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Franchising is a viable business model to grow virtual business GIANTS in Second Life


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34 minutes ago, Wili Clip said:

And about the full permission content makers that let other people use their designs in their own businesses I just wanted to express that I like this practice and want to support that kind of content creators because that is very good for content creation on overall in SL. I like to support people who create something that can benefit other people - just like open source.

Okay, you are changing this from the gist of your OP which seems to me to say franchise what you make and let other's receive a portion of the profit because many people in SL do not know how to create and therefore cannot make good money here.

This franchise idea is a problem for many full perm items though because we are under USER LICENSE to not share full perm items with anyone, so the franchise idea would not work for full perm items for the almost all part.  Some full perm sellers say we can have a partner but we must disclose who are partner is and jump through a bunch of hoops to do that and that is why I don't have a partner for the items I sell.  It's too much of a hassle to go to each full perm dealer and introduce my partner, etc, etc, etc, etc...  That's too much time.  However, I'd love to have a partner but it's an extreme hassle and a half.

So your free rent to those with full perm items and sharing open source experience needs to be kept separate from your franchise idea.  A franchise idea is better for those who full create their own items 100%.  A lot of sellers in SL who import items are under user licenses from other companies also.  All of this user license stuff is to help avoid copy-botting.  Plus, what I think you need are what is called AD BOARDS.  However, many merchants in SL say ad boards are dead because their ad boards are now social media.  This is what I learned by talking in SL merchant groups.  

Wanting to offer free rent to anyone is totally up to you as I see it.

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I can see merit to the idea if the franchises were able to add value through some better service rather than just additional locations. A franchisee for example who is very familiar with different mesh bodies being able to answer questions from someone about the differences and perhaps even have pictures of the huds for each with some tips on how they work. A real boon would be something I saw in one store where by jumping on a pose ball, the attachment in question is automatically put on me to model without having to go through 10 clicks getting a demo, unpacking and then sorting out what parts to wear to see it on myself. If a franchisee had arrangements with several body makers, one could stop at one place to model and then buy one of them. Same if the franchisee had some of the best clothing from competing creators. One stop shopping would certainly be an attraction to me especially if combined with a bit of personal service.

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11 minutes ago, Arielle Popstar said:

I can see merit to the idea if the franchises were able to add value through some better service rather than just additional locations. A franchisee for example who is very familiar with different mesh bodies being able to answer questions from someone about the differences and perhaps even have pictures of the huds for each with some tips on how they work.

What a great idea!

A franchisee could be someone who has a great understanding of the product and can help/assist other people in using it or employ other people in the store to do that. Franchise package can include training / education material.
 

Some products in SL are highly complicated.

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1 hour ago, Arielle Popstar said:

A franchisee for example who is very familiar with different mesh bodies being able to answer questions from someone about the differences and perhaps even have pictures of the huds for each with some tips on how they work. 

So, with this franchise informational kiosk with many different bodies, as a creator I'd have to pay a certain sum of money to each person who wanted to put a learning/information kiosk on their land with info about my mesh body  (using a hypothetical here since I don't have a mesh body to sell). 

It would have to be figured out how much more money I could make doing this because I would be putting out extra money to the land owners for having an informational kiosk about my body.  I could see adding information in those in different languages might help me much.  So, how would one figure that out...how much to charge per body maker per kiosk and it's only in English or what?  

EDIT:  This also runs the risks of having to raise prices on the bodies which could lose sales and do a reverse for the creator - they make less money because of having to raise prices.  

Edited by FairreLilette
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5 minutes ago, Rowan Amore said:

and why stores have CSRs

CSRs could have their own stores and there could be many more of them. That is just 1 suggested way to maybe use franchise and what for.

But that is not really what I had in mind. I have my business in mind and for my type of business it perfectly makes sense to turn it into franchise. While for other products I am not so sure... its really up to content creators to evaluate what type of business model and strategy they want to take and see will most fit their product and their way of doing business.

Edited by Wili Clip
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I have yet to hear a good reason why any store would do this aside from pulling in money for the initial investment from the franchisees.  As has been stated before,  this business model makes perfect sense in RL when physical distance to the main store would be an issue but you can not equate that to SL in any way.   

Many stores now already have info about mesh bodies right there when you enter.  If anything, I'd see the actual stores themselves setting up kiosks and avoid the franchisee altogether.  Why pay someone else to do something you yourself can do in cooperation with other merchants.

 

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4 minutes ago, Rowan Amore said:

I have yet to hear a good reason why any store would do this aside from pulling in money for the initial investment from the franchisees.  As has been stated before,  this business model makes perfect sense in RL when physical distance to the main store would be an issue but you can not equate that to SL in any way.   

Many stores now already have info about mesh bodies right there when you enter.  If anything, I'd see the actual stores themselves setting up kiosks and avoid the franchisee altogether.  Why pay someone else to do something you yourself can do in cooperation with other merchants.

 

Some of the bigger stores get busy and laggy. It is like why I will go to the McDonalds on the east side of town rather than the nearer west side one. Smaller line ups, better service, cleaner, etc. Your points may have some validity for the bigger creators but there are many smaller ones who are better off focusing their efforts on the creation process rather then muddling it up with marketing their products. If they can leave that to franchisee's who specialize in the promotion, sales and perhaps after sales support, then it could well result in increased sales and greater exposure of their products.

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25 minutes ago, FairreLilette said:

EDIT:  This also runs the risks of having to raise prices on the bodies which could lose sales and do a reserve for the creator - they make less money because of having to raise prices.  

Surely on a high priced item like head or body, it should be quite possible to offer franchisee's a 20-30% commission on products purchased through them without having to up their prices to cover it. It is the idea that the sale will be one they wouldn't have made otherwise.

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26 minutes ago, Arielle Popstar said:

Surely on a high priced item like head or body, it should be quite possible to offer franchisee's a 20-30% commission on products purchased through them without having to up their prices to cover it. It is the idea that the sale will be one they wouldn't have made otherwise.

I had to change my post above as I meant reverse not reserve.  It may do the reverse and cause prices to inflate.  I know Legacy adds the 10% of what MP takes into the cost of their mesh bodies if you purchase them on MP.  IOW, Legacy adds 500 lindens to their bodies on MP (see link below).  I also have a friend who does this and sells her items inworld for less because of the cost of LL taking 10% of MP sales; however, it costs money to have the land inworld for a store so I don't really see the need to have higher prices on MP but others do is all I am saying here. 

I think a SALE section on the forum and places having their own sales of 20-30% off would do better for the creators.  It's not a real good time in the world economies to think of higher prices.  We are walking on eggshells as it is.  Economies are very fragile right now.

https://marketplace.secondlife.com/p/LEGACY-The-Ultimate-Meshbody-All-New-Next-Generation-Hyper-Real-HD-SL-UV-Closet-Compatible-Bento/19577050

Edited by FairreLilette
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1 hour ago, Arielle Popstar said:

Some of the bigger stores get busy and laggy. It is like why I will go to the McDonalds on the east side of town rather than the nearer west side one. Smaller line ups, better service, cleaner, etc. Your points may have some validity for the bigger creators but there are many smaller ones who are better off focusing their efforts on the creation process rather then muddling it up with marketing their products. If they can leave that to franchisee's who specialize in the promotion, sales and perhaps after sales support, then it could well result in increased sales and greater exposure of their products.

This is what affiliate vendors have been doing for years.  With various amounts for start up and a percentage of the profit.  The affiliate pays for rentals, advertisement if they choose.  Franchises involve more legalities, RL legalities, which I don't see too many people looking at as something they would want in their SL.

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2 hours ago, LittleMe Jewell said:

Side note -- I did truly 'laugh out loud' at the very idea of Mister Pedantic saying that I was giving the appearance of arguing for the sake of it, when the vast majority of your arguments on the forums over the years have seemed that way to so many of us.

 

2 hours ago, Phil Deakins said:

You are giving the appearance of arguing just for the sake of it, Lil, and it's not very nice to see.

She's got you there, man. 

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Every idea here that has any traction (stores with people who are experts in multiple products surrounded by affiliate vendors, avatar help centers...) all fail in second life due to the basic requirement for near full time staff. How many people with how many hours are you going to need to make a place like that work? Most paid positions in Second Life pay three to four dollars an hour if not far less- so you get tons of turnover because it's basically volunteer work. 

This niche is filled by websites and groups, which do not require regular staff. 

This idea as a whole is a pipe dream because it relies on the second life economy mirroring the real world one. It doesn't take into account the unique complexities of virtual economies.

Edited by Bitterthorn
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6 hours ago, Wili Clip said:

Disclaimer: using SL to relax and escape from mundane life is perfectly ok

Thank you! I was very worried for a moment. :P

 

McDonald's makes much of it's money on rent. It's not a great example of what a franchise might look like in SL.

What power do you have as a franchisee in SL? The product is virtual. You can't fix a bug, or even claim you are fixing a bug. You wouldn't really have the profit margins to make things right with a customer.

Location is something, but mostly only works in RP worlds where it benefits the RP and it's creators. Those locations would be taken quickly if the theme applied.

Most people with $ to spend are typing in a search box to find products and stores. Rarely do they just happen on a quality store while flying around.

The only thing you'd really have the power to do is be the best damn middle-person the virtual world has ever seen. Available 24/7. Answer every IM instantly and work out every problem from beginning to end for every customer. Know the product in and out so well that you can answer every question without referring them somewhere else.

I think most people would find value in this as an easy money operation, not hard customer service work. You'd practically have to give up your SL to make it work.

Good luck!

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8 hours ago, Wili Clip said:

As I had some graphics designed for me by a friend today it suddenly occurred to me, the long forgotten idea of a franchise as a viable business model in Second Life.

What is a franchise? Think about McDonalds.
Disclaimer: I don't like fast food, unhealthy food or promotion of unhealthy life or habits on overall. I am mentioning McDonalds because its a symbol of a success of a franchise as a business model. 

There are many franchise chain restaurants who promote more healthy lifestyle and service more healthy food.

It is a very successful business model that I learned about and many years ago as a student when I traveled in US I was able to see it with my own eyes (Smoothie King, The CheeseCake Factory, SubWay and many others). In past I was going in direction of creating one in SL but then I totally forgot about it as I got busy with other things.

Some time ago I've watched  biographical drama film The Founder and through it I learned about complicated and even controversial history of McDonalds. It was very educational. If your aim is to grow big business some day I recommend you watch it.

I think that franchising could be a very successful model that could be used across different type of virtual services and products in within Second Life. I am not starting this post to promote my franchise (because I don't even have one) but to promote the franchise as a viable business model in Second Life for virtual content creators. It works in RL and I believe it can work well in Second Life. I wanted to become a virtual business coach and help other people find ways how to grow their virtual businesses. For same reason I recently floated the idea of a business incubator in Second Life.

There might already be successful established franchising models in Second Life and we don't know about it. The closest I think is affiliate marketing / virtual products brands in-world stores who share commission on sales. But I think those lost on prominence with introduction of SL Marketplace (but they still work).

Second Life is used for many different things. The aspect of Second Life that I focus on and which one I want to advance virtual businesses and the ability for people to be able to earn money in a virtual world. Basically I employ my mind both professionally and as a hobby to try to find more and more ways how to make as many people as possible to benefit from growth of Second Life economy. 

I would like to see Second Life to become something more than what global community currently sees it for. A place to escape into a surreal world and where you can forget about your RL. (Disclaimer: using SL to relax and escape from mundane life is perfectly ok and I don't have anything against it at all and it is actually currently the biggest reason why and what for Second Life is successful). I would want it to be that and so much more. That is why I am all for exploring other use cases of Second Life not of it just being a game or a role play place but also a place where one can work, learn, advance and earn money and conduct and grow business. I would like to see it being seen by global public audience as a world of many different opportunities.

Now most people don't have skills, talent or time to learn designing or 3D modeling to a level where they could create a marketable products. I believe that virtual businesses in Second Life could provide for employment of people with less skills in a way to provide for them a viable path towards gaining many new skills that can put them on a progression path in life and at the same time grow virtual businesses that can gain a significant importance. 

I have already gained so much from Second Life. I came to the point where I realized that to outside world Second Life is still relatively small and the only way forward is if we as a business community of SL find ways how to cooperate and create real business breakthrough that can lead towards greater and better recognition of Second Life to the outside world. But for that we need to start creating products, services and BRANDS that can go big - McDonalds big (that could break through & gain recognition in real world).

Basically someone within SL business community needs to create a killer product for SL that will create interest and waves of new sign ups to Second Life that will benefit all the other existing businesses in SL. They need to be able to make so much money so that they can afford to advertise on Facebook, Instagram and other social media and add to the efforts of LL marketing. We need to learn or work towards to provide environment to make such things possible. I would not like to see just 1 but a growth of as many as possible virtual business giants in within Second Life.

Franchise is a nice business model for creating new rules and standards for product or service that can then spread all over the grid. All the communities can take the business in a package and integrate them in within their lands for communities to use.

If I ever create any new products in Second Life I'll apply the model of a franchise.

I would like to lay it to the heart of everyone who means something in a virtual business community to maybe start marketing your products and brands in a way you can create opportunities for the SL users. If you want to set your SL business on a enhanced growth path then find ways to make it so that clients of your services and consumers of your products can also benefit from growth of your virtual business and brand. Many are already successful at it and just need to find ways or add their successful model on steroids.

So I present a franchise as a business model as something to look into and learn from it and maybe implement in your own business strategy.

 

So you mean "Business in a Box"? Shoddy clothing or hair ripped from creators and re-packaged by avatars with little info on their profiles?

I don't allow those on my malls.

 

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1 hour ago, Evah Baxton said:

Thank you! I was very worried for a moment. :P

 

McDonald's makes much of it's money on rent. It's not a great example of what a franchise might look like in SL.

What power do you have as a franchisee in SL? The product is virtual. You can't fix a bug, or even claim you are fixing a bug. You wouldn't really have the profit margins to make things right with a customer.

Location is something, but mostly only works in RP worlds where it benefits the RP and it's creators. Those locations would be taken quickly if the theme applied.

Most people with $ to spend are typing in a search box to find products and stores. Rarely do they just happen on a quality store while flying around.

The only thing you'd really have the power to do is be the best damn middle-person the virtual world has ever seen. Available 24/7. Answer every IM instantly and work out every problem from beginning to end for every customer. Know the product in and out so well that you can answer every question without referring them somewhere else.

I think most people would find value in this as an easy money operation, not hard customer service work. You'd practically have to give up your SL to make it work.

Good luck!

SL is like a Renaissance Faire and the Middle Ages in some respect in that a small group of skilled craftsmen provide the goods for the world, and the rest of the people just buy or trade them, and that more sophisticated services like "business coach" or "franchise owner" don't have a place in this more primitive world.

SL is also like the Silk Road in that people have to invest an enormous amount in ships, people, pay-offs to local potentates, etc. to get the spices and silk and come back to sell them at the marketplace, before being killed by angry tribesmen or dying of thirst in the desert. Yeah, it's more like that, actually.

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12 hours ago, LittleMe Jewell said:

Actually, what he said was that "many" was a 'considerable amount', which is not really any sort of proper numerical definition.  I was asking for a bit more clarity on that term.  Honestly, "considerable amount" is a very subjective term.

But that's not what you said - what I quoted. As you know, there isn't a numerical definition of the word 'many'. It means exactly what he said when he gave you the correct answer to your question. If you were only interested in his use of the word 'fact', that's what you ought to have continued with, instead of dismissing his accurate answer and asking for another one, when there is no better answer. If you think the word 'many' means something different to 'a significant amount', please state it.

 

12 hours ago, LittleMe Jewell said:

Side note -- I did truly 'laugh out loud' at the very idea of Mister Pedantic saying that I was giving the appearance of arguing for the sake of it, when the vast majority of your arguments on the forums over the years have seemed that way to so many of us.

Then "so many" of you have totally misunderstood. For instance, I am not arguing with you now just for the sake of it, but because I saw that you were being unfair to the OP by not accepting an accurate answer to your question, and by criticising 2 of his statements as though they referred to the same thing when they didn't. That was astonishingly wrong.

Both of the things I picked you up on were in keeping with the unkind responses he's had in this thread. It seems to me that you posted criticisms just for the sake of it. But they were was more than merely unkind. They were both blatantly wrong, so I pointed it out. That's not me arguing just for the sake of it. It's me attempting to correct a couple of wrongs, followed by you arguing against it.

AND please quantify the phrase 'so many' that you used, and don't say anything like 'a significant number' because, in your view, that's not a correct answer ;)

 

Edited by Phil Deakins
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14 hours ago, Bitterthorn said:

A business will franchise because they have a successful business that had reached the limits of their market-- primarily their geographic market. If you go to Subway you're going to go to the one closest to you. You are not going to go to the one 6 hours away. Virtual space has no such limits and you need to demonstrate why someone would go to a secondary location when the primary one is literally a teleport away. 

 

Yes, I'd second that.

Plus:

I think  the terminology is wrong. A franchisee typically has geographical limitations to avoid cannibalization between the different franchisees. That would be difficult, if not impossible in SL. Maybe the term "affiliate marketer" is a more appropriate term to use in this context.

However, as many said before: Not really a new concept in SL.

For an affiliate marketer to be successful, he needs to know what he is doing. Hence the reason many affiliates /franchisees failed. It involves a lot more than placing some affiliate vendors somewhere.

It can work if the creator has a killer product, but doesn't want to get into doing the marketing part himself. For those affiliate marketing could be a viable option. 

I am testing exactly that at the moment, with some sex furniture as a complimentary product to something I promote on my websites now (Lovense toys).

I did setup two inworld shops selling Lovense enabled sex beds (yes that does exist). It is a pilot project to see if it works and how it does complement the main product. More an experiment than a GIANT project.

 


 

 


 

Edited by Caroline Takeda
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circa 2007/2008 franchising was a viable business model. Give the product vendors and business brand logo/art work textures to the franchisee who would fit out their shop and name the parcel to the franchise brand

PixelDolls was one. I was a big fan of PixelDolls layer clothes in those days. When mesh came they dropped out of the inworld. Can still find their layers and sculpts on Marketplace. Another business that did this was Sweet Faces (to a lesser degree). They sold prim hair (Sweet Hairs brand). I used to wear that hair as well. Sweet Faces still has their Sweet Hairs shop inworld on Grigano region

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16 hours ago, Wili Clip said:

In Second Life the german SL users who usually visit Hamburg might not even know that Chicago exists or they don't go there because they speak different language 

I am German. We are not stupid.
We do know Chicago exists and most of us do speak at least one other language. 

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9 minutes ago, Caroline Takeda said:

I am German. We are not stupid.
We do know Chicago exists and most of us do speak at least one other language. 

We were talking sim names and I used the city were the McDonalds headquarter is located at (Chicago) and a random example city elsewhere as a stand-in to explain why franchise/chainstore concepts work in RL, but not in SL. So in fairness it wasn't about knowing the RL city Chicago, although its still odd to assume knowing a sim name is relevant or that people from outside the anglosphere are that isolated from the rest of SL.

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15 hours ago, Wili Clip said:

 

The fact is that many people in SL only visit or hang out at few of their favorite places and they rarely go to explore other lands. In SL if you want to bring something to attention of the people you need to find ways to introduce it at the place where they hang out - it is called product placement. 

Yes, that is true.

The sim owner of those places does not need to buy  into a franchise. He simply rents out shops to the original creators. This is actually one of the most common ways to monetize a busy place.

How would you get around that one?

Edited by Caroline Takeda
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