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Monday, October 31, 2016

October Ends With $3,400 in Sales, Massive New Listings of Material And Blog Traffic Soars

We have just under a month to go now before we move from Toronto to New Brunswick. I have been in a mad rush to get as much material listed as possible leading up to the move, so that we can continue our sales growth in the months after we arrive. Steph has been busy looking after everything to do with the move: acquiring boxes, packing, booking the truck, picking up harnesses and temporary litter boxes for the cats, acquiring furniture pieces for the new house, while getting rid of old ones that don't fit. I've said before how amazing Steph is at economizing, but she has completely blown my mind with what she has managed to do for the house. She has designed and decorated all the rooms and has managed to furnish it almost for FREE! One of the great things about living in a city like Toronto is that people get rid of perfectly good furniture all the time. Usually they just want it gone, so they just put it on Kijiji for free rather than trying to sell it. Sometimes the stuff is crap, but most of the time it is really good. What Steph has done is review the Kijiji listings every day looking for pieces that fit the style of the house and are well constructed. We have picked them up and then she has bought paint or stain and has refinished them. So instead of moving into a mostly empty new house, it will be fully furnished and nicely decorated. I just cannot get over how talented Steph is at this! It's just amazing.

I have been working very hard on the new listings. I still have about 6,000 items to go until I catch up to the modern period in 1952 and right now I am at 1932. I have been finding faster and faster ways to scan and list material and right now I seem to be able to get about 300 lots up each week when the scanning has been done before. It takes about a month to get through a box of 1,000 102 cards. I have about six boxes to go for this period, so I figure about six months more work. Then I can step back and assess what needs to be bought to strengthen the stock and then I can go about buying and listing in a controlled manner. This should take about 2 months. Then after that I can move on to listing Nigeria in earnest, while Steph works on the modern. We just got a large modern collection in last week, which has all the material from the 1990's and 2000's that we didn't have before, so that will help our inventory considerably. This week I am going to push hard to get the 1932-1935 Medallion issue completely listed, so that all I will have left to do before 1935 are the commemorative issues, which I may be able to get done before we go, or at very least will be scanned and ready to list when we arrive.

Overall sales are beginning to show both consistency and momentum. The number of new customers each month is growing, while the amount of repeat business from established customers is growing. Together, these two trends are pushing monthly sales in an upward direction. I am now fairly certain that at least some of this growth is coming either from word of mouth or social media, as the Canadian blog now regularly gets close to 200 visits a day. Many of these visits are now coming from organic Google searches or people accessing the blog by name, rather than just viewing it through Facebook. Only a few months ago, all the traffic came from Facebook and the number of visits was just over 100 per day. At the very least, these statistics indicate that there are plenty of people who are interested in collecting or at least reading about Canadian stamps, and that the blog is doing a fairly good job of reaching them. I believe that establishing that following will be critical to our long-term success.

My first US stamps arrived last week for my new collection and I was very pleased with them. I cannot believe that they are as inexpensive as they are and that more people don't collect them. The only criticism that I have about them is that they tend to use the same colours over and over again. But the stamp designs themselves are generally really appealing - especially on the commemorative issues. Even the very simple stamps, like the 1938-54 Presidential Issues have a certain charm that pulls you in. I'm not sure what it is, but I am looking forward to seeing where this takes me. I have never even considered collecting US before - I've always been a British Commonwealth guy. But it is fun to venture into something completely new.

Anyway, I'd better get back to updating my other blogs so that I can move on with the listings. 

Monday, October 24, 2016

Sales for October Pass $3,000 With A Week to Go, Massive Listings This Week & Starting a New Collection

After a very busy week with sales, our total for October has now passed the $3,000 mark with a full week to go before the end of the month, which is a fantastic result. Volume of items sold is up and at the same time we are seeing sales in areas which have previously been quiet. Some of this may be attributable to the fact that just over a week ago we placed approximately 25% of our store items on sale at 25% off. Instantly, we saw some increased sales, not only of that material, but also of other stamps that were not on sale.

I spent all of last week scanning and uploading images for material covering the period from 1930-1935. In all, I scanned close to 800 stamps, representing what is probably the most in-depth selection anywhere of this material, nearly all of it mint. This week I am looking forward to getting it all listed and taking our store item count above the 6,000 item mark. That will leave us in striking position to hopefully get all the material from 1935-1937 listed as well. I will be one very happy camper if I can have all our material to the end of King George V listed before we leave for New Brunswick, as the bulk of this material is NH and the kind that is popular with collectors.

All of this handling of 1930's mint stamps has re-awakened in me a desire to begin collecting again. I just love the colours, designs and freshness of the stamps. But there is one problem: I do not want to compete in any way as a collector with my customers. I have to make sure that what I collect is completely different from anything I am currently selling. I also don't want to spend a lot of money on my stamps - at least not for a long time. Why? Because I simply cannot justify it when I am trying to build a new life with Steph.

After much thought, I decided that the time is right to try my hand at United States stamps issued between 1922 and 1971. Apart from the fact that they are attractive, and plentiful, they are very inexpensive. There is very little pretense of these ever being worth any significant amount of money. Collecting material like this completely frees me from any worry about how much I am spending and instead I can enjoy it for what it should be: a hobby - just like going out at the end of the week fora nice dinner. Below are some examples of what stamps from the US during this period look like:

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The Washington Bicentennial Issue of 1932.

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The FDR memorial issue of 1945.

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The American Credo Issue of 1960.

Nice looking stamps, aren't they? I just made my first purchase of them over the weekend and I must say that I am looking forward to having fun with them and seeing what I can discover in terms of printing varieties and neat postal usages. 

Tuesday, October 18, 2016

Sales Continue to Improve - Analysis of Results From September 4-October 16, 2016

Now that we have kept very detailed sales and customer data for 53 full days, the time has come to analyze and interpret it. We already looked at the detailed information from the first 11 of those 53 days, which covered the period from August 22 to September 2, 2016. This is what we found back then:

  • Our average daily sales were $74.01.
  • Total number of stamps sold were 97, or 8.81 per day.
  • Our average stamp sale was $8.39.
  • The number of unique customers buying from us was 40, and out of this 18 (45%) were new customers who had never done business with us before, while 22 (55%) were repeat customers.
  • The percentage of sales from repeat business was 61.8%.
  • Of the 22 returning customers. one-third had only just started doing business with us after July 2016, while nearly half had started doing business with us between January 2016 and June 2016. The rest were long established customers. 
Looking at the 42 day period from September 4 to October 16, 2016 yields some very interesting observations indeed:

  • Total sales for the period were $5,144, or $122.50 per day - 65% more than the previous period.
  • The percentage of sales coming from repeat customers was 23.8%, while the percentage of stamps sold was much higher at 71.8%.
  • Total stamps sold was 390 or 9.28 per day.
  • Our average stamp sale was $13.19, which is 57% higher than before.
  • The total number of unique customers buying from us was 103 and out of this 49 (47.6%) had never bought from us before, while 54 (52.4%) were repeat customers. 
  • Of the 54 repeat customers, 22 had only started buying from us in either August or September 2016. This represents 40% of our repeat business. The rest was distributed fairly evenly between customers who first started doing business with us between July 2015 and July 2016. 
These results suggest several, very positive developments:

1. The breakdown between new customers and repeat customers is more or less unchanged, with the repeat customers slightly outnumbering the new customers. However, it is taking less and less time for those new customers to become repeat customers. This is probably due to the fact that we are listing less expensive, more modern stamps now that these collectors need. Not only that, but many of these customers are coming back several times during that 42 day period, with some coming back every 2-3 days. 

2. The average daily sales is experiencing fantastic growth, and much of the dollar volume is coming from high value items that are being bought by entirely new customers, which suggests that our reputation precedes us now in the marketplace. Clearly there are more customers who are comfortable spending larger amounts of money with us right out of the gate. The volume growth is coming from the repeat customers, who bought 71.8% of all the stamps sold during the period. 

3. While the cheaper, modern material continues to sell extremely well and be very profitable, the earlier classic stamps are beginning to sell in higher volume. 

4. We are developing a larger and larger group of core repeat customers who are continuing with us after more than 1 year as customers. Although we do not see some of them for months on end, it would appear that it has more to do with budgetary considerations than with customer satisfaction. Indeed we have managed to grow our sales without our overall seller ratings dropping below 4.9 out of 5. 

5. A larger and larger number of customers are engaging us by replying to our welcome and thank-you e-mails, and we are definitely getting regular engagment on our blogs now. 

So overall we are extremely happy with how we are doing. 

On another note, I spent all of last week trying to organize material to liquidate to come up with the required funds to put down on the house we just bought. After nearly 2, 16 hour days I had only managed to identify and price stamps that I figured would only sell for just over $500. I quickly concluded that there was just no point in spending a whole month, not lotting my core material, to process stamps that would only yield us a third of the money we needed. So I quickly switched gears and started to pull my best Nigeria stamps out of stock. I pulled 115 stamps having a value of just over $42,000. But despair quickly set in when I realized that we would probably not get more than $20,000-$25,000 on a quick sale basis and we would be selling our best stamps - the kind that take years and years to replace. It just made no sense to me to do any of this, though I am fully prepared if we had to. 

So I followed up with one of my investors who had told me that he was prepared to liquidate investments to be able to advance my the next tranche of investment funds two months earlier than we originally discussed. Initially the week before I told him that I didn't want to impose in any way. But he had offered, so I went back to him, laid out what I had done this past week, which included reducing the prices of 1,800 store items by 25%. I described what I saw as the problem with the alternatives, re-iterated that I didn't want to put him out in any way, but suggested that if he was truly indifferent between advancing the money now versus in January, that I wanted to take him up on his offer. Yesterday he responded and said that he wanted me to do what was in the best long-term interests of the business, which clearly is continuing with business as usual. 

So it would appear that our cash flow problem is solved. So we can get back to doing what we do best, which is writing blog articles and listing stamps for sale. 

The moral of this, if there is one is to not get caught up in pride, or to assume that taking an investor's offer when made like this is imposing on them. It's tough because on the one hand I'm cognizant of the fact that one reason my investors trust me is because I will do everything in my power not to take undue advantage of them. So I don't want to damage that trust and goodwill. However I think I need to learn that it's OK for me to enjoy the benefits of that trust every now and then. My pride and desire to not do so had me almost liquidating perfectly good inventory for peanuts in order to solve what is a temporary cash flow problem. 

So back to listing Canada...

Tuesday, October 11, 2016

Our Wedding, Honeymoon, and the Long Road Ahead

On Saturday October 1, 2016, Steph and I celebrated our wedding with 54 guests at a very intimate location called the Children's Peace Theatre in Toronto. It was a real gem of a find that Steph discovered after many months of calling potential venues and being told of the outrageously high prices to rent a simple space for a reception. Most of you who have been through a wedding will know what I am talking about:

  • Several thousand dollars just for use of the space, because it is a wedding.
  • Stipulations and restrictions that effectively prevent you from buying and serving your own alcohol.
  • Stipulations that require you to use the caterer recommended by the venue.
In the end, the effect of these stipulations is that even the simplest of wedding receptions for a modest number of guests wind up costing over $10,000-$15,000. 

The Children's Peace Theatre is a 1920's Arts and Crafts style mansion that used to be owned by the famous Massey family. When Raymond Massey died, it was willed to the city to be used as the city saw fit. After many years of sitting empty, it eventually became the Children's Peace Theatre and is used to run dance and arts programs for local youth. 

I don't have my wedding pictures yet, but here are some generic pictures of the venue:

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The back of the theatre as seen from the outside ampitheatre. It was raining the day of our ceremony, so we did ours inside, but our original plan was to get married in the ampitheatre outside. 

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A view of the main hall in use for a different gathering. In ours, we arranged 9 tables lengthwise facing the other direction and were able to seat 54 guests comfortably. 

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Another view of the main hall, where we held the reception and the dinner. What the pictures don't show is that immediately adjacent to this hall, there is a large room where we put the buffet, the bar and the dance floor. Off of this second room was a lounge where people could get a few moments of peace and quiet, and a full kitchen, where the catering staff could do what they do best.

The best part of this venue? The price and complete lack of unreasonable restrictions. The price of $950 included a refundable $200 deposit that we got back after we had cleaned the space at the end of the night. We got to set up the day before, and we had the use of the space all day Saturday until 1:00 am. We were permitted to use our own caterer, and to serve our own alcohol, provided that we obtain a special occasion permit from the LCBO, which cost only $30. 

All in, we (or I should say Steph) were able do a complete wedding for 54 guests for about $8,000. I'll post pictures when I can, so you can see for yourself, but the guests had a great time, everyone had enough food and drink and I think it was a marvelous success. 

For our honeymoon, we opted to drive down to New York City, which is about an 8-10 hour drive from Toronto. We stayed at an Air B&B in Bed-Sty, which is a suburb of Brooklyn, about 40 minutes from Manhattan. Given that we are somewhat broke, while we scrape up everything that we have to put towards our new house, we decided to do a cheap vacation in New York. Sound impossible? It's not. The secret to NYC we found is avoiding the tourist traps and staying outside Manhattan. The subway system there is so extensive and amazing that being 40 minutes from Manhattan is really no big deal at all and it goes by quickly. Plus it affords plenty of opportunities to people watch and stop at coffee shops and other interesting places along the way. Another advantage to staying outside Manhattan is that you can sometimes get free parking. Our place had street parking out front that was completely, 100% free the entire time we were there. 

We reserved most of our budget for eating out, which we were able to do for around $100 a day, and have some very excellent lunches and dinners. Our place had a full kitchen, so we opted to buy a week's worth of breakfast groceries and just have breakfast in our room. This was a great idea, as we saved a bundle and ate food that was just as good as what we would get in  restaurant. For activities, we did do a harbour cruise, which was the only touristy thing we did. But most of the time we simply walked and explored. On our first day we walked across the Brooklyn Bridge, and up to 51st street, which took about 3 hours or so and at the end of it our feet were tired and sore. We got to see some of the sights - not all, but enough to make us feel that we want to go back. We had a chance to relax and enjoy our surroundings, which was the most important thing. The cost of this trip including food, accommodation and gas was about $2,800, which is not at all bad for a week in NYC for two. 

Now back to reality....

We have approximately 6 weeks to come up with about $15,000, which is what we will need to close the purchase of the house and move to New Brunswick. Both our investors have indicated that they likely won't be able to move forward with their investments by November 30, so we have had to come up with an alternate plan. After much discussion, we have decided that it would be best to liquidate the inventory that we have that is either too labour intensive to list individually, or too far outside our area of expertise to list in our store as part of our regular inventory. We will see what we can get for that first and then I can do some controlled buying and selling of Commonwealth material. I went through the E-bay listings last night for a few countries and noted a very small number of instances where stamps were misidentified and could be picked up for a very small percentage of their true value. However, this is very tricky because I have to buy with a view to sell immediately at auction, which means that I cannot afford to pay anywhere near what I normally would where I am comfortable taking my time to find the right buyer. I can see that it will be a lot of work to go through the listings, but will be worth it if I find that we are still $5,000-$6,000 short after selling the other material. 

Wish us luck - we have our work cut out for us. By the way, sales for this month are off to a good start, but our focus has to be on coming up with the down-payment.