Promotion Opportunity on Marketplace

[Luna Bliss]

Ami...I don't think this will devalue stores that have a niche or create products that take a long time to make. Just remember that eventually your market will have more competition..and they will be participating in this 'deep discount' fiasco...and your store will suffer some serious crumbling.

Suella...Pamela..that website link you posted (with the pie showing the reason most businesses fail is because their stuff is cr*p) is mean and untrue.
I know lots of creators who make fantastic stuff but have no marketing skills and their stuff doesn't sell very well...their stuff IS NOT cr*p.
I'm not sure how big that category should be (let's call in content that is not so high in quality rather than fellow merchants who make stuff that is cr*p)...but I would venture it should be 1/3, and that marketing should be another 1/3, and that the final third should be a stagnate SL that doesn't bring in enough customers and causes excessive competition.

[Suella Ember]

 

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Luna Bliss wrote:

Suella...Pamela..that website link you posted (with the pie showing the reason most businesses fail is because their stuff is cr*p) is mean and untrue.

I know lots of creators who make fantastic stuff but have no marketing skills and their stuff doesn't sell very well...their stuff IS NOT cr*p.

---

 

That  graph is one small part of a huge set of articles which include many excellent tips for marketing, and the author even points out that it is a paradoy, but she used it to highlight a point. An important point - always look at the quality of your items first. It's also probably true that a substantial proportion of businesses fail becuase of the quality of their prodcts (by no means all, but a good proportion). That's not meant to be mean. It's meant to make people stop and think about their products before they blindly plough all their money into marketing.

There are, of course, some great creators out there who make great products but struggle with marketing, and they would definitely benefit from reading those articles too in my opinion. I'd like to think that, because they do make great products, they'd have the good sense to recognise the point about looking at quality first and agreeing with it. They would then go on to read all the other great advise about marketing.

Of course, it's entirely up to the reader if they study and take heed of those articles or not. Some will probably disagree with some or all of it, as is their prerogative. I'm still more than happy to point people at those articles if they want marketing advice though and let them make up their own minds.

[Medhue Simoni]

Here's the thing, I've already discounted my product massively before I even put the products up for sale, originally. How long do you think it takes to make 50-60 motion capture animations? We, as merchants, make money in the long haul. The prices are already adjusted for that.

Now, LL is asking me to cut the price for a sale, which is fine, and not unreasonable. The part that becomes unreasonable is LL's 50% take on the sales. 50% for what? Some tweets, and postings on facebook are supposed to be equal to my month of work? Some1 that offers to take 50% of your profits must think that they have something extremely worth wild to offer to the profitability. Sorry, but I don't see that value as anywhere near the value of my time and effort to actually make the product.

To me, LL asking to take 50% is a massive insult to the actual creator of the products.

[Toysoldier Thor]

So thanks to Luna's posting turning on a lightbulb in my mind about how LL Commerce Team has created they own SLM version of the MM traffic generating tools inworld and the horrid damage it did and continues to do to the content $L pricing, last night I wrote up a blog on the topic of the DASH DEAL program.  I gave you credit Luna for turning on my lightbulb

Blog Posting of how DASH DEAL is a bad idea

[monkeyman Marama]

Yup i got invited on this 'oppertunity', i find it a bit insulting really, I already pay for front page listings and landing page listings from sl and now they want to discount some of my stuff by at least 50% in the name of promotion and take another 50% of the profits for the pleasure!!!

I would rather see them enhance the overall effect and impressions of the marketing listings I already pay for!

Bad marketplace, bad!

[JubJub Forder]

Take the time spent on Dash Deal and spend it on fixing the delivery failures please. 

Take some of that time and spend it on making Marketplace easier to use (retain user preferences).

This Dash Deal is just a blatent money grab... using LLs monopoly of the web sales side to compete directly with other advertising to push preferred products LL has a financial interest in? Is just wrong.

 

[Luna Bliss]

@Suella - We're discussing the merits of the cr*p article over in another thread "The Best SL Business Advice Ever" so I won't go into it anymore in this thread that is supposed to be about the Dash Deal.

I am still really concered about this Dash Deal thing and pray that it doesn't become the Kraken that Toy described. The freebie mentality has been a major contributing factor in destroying the value of our content in-world and would likely do that on the MP (if many merchants participated, and especially those in less niche markets).I'm going to remove my MM board and withdraw from a hunt I was participating in.
Not long ago I accidentally left something at the default $L 10 price when updating, and the freebie hunters descended on my store to suck it up like locusts. I heard they scan stores to see if merchants accidentally leave an item set at $L 10 and then pass note cards to other freebie sucking groups. I felt invaded and taken advantage of. Finally a loyal customer messaged to tell me what was happening.  I don't believe these kinds of hunts and freebie activities help a store at all...it only serves to feed the freebie frenzy where residents love the game of paying nothing for content.

[Darren Oates]

So doing the math quickly atleast 50% cheaper that means seller would only recive at the very least 25% of the normal retail price so they inefect would be reciving and appying a 75% discount cut in the dash deal program as they would endup with around 25% profit after LL takes its cut .  Do they have to pay a sellers fee aswel ? 

This will only ever work if sales can be driven but I have my reservations high sales can be achived once every man and his dog signs up for promotion their is only so much add space to use before it could get swamped by other adds.

 

 

[Toysoldier Thor]

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Darren Oates wrote:

So doing the math quickly atleast 50% cheaper that means seller would only recive at the very least 25% of the normal retail price so they inefect would be reciving and appying a 75% discount cut in the dash deal program as they would endup with around 25% profit after LL takes its cut .  Do they have to pay a sellers fee aswel ? 

This will only ever work if sales can be driven but I have my reservations high sales can be achived once every man and his dog signs up for promotion their is only so much add space to use before it could get swamped by other adds.

 

 

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Well wouldnt that be funny if after the participating merchant cuts his product price in 1/2 then is forced to give 1/2 of that 1/2 to LL for their marketing and promotion of the event, that LL would then charge an additional 5% SLM commission on top of that.  It would be funny except for the fact that likely its true.

Darren, I am sure you know what Midnight Mania is inworld.  This is just LL's SLM version of the same approach.  The only difference here is that instead of a well organized and pretty effective MM Hunters/Promoters group inworld promoting the merchant MM Boards, with DASH DEAL we now have the all powerful LL becoming the MM Town Cryer / promoter (which in theory might have much more reach and power).

I would as MIGHT have since unlike the well organized MM HUNT groups inworlds that are well established with loyal BARGAIN HUNTING Gamers, LL is not plugged into this network of bargain hunters so the effectiveness of this promotion would possibly not be as powerful as these bargain hunters would not exactly have enough time to understand that the deal is or be watchin LL's normal avenues of commnuication.

I will say and predict that even with all of LL's communication mediums they have available to them, the vast majority of SL Residents do not follow these communications.  Events like this - promoted by LL would likely take a few days or week for word of mouth to get out that LL will be hosting their own MM-like traffic generating event.  Then the next issues is how many freebie / bargain hunting residents really use SLM?  Chances are not that many as they likely get more than their fill of content from inworld.  As such, this event will likely also be less effective because many bargain hunters would not know how to or cant be bothered learning how SLM works.

So, my prediction is that unless LL Commerce Team makes this a very regular event and promotes it well in advance, it will only have limited actual shopper traffic.  Then... the participating Merchants has to sell 4 times normal volumes of that product just to break even.  And hope that maybe some of the lured in bargain hunters will actually buy more products from the merchant than was was given away as a firesale.  Most dont.  I know this from a lot of MM past experience.... 90%+ of the MM culture of bargain hunters during these events do not buy more and do not come back.

And... in the meantime... the merchant has lowered the perceived value of his/her product in the eyes of the market.

Really.... its too bad that Brooke and her LL Commerce Team does not know the SL Merchant/Shoppers market and economy and how it really operates.  If they did, they would not have listened to whomever convinced them that this was a good idea.

But we will see which merchants end up participating - and we can ask them what they thought of the results.

[Girlfriend Melody]

In my oppinion:

1- Serious content creator usually works around 18 hours/day to develop their products.

2- A product price should take into account: working hours + uploading costs + land fees + comission fees + profit % + advertisement costs and so on.

3- Seems that at the end of the Dash Deal process, the merchant would get just 20% of the item price, and this ammount don't cover the product costs.

4- Dash Deal will atract freebie hunters, so the viral effect will not reach the good content creators' target audience.

5- Freebie resellers, stolen content merchants, less developed content creators will take a big advantage with Dash Deal promotional tool.

6- Instead of Promotion Opportunity, LL is providing SL with unfair competition stimulus.

7- Serious merchants and content creators will be even more demotivated.

8- LL will have a lot of headache with freebies, stolen content and unhappy residents.

9- LL Dash Deal profit will not be enough even to cover the aspirin costs.

10- Dash Deal” is the most stupid idea I have heard from LL.

 

[Catwise Yoshikawa]

 

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Girlfriend Melody wrote:

5- Freebie resellers, stolen content merchants, less developed content creators will take a big advantage with Dash Deal promotional tool.

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Don't think so, cause LL is selecting the item that they want to promote. I have to believe they won't promote that type of creators ^^'

 

[Toysoldier Thor]

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Girlfriend Melody wrote:

In my oppinion:

1- Serious content creator usually works around 18 hours/day to develop their products.

2- A product price should take into account: working hours + uploading costs + land fees + comission fees + profit % + advertisement costs and so on.

3- Seems that at the end of the Dash Deal process, the merchant would get just 20% of the item price, and this ammount don't cover the product costs.

4- Dash Deal will atract freebie hunters, so the viral effect will not reach the good content creators' target audience.

5- Freebie resellers, stolen content merchants, less developed content creators will take a big advantage with Dash Deal promotional tool.

6- Instead of Promotion Opportunity, LL is providing SL with unfair competition stimulus.

7- Serious merchants and content creators will be even more demotivated.

8- LL will have a lot of headache with freebies, stolen content and unhappy residents.

9- LL Dash Deal profit will not be enough even to cover the aspirin costs.

10-

Dash Deal” is the most stupid idea I have heard from LL.

 

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Other than point #5, I would agree with your points.

NOW... regarding #5... never say never!  In theory, if LL Commerce Team were to see a huge demand for this DD promotion and they are making some big money on this promotion as compared to their other over-priced/under-effective item enhancements tools, then it would not be outside the rhelm of possibility that LL would remove the criteria and make this a wide open tool and promote a deal weekly or multiple time weekly. 

Revenue Streams can be a blind addiction - even for LL.  Short term gains for long term pain.  But we have seen countless examples where LL's ideas are extremely knee-jerk short sighted because they dont worry about the longer term impacts of their actions.

So.... dont 100% dismiss that #5 would not be the case.

[Madeliefste Oh]

Why is it that LL want 50% of your sales?

The more I think about it, the less I understand. Since LL owns the 'printpress' of the L$, the Linden dollar has no value to them, like it has to us merchants. They don't need our L$ to sell them for US dollars, since they can print as many of them as they like.

So the financial gain of asking 50% of the linden dollar price from the merchants is zero for LL. For everybody else except LL the linden dollar has a value. LL does not win anything with asking 50% of your L$ price. But for you as a merchants this deal will mean a loose 75% per product. Why would LL want this, while this is not going to make them any real money?

Do they want to force price devaluation of virtual goods? Is that what is behind this? And why would they want this?

The only possible construction to make money from these dash deals I see for LL is when customers don't pay with L$ but with USD.  The marketplace already shows USD prices. Those are way too high compared to L$ prices. So customers will only very rarely buy goods from the marketplace for USD. But the only way to profit from this marketplace for LL is when customers do pay in USD. So that might have made LL thinking of strategies how to profit more from this marketplace. They did not buy Xstreet out of charity, their aim is to make profit from this place. How can you seduce customers to spend more USD in stead of L$? Well by offering them better prices. When the USD price of an item is (temporary) lower then the regular L$ price, for example. Now what if these dash deals are only available to customers when they pay in USD? There we have a nice dash deal that does bring in hard dollars for LL.

When this would be the case this will means that LL will make 200% more profit on your product then you as a merchant do. Since they will cash in the USD the customer pays for 100%. And after that you are paid half of that amount in (for them worthless) linden dollars.

That is my theory so far, it might change as soon as I get different signals. But what do you guys think? Why is it that LL want 50% of our L$ prices?

[Luna Bliss]

@Mad -I don't think the Dash Deal was created as a way to decrease our income. I think the new Lindens in charge here are trying to help, but I fear this is going to make things worse for us if our content gets devalued through too many people participating in the program so that a huge amount of near freebie content is available at all times. Once it gets known (and a lot of people do shop on the MP these days) then shoppers would know to look at the Dash Deal to find any category of merchandise they want at a greatly reduced price.

Regarding your observations on how the economy works, I'm not too good with numbers, but it seems if we got less of a 'paycheck' that we cash out each month (real money going to our banks) then LL would keep more money.  It would benefit LL's bottom line if we were happy to create here without taking too much real money out of the game. However this would be a big mistake if implemented, and as far as I know it's not the plan - a big attractiion for SL is the idea that one could make some real money here through hard work and talent. However as content creators we do need to keep mindful of decisions that affect our income and try to make our preferences known among all the other voices trying to control the development of the 3D internet.

 

[Toysoldier Thor]

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Madeliefste Oh wrote:

Why is it that LL want 50% of your sales?

The more I think about it, the less I understand. Since LL owns the 'printpress' of the L$, the Linden dollar has no value to them, like it has to us merchants. They don't need our L$ to sell them for US dollars, since they can print as many of them as they like.

So the financial gain of asking 50% of the linden dollar price from the merchants is zero for LL. For everybody else except LL the linden dollar has a value. LL does not win anything with asking 50% of your L$ price. But for you as a merchants this deal will mean a loose 75% per product. Why would LL want this, while this is not going to make them any real money?

Do they want to force price devaluation of virtual goods? Is that what is behind this? And why would they want this?

The only possible construction to make money from these dash deals I see for LL is when customers don't pay with L$ but with USD.  The marketplace already shows USD prices. Those are way too high compared to L$ prices. So customers will only very rarely buy goods from the marketplace for USD. But the only way to profit from this marketplace for LL is when customers do pay in USD. So that might have made LL thinking of strategies how to profit more from this marketplace. They did not buy Xstreet out of charity, their aim is to make profit from this place. How can you seduce customers to spend more USD in stead of L$? Well by offering them better prices. When the USD price of an item is (temporary) lower then the regular L$ price, for example. Now what if these dash deals are only available to customers when they pay in USD? There we have a nice dash deal that does bring in hard dollars for LL.

When this would be the case this will means that LL will make 200% more profit on your product then you as a merchant do. Since they will cash in the USD the customer pays for 100%. And after that you are paid half of that amount in (for them worthless) linden dollars.

That is my theory so far, it might change as soon as I get different signals. But what do you guys think? Why is it that LL want 50% of our L$ prices?

---

Think of it more of a Source & Sink of the flow of $US Cash entering into LL's account (i.e when a LL Customer pays LL for $L tokens) vs $US Cash leaving LL's account (i.e when a LL Customer/Merchant requests $US payment when selling off $L tokens).

In order for LL to make RL $US cashflow, their objective is to generate as much incentive as possible for their SL Customers to require more $Ls to spend within the SL virtual economy as possible (even if it is to pay another SL customer - aka a Merchant)... while at the same time they must do everything they can to be the one to take the $L tokens out of the hands of their SL Customers - which they would just Sink (aka retire). 

The reason is that once a $L token is transferred back into their hands from any SL Customer, that becomes a net gain is $US for them - because that $L token will never have to be converted back to $US money that leaves LL's real account.

So, in the example of the DD promotion.  Lets say you are selling a $1000L item which you normally sell 10 in a 24 hour period.

During the DD Promotion, you end up selling 100 items.

Based on that...

On a normal 24 hour period you would normally have taken $9500L from customers & LL would have stopped you from being able to cash out into $US currency = $500L ( ~ $2US).  in other words, LL has made $2US Net since they have removed those $L tokens from the outstanding $L currency in the economy.

During the 24  hour DD, you will cut your $1000L price in half = $500L and you will sell 100 of these units = $50,000L and LL will be taking half of that as their service which is removed from the outstanding $L currency in the economy = $25,000L.  So, just from you alone, LL has made about $99US in profit.

They made that $99US in profit because they took it out of the SL Customers hands and now do not have to pay any SL Customer back.  Its a sink.

I hope I got that generally right.

[Amiryu Hosoi]

If LL is going to use the 50% we pay to lower tier it would be a winwin situation...

Ami

[Luna Bliss]

@Ami ....... it would only be a winwin situation for LL and the very top earning merchants here.

I would not be willing to stay if my income dropped down to 20% of what I'm earning now, and I doubt most others would be either.

Yes...tier needs to drop...and I would be willing to sacrifice some...but 80% is way too much.

Besides, if LL is making 75 million in profits each year why can't the majority of it come from that?

[Medhue Simoni]

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Madeliefste Oh wrote:

Why is it that LL want 50% of your sales?

The more I think about it, the less I understand. Since LL owns the 'printpress' of the L$, the Linden dollar has no value to them, like it has to us merchants. They don't need our L$ to sell them for US dollars, since they can print as many of them as they like.

So the financial gain of asking 50% of the linden dollar price from the merchants is zero for LL. For everybody else except LL the linden dollar has a value. LL does not win anything with asking 50% of your L$ price. But for you as a merchants this deal will mean a loose 75% per product. Why would LL want this, while this is not going to make them any real money?

Do they want to force price devaluation of virtual goods? Is that what is behind this? And why would they want this?

The only possible construction to make money from these dash deals I see for LL is when customers don't pay with L$ but with USD.  The marketplace already shows USD prices. Those are way too high compared to L$ prices. So customers will only very rarely buy goods from the marketplace for USD. But the only way to profit from this marketplace for LL is when customers do pay in USD. So that might have made LL thinking of strategies how to profit more from this marketplace. They did not buy Xstreet out of charity, their aim is to make profit from this place. How can you seduce customers to spend more USD in stead of L$? Well by offering them better prices. When the USD price of an item is (temporary) lower then the regular L$ price, for example. Now what if these dash deals are only available to customers when they pay in USD? There we have a nice dash deal that does bring in hard dollars for LL.

When this would be the case this will means that LL will make 200% more profit on your product then you as a merchant do. Since they will cash in the USD the customer pays for 100%. And after that you are paid half of that amount in (for them worthless) linden dollars.

That is my theory so far, it might change as soon as I get different signals. But what do you guys think? Why is it that LL want 50% of our L$ prices?

---

I don't think saying that lindens have no value to LL is right. The lindens have value to every1, as long as people are willing to buy them. It would seem to me, that LL recieving lindens would be a good thing for LL, because it is a way for LL to profit without adding more lindens to the supply of lindens. I'm no economic expert or fiat money expert, but It would seem to me that LL has the same power that any central bank has. It has the power to actually create money. If they do too much of this tho, they will devalue the value of the linden, which will lower the value of their own profits. So, we should be happy that LL profits off the lindens. If they did not, then they would not feel the affects of their own inflation.

The pay in dollars crap on the MP, that LL says is what they have to pay for the service, with a little extra for LL. So, I take them for their word on that. The only part that bothers me, is that the customer will not know any better, and LL does not really point out the extra fees to the customer.

Basically what I'm saying is that I think the Dash Deal is exactly what it states. Maybe it is not a policy yet, but some people at LL must think that the best thing to do is to try to make more money on our content. Or, possibly, they are estimating the cost to do this as much higher than we, as merchants, do. To me, whatever LL has to do to make the promotion happen, that is a set price. It is not more work for this 1 or less work for that 1. So charge us a set price, don't make it LL's way to make a little more profit. Plus, what kind of profit is that for LL, compared to many other ways for them to make more money. This, as a plan for LL, looks more like a guy standing ankle high in a pond with a spear in his hand, trying to spear a fish. When really, LL needs a big net to make a good profit.

IMHO, LL should concentrate on their monopoly of the virtual currency. Sure, there are other currencies, but none as valuable as a linden. Imagine, if LL changed direction, and just became the worlds virtual currency, for all virtual worlds. Seems like a much bigger and profitable plan, than penny pinching us.

[Relm Foxdale]

As much as I get the idea behind this, like with Amazon and a number of other sites that do deep discounts, the practicalities and SL realities are just an all-around fail.

The SL economy doesn't work the same way the RL economy does. It never will. For one, there's no need for repeat purchases in SL. That has its good sides and bad sides, of course. Merchants' costs are greatly minimized when they only have to make an item once and can sell it thousands of times. On the other hand, once it's been bought, it's been bought. Anyone who buys my food can buy a few items and never come back because unlike in RL, the food doesn't go off or get digested and vanish. Because we lack "true" costs, like we'd have if we had to keep making the same thing over and over, our pricing is...bizarre. You can sell an item for L$10 or L$1000, and it works itself out. In RL, if I sold food for 50% off, I'd know that some of those people might be back to buy it again at regular price. A grocery store can charge 99 cents for a bottle of coke and then $1.50 the next week, and it averages out.

But with this, because there's no need for a repeat purchase and because so many people make similar items...and because we aren't compelled to shop at a certain store because it's near our house and such...people can just shop these price-cut deals and hardly ever venture out into regularly priced goods.

Meanwhile, LL is taking a huge cut for no apparent reason. There are always going to be people like me who know what we want and go and buy it without caring much about the cost and not wasting our time on Midnight Manias and hunts, but there are lots of people who aren't like that. So the merchants in this might get a little sales boost from exposure, but LL is getting all the rest of the reward--a steady stream of "dashed" goods that it can take 50% plus commission (!) on for little work. LL and the consumers make out like bandits. The content creators are left in the dust.

And just like all the other promotion methods, it drives down prices across the board, and you get more and more people whining about having to pay a whole US dollar for something that the creator spent many hours to make, and with a decrease in revenue, you have fewer people able to make tier. So in-world stores close, not that is an issue to LL, apparently. The only way this could wind up working out is if the quality of "dashed" goods dropped because of the losses, driving people to spend more, but I'm not sure if the majority of residents operate that way.

And I'd love to hear what exactly costs LL 50% of sales. Will the blogs and e-mails be made of solid gold? Somehow, they're able to manage the SLM in general on 5%. This sounds like it'd just be another tool to script in and some promotional write-ups here and there. I could maybe see an additional 5%--maybe--but 50%? Of course, with the price cut, 5% wouldn't go as far as it once would, but isn't the point that a price cut leads to more sales, balancing it out?

This is completely mental.

Meanwhile, search (in-world and on the SLM) is still a disaster.