Let me start by saying that by nature I'm an optimist, if you run a small business you have to be. Doing battle with all the obstacles that face you, dealing with the vagaries of income and the unexpected means you have to be resilient. But even I have my moments when I wonder if the Universe is against me.
I started this business a few years ago, and was growing well until 2010 when the recession hit, things took a bit of a dive but I bounced back, more efficient, finding new niches for my business.
Then last spring Google announced it was changing the goalposts and in order to have my products displayed on Google Shopping, every one would require at least two extra pieces of information attached to it. My plans to spend the summer researching new products and features to add to my website fell apart and instead I spent 1-2 hours every day typing numbers and letters into a spreadsheet and uploading them to the website. Still, job done and overall it has helped, with an improved ranking. But at the same time some of my products, which happen to be the bestsellers I relied on, unaccountably disappeared. I had restocked based on the previous year's sales, which dried up, despite my best efforts tinkering with my listings and comparing them to other retailers. There are a few reasons for it, not just Google, but the changes have left me with stock which will now take months to shift. One of them magically reappeared recently, so maybe there is hope yet - there you are, that's the optimist in me popping up again.
As a small sheet music retailer, one of the biggest issues is the fact that the big publishers favour the big retailers, to the detriment of the small ones. The biggest buyers tend to get the biggest discounts, which is understandable on a logical level but it sucks the lifeblood out of the smaller players. Earlier this week I saw a sales rep for a publisher and as we finished chatting, I thanked him for cutting my profit margin when their discount rates were reduced last autumn. He winced, clearly every small retailer he saw had said the same thing, and he made a quick exit!
Here's an example of the problem. The new Trinity Rock & Pop syllabus books have been out for a little while now. I was puzzled as to why I had seen not only no sales, but not even any hits on the website for these products. Now I know why. I found Amazon selling them at a discount of 32% with free delivery! The discount rate means the retail price is marginally above the price I pay trade, so with postage costs on top of that, I would make a stonking loss if I sold at that price. So how many of these brand new shiny books do you think I will sell? That's right, a big fat zero.
The effect of the graded discount structures is to subsidise the big players, making them bigger. At the same time, the smaller retailers will never grow bigger (some won't even survive) because the odds are stacked against them. This is short-sighted in the extreme as the suppliers reduce their customer base, putting more of their trade with the big players who will exert increasing influence. So am I being paranoid in thinking the world is out to get me?
Then the Royal Mail announced its new prices and I sunk my head in my hands when I saw them, my naturally sunny disposition vanishing for a few hours. Most of my post consists of letters and large letters of various weights, and with increases of 25-30% this is a major problem, particularly as I offer free delivery. I'm doing an analysis of the costs, and haven't decided what to do yet, but absorbing these costs would mean making a loss. On the other hand removing the free delivery entirely would mean losing sales. So I suspect I will end up somewhere in the middle of these two extremes, with a lower qualifying level for free delivery.
But the Royal Mail madness doesn't end there, with increases of 30% for the bulk of my post. Take this clarinet ligature, for example. They need replacing from time to time; the kids stand on them, the dog chews them, and so on. This ligature weighs 60 grams, it needs to be sent in a box with plenty of packing to prevent damage, so it is of a size to be a small packet rather than a large letter. There are currently four bands for small packets up to 750g, and my ligature falls into the first, with a second class post cost to me of £1.33. I charge £1.40 postage to my customers, which, though I say it myself, is remarkably good value. Under the new prices, Royal Mail has removed the bandings and lumped all the small packets up to 750g in weight together. This clarinet ligature will now cost me £2.20 to post, an increase of around 65%. Almost all my small packets fall into the same bracket.
This particular change has caused massive outrage across many different retailers; many of us make money on small, light packages which are just too large for Large Letter prices. Take this Hidersine Junior Rosin for example, it's just on the border of large letter/small packet size and with wrapping paper and invoice often tips into packet size. I sell it at £2.15, the new postage charge is more than the product! Ebay forums were full of people selling all sorts of things who will be affected badly by this change, some of us are wondering whether we can continue to sell these products at all, would anyone pay these inflated postal prices? Maybe we can package multiples or assemble multipacks of different products, but we will all have to consider it carefully.
Will these increases make more money for Royal Mail? My gut feel is not as much as they expect. Small packets will plummet in number as sellers drop too-expensive-to-post items or sell multiples in one package instead. The increases in prices for parcels over 1kg will push more parcels out to couriers, and the new overseas prices will collapse the overseas market. I'm at the point in my business where I'm profitable, growing well and then another obstacle is dumped in my way. I now have to spend valuable time doing another analysis of postage costs and make decisions about whether to drop some products entirely.
Am I being paranoid? Is it just me or is there a regular cycle of attempts to make life as difficult as possible for small businesses? I haven't even mentioned the Cookie regulations (still to be settled) affecting internet retailers, the outrageous carriage charges by some suppliers for small orders, I could go on. The Universe isn't really out to get me, is it? Is it?