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Holiday sales: More work, more hours, less profit

Posted by: John Tozzi on December 11, 2008

Jeremy Shepherd, founder of in LA, checked in today with an update about how his holiday sales look for the first 10 days of December. Sales volume has more than doubled since the same period in 2006, but the average order has dropped from $695 to $292, or 58 percent. (The change from 2007 was somewhere in between. Last year, he says the firm “squeaked out a successful Christmas with last-minute, site-wide discounting.”) This is the trend Jeremy reported when he got in touch earlier this month.

Jeremy writes:

Assuming this trend holds, our profits will decline sharply and revenues will decline slightly. What this means for us is a lot more work and a lot more hours for a lot less profit. It is also requiring us to streamline a lot of what we do with the product to lower costs to further discount in order to attract new and current customers.

One of the ways he’s lowering costs is by sourcing some of the company’s pearl processing to China. He’s also made a pretty bold promise to staff:

With higher volume and lower revenues, we have to find ways to increase production while lowering costs. I have made a commitment to all of my staff that I will mortgage my house before laying anyone off and I intend to keep it.

(Assuming anyone can still get a mortgage…) Incidentally, he says the company’s Canadian site is bucking the trend of higher sales volume, but lower average order price.

Thanks to Jeremy for keeping us up to date. This site works best with your contributions, so other retailers, what are you seeing? Tell us in comments or email me.

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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