Tips for inworld stores: getting found instead of lost

[Peggy Paperdoll]

"plutocracy "

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Someone said that exact same word a few years ago when the McCain-Finegold campaign finance bill was declared unconstitutional and the law was overturned.  A rather heated discussion was started (mostly by me when I challenged the person on that statement).  It was fun for me but I'm pretty sure the other poster wasn't having much fun.

You wouldn't happen to be that person I was discussing the law with?  I mine I know the meaning of "plutocracy"........but it's really not an everyday word people use.  I've maybe seen that word used since the "discussion" twice.........and that was reading some potitical blog (probably something similar to the Huffington Post).

If so........it's good to see back after all these years.  :smileyvery-happy:

[Spica Inventor]

"However, the cost of labor is not wholly arbitrary for professionals in the content creation business".

Of course it's arbitrary. How much do you think you are worth per hour of work? How much does the next guy think he's worth per hour of work? And on and on and on to the other peeps....How long do you think it should take before you start making a profit after recouping your time invested based on what you arbitrarily think you where worth per hour of work? And the next guy? and the next peep? and so on and so forth....

"If the merchant simply buys templates and flood fills them with a purchased texture, he basically put in no labor and can sale his item at a price far below the market value of the item".

Anyone can sell their items far below their 'market values', but what's to determine market value? I'll tell you this right now, the market value of an item has nothing necessarily to do with the amount of time someone spent making it.

"On the other hand, a merchant that actually makes a quality, handcrafted and original product must recoup the amount of labor that he put into creating a product".

Quality is a relative term. "Handcrafting' and 'originality' should not be limited as a correlative to ones Photoshop or other art software savviness that you seem to be implying.

"Just like RL, there are high priced stores and bargain basement stores that do well".

Actually the 'high priced stores' are not doing anywhere near as well as they used to for the last couple of years and all the growth is in the bargain basement stores (collectively and individually) or where expensive things where allowed to drop considerably in price. SL economics doesn't resemble RL much at all to me. Expenses can be almost non existent.

"The success of the store depends on the owner understanding his market and offering a product that meets the standards (or lack of standards) of his clientele"

I think price produces it's own market. Discourages or enhances by itself far more than anything else can and especially in S.L. where things are bought that would never be bought in R.L. by these same peeps.

"And sorry, slashing a price to 50% less than its actual value is undercutting not competitive pricing. And as I said, undercutting hurts the entire market. That's true in RL and SL alike".

Not if the market is over inflated price wise to begin with which it is and probably closer to 75% price over inflated in reality. And 'undercutting' is basically allowing for competition which is in most cases very good for general market growth in RL and I don't see why it should be different in SL. Advocation for these artificially high prices in SL would be like advocating across the board collusionary monopolistic practices on a massive scale in an economy which most would recognize would be 'bad' for market growth activity.

 

 

 

[Peggy Paperdoll]

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Not if the market is over inflated price wise to begin with which it is and probably closer to 75% price over inflated in reality. And 'undercutting' is basically allowing for competition which is in most cases very good for general market growth in RL and I don't see why it should be different in SL. Advocation for these artificially high prices in SL would be like advocating across the board collusionary monopolistic practices on a massive scale in an economy which most would recognize would be 'bad' for market growth activity."

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They actually call that price fixing........and, in most cases, it's illegal.  The rest of your post I agree with.

[Pamela Galli]

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Spica Inventor wrote:

 

Actually the 'high priced stores' are not doing anywhere near as well as they used to for the last couple of years and all the growth is in the bargain basement stores (collectively and individually) or where expensive things where allowed to drop considerably in price.

 

 

 

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I am curious where you got this data. Could you provide a link?

 

[Sassy Romano]

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Spica Inventor wrote:

This is a blanket response to all those who think that competitive pricing is the wrong way to go.

"so to undercut that by say 50% (or more) is not only logical and practical, but will prove to be necessary over the longer term and the sooner you competitively modify your pricing points, the better it will be for you when the dust slowly settles."

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The merchants who are successful price accordingly and that's typically competitive pricing.  Competitive pricing is NOT "see someone else's price and reduce by 50%".  That is far from logical.

Pricing is one of the fine arts and when negotiating a RL contract, the right price is where the client just about winces but still pays.  Both parties have reached the point where they are prepared to trade labour/materials for remuneration.

Establishing a price is also not trivial for anyone that puts their mind to it, a product should be market tested, compared against competition etc. but simply looking around at one with a similar name and saying "oh lets make ours half that price then!" isn't even testing the market.

I could set all my prices at L$1 and sell all day but that's then simply lowballing and anyone can do that but people don't always want to buy at L$1 because it positions the item as an item of no value and humans being what they are do also like to feel that they have received something of worth since they are handing over money which they themselves earned as remuneration in return for their own efforts.  A bargain and "no value" are not the same thing!

As an experiment, a while back I set a new product for sale which was a premium item in my range and for all my other products I had set the price.  For this new item, I set the vendor to provide 4 prices on the payment dialog and the vendor advertised "Pay what you feel it's worth".

What I will say is that had I taken the route of 50% off my existing prices (or even 75% as later suggested in this thread), I would have underpriced by a huge amount.  I forget the actual statisics now but only one person paid L$1.  The majority paid the price or very close to it, some paid more than the advertised price.

Do I feel that the person who paid L$1 got something for nothing?  No.  I give out promo items from time to time to individuals and I don't know whether he could have afforded the "normal" price anyway.  What I do know is that when someone says that they are "saving up for xxx", then it has a value that is perceived to be worth aiming for.  In reaching that goal, they might quite happily ignore the lower priced items.

As I said, pricing is a complex subject but simply looking around and picking a price that's 50% lower is not science, that's lowballing and the race to the bottom is one that I choose not to participate in, there is NO recovery from it.

Similarly discounting has the same effect, what you sell today for L$100 then sell tomorrow for L$50, irritates the people who paid the earlier price and the effect is that they wait until the next opportunity to buy at half price.  How many people have seen the copious SALE notices from that shoe shop that have been reducing prices by 70%?  What do they think will happen next time someone wants those shoes?  Either people will wait until the next 70% off sale, they'll go elsewhere in the meantime or they'll just accept that what was once considered a premium brand is now only worth 30% of the price that it once was.

I've met plenty of people who are proud to show off their  item of value (particularly RL) but I've never yet met someone who was proud to say that they paid the full price for something when a huge discount was subsequently offered.  They usually insert phrases such as "I was done!" in the conversation instead.

My personal stance is that discounting for an introductory offer then going to the higher normal price is an opportunity to give back to loyal customers with an early offer but deep discounting what was once an established price is not.  We don't have "stock to shift" here which is the main reason to discount in RL becase the cost of storage exceeds the value of the good.  Discounting to stimulate sales?  See above, it just establishes a new lower value for the brand.

Anyway, this thread was about how to get an INWORLD store noticed, not the philosophy behind pricing and we've gone somewhat off topic.

[Ashasekayi Ra]

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Pamela Galli wrote:

I am curious where you got this data. Could you provide a link?

 

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I was going to ask the same question, Pam. I would love to see those statistics.

 

@Spica: And, exactly how did you come by this 75% price inflation figure for all of the SL market? I would be curious to see the data this comes from. As for what is good for the market, I'll agree that competitive pricing is very good for a market, lowballing is not. Also, where did anyone bring up a monopoly or setting all products as high priced ones? It was simply stated that *if* a merchant wants to sell a premium, original and handcrafted product, they should not fall into the trap of selling ultra low just to get in with the hopes of raising their prices to their real value in the future. That just does not work.

@Sassy: Great post and so true. You are also right about the off-topic drift, so this will be my last off-topic contribution to the thread.

 

 

[Vegro Solari]

About prices, I picked up a handy rule of thumb from a famed marketing guru a while ago that I wanted to share.

"A product is worth exactly as much as the average customer in their mind is willing to pay and the competition in that niche will allow!"

 

There's nothing in it about the complexity of making the product, and that's absolutely intentional. You see it all the time, there's no just renumeration in the marketplace, it's all based on quickly-made perceptions.

[Pamela Galli]

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Sassy Romano wrote:

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My personal stance is that discounting for an introductory offer then going to the higher normal price is an opportunity to give back to loyal customers with an early offer but deep discounting what was once an established price is not.

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Good post Sassy -- the above is my policy.  If my customers want something at discount, they know to buy it the first week (sometimes two) after release. Since I send a notice to those who subscribe to my list, it is a perk for them. (And yes I give gifts most weeks as well, but I do NOT give away my main merchandise, but mostly accessories.)

 

 

 

 

[Spica Inventor]

Well like I said there is a tradition of the established prices based on supporting in world tier fees. Product prices remain elevated do to that tradition more than any other reason it would seem. L.L. could manipulate prices legally in many ways i'm sure. I'm not implying that they are doing anything illegal. :-)

[Spica Inventor]

I am curious where you got this data. Could you provide a link?

 

Don't have a reference for you and don't really need one. I noticed that in general high priced stuff is losing ground to medium and low price stuff on the marketplace search results implying that the ridiculously high priced stuff is not selling as well as it used to, and that would also have to be reflected in world as the two market sources are inextricably linked. There are other indicators that I have previously listed on this tread. Of course you may find a few exceptions (for various other reasons), but that will by no means be the norm i'm sure.

[Spica Inventor]

Well, it is true that there is a psychology involved with purchasing things or a psychosis more likely hehe, Most customers who are relatively rich wouldn't buy something 'cheap' no matter what it was. This frame of mind still seems commonplace even in a pixel world with very little expenses, but using 1L$ as an example is quite the exaggeration isn't it? Like a 99.9% discount or there abouts? Obviously that would not be a good move. hehe. ;-)

[Spica Inventor]

"I was going to ask the same question, Pam. I would love to see those statistics.

 

@Spica: And, exactly how did you come by this 75% price inflation figure for all of the SL market? I would be curious to see the data this comes from. As for what is good for the market, I'll agree that competitive pricing is very good for a market, lowballing is not. Also, where did anyone bring up a monopoly or setting all products as high priced ones? It was simply stated that *if* a merchant wants to sell a premium, original and handcrafted product, they should not fall into the trap of selling ultra low just to get in with the hopes of raising their prices to their real value in the future. That just does not work".

Haven't you been noticing all the half price sales that end up not being temporary and then the same things being cut in half again later on price wise just to stay in the same spot on the marketplace relevance search sales position ? 10% or 20% sales have proven to be pretty useless it would seem. And mass collusionary practices is a kind of monopoly based on tradition. The userbase of S.L. is relatively miniscule due to these artificially set high prices. I would like to see alot more folks hanging out in S.L. At least 10 times as many as now. ;-)