O No, Canada

This week brought an email inquiry about six dozen (unspecified) lighted caps -- a nice juicy $1,200 sale, even at my deepest discounted price. That kind of thing catapults a month from ordinary to record-breaking; just a few of them would turn a losing year into a winner. Only a fraction of these bulk requests ever pan out, though, and this didn't look like one for the win column.

Strike One: The shopper asked about embroidering, which I obviously don't do (although I did consider it years ago, during the heyday of lighted caps). Strike Two: I only keep a dozen of any given color in stock at a time, so I'd need to special order them. Strike Three: The shopper was from Canada, and I foolishly warned him about import duties. Canada only exempts $20 from tariffs (most of the world lets you import $1,000 or more duty-free) and large orders never escape the tax man. Even if he avoided Customs by having his order delivered in the US, he would have to declare them at the border, and Canada would soaked him there for a couple hundred bucks.

He went quiet after that. I can't blame him. A better salesman than I would have kept quiet about tariffs and just closed the deal.   

Truth is, I hate shipping to Canada. I like Canada. I've been to Canada many times. My wife's father was of Canadian extraction. But over the years I've had more complaints from Canadians than from any other non-US customers, and they usually involved tariffs (like there's anything I can do about those; take it up with your government. One customer asked me to lie about the value of an order, but that's kind of illegal). "What about NAFTA?" you ask. That pertains to B2B commerce. Canada does not want its citizens to shop in the US.

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I've pared my Bing Ads spend down to just a few bucks a week, but since that handful of clicks delivers no sales whatsoever I'm going to suspend it entirely after Fathers Day. I feel like I have enough data on my Shopping campaign now to reactivate it successfully for Christmas. Google "Product Listing Ads" outperform my regular campaigns dramatically and I'd hoped for a similar result at Bing -- they use the same product feed file, after all. Nope. Bing is worthless for advertising.

On my personal PC, Microsoft keeps trying to bribe me to use Bing with some loyalty program called Bing Rewards, which I judged too complicated to bother with. It might be worthwhile if one has the patience to game it -- I buy my clothes at Bob's Store because their prices are great if one plays the coupon/discount/rebate angles. But that's tedious. I do it when I'm buying something expensive and tangible like clothing; I don't want to think about it when I'm consulting a search engine. I might change my mind if I thought I was leaving money on the table, but as far as I can tell it only pays off in discounts toward buying selected crap, and I never buy anything I don't need.     

Another Christmas In the Bag

I survived another one. I should get a T shirt or something. The sudden silence is eerie.

I don’t know why Christmas was compressed into the traditional four weeks after Thanksgiving this year, rather than strung out from Halloween on as usual. But these intense few weeks set new records for the busiest non-December week ever; for the biggest week ever (beating a 2008 benchmark); and for the biggest paycheck ever (beating the 2010 record by nearly $500). Excel indicates that I’m only running $1,900 behind LY (Quickbooks says $2,700) with a week left to go. Although it’s still going to be my first year-over-year decline, it’s a whole lot better than I had expected even two weeks ago. 

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I wonder why amazon.com is referring traffic to me. One customer left a note complaining that he couldn’t pay me with his amazon gift card, and Google’s realtime analytics periodically shows Amazon as a referring website. I don’t shop Amazon often enough to know how their referrals work. While I’m obviously happy for the traffic, I’m less thrilled about people thinking that I’m affiliated with the evil empire.

Speaking of evil empires: Micosoft, you are this close to losing me entirely.  The past few times I’ve gone to your site to ratchet up my ad spend, I ended up cutting it instead. So I was especially exasperated when you sent me an email with the subject  “Your ads or keywords require changes.” "As part of the editorial review process, we were unable to approve one or more of the ads or keywords you submitted”, you said, which is weird because I don’t think I’ve added any keywords or written any ads in months. When I clicked your handy links for a summary of the “problems,” you showed nothing listed. You said that you had vetoed three keywords in my “apparel” campaign, so I opened every ad group in that campaign…and still couldn’t find anything amiss. While I was looking, though, I did find several more keywords with quality scores that you had inexplicably demoted to 1 or 2/10. So after wasting half an hour during the busiest week of the year looking for problems that apparently don’t exist, I ended up deleting yet another handful of keywords. 

Honestly, I want Bing to show my ads, but you are making it much more difficult and expensive than it’s worth. I’m probably going to abandon you entirely now that Christmas is over.

Lord Yabinghoo

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.

Zzzzzzz

How's that for a snazzy post title? Really draws you in, huh?

It was a slow week. Whether or not I’m going to beat LY is a nail-biter. If I don’t, it will only be the third time this year.

Outlook 2007 jazzed up the week when it started crashing frequently and slowed down my computer drastically. A Windows update might be the culprit. A Microsoft diagnostic utility recommended uninstalling my old copy of Office XP. But a damaged or missing install file prevented the Windows Installer from doing its thing. Revo Uninstaller was no help. Crap Cleaner found 65,000 temp files totaling 22 gig! Every time Outlook crashes and restarts, it leaves behind another 1,000+ temp files. Egad, this is serious.

A tech guy at Octopus Overlords posted a link to an installer cleanup utility. That turned the old version of Office invisible, but the conflict persisted. Finally I decided to reinstall Office XP in order to uninstall it.

That went quickly and smoothly, but it crippled Outlook 2007 in the process. Fortunately, the Repair option on the Office 2007 disk actually worked. I was up and running again in half an hour. I’m not sure that computing nirvana was restored, though. Outlook isn’t crashing anymore but it’s still got a behavioral quirk – every time I open and close a new email, it says the formatting was changed and asks me if I want to save it…then it fails to remove the message from the task bar. I think it’s still spewing temp files, too.

Should I roll Windows back to an old restore point, or just live with Outlook being emo? I'm not inclined to experiment since MS Office is running fine otherwise. Who knows? Who cares?

Hey, I said it was a slow week. Pretty sad that this is my 200th blog entry.

Reasons to Hate Shipping

This post was originally entitled “The Airspeed Velocity of an Unladen Swallow” but I decided it was both too cute and too obscure for a post about the arcana of accurately calculating shipping charges, a topic that I first addressed last December. I shall avoid repeating that earlier post, so I suggest that you read it for background if this subject interests you.

Last week I subtracted $225 from my open-to-buy (or more accurately, I added $225 to my OTB deficit; see the end of this post for more about that) to allow for the cost of shipping a $176 order. Imagine my surprise when the bill came in at $249.12! That’s right; four cartons from the Left Coast cost $73.12 via UPS Ground – over 40% of net! Fifteen percent of net is considered reasonable and customary for freight; lately, 20-25% has become common in our energy-inflated economy. Forty percent, though, is pure bullshit – especially since this was bargain-priced merchandise that should have delivered my benchmark 50% markup at an appealing sale price. Instead I had to price the item higher than some competitors just to achieve a dismal 39% margin. If I were to price-match the competition, my markup would drop to a money-losing 15%.

There had to be a mistake. Sure enough, two 13-pound cartons bore labels showing that they weighed 27 pounds each. When I notified the vendor that they were overpaying for shipping, I learned that UPS was charging a dimensional weight. Because those two boxes exceeded some arbitrary cutoff size, UPS charged double their actual weight. I certainly won’t be reordering this “bargain” again. I can only sell it profitably if I inflate the shipping cost to my customers – a common dishonest tactic that I have always rejected as sleazy.

I try to take in exactly as much money as I actually spend on shipping, with a tiny surplus to cover the cost of boxes and packing materials. Ideally, every order is charged a few cents more than its real shipping cost. Alas, that is virtually impossible to achieve in the real world, as I explained in the earlier post linked above. Last week I actually dropped my handling fee by a nickel, to 70 cents from its high of 85 cents, because my shipping fee collections were running a wee bit ahead of expenses. In aggregate, I do a good job of balancing income and expense. Getting there has taken a lot of time and attention, and a few items are still out of whack.

Google Checkout’s rate calculation bugs have been an ongoing hassle – check the “Reasons to Hate Google” tag to find those posts. You would think that a shipping lookup module would just take a total weight, consult some tables, and return accurate prices. Nope.

Reasons to Hate UPS: UPS charges a base rate that varies across geographical zones. Then they add a fuel surcharge that (presumably) fluctuates with actual fuel costs, but in reality only ever goes up. Then they add a residential delivery surcharge if the package is going to somebody’s home. Then they generate fictitious weights to cover the bizarre dimensional pricing that I mentioned earlier. There’s an insurance surcharge for packages worth more than $100. Even after all that is factored in, the price that I pay when I create the shipping label often differs by a few cents from what UPS ultimately charges my credit card, necessitating fiddly little corrections every time I get a credit card statement. Overall UPS rates are higher than the USPS, their service is slower, they don’t deliver on Saturdays or to PO boxes, and they often damage packages. Package tracking is the only thing I actually like about UPS.

Reasons to Hate the USPS: The post office revises their rate structure every year, requiring customers to re-develop our shipping modules. The parcel post bug about which I’ve written so often recurs so dependably that I suspect it’s a deliberate effort to reduce parcel post sales. And that’s just the beginning. USPS uses separate rate tables for “machinable” (standard) and “non-machinable” (oversized, undersized, and oddly-shaped) packages. In May, USPS introduced UPS-style dimensional premiums for priority mail over one cubic foot. The cheaper services like first class parcels and parcel post are not available online via Click-n-Ship, but priority mail receives a discounted rate when purchased online. And then there’s flat-rate pricing when you use the proper boxes. For all of that complexity, USPS does not guarantee their delivery times, or offer parcel tracking, or provide loss coverage for uninsured parcels. Presumably that’s why it’s so much cheaper than UPS.

Given the level of complexity by both carriers, it’s no wonder that so many merchants prefer fixed-rate shipping tables. Who knows? Maybe some customers really would rather pay a fixed shipping price per dollar amount – at least it’s predictable. I suspect (for no objective reason) that my customers would rather pay the real cost of shipping than a one-size-fits-all rate based on purchase price. Merchants who use flat-rate shipping tables are just dodging the issue. So I gamely struggle with the lookups, constantly fine-tuning item weights and adjusting my handling charge to approach the ideal. Until the next rate reorganization comes along and screws everything up again.

And now, as long as we’re hating companies…

Reasons to Hate Microsoft: I feel like my hatred neglects MS. That’s not a deliberate slight; they just don’t have much to do with e-commerce. But here’s something: After a Windows update a few weeks ago, MS Outlook started freezing on the first load, on both of my machines. It loads OK on the second launch, but makes me wait for a 30-second repair routine each time. I allowed Windows to report the crash to Microsoft each time in the unlikely event that somebody is collecting those. Eventually I got a link Microsoft’s solution: Upgrade from Outlook 2002, because it’s no longer supported. Thanks, Microsoft! You just moved me one step closer to migrating to web mail.

Speaking of my open-to-buy…I don’t think it’s ever going to reach zero. As much as I really want this business to put money into my pocket rather than siphon it out, I am on the verge of loaning the company enough money to wipe out my deficit, satisfy pent-up demand for reorders, and bring in one expensive new product line. It would take $3,000-4,000 to do all that. I even have that much money sitting in an ING Direct account named “Kraken Startup”. Five things keep staying my hand: (1) The aforementioned aversion to putting more money into the company; (2) a real lack of warehouse space in the cellar; (3) the certainty of earning a nice, safe 3% return by leaving it right where it is, versus potentially losing it entirely if I invest it in my business; (4) my belief that future cash infusions should only be used for technology and marketing; and (5) my suspicion that bailing out the OTB – again – merely ameliorates a long-term structural problem in either the way that I calculate my OTB, or the way that I spend it. Yeah, I could pour $4,000 into overstuffing my cellar right now…but will I be right back to low stock levels and an empty budget again when it’s time to lay in Christmas orders in a few months?

Coming Attractions:

• Running with the Big Dogs
• Let Us Now Praise Famous Products
• The Zombie Store
• Legal Extortion