MP fees raising to 10% per sale. Thoughts?

[ChinRey]

27 minutes ago, OptimoMaximo said:

It's a balancing act in the case there is a too big of a spread between benefits and the generated debt towards the shareholders. Again if general financial conditions tun out to be no longer convenient in such terms, it's matter of accepting becoming slave to the shareholders doing their business with your butt exposed or take the reins back by sewing close a bleeding wound.

Yes but there is a scheme going on in the financial market at the moment. It's very simple. Executives buy shares in their company at a reduced price, trigger a buyback (often getting the company to borrow money for it) and then sell when the price is at its top. It's a very popular way for business leaders to make a quick million or ten. Of course, the sh*t will hit the fan eventually (it may alredy have started) and when that happens even honest buybacks will be stigmatized because people aren't going to look into the finer details of each and every case.

Better stay away from it all if you worry about your reputation.

Edited December 4, 2019 by ChinRey

[ChinRey]

20 hours ago, Luna Bliss said:

Exactly.

I can't get behind the narrative "we're making up for decreasing land costs by charging merchants more"......because the cost of land was way too high to begin with.

Indeed and there is also other problem with the scheme. Dropping tier to a competitive level would reduce yearly LL's income by a eight digit number of dollars. No matter how much they increase the merchants' fees, there simply isn't enough money in the content market to cover anything like that.

Anyway, this is all LL's problem. I think we we need to understand and accept their point of view but it still isn't our problem as merchants.

What we as merchants should be concerned about is that we've already been paying quite a lot higher fees than what is reasonable for the services we receive. Now we're supposed to pay even more for exactly the same.

For us, the question is...

I think I'll actually be cheeky enough to page a Linden or two here, @Grumpity Linden and @Dakota Linden perhaps? Maybe somebody up there actually have the courage to give some sort of answer:

What is Linden Lab offering to increase sales volumes and/or making store management easier and less time consuming to compensate for the increased fees?

Or to put it another way, I'm all for the idea creating content for the joy of creating and I don't think there are many content creators in SL who would have done it at all if they didn't love doing it. But in this particular case we have to think purely about the commercial side: How much money can the average merchant make for each hour he/she spends creating, selling, marketing, managing store(s) and providing customer support? If LL can come up with something that increases the amount, they may deserve a bigger share. If they can't, they don't.

Edited December 5, 2019 by ChinRey

[Luna Bliss]

Well ChinRey, we asked for lower land prices and it was explained we are now getting this gift.

Does that tide you over for now?   ;0

[ChinRey]

5 minutes ago, Luna Bliss said:

Well ChinRey, we asked for lower land prices and it was explained we are now getting this gift.

Does that tide you over for now?   ;0

 

Now that I think of it, has land prices really dropped? I know it hasn't for me. I pay my tier (or most of it at least) with the Lindens I manage to scrape together from sales and rentals and no matter what I do or what LL does or how the exhange rate changes, my bottom line has been pretty much the same every single month for four years now.

But how about the others? I don't know but so far the tier reductions have been minuscule and there are several other negative factors affecting the end result.

[Alwin Alcott]

17 minutes ago, ChinRey said:

Now that I think of it, has land prices really dropped?

 

[Alwin Alcott]

i'm also quite interested in the Premium sign ups ... after tricking so many people into subscribing with the bellisseria promotion ánd the more expensive subscriptions .. what's the curve now while so many who got angry about that, and perhaps have ended their premium as they told so in many posts.

Better sales on MP would already be helped by active removal of stolen content, and not wait till a dmca is filed. This is a active role for the host, the people selling there pay enough for such service.
Every 50 L$ not paid to a scammer is profit for a real store.

[Theresa Tennyson]

38 minutes ago, ChinRey said:

 

Now that I think of it, has land prices really dropped? I know it hasn't for me. I pay my tier (or most of it at least) with the Lindens I manage to scrape together from sales and rentals and no matter what I do or what LL does or how the exhange rate changes, my bottom line has been pretty much the same every single month for four years now.

But how about the others? I don't know but so far the tier reductions have been minuscule and there are several other negative factors affecting the end result.

In other words, you are paying Linden Lab little to nothing in terms of actual currency they can pay real-world bills with. What Linden Lab needs is provided by those who buy Lindens or pay tier with cash. I'm not saying you aren't providing value because others are making those purchases and some of those are to pay for your products or services, but employees and utility bills aren't paid in imaginary bushes. 

It's similar to how people kept saying that the old Premium fee had very little real-world cost if the stipends were cashed out, and they were shocked - shocked! - that the equation was changed. 

[ChinRey]

21 minutes ago, Theresa Tennyson said:

In other words, you are paying Linden Lab little to nothing in terms of actual currency they can pay real-world bills with.

Yes, that is correct, except of course, I paid them quite a few thousand dollars before I got to the break even point. And of course, my customers and tenants have to pay LL a fee when they buy Lindens to pay for my products and services.

This applies to most reasonably establirhed merchants, commercial landowners and other "independent entrepeneurs" (DJs, club owners, escorts etc., etc., etc.) None of them are contributing directly to LL's bottom line.

To sum it up, what you are saying is that none of us provide anything of value to LL or SL. I'll leave it to others to respond to that. If anybody can be bothered that is.

Edited December 4, 2019 by ChinRey

[Luna Bliss]

28 minutes ago, ChinRey said:

37 minutes ago, Theresa Tennyson said:

In other words, you are paying Linden Lab little to nothing in terms of actual currency they can pay real-world bills with.

Yes, that is correct, except of course, I paid them quite a few thousand dollars before I got to the break even point.

This applies to most reasonably establirhed merchants, commercial landowners and other "independent entrepeneurs" (DJs, club owners, escorts etc., etc., etc.) None of them are contributing directly to LL's bottom line.

To sum it up, what you are saying is that none of us provide anything of value to LL or SL. I'll leave it to others to respond to that. If anybody can be bothered that is.

Yes, you should up your SL working hours from 40 hours a week to 80 hours, because it's just not fair you are sucking ANY money out of the game when all the others who only play in game without doing any work are actually putting in REAL money  ;0

Edited December 4, 2019 by Luna Bliss

[Theresa Tennyson]

51 minutes ago, ChinRey said:

To sum it up, what you are saying is that none of us provide anything of value to LL or SL. I'll leave it to others to respond to that. If anybody can be bothered that is.

I'll respond to that with what I actually said in the post you're replying to:

1 hour ago, Theresa Tennyson said:

In other words, you are paying Linden Lab little to nothing in terms of actual currency they can pay real-world bills with. What Linden Lab needs is provided by those who buy Lindens or pay tier with cash. I'm not saying you aren't providing value because others are making those purchases and some of those are to pay for your products or services, but employees and utility bills aren't paid in imaginary bushes. 

It's similar to how people kept saying that the old Premium fee had very little real-world cost if the stipends were cashed out, and they were shocked - shocked! - that the equation was changed. 

 

[ChinRey]

8 minutes ago, Theresa Tennyson said:

I'll respond to that with what I actually said in the post you're replying to:

If you really meant it that way, your post was totally pointless, just some idle chatter stating the obvious.

[Theresa Tennyson]

3 minutes ago, ChinRey said:

If you really meant it that way, your post was totally pointless, just some idle chatter stating the obvious.

Linden Labs requires a certain amount of money to operate. As it is possible for people to take money out of Second Life, their fees need to be set in a way that will allow them to have a net income at least as high as their expenses or: no more Second Life. 

Previously that income stream was skewed toward land tier; actions have been taken to change the balance so proportionally less will come from land tier and more from other sources to maintain their operating level.

Land tier has been reduced. You say that your bottom line hasn't changed. That means the changes are working.

[Beth Macbain]

2 hours ago, Alwin Alcott said:

after tricking so many people into subscribing with the bellisseria promotion ánd the more expensive subscriptions ..

How exactly did they "trick" anyone? 

[Iren Tinkel]

2 hours ago, ChinRey said:

 

Now that I think of it, has land prices really dropped?

I did not notice really if land prices are dropped. I only know that i cant sell sim now for good price if i bought it years ago for 1000 usd XD

Land tier? I paid to get grandfathered tier, it was 600 usd for full sim. Now I pay 195 usd monthly. But having -5% more from my MP sales and 50 usd from every 1000 I send to paypal XD I would prefer to pay 295 back and have 1 usd for money transfer and 5% MP comission!

[Theresa Tennyson]

24 minutes ago, Iren Tinkel said:

I did not notice really if land prices are dropped. I only know that i cant sell sim now for good price if i bought it years ago for 1000 usd XD

Land tier? I paid to get grandfathered tier, it was 600 usd for full sim. Now I pay 195 usd monthly. But having -5% more from my MP sales and 50 usd from every 1000 I send to paypal XD I would prefer to pay 295 back and have 1 usd for money transfer and 5% MP comission!

No, you pay $179.

https://lindenlab.freshdesk.com/support/solutions/articles/31000134546-guidelines-for-land-impact-change

[OptimoMaximo]

4 hours ago, ChinRey said:

Better stay away from it all if you worry about your reputation

Reputation? LindenLab? Ooohhhh yes they already got one. "Soon", "follow up project" and "eventually" are trademark under such reputation. 

[ChinRey]

12 hours ago, Theresa Tennyson said:

Land tier has been reduced. You say that your bottom line hasn't changed. That means the changes are working.

Yes but as I said, that's only stating the obvious.

Sorry to repeat so much of what I've already written in other posts but it seems to be neccessary.

What Linden Lab is doing with the combination of reduced tier and increased fees, is take from one group and give to another. I happen to belong to both groups and by sheer coincidence my balance between them means that the two changes more or less evens out for me. That's a very unusual situation and I can't imagine there are many others - if there are any at all - who just happen to be right on that fine line.

It's better to look at those two groups separate from each other.

The landowners, I'm talking about the people who rent out land now, benefitted from the tier reduction of course. But there have also been several other changes that cut into their revenue. The Tillia fees have increased significantly, the exchange is gettign steadily worse from a seller's point of view and LL is now competing directly against them. It is my impression that the sum of all these changes is a negative one for most landowners but I won't say that for sure because I don't really have the data.

The merchants only get the downside of the recent changes. Well, to be fair, those who have inworld stores may save a little bit on the reduced tier, we now have access to a semi-decent order history and LL did some work weeding out a few inactive stores from MP a while ago. But those are drops in the ocean, way too small to have any significance in this context.

---

I'm active as a merchant on two other grids, both of them have online marketplaces similar to the SL MP. I'm also a seller on several other unrelated online marketing platforms, that's where I get most of my income these days. I even programmed and ran my own online store for a while.

Those two other grids both rely as least as much on tier income as SL does. The price for a sim there - you choose its size - is 15 dollars a month with 15,000 prims. If you want 25,000 prims, it'll cost you 25 dollars a month. There is no purchase price or other initial costs and the quality of the services they offer to landowners is at least as good as LL's.

For merchants their effective fees are considerably lower than LL's and the quality of the services they offer are so much better you can't even compare. The most noticeable difference is that it takes me less than half the time to list a product on both those sites as it does to lsit it on MP. As if that wasn't enough, one of them even comes with a built in vendor system, complete with affiliate program even, so I don't have to spend any additional time adding the same items to my inworld store there.

Compared to the non-VW related sales platforms I'm familiar with, MP's fees are on high end of the scale, quality of service and earning potential are both at rock bottom.

---

If we compare SL to other virtual realities today, the prices LL charge both landowners and merchants are way too high. The prices are so high that all the changes they've made recently combined hardly make any difference at all. LL could do this for a long time because they didn't have any serious competition. That is not the case anymore. The more seriously run opensim based grids have progressed in leaps and bounds both in quality and popularity and although most of the new wave of virtual worlds are mayflies, some of them are here to stay. LL have no other choice, they have to adjust to this new situation somehow. Increasing the merchants' fee only makes matters worse of course and that is something they really, really ought to worry about.

---

Edit - forgot this:

12 hours ago, Theresa Tennyson said:

Linden Labs requires a certain amount of money to operate.

They'll have to cut their expenses. A lot.

Others can do the same job much cheaper and if LL can't match that, they're toast. This is a free market after all.

Edited December 5, 2019 by ChinRey

[ChinRey]

14 hours ago, OptimoMaximo said:

Reputation? LindenLab? Ooohhhh yes they already got one. "Soon", "follow up project" and "eventually" are trademark under such reputation. 

Yes, maybe. But dishonesty is not on the list and we don't want to add it.

Edited December 5, 2019 by ChinRey

[Rya Nitely]

20 hours ago, OptimoMaximo said:

Now, about the manipulation of linden dollars value... it keeps going down the sink

Their exchange rate goes down only, there's no significan fluctuation on holidays, it just keeps going down on a steady rate. The inworld/MP economy though doesn't seem to be so stagnating to induce this depreciation. So if it's not voluntary manipulation, i don't know what else is.

LL still have a lot of people convinced it's a natural market of demand and supply. Demand and Supply in SL should be fairly stable and it was so for years. The Linden dollar value only falls when there is a strong injection of L$s on the sell side ---- where does that come from?  There has been pages and pages of debate about this and LL will stick to their story - buyers and sellers set the market --- yes, and LL are a big seller then we get a depreciating L$. That would be the only big seller coming out of nowhere.

So, are they honest with us?

[ChinRey]

1 hour ago, Rya Nitely said:

So, are they honest with us?

I've never actually seen any statements from LL about this and I assumed they were just keeping very quiet about it all.

Also, I don't actually believe LL is trying to control the exchange rate at the moment. That is, I do think they control it but not deliberately.

There are two reasons for this. One is that a higher exchange rate doesn't seem to be in LL's own interest. If they want to quietly generate some extra income, they should try to reduce the rate rather than increase it. That would increase the value of their many L$ based fees and also their income from their own LindEx sales and nobody would notice. It's not only us entrepeneurs who are getting less dollars for our Lindens, they are too.

The other reason is the timing of it all. A few months ago there was a rush on LindEx with everybody trying to get rid of their Lindens before the fee increase. This inevitably drove the exchange rate up for a while but it shouldn't have lasted for long. Yet it did. What I believe happened, was that LL had a fixed amount of Lindens they were planning to sell. When the rate increased, they followed suit, not realizing that by doing so they turned a temporary bump into a permanent trend.

I may be wrong of course. There are other factors to consider too, such as the premium stipend. A higher exchange rate means the stipend is worth less and it's possible, although very unlikely, that is more important to LL than the losses they take from fees and their LindEx change.

So from what I can see, the by far most plausible explanation is that LL is fueling the exhange rate increase not on purpose but by accident.

Edited December 5, 2019 by ChinRey

[OptimoMaximo]

2 hours ago, ChinRey said:

So from what I can see, the by far most plausible explanation is that LL is fueling the exhange rate increase not on purpose but by accident.

I do not agree with this statement. To me, the only possible way to hve a steady increase over months is by doing it on purpose. There is a too close match in timing between the first announcement of fees raise and the beginning of this trend for this to be an accident. Think about it: first increase was about 2.5% over the previous fee, bringing it to 5%. Before this took place, the sell rate was devalued by roughly 3% (i'm more inclined toward the 3.5%, but i don't have written data to suport this aside from my memory), totaling a nice 8% total. Smart move, considering that if they were to announce a 5% increase the outcry would have driven LL to their knees. Then silently the trend kept going for a few more months before the current raise, so that the initial 8% real raise became, overtime, a nice round 10% and then the official fee was doubled, bringing the real total to 15%, while the devaluation keeps going. I'm ready to bet that when the total of the real (not the official) fees will sum up to a nice and round 20%, the trend will suddenly and miracolously stop. On the other side of the spectrum, the buy rates, whatever the "loss" would be, was ready to be recoop'ed with the increased purchase fee (1.49USD, if i'm not mistaken... i don't buy lindens) BUT since that isn't enough to cover their "loss", consider the savings from paying lindens on sale way less than before. It may not be apparent, but the volume of lindens flow is so big that a small amount difference for us makes a big difference for them. This means, basically, that whoever cashes out is paying for the decreased land tiers, a better purchase rate for buyers and for Sansar development.  Might as well forgetting something that could be funded with this though... but regardless, i'd rather pay these fees for a more dedicated staff on SL, full time on both MP and on SL features. Instead we get the same, if not less.

[Alyona Su]

The only legal way LL can control the SL-Xchange is through in-world L$ sinks. I'd like to see 300:1 myself. I'd spend big $ at that rate.

[ChinRey]

1 hour ago, Alyona Su said:

The only legal way LL can control the SL-Xchange is through in-world L$ sinks.

Some of the largest sinks, LindEx/Tillia and MP fees, are not really in-world but apart from that, you are right. That's just the other side of the same coin (pardon the pun) though.

What Linden Lab does, is fill up with fresh L$ to replace what vanishes into the sinks and maybe adjust the total volume in circulation. They do that partly through premium stipends, partly through various game prizes but also by selling L$ on LindEx. All evidence we know of clearly indicate that the amount they sell on LindEx is big enough to dwarf what others are selling. That means they decide what the exchange rate should be because a seller who tries to get a better deal than they offer, will enver ever be able to sell anything at all.

This is all clear. What we don't know is the policy LL follows for their LindEx sales. Are they deliberately enforcing a specific exchange rate? Are they keeping the total amount of L$ in circulation stable? Are they trying to reduce the volume? Or increase it? Or are they just selling a specific amount every day without thinking about the consequences?

 

1 hour ago, Alyona Su said:

I'd like to see 300:1 myself. I'd spend big $ at that rate.

A rate as high as 300 would trigger inflation, there's no question about that. Too many merchants and landowners simply wouldn't have any choice but to increase their prices. And of course, once you do that, you might as well add a little bit extra since people are going to complain anyway. Once the dust had settled, you'd probably get less for 300 than you do for 250 today.

Edited December 5, 2019 by ChinRey

[Alyona Su]

36 minutes ago, ChinRey said:

A rate as high as 300 would trigger inflation, there's no question about that. Too many merchants and landowners simply wouldn't have any choice but to increase their prices. And of course, once you do that, you might as well add a little bit extra since people are going to complain anyway. Once the dust had settled, you'd probably get less for 300 than you do for 250 today.

This is true. But, like an apparent majority of everyone in SL and a huge chunk on these forums, what I want is more important than what anyone else wants and LL *owes* me because I care only about myself and no one else. ~snorts~

/snark=off

I've also done the math in some comment elsewhere, I don't even remember if it was this thread or not. I did the comparison between 250:1 and 270:1 or maybe it was 300:1 exchange rate. The result was like $0.40 per $100 converted (from L$ to U.S. $) - so that inflation can only happen if each merchant were dealing with literally thousands of U.S $ per transaction.Seriously? And no, your taxes, U.S. or VAT, whatever, do not count. That is your RL burden and has nothing to do with SL whatsoever; fact of life.

I do agree that conversion rates between currencies can be a bear, but hey: as a merchant you choose to make money in a foreign land.

My main point is that one has to be converting a *truckload* of L$ and legal tender $ to feel any meaningful difference. If you can afford to deal in those kind of numbers then you can bear it. To which I say L$300:$1 will not create the kind of inflation that people will notice, other than chicken-little types and people who scrutinize every cent to begin with. It would also incentivize more $ being put into the system, because it's a better value, whether it's more people or the same people more often doesn't matter.

Edited December 5, 2019 by Alyona Su

[Luna Bliss]

6 minutes ago, Alyona Su said:

This is true. But, like an apparent majority of everyone in SL and a huge chunk on these forums, what I want is more important than what anyone else wants and LL *owes* me because I care only about myself and no one else. ~snorts~

/snark=off

It can be difficult to see all sides in any conflict for sure.

What one can be sure of in most cases though, is that the side with the money and control gets more than their fair share.