Marketplace listing fees

[Marishka Ixito]

This might not be a very popular idea, but it strikes me as rather odd, that a company that's obviously ultimately interested in profit (LL) would be willing to support an endlessly growing database of merchandise (the marketplace) that doesn't charge a "listing fee" in any shape or form to prevent people from listing junk.

To me, a nominal listing charge of say10L per item listed per week would seem prudent to get the junk unlisted, and ultimately benefit business for both LL and merchants alike (because unlisted junk won't appear in search anymore, confusing potential customers).

To be sure, anyone's definition of junk is as good as mine, but for the purpose of this post it's intended as "stuff that doesn't sell". And yes, as a side-effect this might complicate things for listing freebies, but would it be such a bad thing if people needed to look for freebies in-world?

Ideas, thoughts?

[Claireschen Hesten]

this has been discussed many times the high power merchants making thousands of RL dollars out of their store would support anything that pushes out the little guy and earns them more dollars the smaller merchants would close up their online stores unable to justify the fees some would argue that LL makes more than enough money from marketplace comissions & listing enhancements and inworld tier and other fees with out the need to add a listing fee
last year LL had planned some kind of listing fee but nothing has and hopefully won't come of it 

[Marishka Ixito]

By nature, any merchant, big or small, isn't interested in "free" per se. They're interested in ways to improve their sales. And if getting rid of the junk on the marketplace (there are over 1.6 million items listed!!) helps to improve sales, they'll support doing so.

So in my view this has very little to do with "high power merchants" and "the little guy". If you have something listed that you can't justify putting up a 10L a week listing fee for, maybe it's not worth having it listed at all?

 

[Josh Susanto]

>To be sure, anyone's definition of junk is as good as mine, but for the purpose of this post it's intended as "stuff that doesn't sell".

My stuff sells profitably without any listing enhancements, but as I have 600 products, a weekly listing fee would absolutely suck the life out of my current methodology.

People who are more marketers than builders will naturally be happy to see my stuff disappear from the market, so they can go back to charging outrageous prices for rocks that have two inconvenient apogeed puckers and a seam running up the back (for example), and with no permissions.

But sorry, guys. Even if you get rid of me, my stuff is already out there in-world, full perms copymod, and IT is not going away, so you'll still have to compete with IT, even if I get paid nothing in the process.

Until then, I'll keep making stuff and refusing to sacrifice building time for marketing time, refusing to sacrifice product development funds for listing enhancements, and otherwise refusing to participate in a culture that rewards the middle man at the expense of people who actually make stuff.

 

[Chelsea Malibu]

The reasoning is simple, there is little to no cost on any of this for LL until the content is accessed.  The same is true for iTunes, Zune and many other digital content sites.  More content = more traffic, more traffic = more sales. more sales = more revenue and potentially more end users.

Charging for this would actually be more of a disservice to end users than to content creators.  It would mean less access to content, the driving force behind Second Life.

[Jimena Poggel]

Nothing good will come from having listing fees. It will just make it harder for people to start their shops. Before the marketplace i wouldn't have imagined owning a shop in sl, now i have different shops on 3 alts, my sales are increasing on all of them, and will probably have a shop on every alt (perhaps even on this one), and when i'm done on those and they can sustain themselves, i'll make more alts just to create new shops on them. Because i love building.

I dont earn a lot, not by a longshot, but I can pay rent for my shops and magic boxes. I even afforded to give birthday presents this year in SL. I even bought an expensive vendor system, mirror scripts, puppeteer for making my builds, and i can afford to buy an expensive sculpty making tool too. I can even tip at events. Guess what, I never bought a linden dollar in my life, i never input rl money into second life, only my time. I can't even cash out cause i'm in Southamerica.

If the marketplace had a listing fee i wouldnt have made it, no way. Pffff between uploading textures and playing freeplay zyngo (entire nights!!) to get lindens i wouldn't have afforded the learning curve it takes to create stuff on SL and sell it. All my initial capital to start building towards a stable inworld platform would have vaporized in marketplace listing fees because stuff doesn't start selling the very moment you list it, those first weeks would have killed me.  Sure, my stuff sells now, but not in the beginning.

How lucky we are then, that there are no listing fees, that the little guy that can't buy linden dollars can start a shop, make a profit and inject that profit and creativity back into the Linden economy.

Besides, if all items on the marketplace are supposed to "pay" for being there, it will kill creativity. Everybody will exclusively make stuff that is guaranteed to sell... so that it can stay on the mp, and thus we will have only baggy pants, muscle guy skins, sexy stripper outfits and goth wedding dresses on the market place... not much else... oh and breedable pets and sex beds. And... not much else.

 

 

 

[Tiffy Vella]

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Marishka Ixito wrote:

By nature, any merchant, big or small, isn't interested in "free" per se. They're interested in ways to improve their sales. And if getting rid of the junk on the marketplace (there are over 1.6 million items listed!!) helps to improve sales, they'll support doing so.

So in my view this has very little to do with "high power merchants" and "the little guy". If you have something listed that you can't justify putting up a 10L a week listing fee for, maybe it's not worth having it listed at all?

 

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Speak for yourself. Businesspeople are constantly charged, and told that they are unprofessional if they complain. Because we'd hate to appear unprofessional by not wanting to pay a little more and a little more...and then next month a little more for something else. A search fee here, a listing fee there, and pretty soon our efforts are whittled to nothing.

Any merchant knows how easily their listings can drift up into the hundreds, do a few sums and realise what even a 'nominal' $L10 does to their weekly budget.

[Tavo Vella]

I actually agree strongly with the OP, even though it would cost me, even if the listing fees were offset by a lower % on sales. I have a lot of items that sell for too low a price and too rarely to be viable with a $L10 fee, but I have others that would be in profit that would offset them. I have a couple of inworld shops and they are profitable overall, but many items in them lose money. I would be happy with Marketplace being the same. I agree that there are a lot of obsolete items on Marketplace, and others that are wrongly priced (such as pre-sculpty shoes). Removing these would let the new, small sellers show through and woulds ultimately improve sales.

 

Tavo

[Phil Deakins]

So LL didn't implement the 10L per month per item listing fee that they originally announced? I'm amazed. It's not like them to turn their back on getting more money out of their users, but maybe they did some sums and decided they'd potentially make more money without it.

[VonGklugelstein Alter]

All free items should have a high listing fee because they have no justification on a money driven marketplace.  Items below 10L should actually be only be found in a separate section of the website called Bargain Basement or something like that.  I am not discouraging free items because they are vital for new players, but having them rank higher in search because more people "buy" them is wrong...

 

maybe they should charge a monthly US$ membership fee just to be able to log on to SLM if they are not a premium acct or a Concierge level Customer.

 

What the marketplace is doing to inworld store business is another story ..

 

[Marcus Hancroft]

I see this "Let's have a $10L lising fee so all the "junk" on the Marketplace will go away!" as an attempt to further promote ones own products.  These people (I believe) think to themselves:  "This other junk on the Marketplace sells better than mine.  It's all just junk!  So, how can I get rid of it so my own stuff sells better? ...  I know!  Put a listing fee so that once these fools who sell all this crap start losing money, they'll remove their junk or even close their dumb stores and that way...MY stuff will start selling better!"

Well...forget THAT!  I am a small potatoes seller but I love to build.  I don't make much from my Marketplace store yet (and I hopefully will sometime) but a $10L listing fee per week or per day or per anything would completely take away everything I had worked for. 

Remember the saying:  "One man's junk is another man's treasure."

So while YOU may think that some stuff is "junk," others may think it is one of the greatest things  in SL.  Who are you to try to determine what are good builds and what isn't for the rest of us?  Worry about your OWN affairs and stop sticking your nose in other merchants'.  Worry about what YOU can do with YOUR store to help your sales.  Not try to legislate through your own opinions what should be in the marketplace and what shouldn't. 

[Mickey Vandeverre]

Used to totally agree with your reasoning there.

Then figured a few things out. 

 

[Josh Susanto]

The "junk" is mostly components.

It's like someone who buys wood components in bulk to produce furniture referring part-level sales of wood and metal components as "junk". That is: if you can charge the same tax for the sale of a finished chair, a ton of lumber, or a single piece of wood, that will make it harder for people to buy the single piece of wood and easier for someone to sell the finished chair.... at least in principle.

Except that what qualifies as "bulk" is a little bit different in cyberspace. Charging a listing fee in SLM for the small-priced items that become parts of high-priced items will drive a lot of them off the market and will also limit choices for people who prefer to imagine that they do not ever use any of the "junk" ( despite what we can all easily observe at pretty much any time).

The bottom line for me, though, is not whether I make a profit on an item or merely break even (which I am confident I can do in any case).

The bottom line for me is that LL only gets a piece of my action right now if they actually deliver something, but with a listing fee, they will also get a piece of the action for things they fail to deliver.

If I already think it's stupid to pay enhancement fees to advertise things that are somehow unavailable when people order them, why should I think we should pay even more to LL for things that are "listed" but also "unavailable" (as if that terminology makes any practical sense anyway.... think about it.)

I'm not really surprised to see these kinds of suggestions in SL, though. I expect they will essentially always come from people who are sinking large amounts of money into SL and feel that they are entitled to have the value of their investment protected from competition by people who are investing less. Something similar occurs in RL in the form of corportate protectionism, among other things. It is rooted in a basic misunderstanding, ubiquitous among classists, of how market capitalism is supposed to work. In market capitalism, profits are supposed to be a function of utility provided to consumers; not simply a reflection of how much has been invested in something (sorry, guys, deal with it).

I respect Sotheby's because they very efficiently provide exactly what is wanted to exactly the people who want it. But to make SLM less like eBay and more like Sotheby's would have a net negative effect on total utility provided to SL consumers, and that (also meaning a smaller and slower SL economy as a whole) can't be good for LL in the long term, no matter how large a listing fee they might choose to charge on SLM.

If people are having their refined sensibilities offended by the notion of continued competition with people like me (who live in developing countries and work for less than US minimum wage in RL), my suggestion would not be to whine to LL ("the government", as it were) to remove undesireable merchants from their neighborhood. 

My suggestion would be that they can always build their own plush and subtly perfumed SL products website and script their own limited edition lacquered mahogany magic boxes. Then they can charge any kind of sufficiently exclusionary listing fees for their various Groton School Chapel replicas, fox hunting uniforms and William F. Buckley vocal samples.

[Rya Nitely]

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Phil Deakins wrote:

So LL didn't implement the 10L per month per item listing fee that they originally announced? I'm amazed. It's not like them to turn their back on getting more money out of their users, but maybe they did some sums and decided they'd potentially make more money without it.

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Or maybe they listened. Is that so hard to believe?

[Josh Susanto]

I suspect that they projected lesser total profits due to limitation of options for consumers if they should institute the fee.

Lots of cheap new products every day is part of what drives total content development in SL, and thus also affects things like concurrency, the rate at which new people join, demand for land, and the willingness of product developers to pay loading fees in terms of confidence in data profitability.

[Clyde Lindman]

To the OP: Ultimately I think a listing fee would be good for the marketplace and SL in general but probably not for the reasons that have been mentioned above.

The last time SL announced listing fees aside from the caterwalling there was a large exodus to third party marketplaces. Those of us who were less inclined to knee jerk reactions just had duplicate listings on the other marketplaces as we watched to see what happened after the dust settled from the announcement. The result was the other markets were able to list more products and had more customers because of the free advertising provided by disgruntled creators until LL began deleting any posts that mentioned those marketplaces. Eventually LL backed off and as a result at least 2 of the third party marketplaces went belly up. That's the history as I see it.

SO if listing fees were to be introduced virtually all freebies and nitche items would disappear from the Marketplace. Would they disappear from SL? I doubt it. They would move to another marketplace and the freebie, frugal, and nitche customers would quickly follow thus creating a two-tiered marketplace(s) One hight end run by LL that would handle the big ticket items, kind of like a Harrods and another handling everything else, kind of like Walmart. and not run by LL..

As a merchant my stratregy would be to list only my best selling items on the Marketplace and all others on the other marketplace.

So your idea would result in the end of the LL monoply in the Marketplace which I applaud!

[Darrius Gothly]

There are essentially two polar opposite Merchant Populations that use Marketplace to sell their products. One group is comprised of beginning Merchants .. commonly called Hobbyists .. that have no sales experience with Virtual Goods, have limited experience in building and packaging their products and are usually fairly "young" in SL terms. The other group consists of more sophisticated Merchants, those with experience selling their products, exposure to the particulars of selling Virtual Goods and most often with a keen eye to actually making a profit from their sales (even if they keep that profit solely within SL).

Listing Fees are a concept that has violently opposite responses from the two groups. One group thinks they are the best idea as they would eliminate all the "Junk". The other group knows that imposition of fees would eliminate their products and thus, by extension, takes offense at being labeled as "Junk Makers". It's an issue that has and will continue to raise tempers, personal enmity and harsh words.

Sadly, the real CORE issue is one that both parties agree on .. the need to purge Marketplace of stale and dead items. There are by anyone's measure a large number of products for sale by Merchants that no longer exist in SL, that are not supported, have not sold once in an extended time or are completely out of place for the target audience. These items do represent clutter because they compete with offerings from both the Hobbyist and Sophisticated Merchant groups .. and they tend to draw anger from customers that cannot "see past them" or purchase them only to find out they are misrepresented, unsupported or just flat not even delivered (with no way to obtain a refund).

I would like to ask the Merchant and Customer bodies out there to stop arguing over a concept that was argued to death more than a year ago (Listing Fees) and instead focus their attention on ways to identify and remove the truly useless products from the Marketplace. There should be ways to identify products that are not delivered, not supported, sold by Merchants that no longer exist in SL, and that truly damage the overall reputation of SL and the Marketplace.

Let's turn our attention to fixing the real underlying problem .. and please stop taking potshots at each other's business plans, business skills or personal concept of "Beauty vs. Ugly."

[Tavo Vella]

I would say that is spot on; quality (and "junk") is in the eye of the beholder, and as most of what I sell would be "junk" as defined by one of the other posters (stuff of little use on its own you can use to make useful things out of) I don't think we can judge. In addition I just had a look at my sales over the last 6 months and although they are OK overall, maybe a third of (older) products would have not broken even if there was a L$10/week fee. Maybe I should remove them, but they are still sometimes selling and getting good ratings, so if some buyers like them, why should I?. It is the obsolete items that either no longer sell at all or have no support available that are the problem. Who is now going to buy pre-sculpted shoes for hundreds of L$ or high prim, pre-sculpted furniture? There are still hundreds of these items out there clogging up listings. Maybe there should be some sort of 'opt in' for products where sellers have to actively keep listings going (maybe as simple as ticking a box every 3 months), so products from absent sellers and those where the seller has not bothered to remove old stock will go.

 

 

Tavo

[Sassy Romano]

Simple solution.  If the merchant doesn't log in at least say once a month, delist their items.  Or a variant of this where merchants had to positively refresh their listing intent on a regular basis.

If they're not logging in, they're probably not able to deal with problems, customer support and all the other things that an active merchant should be doing.

Now i'm sure people will start saying "but what about unexpected ill health that keeps them away?" well in that case, I doubt that SL is their major issue and besides, how would they handle rent payments of any tier or mall spots?  Probably get someone to log in for them...

Inactive merchants are just as big a problem as "junk" items.  This would seek to address both issues.

(I was writing this at the same time as Tavo it seems )

[Josh Susanto]

If there is more than one problem and one is a lot less controversial than the other, it's probably going to be counterproductive to try to treat them as one problem if they can be treated as two.

I absolutely DO agree with the removal of unsupported items. Especially as I have ordered things that deliver in a box that I can't open, and the merchant, as far as I can tell, no longer even exists. At precisely what point an item qualifies as unsupported, though, is something on which I do not yet have a very firm opinion.

Requiring some kind of a fee to list items would create some clear criterion for removing them at some point. I can't object to the idea categorically if that is the only purpose for which the new fee system component is to be created. But I think more than a 1L charge per item annually is excessive. That much would satisfy what I think is called a "deminimus" requirement. It would also be easy for almost all merchants to meet without any special difficulty, and it would give them a long time to get their sh## together before an item is removed.

If you look at the stuff on SLM that even I would consider to be "junk", a lot of it has been there since XStreet; that is: over a year. If someone can't log on for something like a month, it seems a bit punitive to me to remove their items. But if they can't log on for a year or more, they probably have much bigger problems anyway.

[Sassy Romano]

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Josh Susanto wrote:

If you look at the stuff on SLM that even I would consider to be "junk", a lot of it has been there since XStreet; that is: over a year. If someone can't log on for something like a month, it seems a bit punitive to me to remove their items. But if they can't log on for a year or more, they probably have much bigger problems anyway.

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It's a moot point anyway but the time period would be easily determined as that time period where it's considered unnacceptable from a merchants perspective to receive a poor review based on there having been sufficient time for attempts by a customer to contact the merchant whom did not reply.

If I buy something and there's no repsonse for a month from a merchant, personally I find that is ample time to attempt contact.  In fact, in my opinion, it's far more than enough time.  Am I really still interested in that product after waiting a month to resolve a problem?  Unlikely.  A year?  I don't think it's reasonable to suggest that we should give a merchant a whole year before leaving a review about lack of support.

I can't think of many reasons where a month would not be sufficient for someone with a sudden and unexpected issue that cropped up and if it's 6 weeks or 2 months, all they'd need to do is log on and re-list.  Just take down inactive items while the merchant is clearly not in a capacity to respond.

What about those merchants for whom this is their RL income?  If that's the case, then for whatever reason that incapacity to log in exists... find a way.  It's just a matter of priorities and one is expected to inform their RL employer of any absence or expected return to work date, they'd get someone to phone in or similar.  It's not hard.

[Darrius Gothly]

I agree with you on the "One Month" time limit Sassy. In an market where customers send irate IMs if their purchase is not delivered in minutes, expecting a customer to be "tolerant and patient" for a month is more than sufficient.

But this also leads my thoughts to a slightly divergent topic .. the money paid to "absent merchants". Let's do a little math.

There are roughly 50,000 merchants listed on Marketplace today. If we assume 20% of those have dropped out of sight and are no longer active, that's 10,000 merchants. If each of those inactive merchants receives an average of L$100 per month in sales (whether the products are delivered or not) that equates to L$1 million per month in suspended money. I've never cashed out that much (ROFL) but at L$250 per USD that's $4,000.00 per month in money paid to accounts that will not ever retrieve it. It's not a lot of money, but I'd be willing to bet the costs involved in keeping the Marketplace hardware running are less than that.

So that leads me to ask .. and perhaps answer .. why is it that so much money goes into a dark hole (inactive accounts) and never comes out again? Linden Lab surely cannot touch that money themselves. By all rights it belongs to someone else. So if they're not touching it, where is it? Sitting in an escrow account somewhere collecting interest?

At any rate, back on point ... if a product is purchased and not delivered, the money is supposed to be returned. But what if the money being paid for unsupported products (listed by inactive and/or departed merchants) is never withdrawn by the account owner? Is that the real key to determining an inactive merchant? That they never withdraw their funds?

[Sassy Romano]

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At any rate, back on point ... if a product is purchased and not delivered, the money is supposed to be returned. But what if the money being paid for unsupported products (listed by inactive and/or departed merchants) is never withdrawn by the account owner? Is that the real key to determining an inactive merchant? That they never withdraw their funds?

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Yes and No.  Monitoring activity on the L$ flow on the account would be one thing except for freebies for which there'd be no L$ flow.

Also, it wouldn't account for an alt being logged in to withdraw from the main account via a debit prim.  Probably unlikely but could easily be scripted to constantly withdraw so then it would need to check the alts accounts too.

Either way, it's not hard to combine a series of metrics to determine an inactive merchant and delist until they're active again.

[Nefertiti Nefarious]

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Marishka Ixito wrote:

To me, a nominal listing charge of say

10L per item listed per week

would seem prudent to get the junk unlisted, and ultimately benefit business for both LL and merchants alike (because unlisted junk won't appear in search anymore, confusing potential customers).

To be sure, anyone's definition of junk is as good as mine, but

for the purpose of this post it's intended as "stuff that doesn't sell".

And yes, as a side-effect this might complicate things for listing freebies, but would it be such a bad thing if people needed to look for freebies in-world?

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The free marketplace listings are a vital part of the LL economy: I have almost 300 items, all of them inexpensive, and that mere 10L/week would wipe out my profits. Marketplace sales are 95%+ of my income. So I would have to increase prices to survive, which would reduce sales and increase the commission ... and wipe out my profit anyway.

I would have to give up the parcel I rent, putting my landlord out of business, depriving LL of the tier the landlord pays, and I would give up the Premium listing, depriving LL of that income stream, and I would stop buying things from other merchants, lowering their incomes and it would all spiral down to nothing.

We discussed many ways to minimize the "junk" last year - one of them being to suspend the listing of anything that had not sold at least one copy in the past 13 months (13 because of seasonal prodicts) ... that would clear out the database without driving merchants out of business.

 

Tavo Vella wrote: In addition I just had a look at my sales over the last 6 months and although they are OK overall, maybe a third of (older) products would have not broken even if there was a L$10/week fee. Maybe I should remove them, but they are still sometimes selling and getting good ratings, so if some buyers like them, why should I?. 

What you are describing is the "LONG TAIL" of marketing and it's a good thing. As long as the carrying cost of the less popular inventory is kept low, it's profitable to sell low-volume products.

http://en.wikipedia.org/wiki/Long_Tail 

Maybe there should be some sort of 'opt in' for products where sellers have to actively keep listings going (maybe as simple as ticking a box every 3 months), so products from absent sellers and those where the seller has not bothered to remove old stock will go.

This was suggested when LL proposed their 10L/month listing fee - just logging on to the marketplace, not ticking a box for every product, along with inactivating any product that hasn't sold in 13 months.

 

[Josh Susanto]

If it's simply a matter of relisting items every month, I think I could work with that, but charging a monthly listing fee seems unnecessarily sketchy to me. The whole idea makes me wonder if I wouldn't have to just pay the listing fee again every time one of my competitors flags one of my items just to get it delisted. 

A one-time minimum listing fee of 1L might be enough to get people to take a little bit more responsibility with their listings, but they might not stay responsible after that. An annual charge for items in-box would provide an "eventual remedy" for things that are just kicking around in the system maybe without even being listed, and it could be a function sufficiently distinct from the monthly relisting issue that people like me don't have to worry about paying yet again for LL dropping the ball in one way or another.