Curious Business

Who Are You?

2009-07-10T13:04:00.002-04:00

Who Are You?

A shibboleth about online retailing says to target a narrow market. I’ve been in business for four years now. What do sales imply about who my customers are?

Outstanding Products

DayClocks were my first real bestseller. I sold more than 200 of them before underpricing competitors killed them off. Retirees (old people) and vacation-home owners (rich people) were the primary customers for those. I still sell a few.

I got my first media break in November 2006, when American Way magazine mentioned the USB Fan. I ultimately sold 350 of them (plus a couple of hundred other USB gadgets) before that one petered out. Travelers and gadget geeks (the young and the rich) were the main customers.

I sold 270 Recycled Motherboard Christmas Trees after my other big media score with last year’s New York Times gift guide. I’m sure that I’ll unload the remaining 42 this year, and probably a few dozen more. It’s a cute, clever, inexpensive gift that appeals to anyone – but especially to those who like computers and electronics. It does have that recycled thing going on, so let’s mention the “green” crowd, too.

Business card holders in general were my wife’s idea. I haven’t found a good, steady line, but the Mini-Briefcase Business Card Holder was a breakout hit. I’ve moved 257 to date. People buy them for graduates and coworkers.

The Neverlate Alarm Clock could have become a major product had its lousy markup not made it impractical to sell. I only mention it because it served the same graduation demographic as the mini-briefcase.

Lighted caps, of course, blow everything else away. These things appeal to everyone. I wish I could find something else with such universal interest. Outdoorsmen – campers, hunters, fishermen, hikers, bicyclists – are all noteworthy customers for these.

Successful Lines

Successful product lines are at least as valuable as hit products. Even if no individual item is a breakout hit, the overall collection can rack up serious sales. Golf balls are easily the best of that lot; their audience is golfers (duh), but I’ve also made a few big sales to corporate/institutional customers. Switchables rise and fall in popularity – right now they’re down, and I'm worried that they are becoming too mainstream -- but they have done well historically. Their base is mostly female, and I suspect older (although I don’t have any objective reason to say that). Pursehooks were a flash in the pan; I think those appealed to younger, trendy (rich) women. Bird kites deserve honorable mention. Although I’ve carried them since Curio City opened, they just developed into a strong line this spring. Those sell mostly to people who need scarecrows, and the Dove of Peace sells to churches, of all things. Maybe I should add Christians to my list.

Another nice thing about themed product lines is the ease of adding new items with a built-in audience. I can simply clone an existing product, change the pictures, rewrite the description, and voila: a new product is born.

3D wooden puzzles are my latest test line. Even though these things are ubiquitous in museum shops and toy stores, I don’t see much online competition for the more complicated adult styles that will be my focus. And the markup is quite good, although freight is expensive. I’ve had them for several weeks now without any results…but I’m not advertising them, either. Hmm.

Best & Worst Categories

Apparel is my best overall category with a whopping 25% of total sales to date. That’s mostly caps, of course. Second-best is gadgets at 13.2%, then clocks at 12.3%. Each of those categories is driven by just one or two products (caps in apparel, clip-on cap lights – 942 sold! – and USB fans in gadgets, DayCocks in clocks.)

Biggest flops: Fine art tie-ins, wine accessories, expensive shopping bags and totes – I need to be more critical of my wife’s product advice. She’s the only avid consumer that I know, but she’s not quite the Curio City demographic. The “nice things” that appeal to her have usually not done very well for me. I don’t think that my customers are Yuppies.

I expected games to do better than they have. Any game that’s genuinely fun becomes popular and ubiquitous. Price competition in popular games is fierce – the deepest discounters always win. Only two exceptions stand out. I dropped a techie game called Deflexion after it was repackaged and rebranded, because the markup was poor and shipping was expensive. Fluxx is the only game I know of that’s truly fun, doesn’t have saturated distribution, and isn’t discounted to death…and I’ve only sold a few dozen copies over all these years. I keep the category alive mostly because I’m a gamer myself, and one of my earliest concepts for Curio City was a game/hobby store.

Other Trends

Out of more than 3,300 transactions, only 158 people have paid me to giftwrap their purchases. The $318 collected is only slightly more than I’ve spent on wrapping paper. Giftwrapping adds an extra click to the buying process (“choose your options”) and only sells when I’m already at my busiest and can least spare the time to do it. Logic says I ought to discontinue it. OTOH, it’s almost pure profit, it doesn’t take long, and it’s a nice value-add service for the few people who do buy it. Anyway, it indicates that my customers are not time-deprived workaholics.

I’ve carried a few marijuana-related products over the years as an outgrowth of Curio City's early concept as an online head shop. None of them ever sold well at full price. Whenever my newsletter introduces a new one a couple of subscribers cancel. This is another product category that I carry mostly out of personal fondness – I’d need to push smoking accessories harder and distance myself from tobacco to develop that market. For whatever reason, I don’t seem to have as many stoner customers as I'd expect.

Finally, I get a fair number of telephone orders from people who either won’t buy online or don’t understand how. Let’s call them technophobes.

So Who Are You?

My customers are:

Old people/retirees.
Young people/graduates.
Rich people.
“Green” people.
Office workers.
Technophiles.
Technophobes
Corporations and institutions.
Golfers.
Slightly more female than male.

My customers are usually not:

Children, or parents of small children.
Known to be of any particular ethnicity or special interest group.
Yuppies or workaholics.
Stoners
Poor.

In other words, my customers are all kinds of people, just as you’d expect from a general-interest store. So much for retail shibboleths. I’ve resisted specialization all my life, and my store reflects that.

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One thing’s for sure: You stopped buying LED caps entirely for several weeks. I’ve sold only a handful since I placed my huge reorder a month ago. A camping store is selling them online for the absurd price of $11.99. Panther says that they paid the same price I do, so they’re only making about $3 per cap. I’d fail quickly if I had to live with a 25% markup on my bestselling item. Currently this evil new competitor is out of stock on all but two colors…maybe that’s a clearance price, and they will go away. I hope so. They will soon own this product if they're going to accept token markup.

Just three multi-cap sales made this week among Curio City’s best so far this year. That's especially bizarre coming after last week’s truly terrible sales. If it weren’t for next week’s vacation shutdown, I’d have some hope for July after all.

Speaking of vacation, the Sunshop upgrade that I was hoping to accomplish next week has been postponed to August. That’s just as well; I completely forgot that I had to remit payroll taxes this month. My cash on hand is at a record low just as sales are about to go into stasis for a week. Not good. I should be able to get $200 for my old Inspiron on eBay. If you're on the market for a gently used, well-maintained laptop at a good price, send me email. I probably won't list it until around Aug. 1.

There will be no blog post next week. Try to amuse yourself without me.

The QuickBooks Crisis Ends. I Hope.

2009-07-03T11:55:00.002-04:00

You’d think that setting up my first new computer in four years would be fun, but business machines are so boring that I didn’t even take my new Vorlon out of the box for three days. Then I spent two days installing and customizing programs and utilities, leaving Wednesday open to deal with Quickbooks.

I started at 11:30 am. Basic installation was routine. Thanks to the warnings that I’d read, I knew enough to patch the program before converting my company file. By 12:05 pm I was ready to register – aw, CRAP! – by telephone. Even though I knew it was coming, enduring a sales pitch from India to obtain a six-digit code pissed me off -- can't computers do that nowadays? By 12:25 I was finally up and running. My 65 MB company file runs great on this shiny new computer. With the QB hurdle finally cleared and only a few minor details remaining, I moved my old Inspiron aside and put the Vorlon in its place of honor. I held a little ceremony. It was emotional.

Thursday morning the QB shortcut was missing from my desktop and from the Programs list. In fact, the QB executable was gone without a trace! The program folder was there. My company file was where QB wanted me to put it. But the program itself is nowhere to be found, not even in the recycle bin. WTF? How is it even possible? I reinstalled, and thankfully didn’t have to reactivate the program. The .exe survived the night and is running normally. Today QB asked me to reapply the big R7 patch, so if that’s what ate the .exe last time I might not be out of the woods yet.

I tried to set up the online banking feature that everyone was complaining about. It seemed to work once, but crapped out on me this morning. Maybe I just don't understand how it's supposed to work. It doesn't matter.

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I’ve been using Kosh long enough to pronounce a verdict on the Dell Vostro 1520. The glossy plastic lid is a fingerprint magnet, although it looks sleek when it’s clean. The onboard speakers are weak and tinny compared to my Inspiron’s robust sound. The screen is very bright and has great contrast, but (like most LCDs these days) it leaks backlight around the edges, and both of the bottom corners are shadowy. Worst of all, it doesn’t have any rear USB ports, and the side ports are near the front of the machine – convenient for changing out USB devices, but anything plugged in permanently (such as the cord for my wireless mouse receiver) is inevitably in the way. My machine is supposed to have 3 GB of RAM. Windows system info shows 2.99 GB of memory. Yet a little freeware system monitor that I installed is only reporting 2 gig. I choose to fault the utility. Functionally, the Vorlon is a great little machine so far. The real test will be how well it runs Fall from Heaven 2.

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I finally made good on my repeated threats to shut down Yahoo Search Marketing. Since July is doomed anyway, why watch the remaining $78 in my account slowly dribble away? I can always reactivate my campaigns when consumers start consuming again…maybe in the fall.

Readers who don’t care about numbers should skip down to the next section break.

I’ve spent $682.35 on YSM year-to-date. That bought 4716 clicks (14.5 cents/click) and 42 conversions ($16.25 per conversion). I’d need a programmer to implement Yahoo’s sales tracking code to know what those conversions were worth; I arbitrarily set their value at $20 – the price of one lighted cap -- which would be $840 in revenue. Am I really paying $16.25 for $20 worth of business? No, the numbers are more slippery than that. A “conversion” means one advertised item sold (thus a conversion can bring along piggyback dollars). Even conversion tracking itself is inexact – for example, Yahoo reports something called “assists”, which seem to be an ill-defined way of inflating their conversion count. Buyers who have cookies turned off don’t register at all. Even if each Yahoo conversion is really worth my average sale (currently $42, but falling rapidly), that’s still just $1,764 in gross sales. With advertising budgeted at 9% of gross, the $682.35 that I spent would need to return somewhere around $7,000 (I don’t know how to calculate that, how embarrassing) to be cost-effective.

It looks to me like I spent 39% of my Yahoo sales revenue on Yahoo advertising, which is to say that each Yahoo ad dollar brought in $1.61 in sales (is that right?). So the roughly $100 per month that I save on YSM should only reduce sales by $161/month.

I might improve this by completely revamping my ad campaigns, or possibly by cutting out all keywords except a dozen or so proven winners. Perhaps I’ll set myself a goal: By September, I want to reopen YSM with a stripped down, cost-effective campaign.

For comparison’s sake, here are my equivalent Google numbers: $1,718.68 bought 152 conversions, for $11.31 per conversion. If those 152 conversions were worth $42 each (the number I awarded to Yahoo), then I spent 27% of gross to drive $6,384 in sales. The same warnings about imprecision apply – if my overall advertising percentage was really that high I’d have gone under years ago.

No matter how you slice and dice it, Google ads are a better investment. I’m going to nudge my Google budget up by the $100 that I’m saving on Yahoo. Theoretically, spending that $100 on Google should drive $173 in sales, or $12 more than if I’d spent it at Yahoo. Whee!

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Traffic and sales are both plummeting now. By the end of June I was down to barely 100 visits per day – 50% below where I should be. This first week of July was even worse. Remember how I said that last week was the worst of 2009? Well, this week is going to be the worst since 2007. My next paycheck will be the smallest I’ve seen in two years. It’s breathtaking how rapidly things fell apart.

My next big project will be figuring out how to use Twitter and Facebook for marketing. Yes, I’m getting desperate. The gods know I have enough time on my hands these days.

June Wrap-up: Worse and Worser

2009-06-26T12:07:00.002-04:00

Another month gone by, another year half-gone. Thoughts of Christmas intrude already. They say the Great Recession will be lifting by then.

In June 2008, two extraordinary sales brought in $2,400 above and beyond ordinary daily business. This month, then, “breaks even” at $2,400 below LY if you toss out the outlier sales. A smaller shortfall would count as a gain. I can therefore kid myself that the $2,100 shortfall is a $300 increase over LY, which is not too shabby.

Of course, that’s sophistry. The fact is that this June came in $2,100 below LY and killed my YTD numbers. The week now ending is on track to be the worst of 2009. I’m paying more to maintain the same level of traffic, while both conversions and the average sale are down. I shudder to even compile these numbers, but here we go:

Total income: -41.6%
Total COGS: -45.5%
Payroll: +6.5%
Net Income (Profit): -83%

The YTD numbers:

Total income: +10.5%
Total COGS: +11.9%
Payroll: +42.9%
Net Income (Profit): -73.6%

Payroll is rising at the expense of profit – more money in my pocket each week means a smaller payoff at the end of the year. That’s unfavorable from a tax standpoint (I pay Medicare and Social Security taxes on payroll, not on corporate distributions), but I need the income up front. Anne’s been out of work for almost five months now.

Can I take consolation in the black YTD numbers? Not so fast. July is preparing to smack me down again. This year’s summer vacation comes a month earlier than usual. I have a $950 computer expense to absorb and I’m planning to pay my new developer to perform his first Sunshop upgrade. With a week’s less business and well over $1,000 in new expenses, July will be an accounting Armageddon.

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In light of the above this tidbit is just nutty: I cut my handling fee from 65 cents to 60. I obviously need every penny I can get, and customers won’t notice a nickel either way. But the May rate increase pushed the total price of one cap shipped via first class mail from $23.00 to $23.05. Now I’m back at $23 even and my inner purist is assuaged.

Far from making any headway on my inventory-reduction goal, I actually spent all of my OTB and increased my stock position last month. Chalk that up as another failure for June. (shrug) I needed some reorders, and a free freight offer persuaded me to finally test these wooden puzzles. I’d love to find a successful new product line on a par with Switchables, golf balls, or bird kites. Now if only somebody would oblige me by actually buying a puzzle, I'd feel better about that decision. At least the month ended with my open-to-buy $10 in the black. I hate red ink.

My new Vorlon is en route to arrive early next week. Moving in to a new computer is always fun. QuickBooks is the only major headache I’m expecting.

The QuickBooks Crisis II

2009-06-19T11:21:00.001-04:00

Prolonged contemplation kept leading me back to three thoughts: Whether I like it or not, QuickBooks is one of the key tools I need to run my business, and it will no longer run on my old hardware. As an Internet business, I need to keep my technology current. And I have a budget for “technology” that I would not have completely drained otherwise (although I am planning to pay for a Sunshop version upgrade in a few weeks).

Dell had a tempting sale on their Vostro line of business laptops (which, as a Babylon 5 fan, I simply must call the “Vorlon”). Vorlons won praise in my source for all things techy, the Octopus Overlords computing forum. The deal I was looking at expired within 48 hours. So I jumped. Yes, I bought a new computer.

On one hand, this is a bad development for all of the reasons that I laid out last week. OTOH, I haven’t had a new computer since 2005, and I’m really looking forward to moving into my new souped-up Vorlon – I upgraded the CPU from 2.1 to 2.4 GHz, added a 256 MB Nvidia video card for gaming, and upgraded to a “wide view” (higher resolution) screen. Obviously, I have to name it Kosh.

Kosh is not due to land until around July 1. I hope this will keep me current for another four years:

Vostro 1520, Genuine Windows Vista® Business Bonus-Windows XP Professional downgrade Unit Price $1,143.00 (Sale price $948, delivered)

Operating System Genuine Windows Vista® Business Bonus-Windows XP Professional downgrade
Processor Intel® Core™ 2 Duo P8600 (2.4GHz, 3MB L2 Cache, 1066MHz FSB)
Memory 4GB Shared Dual Channel DDR2 SDRAM at 800MHz, 2 DIMM
Video Card NVIDIA® GeForce™ 9300M GS 256MB
Hard Drive 250GB 7200RPM SATA Hard Drive with Free Fall Sensor
LCDs 15.4" Premium WXGA+ Anti-Glare Display (Wide View)
Optical Drives 8X DVD+/-RW with double-layer DVD+/-R write capability, Roxio and Cyberlink PowerDVD™ DX 8.1
Wireless Cards Dell Wireless™ 1397 802.11b/g Mini Card
Primary Battery 6-cell Lithium Ion Primary Battery

ACCESSORIES
SanDisk 8GB Hi-Speed USB Cruzer Micro Drive with U3 technology

The QuickBooks Crisis

2009-06-12T13:07:00.003-04:00

I reluctantly decided to install the seemingly unnecessary copy of QuickBooks Pro 2009 that I was tricked into buying. When I opened the package I learned that the minimum supported CPU is a Pentium 4 at 2 GHz (a tidbit that I really ought to have noticed when I was researching the software, but never mind). I have a Pentium 4 at 1.86 GHZ. Ordinarily I would figure that 1.86 is close enough to 2.0 to squeak by, but QB is a notorious resource pig. Suppose I go through the install and then find that I can’t run the program at all, or that it slows my computer to uselessness? Some of the reviews warn that one cannot revert to 2006 if the QB 2009 install goes badly. Inserting that install disk is an irreversible act that I dare not risk.

So it seems that I have two choices. I can set aside the $100 program that I bought and continue running my unsupported version until something else compels me to buy a new machine. Or I can lay out $900 for a new laptop now. Do I really need a new computer?

On one hand, it has been four years. As an internet business I do need to keep up with the tech curve. Even if my Inspiron isn’t obsolete yet, it is getting there. I do have a technology budget that probably would have gone mostly for SEO or website upgrades, had I spent it at all. And yesterday I found a sweet deal on a Dell Vostro that, with a couple of upgrades to make it acceptable for gaming, would cost just under $900 delivered. Compared to the $1258 that I paid for my old Inspiron, that's a bargain.

OTOH, spending $900 on a new machine so that I can run a $100 piece of bloatware is ridiculous. The outlay would come directly off my bottom line and reduce my year-end bonus, so even though it's coming out of Kraken Enterprises's pocket, I ultimately end up paying for it personally (although with untaxed dollars, I think). The Inspiron still works fine for everything except QB, and migrating to new hardware would entail recreating or porting over four years worth of settings and customized programs. The new machine comes with a Windows XP downgrade, but that might just be a runtime environment within Vista – might I have to “upgrade” such hoary mainstays as MS Office 2000? Once I install QB 2009 on a new machine, how tricky would it be to import and convert my QB 2006 company file from the old machine? Might I end up right where I started, with an unusable copy of QB 2009?

Crap. I don’t know what to do. That Vostro deal expires today and I am unlikely to find a better value without considerable shopping. One way or the other, it looks like my hand will be forced again, and within the next few hours.

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A nice little sales surge late last week finally convinced me to place the full $1,300 cap reorder to get the best pricing and maintain my margin. So much for reducing inventory; my OTB is back in the red, and I still have orders wishlisted. And, as you might expect, sales quickly died again as soon as I placed that big honking order. It looks like Fathers Day is going to be a big disappointment this year.

May's national retail sales actually increased over last year, but that was entirely in automobile and gasoline sales. Real retail sales shrank again. That's some cold comfort for my own lackluster May.

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Constant Contact's benchmarks for retailer mailings are 8.0% bounce rate (bad addresses or blocked), 17.9% open rate, and 3.2% click rate. The corresponding numbers from my last mailing are 0.7% bounce, 32% open, and 32.2% clicks. So I guess my results are actually a lot better than I had thought. It’s been over a year since I last purged my list of non-responsive addresses…I could drive my percentages much higher if I did that again. Of course, that wouldn’t change the number of clicks that convert to sales, which is all that matters.

Whining, Grumbling, and Griping

2009-06-05T10:51:00.003-04:00

My inventory reduction effort is not making any headway yet. Only golf balls and kites are selling with any regularity now. Even my old standby lighted caps are becalmed. I’m nervous about those. Panther Vision said that they’re slow, too, but that their business usually recovers in June. Let’s hope so; no other product is in the same league. Oh well, the newspaper says that retail sales fell more than expected in May. Maybe the depression is finally catching up with me. I certainly did not see the Fathers Day bounce that I was expecting this week; June is off to a very poor start.

Incidentally, I’ve carried those bird kites since I opened Curio City, and this is the first season that they’ve sold in any quantity. My pay-per-click bids must have finally reached the critical threshold.

The point of all this is that every time my open-to-buy recharges, I have to spend it on golf balls, kites, or caps. I could easily drop $2,000 today to replace merchandise with a decent sales history, and I have 20 catalogs with wishlisted new stuff stacked up...but my OTB is a whopping $679 this morning. I need to reorder $1,440 worth of caps to get optimum pricing, and I’m trying to reduce inventory, remember? Going $800 into the red is not going to help.

Maybe I’ll order fewer caps and swallow the higher unit prices. Maybe I’ll bring in one new product line today. These wooden puzzles that I’ve been eying for years have a free freight special ending today, and their minimum order is only $100.

Advertising costs (meaning PPC bids) keep creeping up faster than sales are growing. Google routinely runs $10-12 per day, and Yahoo adds another $3-4. The temptation to kill Yahoo Search Marketing grows stronger every time they hit my credit card. I don’t think that the $100 per month I’m spending there is driving anywhere near the $1,100 worth of sales that would justify it. I hate to do anything that I know will reduce traffic and sales. But the next time my account runs dry, I’m going to mothball it for a month and see what happens. What better time to try this than the summer doldrums?

I could shut down Constant Contact, whom I pay $20 a month for the capability to send out newsletters. The past three newsletters brought in no known sales. Maybe I suck at newsletters…but it does seem like a waste of money and time. I just sent out 281 emails this week. The 86 that were opened (30%) generated 29 clicks (34%, or barely 10% of the total distribution). AFAIK no sales resulted. Those are very typical numbers.

QuickBooks Pro 2009 is sitting in front of me right now, mocking me. Apparently I foiled Intuit’s evil plan by turning off the auto-updater; my copy of QB 2006 is not visibly crippled. I don’t want to go through the upgrade hassle that I wrote about last week, but I do own this $95 piece of bloatware now. I suppose I must hold my nose and install it next week. I'll soon see just how justified all the griping was.

We haven’t had a new reason to hate UPS for a few weeks, so here’s one: my application for the UPS-affiliated Visa card was rejected. It’s hardly surprising, given that my personal income is about 1/3 of the federal poverty line. But I think my main mistake was applying before my Advanta card was actually closed. Two of the three reasons given involved having too much available credit for my income. OK, I know that UPS really had nothing to do with issuing credit cards…I just thought they were overdue for a little more hatred. Maybe they’ll at least stop soliciting me every four weeks now.

I ought to have a Mastercard or Visa, but nobody’s raining down offers in this tight-credit economy. I could probably get the crappy PayPal card (pays off in “rewards vouchers” that are only good on PayPal purchases), or maybe one from Citizens Bank (anemic rewards program and no online application – I’d have to go inside a bank and talk to a human? No thanks!). No, for now I think I’ll lean on my business Amex and use my personal Chase Mastercard (cash back, yay!) where Amex isn’t accepted. Eventually the credit market will recover and I can get a decent card. Who knows? Maybe Advanta will even come back someday.

May Stumbles

2009-05-29T10:29:00.003-04:00

It is unreal how fast time passes when you get old…not that I’m often moved to seize the day. I spent more time this week working on my garden, cleaning gutters, mowing the lawn, and puttering around the house…and suddenly it’s Friday again. I will knuckle down next week, when Fathers Day season starts.

May’s numbers are at the bottom of this post.

Advanta lowered the boom, as I knew they would do. My Mastercard is cut off from new borrowing as of tomorrow, and I don’t have a replacement for it yet. I just reactivated my personal Chase card in QuickBooks.

Speaking of QuickBooks, Intuit also lowered a boom that I wasn’t expecting. They only support QB for three years, so my QB 2006 goes obsolete on the same day that my credit card dies. Intuit will not only stop supporting my copy, but will cripple some of its features (payroll being the only one that affects me).

OK, fine. I understand that they have to limit backwards support and compel new sales. When I went to buy a copy, though, I was surprised to see that over 200 reviews on Amazon rated it just two stars.

Here’s what Intuit’s customers hate most about their product:

1. Registering the product requires a phone call. You have to spend 15 minutes giving an Indian call center proprietary company information and listening to multiple sales pitches before you get your registration code. Online registration is no longer supported.

2. The product was patched seven times (so far), requiring about 200 MB of downloads, restarts, etc. If you open your company file before you complete this process, you might destroy your company file.

3. Once you open your company file in 2009, you can no longer revert to 2006. Several users complained that their company file was damaged during conversion and could not be opened anyway.

4. If you have trouble with any of the preceding, Intuit tries to charge you for tech support. There was a lengthy explanation about Microsoft .NET, which I didn't understand. Oh, and a couple people said they had to reinstall Firefox.

5. Intuit added numerous nag screens, advertising popups, and sales menus. You can disable them, but they come back every time you restart the program. (This was true in 2006, too, until a patch finally fixed that toggle. It is extremely aggravating when a program that you've already paid for keeps spamming you with ads).

6. Intuit added about a dozen new features that few users care about (I sure don't). The bloated program brings older computers to their knees -- it can take half an hour just to load up and open the company file. Several users complained that they had to replace their computers. (Mine is four years old and QB 2006 already runs like a dog, so that's of major concern).

7. Intuit weakened some older features, such as online banking and automatic credit card reconciliation. (I don't use these functions myself). They also changed some previously-included features to paid add-ons. There were a LOT of complaints about payroll, but I don't know if they were talking about the paid payroll service or the built-in paycheck program that I use; I certainly do need the rudimentary payroll functionality that I already have.

8. The interface is more cluttered and the program is significantly harder to use in general.

There are no practical alternatives to playing Intuit’s "upgrade" game, which is obviously why they can get away with it. Eight major patches have reportedly fixed the most egregious bugs, so the new version should not be substantially worse than the old one. It’ll just run like crap and be harder to use. Yesterday I coughed up $100 for this unwanted piece of bloatware.

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May was a lousy month, the weakest of 2009. Costs (mainly advertising and payroll, but really across the board) are up while revenue is flat. You can see that I'm paying myself more in salary at the expense of my year-end profit.

Total income: +1.2%
Total COGS: +31.5% (ouch)
Payroll: +84.6
Net Income (Profit): -152.3%

The YTD numbers:

Total income: +26.7%
Total COGS: +30.9%
Payroll: +50.8%
Net Income (Profit): -77.3%

June will surely be worse, because June 2008 included one sale for nearly $2,000 worth of lighted caps and another for over $400 worth of Switchables. Unless lightning strikes twice again this year, the YTD numbers are going to plunge next month.

Take away my credit card, cripple my accounting software, and give me an impossible sales plan. It’s going to be an ugly summer.

SCORE One

2009-05-22T12:04:00.002-04:00

I took a lot of time off this week to put in my squash and tomato plants. Next week will be another light schedule as I finish planting my peppers, beans, and herbs. I’m knocking off early today to go see the Star Trek movie. This “being your own boss” thing would be really nice if it paid better.

Corresponding with my first SCORE exec was helpful. His feedback was much more in-depth than I’d expected. The takeaway points are:

• My conversion rate is indeed pretty good, so I should focus on increasing site visits (as I surmised).

• The most cost-effective way to do that is probably to boost organic traffic through search-engine optimization (which I’d been leaning toward doing; I know that my organic search results mostly suck).

• An alternative to SEO would be a narrower focus. Identify what’s selling now, do more of that, and use social media and internet PR to push a consistent, targeted image. This butts against my general-interest nature. I wonder if I can turn that liability into an asset and specialize in being a generalist – run with “you never know what you’re going to find in Curio City”. It’s a contrarian approach to online retail, that’s for sure.

• Having a merchandise turn rate below 2, when I should be flipping things between 4 and 6 times per year, locks up too many dollars in nonperforming stock. Cutting my inventory by half or two-thirds would free up a lot of money that I could invest in SEO. (This had not occurred to me). This should be my primary immediate challenge. The piles of boxes in the cellar have been gradually shrinking, but I need to be more deliberate about it.

• The way that I calculate my open-to-buy is largely responsible for my chronic overstock. Although QuickBooks handles cost-of-goods-sold (COGS) properly (deducting the cost at the time of sale), my Excel spreadsheet regards my merchandise orders as an expense, without regard for the assets being held. While that’s useful for managing cashflow, it’s not a valid accounting procedure and it distorts both COGS and open to buy.

• There is no easy way to pick and price SEO companies, so extensive research is necessary before hiring anybody.

• As for long-term financing…anyone who loans me money is going to expect a personal guarantee, which ultimately puts my house at risk. Being a corporation doesn’t get me around that. If I think there’s any chance that I might not be able to pay back a loan, I should not borrow in the first place. In order to obtain a loan, I need to prepare a conventional business plan.

Altogether I have a better sense of direction than I had going into this. I’m still going to run my situation past a couple more SCORE people to see what they have to say.

The 150

2009-05-15T11:17:00.003-04:00

Remember how I once said that Curio City is too small to fail? Well, here’s an angle I hadn’t considered. Advanta, the number one credit card issuer for small businesses, is reportedly cutting off all of their million customers effective June 10 (they haven’t notified me yet). I use my Advanta Mastercard for all of my merchandise purchases -- $26,000 last year – because I like getting the 1% cash back. Now I’m left with only my Amex Platinum Business card. I consider myself lucky – a lot of businesses my size lack any fallback.

I broke down and applied for the Visa business card that UPS keeps pitching me, month after month, but I’m skeptical that I’ll be approved in today’s tight credit market…especially with 1 million other small business owners suddenly looking for credit. Carrying a UPS-branded card will be bittersweet anyway, given my feelings about that company (see the Reasons to Hate UPS tag). But feelings have no place in finance.

Incidentally, remember how I said last week that I could theoretically finance my modest expansion plans with credit card advances? Uh, not any more. Losing Advanta cut my available credit by more than half.

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

I finally sifted through a lot of SCORE member biographies and found four whose backgrounds might be helpful. I’m going to approach the first of them this afternoon. I don’t know why I have such a mental block about involving outsiders. I am not bound by their advice.

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

Four years. That’s how long it took to reach Google AdSense’s $100 payout threshold. My check arrived last week. Today the repair estimate for my nine-year-old wristwatch came in at a cool $100. Thanks for clicking on those ads, readers. Now let’s see if we can reach the next $100 in less than four years. You know what to do…clickety click click!

Google changed their AdSense placement routines recently so that readers’ browsing habits now determine the ads that you see on my blog. When I look at Curious Business on my desktop gaming machine, I see much more interesting ads than the boring banky things that appear on my work laptop. That ought to generate a lot more clicks.

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

My wife, who is learning about using blogs and social networks for business, tells me that I don’t post often enough. Now, I think that once a week is plenty. It takes me that long to polish a post, and after writing 150 posts (as of today!) I don’t have much more to say. So she suggests that I start a second blog aimed more at casual readers than business people. I guess I’d be spewing my endlessly fascinating news commentary, economy observations, and political opinions. Or something like that. The secret agenda, of course, would be pimping my products and my store.

I suppose I could give it a try. It’s not like it will cost me anything, and it might expand my little online empire. She’s trying to convince me to revisit Twitter, too, because all of these things are supposed to reinforce one another and ultimately feed me customers. I don’t know how that’s supposed to work; it seems like I’d be spending an awful lot of time writing about work instead of actually, you know, working.

Not that I’m doing a whole lot of that. May is not going to be one for the record books. Sales are slow and there’s no money to spend, so I don’t have a whole lot to do.

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

Dayclocks did start selling again after I marked them down to what looks like their new prevailing price. So I’ll keep carrying and advertising them despite the reduced markup...at least for awhile. Who knows, maybe they’ll go back up to their rightful retail price eventually.

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

OK, so that's all I've got for post #150. Sad, huh?

For SCORE, And Several Years to Go (Part Two)

2009-05-08T15:25:00.003-04:00

I face three major challenges:

1. Increasing business dramatically in a short time, as discussed last week; and
2. Dealing with the logistics of succeeding at goal 1; and
3. Absorbing substantial new expenses that will change my cost structure.

How Do I Get There?

Here’s where I need informed advice. I have a decent sense of what I need to do to grow and what problems growth will bring. But I don’t know how to approach them – in what order, and at what expense?

Business is all about money. A wad of cash would fuel rapid growth. I let Curio City keep 25% of its annual profit each January; that should bring about $2,000 this year. Ordinarily I like to put that into new merchandise. Two charge cards have $50,000 in combined credit. I need to keep $10,000 of that liquid for operations, so I could actually spend $40,000 of it. That makes about $42,000 that I could access easily early next year. I get new credit card offers all the time, too, so I could easily raise more money that way. However, every instinct tells me that using credit card advances is a bad idea. The fine print on credit card agreements usually imposes personal liability for corporate debts – is that enforceable?

So let’s say that I really have $0 beyond operating cash. Two obvious questions arise.

1. How much money do I need to achieve the sales increase that I specified last week?

2. How can I get that money without risking my house or giving up ownership? Is that even possible, or am I stuck with the bootstrap approach that has brought me this far?

I can show a lender a profitable and growing business, but its only tangible asset is its inventory. Will a banker accept merchandise as collateral? My only personal assets are my house, my Fidelity IRA, and my Roth IRA. How can I borrow money without risking my house? My credit card contracts probably impose personal liability for corporate debts – how enforceable is that? My retirement accounts lost so much money in the crash that even liquidating them probably wouldn’t finance this expansion…which I obviously don’t want to do anyway.

Let’s pretend that I’ve somehow conjured up $50,000 or $100,000 on terms that are acceptable to me. How do I put it to work quickly and effectively?

1. Spend it on technology. Hire a web design firm to give my site a complete makeover. Graduate from Sunshop to a custom e-commerce engine. I currently spend very little on technology upgrades, relying mainly upon whatever improvements Turnkey makes to Sunshop. My budget just covers Sunshop version upgrades and the rare non-website expense (such as the version of QuickBooks that I’m about to buy). Based on past spending, $200,000 in planned sales suggests a $6,600 budget for technology. I’d probably need 2-3 times that much to abandon Sunshop for a complete redesign on custom software – let’s guess $15,000.

2. Spend it on online marketing. Hire a search engine optimization company to improve my organic search results. I might be able to squeeze a little more business out of pay-per-click advertising, but I think I’ve taken that about as far as it can go without becoming too expensive. How much should SEO cost? I’ve had offers ranging from $500 to optimize a few product pages up to many thousands of dollars for a complete site overhaul with ongoing maintenance. Staying toward the lower end is probably adequate for the modest sales boost that I’m seeking – remember that overshooting my goal would create all kinds of new hardships. Let’s guess $5,000.

3. Spend it on offline advertising. This is way outside my competence. I’d need to develop a professional-looking ad for a particular product, place it where it would generate at least ten times its own cost in new sales, and do that on a regular, predictable basis. I would have to outsource this whole process. Right now advertising is budgeted at 9% of gross sales. To sell $200,000 worth of stuff, do I need $18,000 (minus my current $4,000 expenditure) for a consultant and ad buys, or will that cost more than I expect? Let’s guess $20,000.

4. Spend it on inventory. I often say that “I cannot sell what I do not have.” If conversions remain steady and traffic grows as planned, I run into a storage problem. Given my low turn rate, additional merchandise might be the least efficient place to spend money. But bringing in new items is the easiest (and most fun) thing to accomplish. I’ve already got a stack of 15-20 catalogs with items that I know I could sell. How much money should I spend on inventory? If I want to sell $200,000 worth of stuff, and my turn rate is 1.5, then I need $133,333 worth of inventory, right? I currently have $42,400 worth of stuff in my cellar. That suggests that I need to spend about $45,000 to buy an additional $91,000 worth of stuff. Physical space is the biggest problem here. The only way I can double or triple the amount of stuff stuffed into my cellar is if my wife throws away her mounds of trash. But she won’t even throw away 2-3 boxes to make room for our storm windows. Renting off-site storage raises both cost and logistic problems.

Those rough estimates add up to $85,000. Let’s call it a cool $100,000 just for comfort.

Logistics

If sales suddenly tripled, would my website withstand the traffic? Could I physically fill the orders? Routinely processing and shipping 12 orders per day would take some time and attention away from my higher management functions. But I could physically handle it 10 months out of the year. Christmas is a different story. During last December’s big surge I hit 49 sales in one day. For a couple of weeks I was routinely making 20 sales per day. What happens if my peak numbers triple, too? I would smother under 60-150 orders a day.

This brings us back to a subject that I’ve written about again and again (check the posts tagged “planning” and “operations”): Kicking Curio City out of the house. It would be suicidal to crank up sales before I get a grip on this old problem. What is the best way to move shipping and receiving out of my house for the six weeks that I can’t handle alone? Should I rent a storage facility and hire some part-time kid to fill orders for a few weeks out of the year? Or should I permanently outsource fulfillment to a professional fulfillment firm, even though I don’t need that level of service 10 months out of the year? My warehouse and fulfillment costs are zero right now. It would be an enormous new expense. How much would it cost?

I’m no closer to answering these questions than I did the last half dozen times I posed them. Everything that came before is easy compared to this. Until I can figure out how I’m going to physically handle it, I don’t want a big sales increase. And so we reach point #3, "Absorbing substantial new expenses that will change my cost structure." I don't know what those expenses are, much less how much they will cost or how I will pay them. I only suspect that my business has to change fundamentally if I'm going to triple its size.

This is where I throw up my hands. As usual, I am stuck.

For SCORE, And Several Years to Go (Part One)

2009-05-01T12:08:00.004-04:00

Last September I set some ambitious sales goals that would finally make Curio City pay me a living salary. Then the economy fell off a cliff. Although running 33% ahead of LY is pretty good under the circumstances, it’s less than half of the increase that I had originally budgeted for 2009.

I need a plan to make up for lost time when the depression ends. So it’s time to explore something that’s been back-burnered for literally years: Finding a mentor from the Senior Corps of Retired Executives (SCORE). I hope that I can persuade an informed, technologically-literate retailer to read enough of this blog to understand who I am, what my company is about, and what my goals are…starting with this post.

Why SCORE?

I don’t have a boss. I don’t have a partner. I don’t have any coworkers or employees. I’m not into social networking. I don’t belong to any professional associations. I work in a complete vacuum. That suits me fine for day-to-day operations and short-term planning. I’m a loner, and I like it that way.

However, I want a growth plan ready if the economy starts to recover. I need expert advice on how much money to borrow, where to borrow it, and how to best spend it. It’s a bet-the-company proposition.

SCORE lets me ask for informed opinions without obligation. Finding someone with a relevant background will be difficult, but I can approach as many people as I care to try.

Incidentally, Dear Reader, if you have ideas of your own, leave a comment or send me email. There’s no reason insight has to come from a SCORE member.

Meta-Goals

1. To earn a living wage. My salary plus profit this year should approach $19,000. I want to earn $60,000 per year by 2012. In order to triple my 2009 income, I’ll need to triple my 2009 sales, from this year’s anticipated $67,000 to about $200,000 by 2012. I will need to average 12 sales per day by then.

2. To retain full ownership. Ideally I will remain a one-man, home-based enterprise (contracting for marketing and tech support, and eventually outsourcing order fulfillment). Ideally, I can avoid hiring employees or leasing commercial space. I will not cede any ownership to investors.

3. To sell Curio City Online and retire by age 65. My exit strategy is to retire 10 years after reaching goal #1, in 2022. That means either selling my business or hiring a manager to run it while I live off the profits. Since our meager retirement savings were devastated in the crash, and we’re not putting anything aside while Anne is unemployed, Curio City is probably our only hope for retiring.

The actual numbers needed to triple today’s business are not staggering. I don’t need hundreds of sales per day or millions of dollars a year. Let me be explicit about this: I do not want to grow too much too quickly. I value my time and my sanity more than I value money. I think that I can handle a $200,000 business by myself without destroying my quality of life. Overshooting that goal would overwhelm me. Perhaps I’ll want to grow large someday, but definitely not now.

How I Can Reach Those Goals

Achieving major sales increases will be the easy part. There are three ways to approach that:

1. Increasing overall traffic. I now rely exclusively on search engine traffic: pay-per-click advertising at Google and Yahoo drives paid search results, and my own amateur efforts at search engine optimization (SEO) drive natural search. I should be able to triple traffic by (1) hiring a marketer to strategically place some professionally crafted advertisements; and (2) hiring a SEO professional to raise my profile for maybe half a dozen key products. How do I actually choose these experts, and how much should they cost?

2. Increasing conversions. To increase the percentage of shoppers who buy something, I could offer more and better things to buy (invest in inventory), and improve my store’s design and my website’s performance (invest in technology). Free shipping would certainly boost conversions, but how can I possibly afford to do that? You need to ship lots of packages before you can get deals from the carriers. Finally, I could subscribe to one of those seals (like McAfee Hacker-Proof or whatever it’s called) to enhance the perception of security. They claim to deliver an average 14% sales increase, although I’d expect less than that because my GoDaddy seal already gives me some benefit.

3. Increasing the average sale. This would mean either selling more things to each customer, or selling more expensive things (or fewer cheap things). Some of the same tricks that convince people to buy will also encourage them to buy more. Free shipping on purchases over $x is one obvious idea. I could also stop carrying things under $10; cheaper items are often more trouble than they’re worth.

According to Google Analytics, Curio City received 58,551 visits (4,875 per month or 160 per day) between April 2008 and April 2009. 1,237 transactions produced a conversion rate of 2.13%. The average sale was $47.96. I think that both the conversion rate and the average sale are pretty good by ordinary gift shop benchmarks. So I should emphasize increasing overall traffic without degrading its quality (by poorly targeted mass advertising, for example), and thereby lowering my conversion rate and average sale.

Let’s stop there for this week. Next week: Challenges and logistics.

April Wrap-Up

2009-04-24T10:12:00.004-04:00

First, I apologize to my legions of readers for skipping last week’s post. I’m picking away at a complicated, long-range planning topic that’s not ready for prime time. Last week I had nothing else worth saying, and so I said nothing. What a radical concept for a blogger! This week you at least get the month-end wrap-up (yes, I know that there’s nearly a week left in April, but my accounting month ends on the 25th). And so, with a day and a half left in the accounting month, we celebrate another highly successful month.

Total income: +33%
Total COGS: +39.2%
Payroll: +143.8% (yay me!)
Net Income (Profit): -171.3% (ouch!)

The bottom line this April came in $246 below last year because there was an extra payday this year. My year-to-date bottom line is +38% on top-line sales of +33.5%.

My almighty spreadsheet says that Curio City can afford to raise payroll from 18.25 to 18.75% of gross. It’s only $324 per year, but it’s a nice step closer to my ultimate goal of 20%. For reference, payroll started out at 10% and had only grown to 11% by June 2007.

May’s numbers are considerably more challenging. I’ll feel good about the rest of this year if I can bag May’s sales plan.

I shall endeavor to wrap up my Big Post in time for next Friday. If I cannot, maybe I’ll break it down into more manageable chunks.

Too Small to Fail

2009-04-10T13:32:00.002-04:00

You see endless reports about banks and insurance companies and multinational conglomerates getting free money because they are, so they tell us, "too big to fail". This might be the first time you’ve read about a company that’s too small to fail. There are businesses in America that scamper unnoticed among the falling dinosaurs, deftly trying to avoid being crushed.

With no debt, no rent, no employees, no insurance, and no utility bills, there are no fixed costs that can put me out of business. Even if sales seized up completely, I could mothball Curio City indefinitely.

Fixed costs include $565 for my Mass. minimum corporate excise tax and annual registration fee. I’d need to pay my CPA $550 to file the tax returns that are too complicated for mere mortals. To keep my address, I’d pay the UPS Store $150. And to keep my phone number, I’d have to pay Verizon $12 per month (the price for an extra phone on my wife’s cell plan). Another $10 per month would keep my credit card processor active. That’s $1,620 per year to continue existing as a business, with most of it going to governments in exchange for nothing. $135 per month is not enough to kill off Kraken Enterprises.

If I want to keep alive the option to resume business at a moment’s notice, I’d also need to add $75 for web hosting and $30 for my security certificate. For $95 Turnkey would keep my Sunshop support current. Renewing my two core URLs would be another $20.

And that’s really about all there is. All of my other costs scale with sales. Kraken Enterprises can only go out of business if I decide that it’s not worth continuing. I might do that if I ever took a conventional full-time job, but the odds that anybody would ever hire me for anything are tiny.

After nearly five years Curio City still doesn’t support me. By that measure it should have failed long ago. Robust monthly sales reports encourage me to stick with it, especially now that the economy appears to be bottoming out. I might change my mind if my wife is still unemployed when her benefits run out, because those unemployment checks are our primary source of income now. Without that base, I don't think I can continue working for $2.50 an hour.

*******

My web host brushed off my last, vague service complaint because the server log showed no errors, but the site is chronically slow and sporadically unavailable. I think I’m going to have to move to a new host. That will be both disruptive and expensive. The new host will undoubtedly cost more; I’ll have to pay my developer to perform the install; configuring my GoDaddy SSL certificate will be a headache (even the annual renewal is a pain in the ass); and a new IP address harms one's search engine rankings. But over the long haul, it’s probably necessary.

Business roared out of the gate with eight sales last Sunday. Things worsened as the week went on – I’ve only had two sales in the past three days – but I did have another inquiry about a potential large sale. History shows April as a crappy month anyway. Retail analysts say it’s got something to do with Easter being early or late or something. I doubt that Easter affects me directly, so who knows?

It's a God-Awful Small Affair

2009-04-03T10:01:00.002-04:00

The exhibition hall’s lobby was nearly deserted when I arrived 45 minutes after the doors opened on the reborn Boston Gift Show. I intended to breeze through the junk aisles in an hour and 15 minutes, have lunch at the food court at noon, then finish off the section where the hand-made and made-in-New England booths cluster in another hour. Instead I walked the entire floor with 15 minutes left before lunchtime. And I wasn’t even rushing.

The Cavalcade of Crap shrank to 10 aisles this year, in a smaller space than before. The first seven of those aisles were the same mass-market souvenir trash that dominates every show. Uninspired jewelry and cutesy crafts filled most of the last three aisles. Even the good-quality stuff didn’t fit the Curio City concept.

Worst of all, there wasn’t enough foot traffic to justify opening the food court’s six fast-food restaurants. I had to settle for a “North End Panini” – a grilled cold-cut sandwich with no visible North End influence, not even made on ciabatta bread – at the Sam Adams bar.

I spent more time traveling to and from the convention center than I did at the show itself. Next time, I think I’ll drive. Assuming that there is a next time; I don’t think they’re doing a fall show this year.

I did place one small order for these little Pewter Desk Cork Pets. I’m not sure what came over me. It was the last aisle, so maybe I just wanted to salvage something from my wasted Saturday. Even though it's a weak Curio City product, maybe it will surprise me. There was one other product with strong potential, but its manufacturer thinks they’re going to sell retailers a $50 item for $37.46 plus shipping. Bzzt!

So I have nearly $400 left to spend and a stack of a dozen catalogs with thousands of dollars worth of stuff that I want. That money will go fast, leaving me one big challenge: I am running out of Mini-Briefcase Business Card Holders (again), and the minimum order is 200 pieces for over $800. Eight hundred bucks is a lot of money to drop on one product, and 200 pieces is at least a year's supply. OTOH, I know it’s a sure thing. I’ve sold hundreds of them.

******

I haven’t sold a DayClock in ages, despite wasting about $1.50 a day on advertising. No wonder: Competitors are going as low as $35.95 with free shipping, vs. my time-honored $39.95-plus price. Last summer the manufacturer offered cut-rate pricing (which I missed out on -- bitter, me?) and ruined the retail price. In a last attempt to revive this old bestseller, I combined four separate product pages into two, cut my price to match the competition (ouch), and rewrote my ads. I can’t afford to give up free shipping, especially with the lower markup. If these measures revive the product, I’ll accept its reduced profitability. If they don’t, I’ll kill the advertising and give up on it. Too bad; it’s still one of my personal favorites.

******

Believe it or not – I couldn’t – Authorize.net charged me $14.95 again yesterday. I haven’t used that gateway in two months. In February the person who closed my old accounts wrote: “If you cancel your Pipeline Data account which is linked to Authorize.net, your Auth.net account will be closed as well.” Today she said “We don't cancel the account, the merchant is required to do so due to the security/sensitive information that they need from you.” So I’m out another $15 for nothing? She clarified: “Yes, but I meant, and I apologize for not being clearer, is that you would not be able to utilize your Auth.net account at all if you closed your Merchant account. Some people think that just because they close their merchant account they can still have access to their Auth.net account which is not true.” Which is also wrong; my Auth.net account was still up and running before I canceled it yesterday.

Of course this is the fault of Merchant Express, not Auth.net. I hate dealing with stupid piddly details from other people's screwups. I knew that goddamned bank was going to be a problem when I decided to cut them loose. I’m glad I don’t own an assault rifle. My shotgun wouldn't produce a satisfying enough body count to make the consequences worthwhile.

A dismal week’s sales aren’t helping my mood. Without a surge today and tomorrow, it will be the worst week since I was on vacation last August. April is always a lousy month. I hope this doesn’t turn into a lousy April.

Long Post, Eventful Week

2009-03-27T09:21:00.003-04:00

Sheesh, what a week. Let’s take it in pieces.

Baking Babies

I've started buying groceries at Shaws again because Stop 'N' Shop is reorganizing. Nothing is where I'm used to finding it. Shaws is a worse store in most ways, but at least I know where everything is there. S&S just relocated the bread aisle across from diapers and baby supplies. Yech! Now instead of smelling baked goods, I smell talcum powder. That’s just nasty.

I have wished for years that Curio City's navigation bar would show any associated subcategories when you click on a main category. Commissioning a programmer to implement that would have cost more than it's worth. I've known for some time about a free software "mod" that adds that functionality. The catch was that I would have to do it myself. It was pretty scary looking.

This week I gritted my teeth and made the prescribed changes to Curio City's SQL database, six program files, four templates, and the style sheet. Lo and behold, it worked on the first try! Not bad for a retailer with an English degree and no technical training.

The bad news is that, like the Stop 'N' Shop, Curio City's going to raise a little dust moving things around in the coming weeks. The good news is that the layout will make more sense, be easier to navigate, and please the search engines more. I just have to make sure that the bread aisle won't reek of babies.

The Cavalcade of Crap Rebooted

Tomorrow is the Boston Gift Show, known to Curious Business readers as the Cavalcade of Crap. Yes, I’m taking the T into Boston and walking from South Station to the convention center, where I will waste the whole day shuffling like a zombie through aisle after aisle of boring consumer trinkets. The Fall ’08 show was canceled after steadily declining participation. Its new owners are trying hard to revive the tired old event…obviously an uphill struggle in this business environment, but isn’t everything? Throughout March I rebuilt my open-to-buy from -$350 to over $1,000 in the black. I’ve got my eye on one new product that will take $120 of that, and I’d like to place about $2,200 worth of reorders. But at least I do have money in the bank in case I find something really great tomorrow.

I Am Not A Lousy Month

This week surprised me with not just one, but two, very large sales. I sold 71 I Am Not a Paper Cups to a marketing firm near Chicago. The UPS tracking site assures me that they were delivered to the UPS Store yesterday afternoon, so I can reship them this morning. The product is made by DCI, the same company that was behind the great Christmas tree debacle. So I won’t believe that the correct merchandise arrived in the correct quantity until I actually drive over there this morning and see it.

Two days later a gentleman organizing the 2009 Turkey Ridge Youth Hunt in Kansas bought 50 camo caps. (Presumably the youths are hunting turkeys, and not themselves being hunted.) Twenty-five adults and 25 youths participate. It was pure luck that I had exactly 50 of these caps in stock when he called (not the 53 that my spreadsheet indicated). A 20% discount and rapid order fulfillment sealed this deal.

I get about one of these institutional inquiries a month, but they almost never pan out – people almost invariably want imprinting/embroidering and deeper discounts than I can afford. I was quite surprised when the first sale went through, and downright stunned by the second in one week. Even after the hefty discounts, this week’s net sales will approach the entire month of March 2008.

March had been looking really anemic before this lucky break. I thought I was going to fall short of LY. This big shot in the arm put me comfortably ahead of my YTD sales plan. Awesome…for now.

The year-to-year numbers:

Total income: +72.4%
Total COGS: +97.3%
Payroll: +26.6% (yay me!)
Net Income (Profit): +107%

Year-to-date sales are up 33.3%, gross profit is up 38%, and the bottom line is up 202%. There are even some hopeful signs that the economy might finally be bottoming out.

Two More Reasons to Hate UPS: An order for a 2nd Day Air shipment came in on a Friday. I dropped off the package at the UPS Store on Saturday so that it would go out first thing Monday. UPS helpfully picked it up on Saturday, then unhelpfully billed me $15.38 extra for Saturday pickup. OK, it’s my own fault for dropping off on a Saturday…but $15 to toss it in the truck? So typical of their “gotcha” pricing.

One of the shipping supplies that UPS offers for free is a two-part adhesive label. You can’t actually use them for UPS packages because their shipping label prints out off-center. The labels are perfect, however, for USPS shipping. Over the past couple of years I've recouped some tiny fraction of UPS’s extortionate charges by using their free labels to ship US mail packages. Well, it looks like they have finally wised up. I’ve been unable to reorder labels the last two times I tried. For some bizarre reason, these things are crazy expensive -- $11.25 per 50 sheets if you buy them through the USPS website, and still pricey even at Office Max. I’ll bet I’ve gone through 300 of those UPS sheets between the time that I realized that I could do this and the time that they started rationing. Now I’m going to either have to go back to taping plain paper labels, or find a cheaper source and buy them in bulk.

Bastards.

President Obama Thinks I'm An Idiot

2009-03-20T08:36:00.002-04:00

Obama has a plan to jumpstart small business growth. I have been wondering if I’ll ever get to belly up to the free money trough along with the big guys. Not yet.

What’s Obama’s bold plan?

The Small Business Administration will step up lending guarantees. The SBA currently guarantees payment on 85 percent of a loan up to $150,000 and as much as 75 percent on loans of more than $150,000. The administration is raising the guarantee to 90 percent, reducing lender risk as an incentive to lending.
In addition, fees of as much as 3.75 percent of the loan's face value are being waived effective today, and people who obtained loans and paid fees since Feb. 17 qualify for a refund of those fees.
Obama ordered the Treasury Department, effective March 31, to begin using as much as $15 billion from the $700 billion bank rescue fund to purchase SBA loans on the secondary market, freeing up bank liquidity to make more loans.

That’s it? Another bank giveaway?

He is trying to trick me into taking on debt so that I will grow big enough to fail. But I am not the idiot that he thinks I am. If/when I do borrow money to expand, I won’t involve the federal government. Kraken Enterprises has almost four years of history and two years of demonstrated profitability. Any banker should regard me as a good credit risk.

An SBA loan becomes available only after you’ve been rejected by a private lender. The SBA then guarantees a loan from the same bank that just turned you down. Obama’s bank-friendly largess will undoubtedly make banks more likely to turn entrepreneurs down in the first place, forcing us into the guaranteed arms of the SBA. A cynic might see here a backhanded attempt at nationalizing small businesses.

According to the Internet (distilled from multiple sources), SBA loans carry these advantages and disadvantages:

ADVANTAGES:

1. An SBA loan can be stretched over 10-20 years, vs. seven years for typical bank loans;
2. The SBA will lend to businesses that are in trouble;
3. The SBA supports areas in which no financial institution would otherwise bankroll new businesses.

DISADVANTAGES:

1. The SBA places a lien on the borrower’s property. If I default and the SBA has to pay off the guaranteed principal, it will go after my personal property and assets to protect the taxpayer.
2. SBA loans take up to six months to process.
3. The SBA may require the owner to put up 20% of the funding himself.

Clearly, this move is meant to be a credit lifeline for businesses that are in trouble. It is certainly not going to persuade anyone to take on debt and expand. Not me, anyway.

Sources agree that a borrower should enlist a lawyer and an accountant when negotiating a bank loan in order to limit personal liability. I will tell you this much: I absolutely will not risk my house to borrow money for my business. If that dooms my business to remain tiny forever, so be it.

Obama said that these measures are “a first step”. I will wait to see the next step.

*****

Here’s a little more hatred in the credit card processing field…American Express reclassified my business to Internet Sales and raised my discount rate from 3.25 to 3.5%. I have no idea what my old classification was. American Express doesn’t use resellers, so there’s no appeal or competition – you pay them what they tell you, or you don’t offer Amex. Since the new classification is obviously correct, I’ll resist the temptation to create a new “Reasons to hate American Express” tag.

Amex and Google nullified my effort to reduce credit card processing costs. I suppose changing credit card processors kept the overall increase smaller than it would have been otherwise. (sigh) I give up. The banking industry is determined to restore solvency at the expense of small businesses and consumers.

Google apparently implemented their no-refund policy a month early; my past five deposits have had fees totaling nearly $8 withheld. I emailed Google despite the trivial sum. They answered a completely different question than the one I asked. I restated it. They replied that "Our engineers are looking into it." O RLY? For the moment, I shall content myself with a new “Reason to hate Google”.

Next week's topic: Too Small to Fail

Let's Spread a Little Hatred

2009-03-13T10:36:00.004-04:00

New Reason to Hate Google

Free transaction processing via Google Checkout will end in May. Currently, their nominal rate of 2% + 20 cents per transaction is waived on sales up to 10 times your previous month’s AdWords spend. That’s always meant free processing.

Their new rate will be 2.9% + 30 cents, with no waivers. That’s cheaper than PayPal, but more expensive than my average charge sale. So much for reducing payment processing costs. Discontinuing GC would be easy enough, but I’d only be doing so out of spite. It was a bitch to get working right in the first place, it’s a very small percentage of my business, and it costs about the same as other payment methods. For my customers’ convenience, I will continue accepting it despite its flaws – defective realtime shipping lookups chief among them, but that’s a whole ‘nuther subject (see the “Reasons to hate Google” subject tag, and particularly this post.)

PPC Advertising Again

I got an email from Yahoo warning that more than half of my bids are below those of my competition. That tells me that my spending cuts are paying off. Another message warned that my account reached its daily spending cap 52% of the time last month. That tells me that my bids are still higher than I’m willing to pay. I wish I could convince myself to shut Yahoo down entirely, but since PPC is the only advertising I do, I can’t really justify closing off one avenue completely. (OK, I did shut down MSN a long time ago, but they were never a contender).

Google is running me nearly $10 per day. I need to get it below $7 to be within budget, and I need to do that without harming sales. I fixed some ancient ads whose old-style Sunshop URLs landed on broken pages. I’m finding lots of keywords whose minimum effective bids have skyrocketed (example: EcoFluxx went from 15 cents to $1 for page-one placement – who in their right mind is bidding a buck a click for a $14 card game?). Keywords that have been priced out of the market are obvious deletions. I'm cutting my bids on winter products and raising the ones on warm weather stuff, like bird kites – which just happened to be among the ads with broken landing pages.

Another New Reason to Hate Google?

This might be premature. Google just emailed a late-night announcement about their AdSense program – the little text ads that get inserted into web pages. They’re introducing something called “interest-based advertising”. I haven’t studied this in detail yet, but here’s the gist of it:

“Interest-based advertising will allow advertisers to show ads based on a user's previous interactions with them, such as visits to advertiser website and also to reach users based on their interests (e.g. "sports enthusiast"). To develop interest categories, we will recognize the types of web pages users visit throughout the Google content network. As an example, if they visit a number of sports pages, we will add them to the "sports enthusiast" interest category.”

If I read this right, it means they’ll be displaying those ads based not on a website’s content, but on the visitor’s browsing history. That’s a little disturbing, don’t you think? The bit that really got my attention is this:

“As a result of this announcement, your privacy policy will now need to reflect the use of interest-based advertising. Please review the information at (URL) to ensure that your site's privacy policies are up-to-date, and make any necessary changes by April 8, 2009. Because publisher sites and laws vary across countries, we're unfortunately unable to suggest specific privacy policy language.”

If I read this right, it means their new data collection will invalidate most existing privacy policies.

I only use AdSense on this blog (which Google owns). My readers have clicked the Google ads exactly 116 times in the past three years, generating a whopping $88.68. Hey, I’m finally nearing the $100 payout trigger! If you’re running Firefox with AdBlock, you probably can’t even see Google’s ads. If you can see them, please help a guy out with an occasional click. Go ahead, do it now. I’ll wait.

Since the revenue involved is trivial, I’ll probably either opt out of their new program or remove AdSense entirely...after I reach that magic $100 payout, that is. Either way, this is one more thing I need to investigate.

Speaking of revenue...traffic has gradually fallen from 175-200 daily to under 150. Should I blame my advertising cuts? The calendar? The recession? It’s probably all three. Regardless of falling traffic, I’m only $33 under plan with a day and a half left in the week.

Web Hosting: Somebody New to Hate

My web server has been acting cranky again – timing out or encountering errors several times a day. It's a chronic problem. Sometimes MochaHost finds and fixes a problem and performance improves for awhile. Once, they even moved me to a new server. More often, they deny that there’s anything wrong.

Moving a website is not trivial. I’d need to pay my developer to perform the actual move. The new host would have to coordinate with GoDaddy to install my SSL certificate. I’d have to restore all of my customizations to the newly-installed site. It would cost $hundreds, take a lot of time, potentially disrupt business, and harm my search engine rankings (Google rewards an IP address’s longevity). And I don’t know where I’d find substantially better hosting at a comparable price anyway. Mocha charges only $75 annually, while a lot of other places get $25 per month or more. I’d willingly pay a little more for better performance, but I can’t afford to quadruple one of my few fixed costs.

So I’ve opened another non-specific support ticket with Mocha. I hope they can find something wrong with the server. I hope they won’t need to move my site internally again. Even though my heart isn't filled with rage, this week’s theme is spreading hatred. Therefore, please welcome the “Reasons to hate web hosts” tag.

Big Picture and Little Picture

2009-03-06T08:39:00.005-05:00

The Little Picture

I didn’t know that Authorize.net bills in arrears until they raided my checking account one last time. Oh well. Now, at last, the savings from changing credit card processors can begin to accrue.

Or can they?

Today I was charged $31.97 for “Visa/MC discount fees.” (At least they have a web page that explains the charge; Pipeline Data did not). They also debit my account daily for discount amounts ranging from a few cents to a several bucks. Turns out that they collect the discount amount daily, but batch and authorization fees are billed with my monthly support fee. Maybe if their online billing report called the charge something snappy like “support and authorization fees” instead of “Visa/MC discount fees”, I wouldn’t have wasted 30 minutes investigating. This little revelation makes their fee structure about as opaque as was the old bank’s.

It is damned hard to see if I’m saving any money. Pay-per-click advertising has crept over budget again -- it's running 12% of net sales, vs. my budgeted 9%. It’s my own fault, of course. I’m a sucker for buying more traffic, even when conversion reports suggest that it’s not paying off. Half the time that I set out to pare back my campaigns, I end up raising as many bids as I reduce or cancel. Conversion tracking isn’t perfect, after all. Some people block tracking cookies. None of my “kite” ads reported any conversions on 15 clicks one day last week…but I did sell one bird kite.

Anyway. The point is that I need to keep the big picture in mind while I focus on small day-to-day things that I can control.

The Big Picture

Today’s economic climate does not encourage thinking about long-term strategy or addressing major challenges. As I said above, I am concentrating on controlling costs and making incremental sales…beating LY one week at a time.

Two things that happened in 2008 need counterparts in 2009.

The first is a website upgrade. Last summer I added some new features when I went from 4.1.0 to 4.1.4 -- nothing major, but enough to improve overall sales incrementally. I need to do that again this year, and the sooner the better.

The second was the NY Times gift guide picking up one of my products. That was a lightning strike that I can't reproduce at will. I’ve sent press kits and announcements to major media for each of the past three years, with never a nibble of interest. I’ll probably try again this year, since the only cost is my time. But if December is going to match or beat LY – as it absolutely must if the year is to succeed – then I’m going to need some publicity. I’ll probably need to buy that publicity…which is to say, place an ad. The potential to waste money is high. To be profitable, an ad has to return about 10x its cost in new sales. If I'm going to spend $1,500 or more on a magazine placement, it can't look like something I made in Paint Shop Pro. But because December 2008 set such a high bar, I need to take that chance. That means identifying a specific product to promote by fall, producing an ad, and placing it to run in November or December, preferably in multiple places.

The Passing Picture

Business started strong last week, then fizzled. This will be only the third week this year to come in below LY. LY was unusually strong, and the rest of March looks more attainable. And, of course, one big sale could still rescue the week.

When a shopper asked about the Infinity Tunnel Clock, I started to reply that it’s no longer available. Before clicking Send, I thought to check. Lo and behold, it’s back! So my open-to-buy deficit suffered a little setback. The next morning I sold an Infinity Optics Lightshow. Coincidence? You be the judge.

And O, how I hate Blogger! I finally figured out a workaround for their resizing fonts; now when I copy my draft from MS Word, I paste it into Textpad before copying it here. Then I can set the font and restore my formatting. Unless, that is, I decided to add images. First, they aren't inserted where I specify; I have to drag and drop them after uploading. Worse, they remove all of my formatting and reset my post to the default font.

With a database of 140 hyperlinked posts built up over three years, I'm not inclined to move my blog. Neither is Google inclined to fix their lousy interface. So I guess I'll have to content myself with complaining periodically.

February Wrap-Up

2009-02-27T10:12:00.002-05:00

February Wrap-up

This week was a little weaker, but not weak enough to sink the month. Here are the year-to-year numbers:

Total income: +29.9%
Total COGS: +5.3%
Payroll: +31% (yay me!)
Net Income (Profit): -29.9%

This year’s bigger loss is merely a bookkeeping artifact caused by taxes and fees. Taxes always push February into the red. My YTD loss is only $70 higher than LY, and that’s entirely attributable to higher payroll – meaning money in my pocket, which is not entirely a bad thing.

Even though February is meaningless, being up 30% in this disastrous economy is heartening – virtually every economic indicator is at historic lows and still free-falling. I choose to believe that changing my tagline from “Curious Gifts for Curious People” to “Unusual Gifts of Good Value” made all the difference. :)

Early this month I had $2,200 open to buy. As of today, I have (-$763). Half of the $3,900 that I spent this month replenished sold items; the other half is buying new merchandise. Since a lot of that won’t ship (and bill) until April, the red ink doesn't worry me. But my cash on hand + accounts receivable is technically below my accounts payable, maybe for the first time ever. I need to be very tight with a buck if I’m going to have anything to spend at next month’s Boston Gift Show.

Speaking of next month…March’s targets are much more challenging than February’s were.

Most of my smaller vendors are filling orders at warp speed. They must be sitting around with nothing to do. One of my newer large suppliers, however, froze me out of their initial spring product shipments. Maybe I ordered too late, or maybe they serviced their bigger accounts first. A lot of stuff that I thought would be arriving over the next few weeks is delayed until late April. That’s going to make March even more difficult.

Turnkey’s investigation into my site’s broken Wishlist feature came up blank. The bug was undoubtedly caused by some modification that Eric or I made in the indeterminate past. Removing one obsolete modification enabled me to toggle the feature off; previously, doing so screwed up my menu bar layout. And so I fall back upon a lesson that I learned in my software development career: If you can’t fix the bug, remove the feature. Fixing the Wishlist is now officially wishlisted.

Making a Call

2009-02-20T09:10:00.002-05:00

My new credit card processor required me to add my telephone number to my Contact page as a condition of approval. I’d previously hidden it on my About page. I’m not a telephone business. I'm personally averse to the telephone (especially my tinny-sounding, staticky cell phone), and I don’t want to be swamped with phone calls or to put that number in front of telemarketers. So I deliberately used less-than-welcoming language: “…leave a voice message at 555-555-5555...but we aren't a telephone business and that line is only occasionally staffed.” I intended to remove my number entirely after my account was approved.

The telephone calls did pick up, and I got a few more junk calls. But the volume isn’t overwhelming, and it's led to one or two sales. A good-sized minority of shoppers out there still don’t understand that encryption makes ordering online more secure than phoning in their credit card number. Instead of removing the number, I made the language less hostile. The page now says “You can call 555-555-5555 Monday through Friday from 10 AM to 4 PM Eastern time...but as we are a small company, our phone is not always staffed. Feel free to leave voice mail.” I’m trying to take a neutral position, neither encouraging nor discouraging phone calls.

Next, I’m going to study third-party Sunshop mods for ways to improve my site. Even though these mods are free, I need to be very careful. They are file modifications, not drop-in modules. They challenge my technical skills and complicate future upgrades by increasing the customization that needs to be carried forward manually. There is also a risk of unintended consequences. For example, one mod implements subcategory menu flyouts – a feature that I’ve wanted literally for years. But some users warn that the code (Flash?) makes the category list invisible to search engines. Improving navigation won’t help anything if I simultaneously harm my search engine rankings. And of course there is always a chance that the modified code will conflict with some other customization or become incompatible with a future upgrade.

I do have a couple of ideas for boosting sales with improvements that should cost little or nothing. Investing in the business is not an option until my wife is secure in a new job. Financially, Kraken Enterprises must carry its own weight until then.

The good news: It’s doing so. Business was good again last week. If next week didn’t contain one $600 sale from LY, I’d be anticipating very good February numbers. Given that the recession was not even recognized yet at this time last year, and that the economy’s in free fall right now, beating LY is impressive enough.

No Post Today

2009-02-13T11:37:00.002-05:00

I spent the early part of the week spending the $1,200 that DCI refunded; $1,000 of it is going back to DCI. Most of my two-dozen new products won’t arrive until April or May. None have obvious bestseller potential, but a few might become standbys, and a good stable of those is better than relying on one star item.

I got my corporate tax returns back and paid the CPA. I canceled Merchant Express. I worked on my next newsletter. I’m changing over my seasonal display. (Yawn)

I spent the end of the week working on our household budget, starting our taxes, and scowling at Anne’s layoff paperwork (COBRA and some state assistance plans). It looks like Obama’s going to reimburse 65% of our COBRA payments for nine months. That would be a huge break, since we’re not quite poor enough to qualify for Massachusetts’ equivalent program...yet Mass. requires us to have health insurance, and letting it lapse can prevent one from getting future coverage. None of the COBRA alternatives that I explored panned out.

Sales are tracking my reduced plan nicely. I got a tiny Valentines Day bump – later than expected, but VD has never been a serious holiday for Curio City. Accounting and tax bills make February a losing month anyway. As of today I have paid the CPA and the government $659, and the month’s bottom line is (-$635)…with another $465 tax payment due. The bottom line won’t turn black again until Halloween.

"What This Country Needs...

2009-02-06T09:12:00.002-05:00

…Is a good, hard recession.”

I used to say that whenever traffic chronically choked the roads, stores and restaurants grew overcrowded, prices rose, and service and civility fell below minimal standards – the byproducts of an overheating economy. Recessions are capitalism’s way of weeding out the weak and the marginal. “Last hired, first fired”.

This recession is not like all the others I’ve known. Instead of firing their worst employees first, companies are cutting their most expensive and losing their experience, competence, professionalism, and work ethic. Instead of improving as the economy wrings out excess, service is eroding as responsibility devolves to cheap young slackers. Instead of the best companies prevailing, we are seeing survival of the cheapest.

Well, at least traffic doesn’t seem as bad lately.

The new credit card processor is finally integrated after Turnkey fixed their payment module. I don’t know if CDG Commerce will ultimately be a good move, but it should at least save me a little money (survival of the cheapest, remember?). I sure won’t miss Merchant Express. I will fire them next week, when I'm positive that CDG is working out.

The big DCI return credit finally came through, seven weeks after their initial error. I can start buying merchandise again. Their missing backorder appeared on the wrong credit card – I gave them my Amex number when my old MC was hacked. They charged me on 1/20, and I haven’t actually received the shipment yet, but at least there’s some indication that it might have gone out.

DCI’s commissioned sales rep has failed to answer three emails this week, so I’ll need to deal with them directly. I’m going to have to watch this company closely, and expect long delays in order fulfillment and problem resolution. It must be run by cheap young slackers.

Another weak week inspired me to reduce my 2009 sales plan again, from a 50% increase over 2008 to 25%. Any increase at all is optimistic, obviously, but Curio City started at such a low level that it needs to sustain double-digit growth if it’s ever going to support me.

From Bad to Worse

2009-01-30T08:29:00.002-05:00

Moving to the new credit card processor isn’t going very smoothly. My test transactions go through fine, but Sunshop reads them as declined and won’t complete the sale. Credit card acceptance was broken for a day before I realized that all was not well. “Fortunately”, there were no sales that day.

Sales are running way behind LY now. On Inauguration Day business fell from 4-5 sales per day to 0-2. The little Valentines Day bump that I expected did not happen. January will finish very slightly up, thanks to one record-breaking sale from two weeks ago, and that itself is remarkable. If you take away that one big boost, though, the month flopped.

January’s numbers might be the last black ink I will see for some time:

Total income: +6.7%
Total COGS: -5.1%
Payroll: +11.8% (yay me!)
Net Income (Profit): +3.8%

DCI, the company that double-shipped two Christmas orders and then dragged its feet about sending return labels, is stonewalling on my $1200 Mastercard credit, six weeks since their original error. Only four of the five UPS return labels show delivery; the fifth one was apparently never scanned. I’m hoping that DCI is just too incompetent to realize that, and not deliberately stalling me until it’s too late for me to dispute the original charges. I DID return all five boxes, of course. I don’t have a clue what might have happened to the missing one, if it is really missing at all. DCI was supposed to have shipped me a backorder last week, too, and I don’t see a charge for that. I’ve dealt with many incompetent vendors, but never on this scale. It’s too bad their merchandise is so good.

Worst of all, my wife joined the ever-growing legions of the unemployed last week. Her lousy job goes unlamented, but it subsidized me while Curio City grew. Without that support and with Curio City’s growth stopped, I’m going to need a part-time job. Kraken Enterprises will remain my number one priority, but it can’t keep me busy full-time until the customers come back.

If there is a silver lining to this post, it’s February. Historically accounting for only 3.5% of annual sales, February’s targets look laughably low.

So why am I not laughing?

Avoid of Fraudsters!

2009-01-23T10:09:00.002-05:00

My largest single sale ever (for 58 lighted caps) saved this week from disaster and made up for all the refunds I had to give this month. January is going to be OK now. Not great, but OK. If history holds up I should see a very small Valentines Day bump next week.

Yet another reason to hate UPS: The aforementioned customer paid big bucks for 2nd Day Air. I quickly tested all those caps, weeded out a couple of defects, replaced a few dead batteries, and packed them up neatly. Hoping to impress her, I upgraded to Next-Day Air when I saw that the incremental cost was still within the customer’s shipping charge. The box’s value triggered a requirement that I’d never seen before, to hand the package directly to a driver or “a UPS agent” for a signed receipt. I wedged the big box into my Miata for a trip to the UPS Store…who could not accept it, because they are not “UPS agents”. Hmmm.

OK, back into the Miata we went. UPS never misses a chance to charge my account, so I expect to pay extra for this home pickup that they required. Well, whatever. The big valuable box was finally on its way, I had complied with their insurance requirement, and my customer should be pleasantly surprised when her caps arrive a day early.

Since this is a UPS story, you can guess what comes next: My customer emailed me about receiving delivery delay emails from UPS. She wanted her hefty expedited delivery fee refunded. I had to explain that it was still being delivered within the two-day service that she had actually purchased, and only the upgraded delivery that *I* had paid for was forfeit. My pleasant surprise had backfired. I filed a claim with UPS and offered to refund her shipping charge if UPS would honor their guarantee.

As you might guess if you read this post, UPS’s guarantee is not worth the pixels it darkens. Here is their list of excuses:

• Disruptions in the air or ground transportation networks, such as weather phenomena and natural disasters;
• The unavailability or refusal of a person to accept delivery;
• Delays caused by the consignee;
• Acts of God;
• Public authorities acting with actual or apparent authority on the premises;
• Riots, strikes, and other labor disputes;
• Civil commotion.

And so I added a new section to my shipping policy. OK, I can see blaming God and public authorities. But “weather phenomena”? Come on. UPS has obviously never heard of the post office’s unofficial creed: “Neither snow, nor rain, nor heat, nor gloom of night stays these couriers from the swift completion of their appointed rounds.” One might even argue that all of those fine-print exclusions make their guarantee border on fraud.

In other news:

I noticed a pending charge to my business Mastercard for $7.50 from PayPal. That’s strange; I didn’t think I owed PayPal money for anything, and why would they hit my charge card rather than my PayPal account, or maybe my linked checking account? Maybe they were doing a routine card authorization check...but those usually use $1, not $7.50.

When the charge settled, the payee's name changed to Rebatesoft. That’s even stranger. Who? When I googled them I found multiple forums dealing with credit card fraud. Maybe Rebatesoft is laundering stolen credit card numbers prior to selling them. It's unclear whether Rebatesoft is the actual thief, or a willing accomplice, or an unwilling tool. There is a real company called Rebatesoft. Their contact page includes this gem: "Avoid of Fraudsters. Please note what Rebatesoft.com not charge anybody credit cards. All payments going via RegNow.com system. Beware of the fraudsters!"

I immediately canceled my card. Now I’m stacking orders until the replacement card arrives. I could use my Amex instead, but I want to earn my cash rebate.

I used this week’s idleness to (finally) poke around in my new merchant services account. I am ready to integrate it into Sunshop and make the big switch…possibly as soon as today, if I can get somebody to hold my hand. I obviously can’t afford to screw up credit card acceptance.

Inaugurations

2009-01-16T09:20:00.005-05:00

Apropos of nothing…my wife took this photo on Monday, Dec. 8, just as I was about to load up the Forester with the weekend’s orders. The huge box in the foreground is about 4 feet deep. All three of those boxes are filled to overflowing with orders. She named the file “why isn’t the mayor smiling.jpg”. The mayor is stunned. The mayor thinks his business may have outgrown him. The mayor is rethinking this whole "success" thing.

Anyway, on to today’s post:

It looks like the Obama administration is going to parade into Washington throwing fistfulls of cash to anybody who asks. I’m tempted to grab a piece of whatever action they toss at small businesses, even if it means taking on debt for the first time -- we all know that government debt never has to be repaid.

Here’s what I’d do with a big pile of free government money:

Take Curio City beyond Sunshop with a custom e-commerce engine and a graphical makeover. I just met a developer who’s going to take over from Eric very soon -- solving one of my longstanding challenges -- and who would happily step right into a complete redevelopment.
Contract with a marketing firm to bring Curio City to America’s attention. Last Christmas proved that people love my store…when they stumble upon it. Long-time readers know that marketing has been my Achilles heel since before I launched this company. Three years later, I am no closer to figuring it out myself.
Rent commercial space with warehouse, shipping/receiving, and office capabilities. Nothing lavish…I use maybe 250 square feet of our house now; quadrupling that to 1000 would be luxurious.
Hire a part-time or seasonal employee to handle the shipping/receiving duties, freeing me to focus on the intensified admin requirements that points 1 & 2 would impose. The above photo should explain why I need to do this. Do you know how long it takes me to ship that many boxes?

The new regime has promised most working Americans an extra $10 per week from reduced federal withholding. Ten bucks would be a nice windfall. How am I going to spend mine?

Hah!

My paychecks are too small to trigger the federal withholding tables. Since our combined household income is taxed at 25%, I just withhold as much as I can afford without shrinking my paycheck to invisibility. To date, I’ve arbitrarily taken 10% for federal withholding. Starting with my most recent check, I raised that to 12.5%. So unlike the rest of America, I’m getting a 2.5% “tax hike” that will reduce my average weekly paycheck by about $3.50.

My wife, being a grownup, will reap the Obama windfall. That $10 per week will help offset a fraction of this year’s $100 monthly health insurance increase. Our combined net income is going down again for the fourth year in a row. Hopefully a round of deflation as other Americans join us in the shrinking income department will make it a little easier to survive on less.

To battle this, I gave myself another raise, to 18.25% of gross. If Curio City defies gravity again this year, we might be able to hold our ground.

Oh, and while we’re on taxes…in the past week Kraken Enterprises deposited:

$1,236.81 in federal Q4 payroll taxes
$259.89 in state payroll taxes
$56 federal unemployment
$235 state unemployment
$69.23 in sales taxes

Put that together with our personal Q4 1040-ES payment and our quarterly property tax bill, and it’s hard to understand why the government is broke. Maybe we are the only people who actually pay our taxes.

Let's end with a parting shot at Blogger: Every time I Preview a post, Blogger changes the font and removes my formatting. It's probably because I paste in text that I composed in MS Word, but you'd think that after all these years they would have fixed that. It is highly annoying to see everything changed to LARGE and all of my line breaks gone. It's why my posts don't look consistent from one week to the next. This paragraph, for instance, simply refuses to convert to Verdana.