suddenly no sales?

[Theresa Tennyson]

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Amethyst Jetaime wrote:

• Customer buys an item in world and pays $200L 
• Customer gets the product
• Merchant receives $200L  
• MERCHANT PAYS TIER/RENT ON IN-WORLD STORE

• Customer buys an item on MP and pays $200L 
• Customer gets the product
• Merchant receives $190L  
• MERCHANT DOESN'T NEED TO PAY ANYTHING ELSE

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Amethyst Jetaime wrote:

 

It is the Merchant who paid the fee, not the customer.  The only way the customer would have paid would be if they paid $210L for the item which is not allowed by the LL terms which forbid pricing the dress higher than the inworld price.  If LL wanted the customer to pay the fee they would allow merchants to increase the cost by an amount equal to the fee.

The fee is overhead for the merchant

in the same way any other cost of doing business is, such as upload fees, and the costs of anything the merchant buys to make the item which all come out of gross profit.  A merchant doesn't make any money (net profit) unless the gross profit exceeds the overhead.  Many merchants don't make enough gross profit to cover their expenses and have to pay out of their own pocket for any losses.

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The "fee" isn't "overhead," because they don't "pay" it. Any money that comes in from a Marketplace sale is net profit. You can't assume that the same item would have ever sold in-world in the first place.

 

 

I had my eye on a SL bicycle, but I couldn't really justify paying the list price so I didn't buy it. This weekend that merchant had a half-off sale and I decided that I would buy it. Did the merchant "pay a fee" to get me to buy it? They theoretically didn't get the money I would have spent if it had stayed at full price, but they made a sale they wouldn't otherwise have made.

[Drake1 Nightfire]

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Theresa Tennyson wrote:

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Amethyst Jetaime wrote:

• Customer buys an item in world and pays $200L 
• Customer gets the product
• Merchant receives $200L  
• MERCHANT PAYS TIER/RENT ON IN-WORLD STORE

• Customer buys an item on MP and pays $200L 
• Customer gets the product
• Merchant receives $190L  
• MERCHANT DOESN'T NEED TO PAY ANYTHING ELSE

---

 

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And there are those of us that do both... What is your point?

[Theresa Tennyson]

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Drake1 Nightfire wrote:

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Theresa Tennyson wrote:

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Amethyst Jetaime wrote:

• Customer buys an item in world and pays $200L 
• Customer gets the product
• Merchant receives $200L  
• MERCHANT PAYS TIER/RENT ON IN-WORLD STORE

• Customer buys an item on MP and pays $200L 
• Customer gets the product
• Merchant receives $190L  
• MERCHANT DOESN'T NEED TO PAY ANYTHING ELSE

---

 

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And there are those of us that do both... What is your point?

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I edited my previous post to clarify that.

[Amethyst Jetaime]

My point is that it is overhead that the merchant pays from gross profits. Overhead not only is the fee or rent but all costs of running the business.  It includes items that the merchant may pay for supplies to make the item, upload fees, advertising, cost of ourside software, employees etc., as applicable.   If gross profit doesn't cover the expenses who pays?  The merchant from their own pocket. 

There are many people that sell things on the market place and make no money at all, and in fact lose money because they do it just because they enjoy creating things.

[irihapeti]

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Drake1 Nightfire wrote:

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irihapeti wrote:

pay as in pay for the service

when nobody buys anything from the shopkeeper then is no fee to pay

if shopkeeper had to pay rent or a product listing fee then can say the shopkeeper pays (for the service). But they dont so customers pays

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You really don't understand how things work.. The customer BUYS things from merchants.. The merchants PAY fees to LL. Many merchants do PAY for product listings. The customer is not PAYING  anything to LL.

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merchants do pay for Featured Items display, true. Same like they can pay for inworld Classifieds. Featured Items and Classifieds are a visibility promoting service that run parrallel to the search

 

 

[irihapeti]

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Amethyst Jetaime wrote:

My point is that it is overhead that the merchant pays from gross profits. Overhead not only is the fee or rent but all costs of running the business.  It includes items that the merchant may pay for supplies to make the item, upload fees, advertising, cost of ourside software, employees etc., as applicable.   If gross profit doesn't cover the expenses who pays?  The merchant from their own pocket. 

There are many people that sell things on the market place and make no money at all, and in fact lose money because they do it just because they enjoy creating things.

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on the first

the merchant has full control over their budget. How much time and resources and own money they are going to put into it They also have full control over quality and price setting to attract customers, recover their costs and make a profit. If they dont get the balance right then they out of pocket. true

none of these costs the merchant incurs has anything to do with the way the MP works. MP is a free service for the Merchants to use, to spend their time on or not as they choose

merchants incur a time cost when using MP. Customers also incur a time cost when using MP

+

about the second

people who sell for way less than the recovery cost dont lose anything. Mostly bc like you say they arent in business. It can cost them tho to do what they do. But am not sure that they would all see that as a loss, in the same way a business person usually does

[Theresa Tennyson]

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Amethyst Jetaime wrote:

My point is that it is overhead that the merchant pays from gross profits. Overhead not only is the fee or rent but all costs of running the business.  It includes items that the merchant may pay for supplies to make the item, upload fees, advertising, cost of ourside software, employees etc., as applicable.   If gross profit doesn't cover the expenses who pays?  The merchant from their own pocket. 

There are many people that sell things on the market place and make no money at all, and in fact lose money because they do it just because they enjoy creating things.

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You're confusing "overhead" with "expenses." The term "overhead" is used for one specific type of expense - a recurring expense that can't be tied to a specific item. It's an inescapable cost of your operation that has to be covered by income.

Uploads, templates, textures, etc. aren't "overhead" because they're only paid for once. Once you make enough to cover the cost they're free after that. Since they can be re-used they're not material costs either. Once an item is created in SL with standard building techniques (i.e. not something like a breedable) additional copies cost nothing to the creator and the elements used to create it can also be re-used for different projects. This makes these expenses more of a capital investment.

Software would be capital investment unless it's a license that's paid over time, when it would be overhead -- however, it's not a necessary expense for a SL creator. There are free programs available that can do most of what is necessary to make things in SL.

Cost for a salaried employee would be overhead. A commissioned one wouldn't because they wouldn't have to be paid during a time of no sales. Someone like a scripter is usually paid at the start of the project and isn't an ongoing expense. However, employees aren't necessary either; nor is paid advertising.

This leaves rent. If you put an object up for sale in an in-world store you will need to pay rent/tier for a space whether you actually make sales or not. This is clearly overhead. The more items you have for sale the more space you'll need if you don't want to risk having the item buried invisibly in a multiple-item vendor.

However, with a Marketplace listing it can be offered for sale indefinately without your needing to pay for it to be sellable. Once your initial costs are met that item will only bring in profit. One of my alts recently bought four tank-tops from the Marketplace that the creator was no longer offering in their in-world store for space reasons. No listing enhancements were involved - I saw them when looking for something else from that creator (that had also been pulled from the in-world store, incidentally.) The Marketplace allowed the creator to make money from these items that they wouldn't have made at all with only their in-world store, and with no overhead cost.

[Medhue Simoni]

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Amethyst Jetaime wrote:

• Customer buys an item in world and pays $200L 
• Customer gets the product
• Merchant receives $200L  

• Customer buys an item on MP and pays $200L 
• Customer gets the product
• Merchant receives $190L  

It is the Merchant who paid the fee, not the customer.  The only way the customer would have paid would be if they paid $210L for the item which is not allowed by the LL terms which forbid pricing the dress higher than the inworld price.  If LL wanted the customer to pay the fee they would allow merchants to increase the cost by an amount equal to the fee.

The fee is overhead for the merchant in the same way any other cost of doing business is, such as upload fees, and the costs of anything the merchant buys to make the item which all come out of gross profit.  A merchant doesn't make any money (net profit) unless the gross profit exceeds the overhead.  Many merchants don't make enough gross profit to cover their expenses and have to pay out of their own pocket for any losses.

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Well, technically, regardless of who actually pays, the reality is, that the customers always pay for all overhead and expenses, if the merchant is profitable. All costs are part of the price. No business would survive if this was not actually the case. So, whether you are talking about real world taxes, or LL commission fees, it is always the consumers that pay. Taxes and fees on merchants are really a way for the governing bodies to tax the public without them knowing it. Some ignorant people even want their governments to tax their corporations more, not understanding that this will raise the price of what they buy. If the government taxes corporations at a rate of 25%, all that really means in that the costumers of that corporation are paying 25% more to the government. The same goes of LL and the commission on the Marketplace. All the consumers are paying 5% more than they have to. Most merchants don't have an inworld store, so it doesn't matter what rules LL puts in to make the price stay the same.

[LovedWarrior Quan]

ok that was a fun topic to read!