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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...

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