There IS Such a Thing as Too Much Business

When that business is being conducted at a loss.

I’ve been deeply involved in the Groupon debate for the past few days.

Earlier in the summer, I’d bought a Groupon from a Twitter friend and had used it to buy some jewelry at half price. Later, in August, I was approached by a Groupon clone company and got the details on what they really cost a small business. I did some math, realized it would never work for my business, and blogged about it .

Only a week or two later, I heard a story on NPR about Groupon in which a friend of mine with a business similar to mine was interviewed. He seemed to say positive things in the interview. When I called him, he gave more concrete information that didn’t seem too positive. I spent half a day crunching the numbers again and still couldn’t see how Groupon could benefit me.

I put that aside and got on with my life.

Back into the Debate

Yesterday, my attention was captured by a story on Plagiarism Today about a photographer who had been caught apparently passing off professional photographers’ images as hers on her Web site. The whole thing blew up in her face when she offered a 1-hour portrait sitting with print and CD of images for $65 through Groupon. She’d sold over 1,000 of these — far more than any photographer could complete in a year — when someone pointed out that photos on her Web site belonged to other photographers. She attempted to say that her site was hacked, but it was pointed out that the same photos also appeared on her Facebook page. Then her site and Facebook page went down; when her site reappeared it had a collection of crap photos that my mother could have taken with a Kodak 110 camera. (My mother is a horrible photographer.)

If you’re interested in seeing how the situation developed, read the comments from the Groupon thread, which were preserved by Petapixel after Groupon cancelled the offer, refunded the money, and deleted the thread. (A little too late to put out that fire.)

This story was picked up by many other sites, including TechCrunch. Their focus was on the ability of a business to effectively service Groupon customers, Groupon’s apparent failure to properly vet the services it features, and the hardship incurred by at least one Groupon merchant, Posie’s Diner. Since I’ve always thought that the Groupon model could be potentially harmful to a small business merchant using their service to advertise, I went to the Posie’s Diner blog post and read the story. It’s an honest and rather sad account by the restaurant owner who wound up having difficulties meeting payroll expenses while accepting the Groupons she’d sold. Each one had a face value of $13 but she’d received only $3 for each one. That meant she’d have to sell $13,000 of product for only $3,000 in revenue. The blog post explains the other related problems, which are mostly customer related.

Some Commenters Are Jerks

To make it clear, Posie’s Diner does not blame Groupon. She admits she made a mistake and takes full responsibility for it. But that didn’t stop the usual bunch of jerks from making nasty comments on her blog post. This one really pissed me off:

Businesses that complain about too much business should not be in business.

Wow. This guy needs to get a clue. If every sale you make comes at a loss, then even one sale is “too much business.”

That’s the situation I would have faced if I went with the Groupon clone — or Groupon. My margins are so low that I’d lose money on every single sale. I didn’t need that kind of business. No business does.

Is Groupon a Problem?

I admit that I resent the idea of a company making money off my hard work while I lose money on deeply discounted sales. Posie’s might have made a mistake going with Groupon, but it’s a mistake they won’t make again. I just won’t make that mistake at all.

To be fair, I read both good and bad comments all over the Web about Groupon from both merchants and customers. Clearly, there are possibilities for using the service with success. I just can’t figure out what they could be for my business. But there’s also a lot of pain in the Groupon model: the financial hardship of businesses with too many Groupon sales, the difficulty for customers being able to redeem Groupon goods and services due to crowds and overbookings.

Back to the “Photographer”

The idiot “photographer” who unknowingly pulled me back into the Groupon debate is truly a fool. Not only did she commit fraud when attempting to use other photographers’ work as examples of her own to sell her services, but she sold far more Groupons than she could ever expect to accept. If she hadn’t been revealed as a scammer in time to cancel the sale, she likely would have been out of business before long. After all, she was making less than $35 on each hour-long session at a client’s home. Between transportation costs and materials costs, she would have been in the red from day one. Would 1,700 sales at only $35 each have been “too much business” for her? I think so.

Then, when customers starting seeing the dismal quality of her work, would Groupon have refunded their money? And what would they have done when the fraud claims starting coming in and Groupon was called out for not properly vetting the offer?

Or maybe she was a true scammer who never planned to do any Groupon work. Perhaps she planned to just take the money and run.

Clearly, there’s some kind of problem with Groupon that needs attention. I’ll continue to watch from the sidelines. But I certainly won’t be giving Groupon any business in any form.

When Is an Ad Not an Ad?

When it’s part of a blog post.

The other day, I was contacted by e-mail by someone who claimed to represent an advertising company that bought text ads on small blogs. They were interested in placing an ad on Maria’s Guides.

I was interested. It’s always nice to make a few bucks with advertising. I replied that I was interested but did not accept ads for pharmaceuticals, casinos/gambling, or sex/dating services. He got back to me within 24 hours and told me the rate they’d pay, which was agreeable, and the fact that they just wanted to ad to appear in one post on the site.

That should have started alarm bells ringing, but it didn’t. I had another advertiser some time ago who bought 10 ads, each on a different post. Targeting, I supposed.

He got back to me the next day with the text of the ad. It was about three sentences, one of which included a link to some kind of mobile Internet service. The ad was written in first person and ended with a the phrase “[Redacted company name] gets a big thumbs up in my book.”

I read the instructions. They wanted me to place the text of the ad, with its link, in the middle of a paragraph of blog post text. As if it were part of the post and I was the one giving the thumbs up.

I wrote back:

I don’t think you understand. I agreed to an advertisement. I didn’t agree to modify my blog post’s text to apparently recommend an organization I know nothing about.

I wouldn’t mind putting similar text — without the recommendation — in a box floating “above the fold” within the post. That box would be titled “Sponsored Link” or something similar. But I will NOT put it into the post itself as if I wrote it.

Obviously, he wasn’t interested in an advertisement. He was interested in a paid endorsement. He wrote back to thank me and let me know he’d remove me from his contact list.

I guess some bloggers will do anything for a few bucks. I won’t.

Blood-Sucking Leeches

Another parasite.

Interested in my thoughts on Groupon? You need to read this instead.

Earlier this year, I wrote about one of the many parasitic organizations that earn revenues solely by selling services provided by other people. I call them the parasites of the tour industry because they live off our hard work and require us to compete against ourselves.

The BillToday I was contacted by a similar organization. This one, which I refuse to publicize with a company name or link, gets businesses to offer special deals on goods and services on the organization’s Web site. They sell the deal and then take a “commission for the use of the platform.”

The commission? 40%!

Of course, I didn’t get that information from the caller. She assured me that the service was free. She said she’d send me a link so I could check it out. She said she looked forward to having a conversation with me about it. I wondered: aren’t we having a conversation now?

I had to visit the site, poke around, and discover the commission fine print. Then I called her back. She was surprised — she hadn’t given me her phone number. But I have caller ID, so it wasn’t tough to call back. I asked point blank what the rate was and she said they do a 60/40 split. I’d get 60%.

Let’s do the math. Today’s special offer is 50% off on rock climbing for a Phoenix-area rock climbing “gym.” The price: $8. So the original price must be $16, right? But what are the rock climbing people getting? $4.80 on something they’d normally get $16 for. That’s a 70% discount. Those folks must be pretty desperate for business.

I don’t even need to do the math to know that I can’t work with these people. My margins are far less than 40%. That means that even without a special discount for buyers, I’d lose money on every sale just by paying the commission. I told her not to bother calling me again; I wasn’t interested.

The next time you find a Web site that offers smoking deals on goods and services, take a minute to consider the struggling small business owner on the other end. When you take advantage of one of these offers, you’re not buying directly from the business owner. You’re buying from a middle man who’s taking a piece of the pie. 40% is a huge piece. What’s that business owner going to wind up with?

The crumbs left behind by a blood-sucking leech.

The Facebook Decision

Unhappily sitting on the fence; here’s why.

A while back, I wrote “Why I Suspended my Facebook Account.” I just reread it and it still rings true. But Facebook has again gotten in my face and I need to make a decision.

Facebook has proliferated to the point where it’s impossible for anyone in business — especially the business of writing computer-related content — to ignore. It’s everywhere. “Friend me on Facebook!” has become the robotic chant of businesses and individuals all over the country. I have tried to play the part of South Park’s Stan but Facebook continues to intrude on my life.

Recently, I discovered that Facebook had created a community page for me based on my Wikipedia entry. The opening paragraph states:

Our goal is to make this Community Page the best collection of shared knowledge on this topic. If you have a passion for Maria Langer, sign up and we’ll let you know when we’re ready for your help. You can also get us started by suggesting the Official Facebook Page.

So I have become a Facebook “topic.” I don’t know if I should be flattered or horrified.

(And, by the way, if you have “a passion” for me, I’d love to know. My husband might be interested, too.)

My Current Career Situation

Meanwhile, my dual careers as the creator of how to books, articles, and video training material about computers (which I’ve been doing for 20 years) and helicopter charter operator (which I’ve been doing for 5 years) are suffering along with the economy.

Print publishing — especially of computer how-to material — is dying a slow and painful death. The widespread availability of the same content — usually for free — on the Internet is destroying book sales. Just about anyone can use Google to find the answer to a computer or software question online. (That doesn’t mean the answer will be right, but that doesn’t seem to matter to anyone.) There are numerous blogs, including one of mine, that provide how-to information with the same step-by-step instructions I built my writing career on for free.

This is what publishers are competing with. They know it and they try to fight back by stressing the simple fact that their content is being created by experts. But no one seems to care. Why spend $20 on a book that might answer a question when you can spend 20 minutes with Google and the World Wide Web and get an answer for free?

As a result, most of my books are not being revised. The most recent casualty to this trend was my Excel for Windows Visual QuickStart Guide which I have been revising since I wrote the first edition for Excel 95. Look all you want for an Excel 2010 edition — you won’t find one.

The world of helicopter charters is even more shaky with the economy the way it is. My last season in Arizona was dismal, with very few good charters — certainly not enough to pay the bills. The agricultural work I do during the summer months is a lifesaver for the business. Without it, I’d likely have to sell the helicopter and close up shop.

And I’m not the only one in this situation. Helicopter operators and flight schools have gone out of business all over the country. Most people simply don’t have money to spend on things they don’t really need. Who needs to fly in a helicopter? Very few people.

Enter, Facebook

Facbook LogoAnd then there’s Facebook, sitting out there, presenting itself as a free way to make contact with potential readers, video learners, and helicopter passengers. A marketing tool, waiting to be used. Like a worm sitting on the grass, waiting for the a bird to snatch it. But is there a string attached that will drag me down into a hole?

I could reactivate my Facebook account. It’s easy. All I have to do is log in. Everything is there, just where I left it.

Of course, I did strip out all my personal information — or whatever information I could — to prevent it from getting into the hands of people I didn’t want to have it. I’d have to build that back up, selectively, to make a real profile page.

Then I’d have to build pages for each of my careers, keeping them up to date. I’d have to visit them regularly to keep in touch with my new “friends” and respond to their comments on my “wall.” I’d have to accept friend requests from strangers and then struggle to figure out which ones were real people and which were spammers trying to sell me their crap. I’d have to find new people to friend. I’d have to post on my wall and their walls. I’d probably have to fiddle around with the never-ending collection of applications, trying to figure out what they do, how they work, and why I should use them. I’d have to build a presence for myself on Facebook, in a community I have no desire to be part of.

I’d be going through the motions just to satisfy fans and mollify editors. I’d be playing the game because it was expected of me. I’d be spending hours of my life every week on a marketing tool that might get me a handful of new readers and video learners but would more likely expand the audience for the free content I already put on the Web.

Time is one of the most valuable things I have. My freelance lifestyle gives me more time than most people have. But I don’t want to waste it. I’d much rather spend it on things that are important to me, learning or doing something interesting, something worth remembering, worth writing about, worth sharing.

Is Facebook any of that?

There’s more to my life than writing on virtual walls and tending to imaginary farm fields.

I don’t want to sell out.

MagCloud

On-demand magazine publishing.

I need to start this blog post by thanking RickHap for his comment on my blog post, “Marketing Madness.” My post whined a bit about the chore of putting together a 12-page package of information about Flying M Air‘s helicopter tours and day trips for Phoenix area concierges. Rick told me about MagCloud, an HP service that can turn a PDF into a slick, bound, full-color magazine.

The deal seemed too good to be true: only 20¢ per page for full color printouts with no minimum purchase. Just create the PDF, upload it to the site, and get a free proof. If it looks good, click the Publish button. Or, if you’re confident about your PDF production skills, simply publish it without waiting for the proof.

So I tried it. I threw together a quick PDF of the files I’d been printing at my local print shop for 80¢ per page and painstakingly slipping into special binders. I went away on a trip — have you noticed how much I’m traveling lately? — and when I got home, the proof was there.

And it was pretty damn good.

The print quality was better than I’d been getting from the local print shop’s fancy printer. It was smartly bound with staples, so it wouldn’t fall apart. And on the back page was an address area to make it easy to mail the materials out.

Not only was I hooked, but I began to see the possibilities in using this service to meet my own publishing needs.

Exploring Arizona by HelicopterFirst up (after the concierge package was properly done) was a newsletter for Flying M Air that I’m calling Exploring Arizona by Helicopter. I had to come up with a new design that utilized my company colors. The resulting PDF looks pretty good for a first effort, if I do say so myself. I can’t wait to see the printed version.

Although this first issue is a bit heavy on the marketing content, some comments from Miraz will help me focus on content with more universal appeal in the next issue. This issue does feature a few of my better photos, though, many of which can be found in my photo gallery. (Hey, a girl has to pay for this photo equipment, doesn’t she?)

I’ve ordered 20 copies to send out to former clients and hopefully entice some of them to submit photos and first-person accounts of their experiences flying with me. I’ll also be dropping off copies with some of the concierges I’ve been visiting to get them interested in what’s new.

If you have a newsletter or magazine you’d like to get printed on demand, I highly recommend MagCloud. And again, I’d like to thank Rick for sharing this info with me. I think it’ll really help me get the word out about all kinds of things in the future.