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The problem with the Marketplace from a merhcant's point of view


ChinRey
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I know this sounds like a very negative subject. But I'd like to explain to those here who don't realize yet what all those complaints from merchants are all about and also maybe even explain why it doesn't generate nearly as much income, neither for Linden Lab nor the merchants as it could and should.

I think most of it can be summed up in a single sentence:

  • The Second Life Marketplace is not suitable for BIG

 


 

It is not suitable for big catalogs.

I'm going to use myself as the example for a change. I have about 3000 works I should have listed on MP long ago. The way MP is set up now, I have to expect at least 15 minutes work for each listing if I want a good, professional look with good images, related products listings and all that. That's almost half a year of work just transferring data and files from my computer to MP. Then I have to manage those listings and with the inadequate tools MP offers there (try to chop down a tree with a breadknife) that too is a nightmare. And it gets exponentially worse. Double the number of listings and managing them becomes ten times as hard.

(Edit: yes, I know I'm an extreme example here but I'm certainly not the only one to keep sellable products away from MP simply because adding and maintaining the listings would be far too much work.)

 


 

It is not suitable for big sales volumes.

Tech Robonaught brought up one of the issues in the thread More Redelivery Options needed Heads up Marketplace Team but redlivery is really just the tip of the iceberg.  The Marketplace offers no adequate functions to track past sales and sales results.

 


 

It is not suitable for big earners.

In an interview at hypergridbusiness.com Ebbe Altberg mentioned that a well known maker of mesh body parts made "hundreds of thousands of dollars." That's good for her and I'm sure LL is very happy about the 5% they get from her MP sales. What Ebbe didn't mention, and possibly didn't even know, is that there are four makers of mesh body parts with sales figures in that order. One of them may even be bigger than his example. But the other three do not list their products on the Marketplace, they only sell at their inworld stores.

The reason is easy to see. If you have a product lots of people really want:

  • Rez a prim
  • Set it up as a vendor and place it in a nice place
  • Post messages about it in a few groups and blogs

Much cheaper and much faster than an MP listing and it does the same job.

There's been some talk about LL's 5% commission on MP sales recently. In cases like these 1% would have been to much. It simply wouldn't be worth it for them.

 


 

It is not suitable for big buyers.

Shopping cart can only hold ten items. You can store favorite listings but not favorite stores. Viewing transaction history is easier for the buyer than for the seller but only in the same way a tortoise is faster than a snail.

 


 

One of the stated goals of the Marketplace Search Beta is to make the search "scale better as more content and categories are added to the Marketplace". That is good of course but it will only have limited effect on its own because a chain is only as strong as the weakest link. Every single function, every single line of code in the software, will need to be upgraded to become robust and performant (sorry Sassy) enough to handle the size MP has grown to.

Three questions to Linden Lab in case anybody there reads this and is willing and able to answer: Do you realize how much work is needed to repair MP? Are you prepared to do that job? And do you have a roadmap for it?

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It is more clunky than it ever needed to be. From the start it involved all the wrong decisions. When LL first decided to acquire the marketplace from XStreet and then do a rewrite, their first talks involved questions like "what is your favorite shopping site on the internet?" and discussions about how it can be like Amazon, or other RL sales sites.

I think what they really should have designed for was more game-ish,  that could have been integrated more tightly with SL and then building the web based services out from that integration.

The delivery system would have been one of the first things tackled and we wouldn't have it finished only recently some years later.

Why? Because they decided to mangle Spree, an open source (and immature at the time) shopping cart, which just isn't a fit, to do the job of handling all sales. Bear in mind that they already had a working shopping site before they decided to do the rewrite.

So here we are, years later, still hacking at the wrong tool for the job, with something that doesn't include the kinds of features suited to individual merchants and stores for virtual products.

Working on a new machine learning search currently rather than the core problems of the underlying shopping cart.

You aptly stated: "Viewing transaction history is easier for the buyer than for the seller but only in the same way a tortoise is faster than a snail."

That one gets a prize. And a reminder that back before LL bought out the resident-run and operated marketplaces, XStreet, developed and maintained by ONE person had better reporting than we have today some years later. And charts, we actually had charts.

If I'm going to be posting here again, I'm going to need a new rotating signature source. I usually match my signature quotes to current conditions. Since I've worn Heinlein out over the years, here we go ... Stephen King and B movies

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Sassy Romano wrote:

You meant to say "and with improved performance"

 


Pardon my French but you got to speak a language they understand to get your message through. ;)

In any case, English has been busy adopting French words ever since 1066 when a Danish expatriot in Normandie decided the grass was greener on the other side of the channel. One more imported word isn't going to make much difference.

Besides, "performant enough" actually has far more semantic meaning that the word "performant" on its own.

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Sassy Romano wrote:

Ok that was terrible...

Not at all, well said!

 

And for the tech people:

The Marketplace software is outdated and no longer compatible with reality. Please update.

 

For board members:

It turns out that the Marketplace Department has been unable to reach its optimal performance due to insufficient capacity and outdated solutions. This situation has existed for a while and has caused Linden Lab a significant relative financial loss. There have also been complaints from B2B customers who also suffer financial losses due to this.

 

And finally:

Marketplace fungerar inte som den borde och vi måste gjora något drastiskt.

(Yes, I know there's a typo there but that's because this message board doesn't allow umlaut characters!!!)

 

I think that should cove all bases. Or did I miss something?

 

----

 Edit:

 

But seriously:


Sassy Romano wrote:

...but nothing else works...

That's not absolutely true. A question at Lab Chat seems to have some effect. Wjat worries me is that Linden Lab may still believe they can patch up this new search engine, add a few of the things mentioned in those two threads here and be done with it. The problems with Marketplace runs deeper than that, much deeper.

If they think they've finished the job after that, I'm afraid I shall have no choice but to start quoting Churchill and that would be sad for everybody.

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ChinRey wrote:

I know this sounds like a very negative subject. But I'd like to explain to those here who don't realize yet what all those complaints from merchants are all about and also maybe even explain why it doesn't generate nearly as much income, neither for Linden Lab nor the merchants as it could and should.

I think most of it can be summed up in a single sentence:
  • The Second Life Marketplace is not suitable for
    BIG

 

 

It is not suitable for big catalogs.

I'm going to use myself as the example for a change. I have about 3000 works I should have listed on MP long ago. The way MP is set up now, I have to expect at least 15 minutes work for each listing if I want a good, professional look with good images, related products listings and all that. That's almost half a year of work just transferring data and files from my computer to MP. Then I have to manage those listings and with the inadequate tools MP offers there (try to chop down a tree with a breadknife) that too is a nightmare. And it gets exponentially worse. Double the number of listings and managing them becomes ten times as hard.

(Edit: yes, I know I'm an extreme example here but I'm certainly not the only one to keep sellable products away from MP simply because adding and maintaining the listings would be far too much work.)

 

 

It is not suitable for big sales volumes.

Tech Robonaught brought up one of the issues in the thread
but redlivery is really just the tip of the iceberg.  The Marketplace offers no adequate functions to track past sales and sales results.

 

 

It is not suitable for big earners.

In
Ebbe Altberg mentioned that a well known maker of mesh body parts made "hundreds of thousands of dollars." That's good for her and I'm sure LL is very happy about the 5% they get from her MP sales. What Ebbe didn't mention, and possibly didn't even know, is that there are four makers of mesh body parts with sales figures in that order. One of them may even be bigger than his example. But the other three do not list their products on the Marketplace, they only sell at their inworld stores.

The reason is easy to see. If you have a product lots of people really want:
  • Rez a prim
  • Set it up as a vendor and place it in a nice place
  • Post messages about it in a few groups and blogs

Much cheaper and much faster than an MP listing and it does the same job.

There's been some talk about LL's 5% commission on MP sales recently. In cases like these 1% would have been to much. It simply wouldn't be worth it for them.

 

 

It is not suitable for big buyers.

Shopping cart can only hold ten items. You can store favorite listings but not favorite stores. Viewing transaction history is easier for the buyer than for the seller but only in the same way a tortoise is faster than a snail.

 

 

One of the stated goals of the Marketplace Search Beta is to make the search "
scale better as more content and categories are added to the Marketplace
". That is good of course but it will only have limited effect on its own because a chain is only as strong as the weakest link. Every single function, every single line of code in the software, will need to be upgraded to become robust and performant (sorry Sassy) enough to handle the size MP has grown to.

Three questions to Linden Lab in case anybody there reads this and is willing and able to answer: Do you realize how much work is needed to repair MP? Are you prepared to do that job? And do you have a roadmap for it?

Focusing on a niche product as an example for success is somewhat misleading.  

Of course we should learn from success but niche products  serve as the wrong example.

Another important thing to look at is why something doesn't flourish?   

And I would add a fourth questiion to your list:  Does the road map you are using lead to the correct destination?

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"The Second Life Marketplace is not suitable for BIG"

 

But how many 'millions' of hours have  you wasted trying to sell things in world?

In world shops where always much more an ego thing then they where a money maker thing. Bagging rights for those merchants who where well established in world and had been around a long time.

Same psychology applied to the high relative price tag thing as well and peeps great reluctance to sell their products at lower prices. The false associating with price = quality idea that was constantly being pushed did considerable damage.

L.L. should have been taking 50% profits from MP sales instead of the measly philosophical 5% from the get go, and scrapped the profits from land model reality at least as far back as 2009 when it was clear that peep involvement in the game/platform had peaked far too soon.

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I disagree that inworld shops are an ego thing at all, it's just another facet to people's creativity.  Creating a shop or an environment that was also part of their imagination.

Marketplace on the other hand is an utterly sterile presentation where you have no scope for creativity in the listings whatsoever.  Everything is just too uniform.  It wouldn't be so bad if you could create a different environment other than just web page after web page that are all identical.

As for doing away with the land model and charging only people who create things to sell, 50% of their revenue well that's just hmmm!

Do you feel that would encourage people to be more or less creative?  I know which I believe.

The problem here is that "land" is tied to hardware resource in terms of hosting servers in a very linear model.

If you follow this model, then there's no limit to people asking for more and more land (physical servers) yet you're expecting revenue to come from the small number of successful merchants giving away 50%?  Would never work.

Using old figures, 0.3% of merchants earn over $5000 per month.  1% earn over $2000.  There simply are not enough sales on MP to support your suggestion.

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Spica Inventor wrote:

Same psychology applied to the high relative price tag thing as well and peeps great reluctance to sell their products at lower prices. The false associating with price = quality idea that was constantly being pushed did considerable damage.

True and one of the issues with all merchandise, items and services, in Second Life is that there is very little quality control. But don't forget the very real associating with time = money.

Say you want to make - a mesh chair for example - and you want to do it properly, good modelling, proper LOD, low LI, low lag, good texturing and some decent sit animations.

So, you spend ten hours modelling, three hours UV mapping, two hours getting the texture and normal map and specular maps right, an hour to get the LOD models right (fortunately we don't have to worry about physics for such an item, that saves us a huge lot of work), an hour to get the sit positions right and an hour writing description, taking pictures and listing it on MP. In SL today, you can probably sell it for about 100 Linden and if you're lucky, you eventually sell ten copies of it.

Four U.S. dollars pay for 18 hours of work.

 

That's perfectly OK for those who only build for fun and have enough time and money to spare they don't have to worry about it.

It's of course great if you don't make a chair at all but instead something you can sell 100 000 copies of at 2000 Linden each.

It's not too bad for the many who take shortcuts, rush uploading something they stole found on the internet.

The losers are the people who make all those items that don't sell for huge sums or in huge quantities, who take pride in their work, and need some income in return for all the hours they spend.

 


Spica Inventor wrote:

L.L. should have been taking 50% profits from MP sales instead of the measly philosophical 5% from the get go

50% is a bit too much but 30%, yes I'm with you that far. But only if they actually provide a service that is worth 30% and what they offer today isn't really worth the five percent even.


Spica Inventor wrote:

and scrapped the profits from land model reality at least as far back as 2009 when it was clear that peep involvement in the game/platform had peaked far too soon.

I'm surprised nobody's mentioned this before but there is a very strong connection between tier and content since tier is just as much about the prim count as it is about land size. With old style prim builds and with inexpertly made sculpts and meshes, prims can easily be short even on a full sim. With top quality modern builds, you'll run out of space long before you run out of prims even on a homestead sim. But it has to be done right. The builder can't take any shortcuts here or the poor customer will end up in lag and/or LOD Hell. He or she has to understand how the various building materials (not just mesh) in Second Life work and also be willing and able to invest the necessary time in the work. Today there are probably only a few hundred or less SL builders who deliver at that quality level. There are many others who can do it but has figured out (quite correctly) that it's better to build quick and dirty and sell on your past reputation. And there are lots of aspiring builders who want to do it if it only was something in it for them. And of course, there are lots of highly skilled professional 3D modellers elsewhere in the world but as it is today, Second Life isn't an interesting market for them.

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Inworld shops are probably an ego thing in most cases if the merchant has no SLM presence as well. I noticed some merchants have a minor SLM presence putting up just a small fraction of their products on the SLM when compared to what they have for sale in their inworld store/s. The logic to that would be to use the SLM for advertisement purposes to entice/force searching peeps to go to their inworld store/s where much more of  their product is for sale. To increase the traffic in that way is beneficial to sales at the sim where the store is, but not at the expense of loosing the additional sales the SLM would have otherwise supplied if the product was at the SLM as well, because the second best form of advertisement is to inundate the marketplace with your product. (The best form of advertisement is to get your product to the top of search results.)

Doing away with the land model is by far the single best way to get peeps to come to SL and stay (and therefore spend their money). Peeps want land to put all their goodies on and they want a place to have unlimited freedom with which to create on and a place to do whatever they want. Doing the catwalk on other peeps sims is all fine and well, but by itself it can hardly be considered a superior form of creative enhancement or peep retention enhancer. Freedom and personal/private space = creativity. Offering public and private sandboxes as an alternative is not a good compromise. 

"The problem here is that "land" is tied to hardware resource in terms of hosting servers in a very linear model."

Yes, another problem with LL thinking is their not understanding the reality that you got to spend money and invest money to make money, and short term thinking alone is never a good way to run a business. Improving server resources would be a good investment for many reasons.

"If you follow this model, then there's no limit to people asking for more and more land (physical servers) yet you're expecting revenue to come from the small number of successful merchants giving away 50%?  Would never work."

Many more small plots of land is all that it would take. Wouldn't even require alot of prims per parcel of land. Revenue increase would come from a much larger user base as a consequence of much cheaper land. That in turn will increase sales volume for merchants to a great degree, netting them more money and not less. Land price reduction could be done gradually over time if economic shocks are a concern. All merchants small to big would benefit.

 

 

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"True and one of the issues with all merchandise, items and services, in Second Life is that there is very little quality control. But don't forget the very real associating with time = money."

Let me take that one further and say 'userbase = money'. And what increases a userbase? cheaper prices, quality products, quantity of products. All the above working in tandem.

"50% is a bit too much but 30%, yes I'm with you that far. But only if they actually provide a service that is worth 30% and what they offer today isn't really worth the five percent even."

I would say that having an online marketplace by itself  is a great service over having to waste peeps valuable time shopping around in world. Even so, LL would have to tax inworld as well so some degree to make anything over a 10% SLM cut work well. Otherwise the malls will populate all over the SL again and even though LL would like that by generating more inworld income via land over the SLM ratio wise, the vast majority of us would not be pleased to go back to those time wasting days imho.

"I'm surprised nobody's mentioned this before but there is a very strong connection between tier and content since tier is just as much about the prim count as it is about land size...."

I agree. But I will add that I think currently prim amount is much more important for people than land size. Peeps just want a little place to call home all their own but want to decorate it nicely as well. A personal space to get creative and do whatever. Maybe combine these 'pocket realms' with other pocket realms to create a bigger place to do bigger things in.

To increase quality requires increasing the userbase more than anything else as the whole economy is really based on userbase. The viability of relying on peeps with deep pockets as the main revenue stream and economic growth catalyst topped out in 2009.

 

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Spica Inventor wrote:

"If you follow this model, then there's no limit to people asking for more and more land (physical servers) yet you're expecting revenue to come from the small number of successful merchants giving away 50%?  Would never work."

Many more small plots of land is all that it would take. Wouldn't even require alot of prims per parcel of land. Revenue increase would come from a much larger user base as a consequence of much cheaper land. That in turn will increase sales volume for merchants to a great degree, netting them more money and not less. Land price reduction could be done gradually over time if economic shocks are a concern. All merchants small to big would benefit.

 

No, you're way off the mark here.  There's plenty of land already that sits idle.  The last thing LL need to do right now is just keep adding more servers to make up for every few more simulators that need to run and hope to sell lots of little bits cheap.

The problem is with the architecture in that a simulator hosts scripts.  If just ONE script needs to be running a process that listens on a sim, it will need to be active and ready and that takes resources.  It simply does not scale.

Nor can it be guaranteed that a larger user base will arrive just because of cheap land, if that were the case then the other grids would have long since surpassed Second Life but they haven't.  All those sims for $40 or less?  where's the user base?  It didn't happen, thus we can see that cheap land does not equal lots of new users.

Had LL allowed for servers, architected in a scaleable manner, they could have separated scripts from land from assets and so on and ideally virtualised "land" instead of simulators such that your plot of land could essentially be anywhere, then that would efficiently utilise all available resource.

This way, resources would be added and shut down on demand and scripts could run regardless of whether there was anyone in the sim or not.  If nobody there and no activity taking place, it would be dynamically shut down, saving power and needing less overall hardware.  It's how big virtualised server farms operate to cope with changing demand throughout the day.

Easy to be wise with hindsight though.

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The land that sits idle is not cheap. That's largely why it sits idle. It's still the same expensive tier land. When I talk about land, I'm talking about tiny independent sims, not just rentable bits of normal sized sims. More servers would reduce lag, and that would also pay dividends. I know that the official duckspeak sponsored by LL is that the lag is at the users end, but of course that's not true out of necessity and there is always a direct correlation on both sides. It's not like adding lanes to a highway where individual servers become less efficient the more or better you have. Servers are much closer to a zero-sum situation.

"Nor can it be guaranteed that a larger user base will arrive just because of cheap land, if that were the case then the other grids would have long since surpassed Second Life but they haven't.  All those sims for $40 or less?  where's the user base?  It didn't happen, thus we can see that cheap land does not equal lots of new users."

There is only one reason that keeps the other cheaper grids from not attracting peeps, and that's the reality that SL has a virtual monopoly on the goodies. Merchants can't afford to spend valuable time in multiple grids with different setup and sell areas without a substantial equitable split up of merchandise without some type of probable payoff. Much product is hard to transfer over legally having parts of different creators. The government should step in and do an antitrust.

To sum up the real problem with lack of userbase and therefore revenue generation is that SL was set up from the get go to be a playground and fantasy land for silverspoons, and the great majority of plebs where to complete the silverspoons fantasy by participating in it with themselves, mostly just their avatars. In return the plebs could collect the crumbs and scraps that fell from deep pockets table and be happy about it or they could be shown the door. Many took the option of going through the exit door with their marbles. Particularly the ones that where in SL not to create things, but just to play around and enjoy themselves (which where the vast majority of them) otherwise happily opening up their pocketbooks to enhance that experience.

And hindsight would be 2006 but definitely not 2009. :smileywink:

 

 

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Spica Inventor wrote:

I would say that having an online marketplace by itself  is a great service over having to waste peeps valuable time shopping around in world.

No it isn't really. The Marketplace is a very ineffective channel for promoting your products. You can sell there, yes, but if you want anything resembling significant volumes at all, you need to recruit your customers yourself elsewhere.

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Spica Inventor wrote:

The land that sits idle is not cheap. That's largely why it sits idle. It's still the same expensive tier land. When I talk about land, I'm talking about tiny independent sims, not just rentable bits of normal sized sims. More servers would reduce lag, and that would also pay dividends. I know that the official duckspeak sponsored by LL is that the lag is at the users end, but of course that's not true out of necessity and there is always a direct correlation on both sides.

There is only one reason that keeps the other cheaper grids from not attracting peeps, and that's the reality that SL has a virtual monopoly on the goodies. Merchants can't afford to spend valuable time in multiple grids with different setup and sell areas without a substantial equitable split up of merchandise without some type of probable payoff. Much product is hard to transfer over legally having parts of different creators. The government should step in and do an antitrust.
 

Ok but what you're asking for is now micro-sims, that's kind of what I alluded to when I said they need to be able to virtualise land so that it is essentially anywhere and not tied to script or asset resources.  This isn't the architecture though, it just isn't and that's the major flaw. 

As a result, LL simply cannot keep adding servers because there's a linear relationship between servers and sims and hence land space.  Land is a chunk of a sim and that's that, adding more servers increases LL's costs in hosting and then they have to sell that to make it viable and the last thing LL would do at this point would increase their costs in the hope of attracting users when there's already lots of spare land.

Here's the deal, SL remains the cash cow that funds the next pet project, LL don't really have much incentive to add capability here that increases their costs in the hope of something.

Think of it like this, you have a holiday camp, half of the properties are empty so in order to make more money, you plan on buying the huge field next door, upon which you then spend millions building some high rise apartments all in the hope that people occupy those instead.  You still leave the existing half of the properties empty.  That's what you're suggesting in effect.  Now, if you were to consolidate half of each property and move the residents, then clear out the remaining land that you already own, build something new at very little cost, then it's different but that's not the SL architecture so can't happen.

I don't agree at all about the merchants problems on other grids.  You did claim that lower land would bring in users, so why haven't end users gone there?  Merchants don't go there because there's nothing unique that can't be achieved in SL already and in SL there's a user base.  Merchants have no reason to go.  It isn't a case that users don't go because there's nothing to buy, it factors yes as in there's nothing different than SL but otherwise, no draw for users and clearly low land price isn't a winner.

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