with an eye toward starting 2018 in the black and making that my comeback year. 

This week I billed my first $100 for two hours of editing. Curio City currently pays me $50 per week, and that's in a decent week. I also finished a package of stories for MIT that will pay me more in two weeks than I earned from Curio City in all of 2016. I actually caught myself hoping that I didn't have any new orders one morning because I didn't want to spend the time filling them; wishing that your own business would go away and leave you alone is not exactly an attitude for success. 

The next sentence in the first draft of this post said "I'm still committed to staying open through Christmas," but I'm not so sure about that after what happened last Friday.

I needed to finish three stories on Friday out of the nine in that MIT package that was due on Monday. I quickly tended to Curio City's needs in the morning and reserved the rest of the day to write. Then the emails and phone calls started. In the wee hours of Friday morning, credit card thieves had used my checkout page to repeatedly submit a transaction for $2,958.58 with a different credit card each time. I later learned that their script selectively targets Sunshop stores. PayPal shut down my payment processing ability when they detected what was happening. I closed my store overnight so that the script would move on to some other poor soul. Soon, people who saw a huge charge authorization attempt with my store's name on it began calling me for an explanation. 

By the time it was over -- and I hope it is over, although I was still getting calls yesterday -- 14 people had complained. All of them had recently-opened business credit cards. All of them were in Virginia, Maryland, or one of the Carolinas. Based on the time of day that the script ran, PayPal guessed that the attackers are in Russia or Eastern Europe. These are probably not the same Russian hackers who installed Trump, but who knows what's really going on? People are saying, I don't know, what do you think? These particular slimeballs are "carding," which is a common practice whereby they validate the stolen card numbers for resale. They used a huge transaction amount because high-value cards are worth more on the black market. Wiki tells me that validated credit card numbers can be resold for up to $30 apiece. 
 
Curio City sucked down enough hours and raised my blood pressure sufficiently to prevent me from finishing more than two of the scheduled three stories and leave me feeling like I literally don't need this crap anymore. Blue Hills pays me way, way more than Curio City ever will, and it's far less aggravating because it doesn't face the Great Unwashed Masses. Blue Hills operating costs are close to zero. The big caveat is that all of my work so far has come from assignments that my wife handed me because she has more jobs than she can handle. Nobody would knowingly hire me to write something at $1.50 a word; even though I can deliver quality work that's worth the price, I have no credentials of my own. It will take months or years to develop those. Anne is technically an employee of Kraken Enterprises for tax purposes, but I'm effectively working for her. 

If the editing work becomes steady enough I might finally fold Curio City. I really only need to earn about $600 a month; 12 hours of editing would do that. On one hand, Curio City doesn't pay squat, I don't enjoy it, I don't care about retail, I'm apparently not as good at it as I used to be, it doesn't make the world a better place, and its passing would scarcely be noticed. OTOH, inertia is strong in me; in the short run, it's easier to keep it going than to shut it down. I'd rather convert some of the $20,000 worth of junk in my cellar into dollars than trash it...but, because they are both Kraken Enterprises, what I do write off will offset Blue Hills' considerable profit. The decision to close has big implications that I'm not ready to consider yet. The immediate question is whether I will invest the time and money to actively pursue a successful Christmas, or sit back and take whatever it brings...and I don't even have to address that for a few more months.

Dumb and Dumber

Around the beginning of April I started getting scam letters from people who hope I'm dumb enough to pay them anywhere from $389 to over $1,000 to renew my trademark, which involves verifying an online form and sending the government $400. My favorite was from someone who "only" wanted $250 to send me the relevant paperwork...which, as I said, is just a web form. Obviously, I know better than to pay anyone for that. But I really do owe the government $400 to retain ownership of "Curio City." What I don't know is when the government needs its money. I filed for the trademark in March or April of 2006. The filing was published on Sept. 26, 2006, and registered on May 29, 2007. So which is the 10-year anniversary deadline?

I posed that question to the USPTO on April 7. The recipient of that email dodged answering and linked me to a different office, to whom I forwarded the same simple question. On May 11, the Trademark Assistance Center finally sent me an unsigned reply. As you might have guessed, I waited a month for an email that details the filing process without specifying the deadline that I asked them for. Thanks, Obama!

One of the scam letters says that the "start of filing period" was May 29 of this year, and the actual deadline is May 29 of next year, which is the actual 10-year registration anniversary. I can pay up within that year-long window. I'd have liked to hear that directly from the government, but it's the best answer I'm going to get.   

Speaking of thieves...PayPal finally snatched back $196 plus a $20 chargeback fee for last month's fraudulent charge. Since I got my merchandise back, the actual loss was "only" $20 to PayPal plus $15.68 to UPS for outbound freight plus $23.68 for return freight = $59.36; UPS was the big winner. The actual thief got bupkis. For accuracy's sake, I ought to debit the "return" from this week's sales and reduce my next paycheck accordingly...but, screw it.

Speaking of dumb...I think I mis-shipped a package. I got the customer's name and email address wrong so it won't surprise me if I screwed up her street address, too. Her small order is heading for the loss column since I'll either have to refund her purchase or reship it at my expense. Poor sound quality is just one more reason to hate telephone orders. Here's a pro tip: Not only is ordering online faster and more secure...it's also more accurate than using the phone because you're not depending on some old man trying to understand a crappy speaker. There's a reason that the game of miscommunication is called "Telephone."

April Numbers: Another Red Sea

I never did figure out why this April opened with Curio City's worst week in five years. 2015's April was the best ever and its final week (corresponding to this week) was the best non-Christmas week of last year. 2016, OTOH, delivered the worst April since 2009, coming in 7th out of 11, and this week is running on the low side of average. A surge in Dove kite sales implies that Christians must be having another holiday.  

Read 'em and weep:

April

Total income: -27.7%
Total COGS: -27.7%
Payroll: -49.9%

Marketing: +7.5%
Net Income (Profit) vs LY: -187.4% (-$230)

Actual Profit/Loss: -$107

 

YTD

Total income: -17.7%
Total COGS: -16.8%
Payroll: -22.1%

Marketing: +3.9%
Net Income (Profit) vs LY: -107.7% (-$1,031)

Actual Profit/Loss: -$2,004

Falling another $1,400 behind LY isn't as bad as it looks if you squint sideways really hard. Watch this: Sometimes my weird whole-week accounting calendar gives April four weeks and sometimes five; this being a four-week year, a 20% decrease from LY would have been expected; 20% of last April is $800. If my most-expensive bestselling product (the eagle kite, duh) had been available I would have expected to sell at least four more of them than I did for another $280. Half of those orders probably would've included poles for another $150. Fourteen hundred dollars minus $800 minus $280 minus $150 = $170. If week one had been average instead of inexplicably and historically poor, it would have brought in $400 more than it did...so my hypothetical April is now $230 ahead of LY! Yay!

Of course, actual April was not hypothetical April, and these QuickBooks numbers don't know anything about four- vs. five-week months.  
   
Last May was average. The odds of beating it this year would be decent if those eagle kites were available. Without them, I'll probably lose another $500. I asked Jackite again for an anticipated restock date and was ignored again.    

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A phishing snailmail from "Patent & Trademark Office" might have suckered me in had it not asked for an outrageous price. The letter is an exact copy of the government form; their envelope didn't have the legally required "not government business" disclaimer; and their URL only differs from that of the real trademark office in using ".org" instead of ".us" -- altogether, a fraud so polished that they almost deserve their laughable $1,690 to file my $400 renewal. Another, more obvious, scammer wants just $250 "to receive all documentation to renew your trademark." Hah! Said "documentation" is, of course, a free online form.

It does look like I am going to have to come up with $400 this year, though. So far I have been unable to determine the deadline. My first query yielded a link to someone else; the second attempt wasn't even acknowledged. Well, I can't afford it anyway.  
  
Speaking of scammers and thieves...I had a doozy of a chargeback this week. A supposed-customer complained to her credit card issuer that she didn't authorize the purchase of $180 worth of lighted caps. I was able to initiate a UPS intercept just hours before delivery for the low low price of $10.90. Of course I'm out the original $16.87 shipping cost, and PayPal's going to hit me up with a $25 chargeback fee, for a total anticipated loss of $52.77 on top of the $196 in revenue that they'll claw back. Lovely. Was it a stolen credit card? Did a family member place the order without the cardholder's knowledge? Did the customer merely change her mind, or forget what she had ordered, or not recognize my store name? I will probably never know. At least I'll get my merchandise back, so it could have been worse.

That $250 hit isn't reflected in April's numbers, btw, so May is going to start out that far in the hole.  

The Wisdom of Age

Do you think the thieves are getting smarter or falling down on their game? This week's email said:

I will like to know if you do carry golf balls for sale, can you get back to me with the  types you have instock, and also would like to know if you do accept credit card payment,so that we can proceed.

Not revealing one's scam in the initial contact counts as criminal genius. I might have fallen for it if I hadn't seen it all over the past 10 years. The "customer" (a) doesn't know what I carry, yet wants to order some anyway; (b) is concerned chiefly about credit card acceptance (every legitimate business takes credit cards and my payment options are prominently displayed on my website); and (c) either doesn't speak English or is a Millennial. But the real tipoff is the email address: "firstname" + "lastname" + "three-digit number" at gmail is always suspect.

Experience brings wisdom. Age brings experience. At least it does if you're paying attention.

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Speaking of "the past 10 years," I bought my Sunshop license and started developing the original store on 10/2/05. I had incorporated in August, IIRC, the first sale was on 11/21/05, and the first sale to a stranger wasn't until 12/5, so take your pick for Curio City's actual 10th anniversary. I think I'll go with 11/21. 

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Speaking of sleazeballs, a clever spammer found a new way around my filters. Adding them to Outlook's Junk Senders list weeds out the amateurs. For the professionals, I add key phrases that never appear in real message subjects to my Penis Rule (so-called because "penis" was the first keyword I added to it). I can usually block 90% of the garbage that floods in every day.
This new sleazeball stymies adds random spacing and punctuation to his subject lines. "Draft kings" might have one space, or two, or more, or hyphens and spaces. I can't add all possibilities to the Penis Rule, so I wind up deleting them manually. Congratulations on discovering a new way to irritate people, Sleazeball!  

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Speaking of dodgy subject lines: My "Sanders vs Trump" clickbait headline actually got fewer views than usual -- 23 on Blogger and just 12 on Facebook, vs. 67 for the previous week's Trump headline. Trump got four Likes and a couple of comments, while Sanders only got one Like. Let's hope that doesn't foretell our next president.  

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I recently put $800 worth of old Metal Earth models on the credit card with the intention of spending as much on new ones. Well friends, I waited too long. By the time I started slogging through it virtually everything that I really wanted was sold out. I still spent $1,100 on what I consider second-string models, and that only bought 36 of nearly 100 candidates (just about doubling my inventory). $1,900 worth of deficit spending has produced no sales at all yet, but I won't start panicking until after Halloween. I need to see some encouragement before I blow another $500 or so on "coming soon" models.

I'm not thrilled with anything from my other usual vendors. They're already running out of stock and they're difficult to order from anyway, so all of my eggs are in the Metal Earth basket by default. Did you know that most of these companies don't have online wholesale ordering? One doesn't even put their order form online, so I can't see what's still available or what happened to prices since my last order. They expect us to use human sales reps. That's so 20th century....  

Today I'm grappling with the most difficult vendor of all to finish off my Christmas buying and will have most of the inventory before Halloween. I'll be carrying a staggering $6,000 in debt into the season. But if I can count on matching LY's lackluster holiday sales, I should gross $16,000 during November and December. $3,200 (20%) of that goes to payroll (yay!), $6,000 digs me out of debt, Google and PayPal take $3,000 for advertising and payment processing, and I might need $2,000 for reorders. That reckoning still leaves me $1,000 in the clear. That's just enough to pay for taxes and tax return preparation and survive 2016.  

So it's going to be OK. But I'll feel a lot better when Metal Earth starts trickling out.