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Pamela Galli

"Select" merchants

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Reading through yesterday's posts, I'm actually shocked.

I'm still fairly new to Second Life and I thought this was an isolated one-time blunder. But if they've done it before and not learned from their mistake, that's bad, really, really bad.

And I thought the reason why they've been neglecting the Marketplace was that it contributed so little to their income,,,

 

This is no way to run a serious business of course, anybody can see that. It explains why the big RL corporations pulled out, they certainly wouldn't want to deal with a bunch of amateurs like that. I mean, there are big companies who pay taggers to spread their brand names where regular ads won't work and even they don't want to have anything to do with Second Life. Somebody once told me that somebody from Mercedes Benz explained why they pulled out of Second Life with "You don't advertise in a latrine". I'm actually beginning to wonder if that story is true.

It doesn't bode well for the future of Second Life and it looks even worse for Sansar. :(

Linden Lab really have a strong need to explain themselves now, to their business partners and prospective business partners big and small. But they probably don't even realize the problem. Most likely they are busy congratulating themselves for creating the perfect textbook example how to become your own worst enemy in business.

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Hundreds of pages of feedback about what is wrong with marketplace, over a period of years, and THIS is what they come up with to spend time on to "improve " it. 

No, it does not bode well for Sansar that it's creators are so persistently clueless about their clientele and product. 

 

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ChinRey wrote:

Reading through yesterday's posts, I'm actually shocked.

I'm still fairly new to Second Life and I thought this was an isolated one-time blunder. But if they've done it before and not learned from their mistake, that's bad, really, really bad.

And I thought the reason why they've been neglecting the Marketplace was that it contributed so little to their income,,,

 

This is no way to run a serious business of course, anybody can see that. It explains why the big RL corporations pulled out, they certainly wouldn't want to deal with a bunch of amateurs like that. I mean, there are big companies who pay taggers to spread their brand names where regular ads won't work and even they don't want to have anything to do with Second Life. Somebody once told me that somebody from Mercedes Benz explained why they pulled out of Second Life with "You don't advertise in a latrine". I'm actually beginning to wonder if that story is true.

It doesn't bode well for the future of Second Life and it looks even worse for Sansar.
:(

Linden Lab really have a strong need to explain themselves now, to their business partners and prospective business partners big and small. But they probably don't even realize the problem. Most likely they are busy congratulating themselves for creating the perfect textbook example how to become your own worst enemy in business.

Heh, no the marketplace is pretty lucrative.

As far as corporations feeling like they were advertising in a latrine? They did feel that way and they had some reason. At the time it was the wild west and anything went. It was not at all unusual to shop in an SL mall alongside a bunch of nekkid slaves or some nekkid noob with a wooden err ... extremity hanging out and all manner of things. Because LL didn't really do much about that stuff. And to many people that kind of anything goes freedom was part of the charm of SL.

LL has always looked down on its "residents" as second class citizens who just complain a lot for no reason, etc.

Mitch Kapor, the original investor and chairman of the board of LL at the time said this about residents during his SLB5 speech:

"So the first is, in the earliest wave of pioneers in any new disruptive platform, the marginal and the dispossessed are over represented, not the sole constituents by any means but people who feel they don't fit, who have nothing left to lose or who were impelled by some kind of dream, who may be outsiders to whatever mainstream they are coming from, all come and arrive early in disproportionate numbers."

And then went on to say in so many words that they were seeking a better class of resident, because you know ... all of us early adopters are well, undesireables.

Reference: http://wiki.secondlife.com/wiki/SL5B/Transcripts

Only later after the corporations were gone did they really start enforcing maturity ratings, and the only reason they did that is because they wanted to close the separate teen grid and let 13 year olds into SL.

But by the time they made these moves, the corporations were gone. And they still resent us to this day. One ex Linden calls us wackadoodles. It's not like our money pays their salaries or anything though, right?

 

 

 

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I have always believed the MP was lucrative, even in its crippled state. 5% of sales is a lot. Add to that LLs fee when cashing out, and tier (esp for those like me that need to pay to keep rezzed thousands of demo objects), and LL is making a lot from merchants already. 

But will I want to move over to Sansar to be further abused, neglected -- and unselected?  Not looking likely at this point.

 

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Pamela Galli wrote:

I have always believed the MP was lucrative, even in its crippled state. 5% of sales is a lot. Add to that LLs fee when cashing out, and tier (esp for those like me that need to pay to keep rezzed thousands of demo objects), and LL is making a lot from merchants already. 

But will I want to move over to Sansar to be further abused, neglected -- and unselected?  Not looking likely at this point.

 

I've got some wrangled numbers on an old hard drive about somewhere. I think the last bits that I put together were that LL had estimated some $75 million (real dollars) worth of annual sales of user goods, modified a bit to reflect a reality that they weren't publishing. At any rate my projections came out to be something like a total of somewhere between $4-$7 million per year that their 5% commission generates.

So say conservatively some $3 million real dollars annually of L$ that never gets cashed out by users that LL gets to keep from the marketplace. More than enough to pay salaries of the marketplace team and then some. More than enough to treat merchants like customers and develop for their needs.

And right, that doesn't include all the other sinks, tier, advertising, etc. 

 ETA: Feel free to correct those numbers, LL. Anytime now.

 

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DartAgain wrote:

LL has always looked down on its "residents" as second class citizens...

 Oh. In that case it's actually nice of them to ensure that the feeling is mutual. ^_^

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Consider all the fees associated with a resident purchase of $100 USD converted into lindens and spent in marketplace: 

Fee to buy items in the marketplace (5%), Add extra fee for merchants to convert lindens into USD (either for tier payments or to cash out to paypal), Linden lab makes $12.28 USD.

Bottom line, Linden Lab earns over $12% on most marketplace transactions.

 

So, if you assume marketplace sales to be $75 million, Linden Lab would be making in the vicinity of $9.2 million USD per year.

 

 

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Blaze Nielsen wrote:

Consider all the fees associated with a resident purchase of $100 USD converted into lindens and spent in marketplace: 

Fee to buy items in the marketplace (5%), Add extra fee for merchants to convert lindens into USD (either for tier payments or to cash out to paypal), Linden lab makes $12.28 USD.

Bottom line, Linden Lab earns over $12% on most marketplace transactions.

 

So, if you assume marketplace sales to be $75 million, Linden Lab would be making in the vicinity of $9.2 million USD per year.

 

 

Throw in the fact that if that $100 is spent on the Marketplace and not in an in-world store, they not only make the commission, they also don't have to spool up a possibly idling region or pay for the data transmission of all of the graphics.

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DartAgain wrote:

I've got some wrangled numbers on an old hard drive about somewhere. I think the last bits that I put together were that LL had estimated some $75 million (real dollars) worth of annual sales of user goods, modified a bit to reflect a reality that they weren't publishing.


I think this article may have the answer:

http://www.hypergridbusiness.com/2015/05/ebbe-sl-users-cashed-out-60-mil-last-year/

It was never clear from context what those 60 millions included but it's close enough to your figure we can assume Ebbe was talking about MP sales and only MP sales.

There are far to many unknown factors to give a good estimate of how much LL makes from tier of course. Somewhere between 10 and 25 millions is the best I can come up with.

So yes, MP is quite important to LL's finances.

Also, it's clear that LL and SL aren't nearly as big business as we tend to imagine them to be (but I think we all knew that really), and with the costs of developing Sansar and the rapidly decreasing revenue from SL, they're obviously struggling.

 

For some reason that reminds me... in case somebody from LL stumbles across this thread:

https://www.linkedin.com/pulse/20130604134550-284615-15-statistics-that-should-change-the-business-world-but-haven-t

No. 14 on the list is a bit incomplete, it doesn't say anything about reaquiring lost customers. But that cost is much, much higher.

 

Edit, btw: Average income for an MP merchant is about 350 dollars a year. I know that number doesn't really mean anything but it may put things into a bit of perspective - or at least be and interesting curiosity.

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anniepany wrote:

I'm not a merchant, just a simple avie and I received the email and I don't know you, but I read your other response and now this, perhaps someone is just a bit jealous because they didn't get picked....just sayin'.....have a great day.

Jelousy is an odd word to use here, this is business and basically they didn't need to do this promotion any different than the others they have done in previous years...or did they!?

They usually do a hashtag thingy, you make stuff and then hashtag it and then they promote the hastag thingy and have a link you click and it comes up. But, people put hashtags on things no in the theme maybe? Not sure, but this would make the promotion seem useless to searchers, right?

Still, the promotions where basically:

1. You add a hashtag, like #12days, to you items and then list it.

2. LL has a link and promot thingy, people basically click it and it just lists stuff with the hashtag.

3. People shop, or shout at the screen as non related items show up lol.

Destination guide does this, sort of. You see popular places, but so many people here may not look for a popular destination. They ignore it, just as they roll thier eyes at mass market clothes and jewelry makers and just go back to thier favority sub-culture stores as usualy. It was meant simply to get people to shop, LL doesn't really need so many makers and some would make more if they where paid more and could do it full time so they could very well replace 90% with just 10%, but what happens after that and which method makes them more money is the issue.

 

Another note possibly worth mentioning (OK, mot likely not) is that some here started posting about who they must have sexual interactions with...this type of thing is possibly not becoming to the Labs image (though they do have Zindra, right lol) to the public and they wish to choose wisely the people they associate thier name with and who they want showing to the masses as leaders. 

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SL is not a game, remember how people say that?

So that means it can include things from RL, much like 'preffered partners' programs and so on.

I have to admit, Slink items do appeal to creators as well because creators do sell items for users of thier hands and feet.  So, they did no focus most likely out of thinking it a waste of time to do so. At the same time, they feel as if they have it all covered maybe? Some are avid sales watchers.

If employees do nothing for the marketplace, they lose thier job when someone points out they do nothing. So, start a promotion program or something, right? Lol, just folks trying to make money I guess is the answer to all of this.

Gotta try something new with the marketplace and basically the new changes upset people, that is all really.

You sound like a candidate for government employment, they have very structured systems for US government employees. Then, you can use your position for revenge on LL maybe? Just a joke, I am sure LL are working hard to make money and that will hopefully help all have fun here in SL and you are a benevolent free spirit that loves some part of what you do strongly.

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ChinRey wrote:


DartAgain wrote:

I've got some wrangled numbers on an old hard drive about somewhere. I think the last bits that I put together were that LL had estimated some $75 million (real dollars) worth of annual sales of user goods, modified a bit to reflect a reality that they weren't publishing.


I think this article may have the answer:

It was never clear from context what those 60 millions included but it's close enough to your figure we can assume Ebbe was talking about MP sales and only MP sales.

There are far to many unknown factors to give a good estimate of how much LL makes from tier of course. Somewhere between 10 and 25 millions is the best I can come up with.

So yes, MP is quite important to LL's finances.

Also, it's clear that LL and SL aren't nearly as big business as we tend to imagine them to be (but I think we all knew that really), and with the costs of developing Sansar and the rapidly decreasing revenue from SL, they're obviously struggling.

 

For some reason that reminds me... in case somebody from LL stumbles across this thread:

No. 14 on the list is a bit incomplete, it doesn't say anything about reaquiring lost customers. But that cost is much, much higher.

 

Edit, btw: Average income for an MP merchant is about 350 dollars a year. I know that number doesn't really mean anything but it may put things into a bit of perspective - or at least be and interesting curiosity.

AH, you mention customer retention? Sorry, I didn't read the linkedin article BUT, you are not noticing that not many of the strange or upsetting changes that have "killed" SL and driven customers away ever lead to a competitor of sorts that is large...yet.

I mean, a competitor for merchants here in SL. I am not sure if I can mention competitors by name, there was a policy about this in Forum TOS years ago but I don't know if it is still in effect. Basically, NOW is the time to do all of your experiments as a business because you have no serious competitors with a similar system other than ones that have much lower graphics qaualities.

There are large enough virtual hangouts out there, some are about as old or older than SL. Virtual worlds that make it for so many years seem to never die, seriously it is very interesting thing that there are others out there that never got hardly any controversial news and have much smaller communities but are still alive! A quick search may lead to some, I don't want to name them here but they exist and all of the things people claim will kill SL they have lived through, almost. Bad building or ugly graphics? Check, check and even more checks! No merchants? Check. I mean, the list goes on.

Block world didn't need mesh imports, it sells and is profitable. During the time LL was going to be killed by SL failing, it kept on going.

This is business, it is risky and when you have few strong competitors and your product is immortal I think you will experiment.

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I totally missed this one, it was posted before I really started to take notice of this thread:


anniepany wrote:

...

perhaps someone is just a bit jealous because they didn't get picked....just sayin'.....have a great day.

...

Imagine this scene:

You go to a restaurant and order a steak. At the neighbor table, there's another guest who also have steak.

Now this other guest happens to be a good friend of the waiter and the waiter wants to give him something extra. So he goes over to your table, cuts a piece off your steak and gives to his friend.

Would you be a bit jealous if that happened to you?

 

And btw, in case I didn't make it absolutely clear, I have no direct personal interest in this particular case. Nobody touched my steak and my store is certainly not big or old enough yet to get an extra perk. But blunders like this ruins the Marketplace's and Linden Lab's reputation. How is anybody ever going to take them seriously if they keep doing things like this? That is a problem for everybody in SL - and everybody at LL too of course.

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Poenald Palen wrote:

There are large enough virtual hangouts out there, some are about as old or older than SL. Virtual worlds that make it for so many years seem to never die, seriously it is very interesting thing that there are others out there that never got hardly any controversial news and have much smaller communities but are still alive!


Oh yes. Many people will stay becuase they have their virtual home and belongings and friends there. A virtual world is very scaleable so when popularity decreases, you jsut scale down. Cut down on your server park, cut down on your staff and you can go on and on until the last old-timer dies of old age.

Somehow I have a feeling that's not how LL envisions their future...

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ChinRey wrote:


...

Somehow I have a feeling that's not how LL envisions their future...

Linden Labs future, as a company with Sansar (or whatever they call it) and Blockworld? SL can get old and handle overflow residents who don't have GPU and CPU power to handle Sansar maybe?

You are maybe 100% right about how they feel about the future of thier company, according to what I see from thier actions to make a new virtual world. VR is maybe part of this, it is getting popular.

Maybe preffered creators are just what they will use for creating content in Sansar, it reduces AR and other complaints and helps preserve a squeeky clean image for mass market focused companies etc. Then, if it fails you just make another Zindra and try to attract the sub-culture crowds in SL by converting over the simulators they have using (by that time the code is maybe worked out) and then just close SL off? Not as likely, but Geocities was a Yahoo property. They just closed it, not much warning for folks to backup thier sites. It has and and will be done somewhere on the web, so a successful Sansar could just spell the forceful end of SL...no?

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(NOT to Pamela .. but to all. I've read this whole thread in one whack, so I'm commenting about it all in one whack.)

The root concern here is "Target Audience". Linden Lab has already broadcast quite loudly that Sansar will require a higher degree of technical skill and investment in order to create content for sale to other users. They feel they can crank up the "take" on each sale close to 30% for those sort of products .. primarily because they will have sustainable high prices that are not diluted by 10,000 copies of things with the same concept but radically lesser quality.

This marketing campaign was targeted at Makers and Merchants about whom they have confidence to provide quality products. Understood. These are the same caliber Makers and Merchants they want to come live in Sansar too. Sansar won't be as full, but it will be high-class from the start.

The comments about us being second-class citizens is .. almost right. It's not that we're second-class, it's that our profit ratios are much worse than for the highly skilled Makers. Think about it? Why would they spend the CPU time showing, selling and delivering something on which they make L$1 when they can use those same cycles making L$200? That would be a bad decision.

THE PROBLEM .. is that it's a very short-sighted strategy. It is very much akin to early attempts at crop fertilization using one or only a few chemicals. Yeah, one or maybe two years crops were FANTASTIC!! But it also burned up the ground so it couldn't be used for 5 or more years. Great short term .. sucky long-term.

LL does not learn because they do not want to learn. They are using the "short-term then throw it away and make a new one" overall strategy. This also works and can extend time to death for many years. But eventually one stumble is bigger than the model can tolerate and it all goes down the hole. Slowly .. usually .. but not always.

I like Gadget's comment best though. This means the TOS is meaningless as LL has just clearly broached it .. publicly .. with evidence sent to 1000's of customers. So yeah .. wild west time again .. let's have FUN!

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Darrius Gothly wrote:

The comments about us being second-class citizens is .. almost right. It's not that we're second-class, it's that our profit ratios are much worse than for the highly skilled Makers. Think about it? Why would they spend the CPU time showing, selling and delivering something on which they make L$1 when they can use those same cycles making L$200? That would be a bad decision.

That's the reality for all online services, games, social media, search engines etc., most users generate very little or no income on their own. But you need the masses to attract the few big spenders, the "whales" as they are called in the gaming industry.

 


Darrius Gothly wrote:

This marketing campaign was targeted at Makers and Merchants about whom they have confidence to provide quality products. Understood. These are the same caliber Makers and Merchants they want to come live inSansar too.Sansar won't be as full, but it will be high-class from the start.

Yes, that makes sense. But they're also telling all the other MP merchants that they're not good enough. And that is the problem. They can't build Sansar with just six content creators of course and with this campaign they are alienating all the other established MP sellers who are just as good as or better than the six chosen ones.

Come to think of it, if I'm to be cynical, selfish and shortsighted, this looks like an advantage to me personally. I'm not an established MP seller, so I have no reason to be offended but I'm certainly good enough by now to compete at this level. If Linden Lab is trying to get rid of most of their current major content providers they leave the field wide open for people like me...

  But no. They're willing to stab their partners in the back once; they may well do it again. Better stay away. This is way too risky.

Credibility is one of the most important assets for any organisation who want two think long term and Linden Lab as been desperately short on it for a long, long time. This isn't going to improve that situation.

Linden Lab has to (re)build their credibility to stand any chance at all and that isn't easy even without blunders like this. As the Ruby Newell-Legner quote on the page I linked to earlier says: It takes 12 positive experiences to make up for one unresolved negative experience. So, Linden Lab: 12 positive experiences for all the serious established merchants and content creators you offended, insulted and hurt with this stunt please! With a healthy portion of apologies on the side.

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Thanks for those links. That one list was spot on and there's some great wisdom there.

In honor of the new ToS changes yesterday protecting LL employees I offer my own ToS and disclaimers.

 

If you are an LL employee you don't have to agree to the following conditions and realities.

1) I do not know any of you personally, if you feel that I do, please check your paranoia at the door.

2) I will not personally disparage any of you personally. It isn't personal. It's called customer feedback. Please check your paranoia at the door.

3) You will be expected to maintain the same level of anonymity that your Linden last names afford you. This applies to all Lindens including the god complex Linden known as Linden Lab and the multiple personality Linden known as CommerceTeam Linden.

4) You understand that it is extremely difficult to direct a personal volley against a pseudonym. You agree not to bend reality to spawn a virtual reality.

5) Arbitration will take place in my living room and you will be required to bring a decent micro-brew in sufficient quantity, During said arbitration you agree to maintain your current anonymity by placing a paper sack over your head.

Disclaimer: That wasn't a real TOS, any more than a judge would consider an LL ToS a contract.

But seriously, what brought that on, LL?

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Oh jeez. Sorry, that was an unsolicited reaction.

ETA: Just finished reading the posts over there. Would it be too personal if I said their legal team is just going to piss off any judge that reads it over. It's already happened once that a judge admitted that the LL ToS is overreaching. Now it's just ... well, more overreaching.

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I could, but chose not to, link to my many posts on exactly the same topics. They're repeated in many instances and spread out over time .. since about 2009 .. so I'd have to dig through many archives. Suffice to say:

Choir here! Thanks for the repeat sermon!

*smiles*

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Darrius Gothly wrote:

I could, but chose not to, link to my many posts on exactly the same topics. They're repeated in many instances and spread out over time .. since about 2009 .. so I'd have to dig through many archives.

I didn't know that of course but I'm not surprised. One nice thing about LL is that you can always recycle old complaints. Elsewhere you often have to keep looking for new issues to complain about all the time and that can be tedious work.

 

Anyway, since we're touching the TOS discussion here, as I'm sure most people already know, the sum of the TOS is that Linden Lab is not liable for anything that happens so we just have to trust them to do their job and play fair.

 

I withdrew all my Linden dollars today. And I double checked that all my dae files, textures, sculpt maps, scripts and even notecards are safely stored on my harddisk.

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One thing that you might use to give a bit more context in the future: The "Registered" date showing on my Forum Badge. It means I've been around and an active contributor since late 2009. When I say something, and do so with rather evident energy .. it usually means I have a very sturdy basis from which to speak.

Y'know ... just sayin' ..

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Darrius Gothly wrote:

...

it usually means I have a very sturdy basis from which to speak.

Of course, I know that! ^_^

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