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BiyoArt Business Update


Another show season is once again is the rear view mirror, and to be blunt it was a pretty poor showing as sales were extremely erratic coming in -8.57% from a year ago. One of our best shows shut down at the beginning of the second day due to thunderstorms which cut sales from 2010 by 70%. We did managed to reduce overall expenses by 6.38% but internet sales were also lower by 8.36% despite a 20% increase in advertising cost while internet ad revenue, although small, was still 56% lower.

We were recently notified that the Hollis Festival will be cancelled for 2012 with possible re-schedule for 2013. The show was hammered by high winds (40-50 mph ) which knocked out many booths. The show has followed the Columbus holiday weekend in October and has seen varied weather conditions over the years. The show's coordinator tried to get the show moved to the end of June 2012 but couldn't get enough artisan commitment to validate a responsible effort to the community and fellow artisans.

As was reported in the 2011 Business Update we re-launched the website at the beginning of 2011. We got rid of the framed based website, as well as anything that was not sports related. The re-launch is completely focused on sports; which was both a painful transition and a relief to re-establish focus on a product base. The base pages are still transitional but the authorized, site navigation function is purely CSS. Also, the new site currently does not have any in-stock silkscreen sports products listed; we are shutting down the silkscreen portion of the business.

As noted, we are shutting down and dissolving the silkscreen portion of the business. Main reason being no one wants to spend the money buying a silkscreen when they can get 2 of the machine prints for the same price. Spite the uniqueness of the silkscreen most of the potential customers cannot tell the difference between the two forms; which really is a surprise given the differences. So, closure of the silkscreen print room this past year also contributed to an overhead savings of 11.73%.

Further savings for the studio was gleened when we converted the 10 recessed 75w flood lamps with 8w LED floods at the begining of 2012. The light is a little dimmer overall within the studio but it's also more focused on the work product, walls and work space.

We thought the re-launch of the website would help with its search position on-line, since a frame based site has no chance of positioning itself. Well that never happened after about six months, but what did happen was that the individual print images listed for all sports product lines are now located in top page ranking on Google Images. Note: we also relist out site at the beginning of every month with Google, Bing and Ask, as well as upload the entire product file to Google Base every 30 days. We also maintain midland ranking (3-4) with Google AdWords at a yearly cost expense comparable to one of our road shows.

We also began listing the entire product line (Google Base) with Amazon Marketplace since they gave us $75 in advertising fees until the end of June 2012. Amazon gets Google page rank for our product search and our product image appears to get page rank on Amazon as well as our Google ad appearing on the same Amazon search page (Home & Kitchen > Wall Decor > Prints & Posters). We currently use external site preferences and may have to submit to utilize Amazon check-out for customer convenience and pay the cost per product sold; as an avid Amazon user the convenience and reputation would possibly help customer sales hesitation.

The IRS enacted section 6050W in accordance with the Government mandated Housing Assistance Tax Act of 2008 which required our Merchant Services to report all credit card processing transactions on a monthly / yearly basis and report the transaction on an end-of-year 1099-K. This in turn costs another monthly $4.00 fee.

We were also introduced to the dreaded charge back 12b letter process; someone disputed a charge on their account. The both sad and funny thing about the sale was that it was a point-of-sale at a festival and we remember the nice old couple who made the purchase. All documentation had to be emailed in a secure zip file with the password to open the file phoned into an aswering machine. Just having the charge disputed initiates a 12b letter and automatically charges the business account a non-refundable $15; the dispute was resolved about one month later and luckily we were still in the black on the framed artwork sold.

Our first international shipment went to Canada. Lots of duplicate paperwork and extra fees, but FedEx made it a fairly simple process. Plus, just got another request for a print ship cost to the UK; we approach these requests with caution.

Had a request from a hockey sports agent for a very large canvas print of our hockey design be sent to Canada. The only economical way to get it done would to contract with a Canadian firm. We found one with the right Epson printer, but they didn't want to deal with our postscript file and requested a tiff file instead. Our prints do not reproduce properly with a tiff file whereas a postscript plot file handles the vectored lines in perfect resolution as compared to the slight jags of a tiff. In the end a 40x60 canvas would cost about $800 after our bump, with another $250 to frame; never heard back from the sports agent.

We are currently researching canvas prints off our Epson as well as framing costs...etc. Given the cost of the archival canvas, the stretcher frame, as well as the canvas framing it's about in the ballpark cost of our large glass framed 20x27 prints. But the handling and durability of the canvas with acrylic protection instead of glass is enticing...

For the past few years we have been having an issue with charcoal Bainbridge (041) mat board that we have drop shipped. We had to take a $175 write down on a couple cases of it that sat for six months prior to opening. The issue is that the charcoal mat (32x40) appears to have a waterfall type washed effect throughout the mat; it looks like a process error. The other problem we've had is that these cases also do not have a manufacturing barcode listed on the case to trace the product back to its production. These cases have been bought from a nationally reputable company, who has also in the past compensated for two other bad cases. To add insult to injury the last good case of charcoal mat board was one-quarter inch out of square along the short side; no barcode either. So, from now on upon drop ship, if the case does not have the manufacturing product barcode we're not accepting shipment.

Also started using (2011) a new UltraSharp U2410 screen from Dell versus our previous 2408WFP UltraSharp. The difference between the panel manufacturing process is an IPS type for the 2410 versus TFT for the 2408. We use a Spyder3 Pro for calibration and active sensor. The difference is that my eyes are no longer getting tired staring at the monitor for long periods of time, with no discernible difference in utilization.

The saga also continued last year with our Merchant Services upgrading the PCI DSS SAQ-D compliance to the latest Security Council's version 2.0. The previous year they updated their own version of 1.2 to the actual Security Council version 1.2. Last year the update was incorporated without any notification, nor information regarding the differences between the releases, just that compliance is mandatory. For this we pay a fee of $129 a year over four months. Our Merchant Services then tried to apply a non-compliance fee of $30 per month until we were compliant with SAQ-D. Once contacted the fee was dismissed for one quarter while we attempted to complete the compliance paperwork with our ISP service. It took about 2 months to hash out the meaning of the compliance parameters and whether or not we were in compliance on our server. What we found was that compliance went from 1.2 to 1.2a to 2.0, and that apparently other companies got a clarification written into the compliance parameters such that one question on 1.2 was now one question with five subsections for 2.0. Because of the clarification we also had to modify some of our process with alphanumeric bumpy case passwords, secure FTP protocol with FileZilla and secure mail server access. In the end we figured out the compliance parmeters and are currently compliant with quarterly server scans via ComplyGuard.


It's been real
We'll have to do it again real soon.
Talk at ya.

- yO

20 - March - 2012


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