Blame Canada

I mentioned last week that I'd given someone permission to return the nine blackbird kites that she had bought for a school play. They showed up on Wednesday along with the four Create-a-birds that she had said she was keeping, inflating the refund from $125 to $182 and pushing the week's sales to a negative $61. It subsequently clawed its way back into positive territory to avoid becoming my first-ever negative week. 

I've lost money on two international sales this month (different products). The product weights are set to 0.5 lb so that I can ship two widgets for the 1 lb rate. In my lightest possible packaging, the shipments each actually weighed 8.4 ounces -- no biggie for a domestic shipment, but First Class International rates jump from $13.75 for 8 oz to $22.75 for 12 oz with no steps in between. Four tenths of an ounce cost me $9 out of pocket. I gave away the product with the $10 markup and actually lost money filling the order with the $6 margin. 

Have I mentioned that it takes me a day and a half to earn $9? I'm resigned to not making any money until Curio City gets out of debt, but actually losing money is a different story, and this was definitely a losing week.

Aside from doing a slow burn about spending my time shipping money-losing orders, I'm cheesed off because I've spent 10+ years refining my product weights. Changing those weights from 0.5 to 0.6 lb will cover me against future international shipping losses while screwing over US customers who buy more than one piece. But I can't afford to lose $9 per shipment because the USPS decided to skip a 9-oz rate, so 0.6 lb those products shall henceforth be. Sorry, Americans. Blame Canada.

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.

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

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.     

The Science of Trademarks

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.

The Halloween Ball

It’s funny, how products sometimes blow up out of nowhere. I’ve carried novelty golf balls since the beginning. A few months back somebody bought enough Halloween balls to propel that style onto the bestseller list (they do sell year-round). This week a blogger in Italy picked up on them (see the 29 Ottobre 2009 post). I can’t read Italian, but I do know that her link works. Links are good. Creating product links is part of this blog's reason for existing. Even if none of her readers buy anything from me, that link will raise the page’s stature in the all-seeing eyes of Google. Halloween is over, so that should be the end of it…but who knows where it will really go from there?

I’ve explained that I don’t particularly like international sales. I lose money on the currency conversion, the charge processing cost is higher, the shipments take considerable time to prepare, and I am supposed to hand the parcels to a postal employee, which means either scheduling a carrier pickup or (shudder) standing in line. Last week I stood in line with a package to Denmark and one to Canada among my domestic shipments. One clerk was working the counter while three others bustled around officiously. The working clerk was tied up with an old woman who apparently had set aside her whole afternoon for the post office. Eventually a manager-type came out and started trying to steer people toward the automated postal center. He couldn't take my international packages, though – those had to be handed to a counter clerk, he said, and he couldn’t hand them off for me. :rolleyes: OK, whatever. Finally I made it to the front. The clerk took my packages, and then told me that he couldn’t scan in labels purchased online because those are already “accepted”, technically. From now on, I’m going with carrier pickup, even though it adds an extra day.

Which brings up a new reason to hate both Canada and UPS – a twofer! A customer paid $39.98 for two sets of Whisky Stones – which is to say, rocks. Postage to Canada was $16.15, bringing it to $56.13. Converting to Canadian funds made that $60.76. And then Canadian Customs hit him for $36.49 in import duties. Bottom line: $97.25 for 18 pieces of rock. They’re nice rocks, but wow.

I strengthened my international shipping wording. Truth is that this seems to happen to everyone who chooses UPS Standard to Canada. USPS shipments are less likely to be intercepted. I don’t know whether that’s Canada’s fault or UPS’s, and so I shall hate them equally this week.

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

I went back to manual click bids after seeing some weird money allocations from Google’s conversion optimizer. I only had the nerve to stick with it for four days. My daily spend rose by about $4 per day. On three of those days I got the usual 50-75 clicks. On the last day I got 83 – a little better than average. I did make three international sales during the period, which is also more than average…but that’s hardly desirable. I think I’d have to run this for at least a month to draw any conclusions, and that’s a more expensive experiment than I care to perform. Maybe I’ll try it again during the slow season. Or maybe not. I don’t really like surrendering control.

October was a phenomenal month. I wish that the changeover from 2-LED to 3-LED lighted caps could go on forever. Sadly, the old ones are selling out, and that’s going to take some wind out of November’s sails.

Of course it all comes down to November and December, but here’s what it looks like going in. Remember, this year’s plan is +25% growth (reduced from 33% when the economy collapsed).

For October:

Total income: +58.0%
Total COGS: +61.2%
Payroll: +232.5%
Net Income (Profit): -50.1%

The YTD numbers:

Total income: +24.2%
Total COGS: +21%
Payroll: +44.2%
Net Income (Profit): -37.4%

I continue to steer more money into my paycheck at the expense of my year-end profit -- not the optimal tax strategy, but I need every penny while Anne is unemployed. COGS is rising more slowly than income. And income is very near my 25% growth target. Pretty good numbers all around.

The next two months will decide next year’s plan. Tentatively, I’ve set it at 30% growth, but I might lower that if Christmas is a bust.

Climbing a Tree Technologically (Metaphorically)

The pace of web development is quickening. A Halloween launch begins to look feasible. The cosmetics won’t all be done; in fact, I’m abandoning much of my custom look in favor of a modified standard template. Shoppers want easy and familiar, not clever and original. I’m fine with that, although I’ll miss the urban look of Curio City 1.0. Maybe I can gussy things up later on.

The transition process is going to be a ton of work, and it’s starting right now. I have to rebuild many product pages to take advantage of what they call “option inventory” – tracking the quantity of each variant of a product (e.g., a running total of how many of each color/size/design I have). I have to plug in all those quantities. And in many cases, that will entail consolidating multiple pages into one. A new HTML editor allows me to use formatting when I build product pages. Imagine that: fonts, colors, even simple graphics! Ultimately I want to revise all of my product pages to fit a template that I’m going to design this afternoon.

In the interest of search-engine optimization, Sunshop has changed the way it builds page URLs. That means that all of my existing product URLs will become invalid. And that means that I have to create a .htaccess file to redirect the old addresses, which are used in literally hundreds of pay-per-click ads, to the new product pages...something I can begin now that the product catalog is being moved over. Ultimately I should revisit both of my PPC campaigns in great detail, replacing old URLs with new ones and generally overhauling the ads. Oh, and speaking of SEO…the new Sunshop allows me to create title tags for each product page, instead of using the automatically generated ones.

If September was low-hanging fruit, I started stretching for higher branches in October. Now I’m grasping at the beanstalk of November, twining up the unimaginably high redwood of December. September finished 73% ahead of LY. Right now October is 16% behind LY; the last two days left in the fiscal month could reduce that to single digits. Year to date, I’m running 22% ahead of LY, but it all comes down to November and December. The last week of October and all of November 2006 were buoyed by my one and only marketing success. This year I have nothing comparable going on. Due to the lack of a mailing list, I only ended up mailing out six copies of my 50 caplights postcards, with predictable non-results. Now I have a pursehooks postcard in production, and I still have no mailing list. My media-savvy, but overextended, wife says that she’s going to supply that.

This years-delayed rollout of Sunshop 4 is my only ace in the hole. If the launch goes without serious bugs, I expect some immediate benefits.

Easier navigation, plus the perception of greater security, will lead fewer shoppers to abandon their shopping carts. If I were smarter, I could probably extract my current abandonment rate from Google Analytics. But I’m dumber, so I just believe some indirect clues that the number is substantial. If I can cut abandonment in half, sales should improve measurably.

Better PayPal integration should eliminate the handful of customers who never actually pay because the PayPal interface isn’t perfectly clear. Introducing Google Checkout will give customers another payment option, and allow me to jazz up my PPC ads with the Google Checkout logo, drawing more attention to them. Together, those changes might be good for another small boost.

Fixed international shipping will enable me to serve overseas customers again for the first time since last May. It’s a tiny fraction of my business, and one that I don’t actively pursue – exports are just too much work and expense. But it should be good for a few bucks, anyway.

Over the longer term, built-in SEO abilities should goose traffic by improving my natural search results. I don’t expect that to make any difference for this Xmas season, though.

Working against me…changing all those URLs will torpedo my natural search traffic in the short term. Natural search drives 15-20% of my traffic. The .htaccess redirect file that I mentioned earlier will keep some of that from drying up. But I do expect a dip until the new URLs get indexed, and my page ranks might suffer in the process. Eventually, the new search-engine friendly features should more than offset the changing URLs. But November and December are not “eventually”, they are now.

Oh. Speaking of exporting…I had my first sale to a military APO address last week. The postal clerk said the package was going to Iraq. And remember how I said that Canada is the most difficult country to deal with? This week a Canadian customer paid nearly $20 to have $60 worth of merchandise sent to him via UPS. Then, for some random reason, Customs assessed him $40 worth of taxes and duties. He ended up spending $60 to import $60 worth of merchandise that I bought from Canada in the first place! Somebody’s getting rich, and it ain’t me.