Neville's Financial Blog

Over at House Of Rave it’s been busy because of the Christmas holiday shopping season. Owning a store that sells light-up and relatively unique items, I’m always tickled by the surprise hit products that seem to sell like crazy during the holidays.

Every year I see odd products that previously didn’t really sell, then all of a sudden see huge spikes in demand. Often it’s products that are unexpected hits, the manufacturer runs out of stock, so it goes out of stock at most stores, so people flock to whatever store they can get it at.

By far, the most demanded item I saw on HoR this year was this Lava Plasma Lamp:

It’s basically a Lava Lamp that has one of those electricity-looking plasma balls inside. It’s a new product and actually looks like a slick little room decoration…which makes it prime gift-giving material.

Unfortunately the Lava company didn’t anticipate such a high demand for it (likely because this tight economy doesn’t permit companies to easily extend huge lines of credit for large manufacturing runs). Or maybe there was a fire at the warehouse and they all got burned up. Who the hell knows. The end result was EVERY store was sold out.

I opened my orders one day and found 20+ orders for JUST this item, all from new customers…it was a little odd. For a while I could send them out, but of course my supply dried up also. I of course immediately cancelled and refunded all the orders since I couldn’t fulfill them….but kept the item up for a while in order to grab new customer info (so I can send them my email newsletter later). Kind of sneaky actually….

I eventually put the “out of stock” status on the item because so many people kept ordering it and the customer service required for canceling and refunding got a little tedious….plus it pisses people off when they order something so close to Christmas then get an email their order has been cancelled.

Another funny runaway product line this year was BACON stuff. Yes, bacon. These are some of the items that recently came out and started selling REALLY well this holiday season:

Bacon Bandages:
There’s a whole lineup of these novelty bandages, and by far the bacon strips sell the best.

Bacon Gumballs:
Why bacon flavored gumballs sell so well is beyond my understanding.

Bacon Toothpicks:
I’m not even kidding…

Who would’ve thought the American public has such a fascination with BACON products?? Like the popular Lava Plasma Lamp a lot of these bacon-related products sold out quickly too.

Another weird item that really took off and I had to keep canceling orders for was this Gravy Fountain Gag Gift Box:

It’s a fake gift box you put a real gift inside to fool your unsuspecting subject. I presume this gag box is great for White Elephant gift exchanges, hence the popularity. What’s weird is there are other gift boxes like this, but by an exceedingly large margin the gravy fountain box was the most popular. Baffling and kind of hilarious.

Most of these small items don’t have a huge margin, so even if you get lots of orders per day for them it’s not a huge amount of profit. However you gain new customers, some of them buy a lot of other stuff, and it’s always fun to see the weird products that hit a nerve with the buying public!

I though it’d be interesting to take a look at all the Google Analytics since I installed them on House of Rave somewhere around the beginning of 2006. I’ll only use Google Analytics because they are probably far more accurate than my server’s reports (which I believe counts viewing an image as a full unique visit which may distort the number of TRUE visitors to the site):

2006:
I had to put this report on a weekly view rather than daily so the rest of the years analytics even show. There was an “event” that caused hits to go from a few hundred per day to about 50,000 one day then 25,000 the next day. That was great, but it really screws up viewing the yearly analytics.

HoR has always been a very “sticky” website, and 5.41 pages per visitor is a pretty good stat I’d say.

2007:
Some funny activity in the beginning of the year was most likely attributed to this very blog. Whenever I talk about the business in a way that interests people, I can see little spikes in traffic. I don’t particularly care because those visitors from my blog rarely buy anything from HoR…so it doesn’t make me any money. In fact simply talking openly about this business has caused a slew of people to copy. Why on EARTH anyone would want to copy a business model I did back in high school is beyond me… If I could do it over again I would’ve preferably picked a much larger niche.

Judging from this chart, HoR was pretty stagnant or even declining during 2007.

2008:
I ended up doing all sorts of improvements to HoR in 2008 in my own sporadic way. I suppose it helped as traffic went up. Traffic may also have something to do with this blog. Once again, traffic doesn’t necessarily = income. Although I’m sure it doesn’t hurt.

2009 (Up till Sept. 1, 2009):
Here is a snapshot of 2009 thus far. These stats don’t account for 4 busy months of the year, so I’m not sure how trusting I am of them yet. Looking at the stats I notice the Avg. time on site is lower than it was 3 years ago. I suspect 3 years ago people had slower computers and less web savvy. Or maybe the site just sucks and people aren’t staying as long. Who knows.

Site traffic seems to be consistently growing a small bit. Based off my estimates (with information not presented here) it should overall grow to a new high.

From the information presented I need 102,689 more visits this year to equal the traffic of the heavily inflated 2006 sample. Based on the 2008 sample, a yearly avg. for monthly traffic would be 27,303 uniques per month. Multiply that by the extra 4 months in the year and that comes to 109,214 which would put 2009 as the highest traffic year. That 27K average is also probably a low average, since generally the 4th quarter is a higher traffic time for almost every business in the United States.

In addition HoR has an ancillary rave blog that gets 200+ visits per day…those are not included here.

Effects of recession:
I always get asked if this recession has had any effect. Well…yea.
Anytime you get people making less money, lots of money fear etc. etc. people will buy less…especially stuff in the party/retail sector. Also, with lots of big corporations in extreme money-saving mode, most of the really large orders I would get from them have disappeared along with those fat-ass budgets.

This business also sells stuff people don’t really need. We actually have managed to grow believe it or not, but not by the 4X factor we were hoping for late last year. What hurts the most is the indirect effect the recession has taken. HoR sells “hard to find light up stuff“…and “hard to find” roughly equates to “not manufactured that often.” It takes LOTS of money, time and resources to manufacture/store/ship/distribute a single product, and lots of the cool products we once used to carry have gone bye-bye (much to my chagrin). If anything, this has been the single most destructive part of the recession to the business.

Well, recession or not, cheers to a decent 2009! *clink*

I read Adam’s post about a large chargeback a while ago and could completely relate to the pure helplessness felt when dealing with these.

A chargeback is when someone files a claim to get their money back from you. This is a great consumer protection device, but it can be abused.

It’s almost obscenely rare that the merchant will ever win one of these disputes. I’ve tried many times to no avail. I fully understand that this is simply a cost of doing business, but I’d still like to send a message:

As you know I own a business called House Of Rave and over the years we’ve had to deal with chargebacks. Since customer service is good and everyone gets handled properly, legitimate chargebacks are quite rare. However the occasional piece of fraud slips through the system, and it really sucks losing even $1.00 to these people.

I’m not in position to change how this entire system works, but I’d like to do something to help. Whenever I see a suspicious order, I’ll basically just Google the name, address, email etc. to see if I can find results. Based on this I can often make a judgement to send the order or not.

Inspired by Adam’s post, in the archives of the House of Rave Blog I’ve created the Chargeback and Fraud Warning Page:

We don’t get many chargebacks, but I listed two of them we’ve recieved in the last five months. I’ll list more if they come along.

This way if any other merchant Google’s some of this information, it will give them a hint that this person/address has done this before. They can make their own judgement call from there.

If you own a store or have the resources to make one of these pages, I’d suggest you do. I’m not sure if it’s worth it, but if this manages to stop even one jackass from ripping off someone else’s store, I’d be happy.

I’m still immature and am slightly fascinated by monetary success, and was thrilled when I first read about this simple measure of success a while back.

It’s pretty much an easy way to see WHY a person (or organization) has a certain amount of wealth.

Simply look at a person or organization and ask: Who do they serve?

Look at what they do for other people and how many people they serve. Almost immediately it becomes apparent.

It breaks down like this:
Serve few + not valuable work = Little money
Serve few + valuable work = Good money
Serve few + very valuable work = Lots of money

Serve lots + not valuable work = Little money
Serve lots + valuable work = Good money
Serve lots + very valuable work = Lots of money

If you’re a numbers person you can make into a simple mathematic function:
People Served = a
Value of Service = b
Success = c

a X b = c

If you want ‘c‘ to be higher, you just have to increase ‘a‘ or ‘b‘ (or both).

Perhaps it’s easiest to demonstrate with real life examples:

The guy making your burger at McDonald’s:
Makes little money.
He performs a job almost any person can quickly learn. If he cannot show up, someone can easily replace him. Serves one organization and doesn’t serve much.

Cardiac Surgeon:
Makes good money.
Goes through over a decade of grueling medical training to be prepared for any circumstance that arises in their specialty. They serve relatively few people in the grand scheme of things, but they serve those individuals A LOT (he can either save you or kill you). Can he be replaced? Yes. However there are relatively few cardiac surgeons in the general population, so it’s very difficult. This means if someone is particularly “good” amongst their peers they could make quite sizable sums of money for their premium service. Serves few but serves them a lot.

Elton John:
Makes lots of money.
Provides a small amount of service (entertaining them is still serving them) to a large amount of people. Has a unique style, voice and persona that’s nearly impossible to duplicate. Serves a little but serves a lot of people.

Google:
Makes lots of money.
Here’s a fun one. Google serves A LOT of people (billions) and provides them a lot of service. Almost everything they offer is free, and it’s almost always a few grades better than competing services that charge money. They provide lots of service to lots of people. It’s no wonder they will make lots of money.

• So who do you serve?
• How much value are you providing them?

I bet your answers will clearly reflect your income. For fun, take a look at everyone around you and calculate their incomes using this method. Pretty cool huh?

Since you know this, you can now improve your own outcome (c) by improving one or both of those areas.

a X b = c

Like most crazy/new/different things in life this is generally the pattern:

1. Come up with an idea or something you want to do
2. Most people think it’s crazy, silly or just “eeh”
3. You start doing it
4. For a while it’s just you without much support
5. Turns out what you’re doing is pretty cool
6. People starting joining you
7. More people join you
8. Your success starts to compound on itself

Perfect and hilarious example, this video (which has been buzzing around the net after it was on front page Digg):

For Christmas I went on vacation to Cancun with my family and friends. There were lots of relaxing and fun activities like this:

….and this:

(Notice the House Of Rave shirt)!

…but there are some definite upsides and downsides to owning a business and taking a vacation. For the most part I prepared for my absence and there was little work to be done, so it wasn’t that bad.

While I was the only one who generated any income during the trip (good), I was also the only one who had to take time out of the day to work (bad). Fortunately I don’t see this as a bad thing because I start going crazy if I don’t stay at least slightly productive several days in a row.

On two different occasions I whipped out my laptop in the lobby of the resort (working in the room isn’t as fun) and started handling business. Each session was maybe 1-2 hours, and pretty much looked like this the whole time:

Getting the work done during vacation actually makes the vacation more enjoyable in my case because I get a feeling of accomplishment out of it. However if you want a week completely void from thoughts about work, owning a business may not always be the best thing.

Here’s a typical introductory conversation with me:

I attend tons of events, networking parties and all that jazz, one thing in common is coming back with a pocket full of business cards.

Some are big, some are small, some are normal, some are fancy. By and large, it doesn’t make a single bit of difference what your business card looks like. I have never once decided to contact some someone back based solely on their business card.

In fact, most of the very successful people I meet have exceedingly simple business cards. Name, contact info and maybe a company logo. Nothing ornate because it doesn’t matter.

What my business card looks like (except a different email address, this was an old photo and I was too lazy to take a new one).

The funny thing is, usually the people with brand new companies which aren’t even making money generally have the coolest/most expensive business cards. I interpret that as a very ominous sign.

Not all cool business cards are bad though. If you’re making good money with the company, then sure, go nuts, although it’ll unlikely make any difference. I like some business card designs that tie into their industry, like some of these which would be great for tradeshows….but for most occasions, a standard personal business card would do fine.

If you’re actually of any interest to a person, it doesn’t matter if your contact info is written on a napkin, they’ll get back to you. If you’re relying on a cool business card to get you a call back, then you’ve probably got some work to do on yourself.

Just remember: You are making the impression, not the business card.

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Random:
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• In 2007 I bought several hundred business cards with a 2007 yearly calendar on the back thinking it would be a good idea. It wasn’t. Now in 2008 I still hand out those business cards and mention, “…and on the back you have a nice 2007 calendar!” which always gets a laugh! However a more timeless card would’ve been preferable.
• VistaPrint.com has really cheap and easily designable business cards.
• I keep about 3 business cards in my wallet at all times, it really comes in handy.
• Sometimes at events I get a person who introduces themselves and nearly immediately hands me a business card *cough* real estate agents *cough* …these generally go immediately into the garbage. Only trade cards if there’s at least a small possibility of you two connecting again.
• Even if you don’t have a business, a personal business card with your name, email and phone number would be nice to carry.
• I don’t like glossy business cards, you can’t write on them.
• It’s helpful when you get home to write interesting information about the person directly on the business card in case you forget. This has helped me several times.
• Generally when I get home, I checkout the websites listed on the business cards I get.

You know, I wasn’t quite sure how to write this particular post. Originally I wanted to do a post called “What Would I Do If Google Disappeared?” in which I would describe the various facets of life that Google directly affects my life.

Then recently I wanted to write a post about my trip to the GooglePlex in Mountain View, CA. I just had to see it since I’ve heard so much about it…almost built up to mythical status in my head.

Both ideas seemed good, so I think I’ll just roll them both into one big Google-y posting:

WHAT WOULD I DO IF GOOGLE DISAPPEARED?
All the ways I use Google in life.

Boom. Something big happens and every Google service I currently use is gone. The best way for me to think of every Google service I use it by taking it step by step.

DAY TO DAY:
I wake up every day, and the first thing I do now is NOT go into the home office like I used to, but stay in bed and grab my iPhone. Almost immediately all my email from several different accounts are downloaded. Two of them utilizing Gmail.

So my day starts off without any spam mail whatsoever, thanks to Google Gmail. I later get up, then start my desktop and laptop…both of them have Google Desktop installed (which I use constantly), and then I soon after load up my internet browser, which is 50% of the time Google Chrome. The other 50% of my surfing is done on Internet Explorer since Chrome is so new and still has a few tiny bugs, but even my Internet Explorer has the lovely Google Toolbar installed on it.

BUSINESS RELATED:
I update invoices and many documents through Google Docs which is great. Many times a day I search the internet for something. The search engine I use? Take a guess…

Even though my business email addresses all have their own domains, all the mail is relayed through Gmail servers to filter out the spam.

When I look up videos or host my own product demonstration videos, of course I use YouTube which is owned by Google.

When I look at the analytics for my businesses, guess which service I use? Google Analytics. It’s by far the best website analytics service around, and it’s free.

For making money off websites I use Google Adsense.

For advertising my own products I use Google Adwords.

For accepting money on websites I use Google Checkout in addition to my merchant account.

For HouseOfRave searching, the site uses Google Sitesearch.

…and finally, as I type these very words into my internet browser, I’m using Blogger….ALSO owned by Google!

I’m sure there’s lots of different ways that Google affects my personal and business life that I forgot to mention, but I digress to continue to my next subject:

MY TRIP TO THE GOOGLEPLEX:
WOW, so Google plays a hand in almost everything I do. There’s many other companies that do this: Microsoft, AT&T, Johnson & Johnson and the list of big companies goes on…but Google is the most visible character I play with.

Myself and many others continue welcoming Google into our lives because they keep simplifying things for us, making things better and providing great tools.

Now where is all this stuff made, and how do they continue banging out such cool stuff at such breakneck speed? Well, I’m pretty sure my visit to the GooglePlex shed some light on that.

QUICK DISCLAIMER: Google, if I offend you in any way I apologize in advance. I don’t think anything I’m posting here is confidential or intrusive to Google. I might have gotten a few security gaurds on my case telling me to put the camera away, and I always obeyed, but here are the pics I have. Considering the above list of ways I use your services, you probably know EVERYTHING about me, which makes you sort of like God. Please don’t smite me.

Now keep in mind I have pretty much zero experience working for a big company, so I’m not too familiar with how workspaces are setup, but from what I know, Google seems to be on the cooler end.

I quickly realized why they call it the GooglePlex. It’s BIG. Each building isn’t particularly massive, but it’s definitely a large network of separate buildings (hence the ‘plex’). In the relatively small city of Mountain View, CA., Google’s offices hold roughly 15,000+ people and is still growing. It occupies 47 buildings.

At first I thought I was driving through a large business park, but quickly realized that every building I was passing had a Google sign. Some are buildings that existed previously, some were just recently built for Google, and more are in construction, but they’re all Google’s.

So walking through a typical building might look something like this:

Very nice, serene landscaping coupled with the beautiful year-round weather of Mountain View makes a nice combination.

But for the most part, the main attraction at Google is the food. From what I’ve read, I had this weird impression the Google cafeteria would be some crazy Willy Wonka-like wonderland with chefs sliding down poles and food being tossed into your plate by Oompa Loompas, but it was a little different.

Have you ever been to Las Vegas and eaten at one of those expensive buffets at a nice casino? It was kind of like that.

So the entrance to the main cafeteria building looked like this, with lots of people opting to eat outside:

I personally don’t like buffets too much because there’s just WAY too much stuff to eat. However there’s something to please EVERYONE at Google!

Google provides free breakfast, free lunch, free dinner and free snacks to all their employees…and they’re welcome to bring guests and family often as they wish. Many Googlers feel absolutely no need to eat anywhere else.

They have every type of cuisine you can imagine, and hire some of the best chefs around. From the main buffet area here’s what I chose:

I eat weird things at buffets, and wasn’t particularly hungry, so don’t judge the quality of the food by my diet.

What’s also cool is they have 19 other cafeteria locations, each with a theme. One of them is called ‘Seven’ or something like that….and it serves only foods made from the 7 original food groups. Near the main cafeteria there’s also a fruit smoothie bar that makes smoothies only from fresh fruits, vegetables and other stuff that was harvested practically yesterday.

There was a woman in one of the ancillary cafeterias I saw whose sole job was to grind wheatgrass into juice. It takes a huge amount of wheatgrass to make a little juice, and she puts this concentrated juice (which is supposedly full of stuff that’ll make you healthy) into a shot glass, then puts the shotglass in crushed ice. There’s roughly 20-30 shotglasses on ice full of ice-chilled wheatgrass juice which you can just walk by and drink. As for drinking pure, crushed wheatgrass….it honestly didn’t taste that bad.

Here’s me chillin’ with my Gmeal:

Another cool thing is many of the herbs, fruits and veggies used to make the food are grown on site at Google. In the same outdoor area where people sit to eat, the food is being grown. Fresh food AND locally grown…hard to complain.

Walking along one of the main buildings there was a full scale tyrannosaurus rex, one of the many pieces of funky art dotting the landscape:

Right alongside this garden were meeting rooms. Here’s an actual Google meeting taking place (with the T-Rex in the reflection):

So after taking pictures of a meeting room, I think I got a few uneasy stares and had to chill out with the camera action. In fact while indoors I wasn’t supposed to be taking any pictures at all (hence the lack of the cafeteria pictures).

This was one of the outdoor concourses of the main building. Pretty funky architecture:

Now you see that bike the guy is riding in the above picture? Well there’s hundreds of those around the GooglePlex that anyone can use. Lets say you need to go from building 25 to the building 40…well that’s a long walk. However simply walk outside the building, and you’re bound to see a fleet of these bikes just randomly parked around. Grab one and go!

I thought it was pretty fun just grabbing a bike and going, then not having to worry about securing it to a bike rack…just leave it and go, ready for the next person. By the way, I actually got in trouble for taking the above picture on the bike.

Here’s a bad picture of the visitors center:

On the walls they have several monitors projecting live Google searches from around the world. The monitors quickly scrolled keywords, maybe 1 or 2 per second. From what I understand, they’re filtered for profanity, or else it’d be a very offensive visitors center!

And finally here’s the picture I call my “SEO Picture.” Search optimization at its best, literally on top of Google!

So that was my Google trip. This was one of the first corporate environments I’ve ever stepped in (besides Take Your Kid To Work Day), and I must say one thing:

It reminded me of college.

It was a bunch of smart, young people working hard on projects, riding bikes around, working and playing in the same area and everyone lives close by and you don’t necessarily have to show up every day.

There are however some subtle differences such as you get PAID to be here, they provide everything for you completey free (gym, personal trainers, haircuts, car washing, dry cleaning, good food etc) and everyone is slightly older (but not by much).

From what I understand, this single Google location blows through $1,000,000/week on food alone. That number doesn’t include all the other amenities they provide. But considering the company brings in a billion and half dollars per month, that figure isn’t so crazy.

I definitely see why people would want to work here, and how they attract some of the best talent around. So I guess attracting top talent and keeping them very happy has definitely helped Google become such a strong, global force so quickly.

The only problem I found with Google:
…was parking. I find it ironic that I can find the entire text of Moby Dick using Google in half a second, but it takes me 15 minutes to search for a parking spot. Ha! Perhaps they’ll find a solution for that too (update: I’ve been informed they offer free valet parking at buildings 40, 41, 42 and 43)!