How To Destroy Secondlife and The Secondlife Economy

[Medhue Simoni]

Well, boring, even tho I used it also, is not really correct, and SL should in no way be categorized as that. If it is really boring to some1, it is likely they are used to not being imaginative and like to be mindlessly entertained by a box. Yeah, probably the same people that play Farmville, lol.

I really don't understand selling anything for 5L. Maybe for a promotional thing, but I think its quite sad that people think so little of their own work. Plus, you never know, Ralph could have been making 1000 a week and is now only making 500, which, I'm guessing, is still more than most of the people that are responding to him, lol. We can't have a clue unless we know what he sells, and even then, you never know.

Wait a minute tho people. You all act as if nothing has changed. Like you all just entered SL yesterday. Free stuff has never, ever been at the top of any search results, in any web marketplace ever in the history of SL, until LL took over the site. That is a fact, and you all want to act as if this is not true.

Oh, that is a good idea Josh. I gonna go out on the RL golf course tomorrow before it gets too cold out. That is the best part about being an SL merchant, I can go golf during the day while the slave class are at their labor camps.

[Josh Susanto]

I, for one, am making more than that.

If ralph is making more than I am, specifically on SLM, he should be complaining not about people stealing his sales 10L at a time, but about LL constantly finding new ways to break SLM and throw away thousands of L every week that would also be his if they would just knock it off already. 

That he cares more about SLM working correctly than about it working incorrectly quite strongly suggests that the core of his business is in-world, not on the SLM.

This is consistent with my current model of Malefactor Linden as being a frustrated animations merchant. 

[Medhue Simoni]

I don't quite get the whole frustrated animator stuff. Do you have a thing for animator? Are you jealous? Why animator? If you don't sell animation, how can you even speculate about it?

[Mickey Vandeverre]

Interesting you should mention that, Josh....because I was really curious about this, and in fact become more curious every time Ralph runs his theory, and everyone else chimes in with their own theories....

so made some new avs and spent some time being a Noob.  Hung out at the hubs for a while.

I want to talk to Ralph about this....but he seems to be fixated on one particular aspect and you never can get him to veer off toward another angle....

you know what I mean?

[Mickey Vandeverre]

Price point is about marketing, Medhue.

You might be surprised running the numbers.

Unless you've experimented with many price points you're hardly in a position to judge what the numbers end up being.

Actually suspect that's what is happening with new log-ins.  Running the numbers.  That works.

[Medhue Simoni]

Plus, why does any1 think that Ralph is only thinking about himself. I don't see that at all. I see a business man who has pointed out a major difference between Xstreet and the current Marketplace.

[Medhue Simoni]

Hey, what do I know. I've just worked fulltime in here for almost 6 years. Guess I must be pretty ignorant.

[Mickey Vandeverre]

not really sure which comments you are responding to...you keep responding to yourself.

you must have heard that all my posts get deleted. 

if it was to me...no, did not say that you were ignorant.  You were relating price point choices to an aspect that I rarely consider.  maybe others do. 

that's great that you got your business back in line.  Last time I chatted with you....you were getting ready to pull and fold?

[Medhue Simoni]

Oh, no, we were having some troubles, but even on my worst weeks I'm still easily in the top 5%-10% of merchants. Losing a few hundred dollars a week from your norm hurts tho. Plus, It's not like I don't have some major expenses to do what I do. RL stuff aint cheap. No freebies in RL, lol Now, we've done what I needed to do to diversify, and figured out some of LL's crazy search BS. So now, I'm actually making a bit more than my norm on some weeks. This is not to say I'm not worried tho. This past year has taught me a good lesson. Plus, I'm selling some mesh now, so that is a whole other line of products.

I'll always be looking to expand outside of LL's stranglehold, but I would never just pull out, as long as I can pay for the sim and make a little extra. But going back to working in a factory would seriously suck, and not be good for my son, as he needs me right now.

I'm always going to fight for us the merchants. If I'm doing bad, that means others are doing bad. I don't play games or have secret strategies like some. I'm just like every1 else, I just tend to sell quite a bit.

I think more than anything, it hurt to see some of the people that relied on my sales struggle. I always know that I will get by, but when others struggle because of me, I get emotional.

[JoJo Aurelia]

Erm,  I have a small area of 10 L items in my store, and they are nice designs. There is nothing second hand about the quality at all. That does bring in customers who will buy other things. The 10L wall isn't the real problem to me, it's the hunts. I've been in a few this year and 100's of people come to the store but few buy.

I do freebies in world, one a week to drive traffic. But my one item is so nothing compared to the sims dedicated to free items. Because there are so many freebies, the 10 L thing is kinda mute... and I don't get the rant. Also, the freebies on MP, other than building tools, have been subpar to me. I rarely buy 10L items myself, but do look for designers who have sales and group items.

[Mickey Vandeverre]

ok, cool...glad to hear that you got back on track.  I really didn't see much of a future for busting it out further, so at that time reduced significantly, and now in hobbyist mode, I think they call it.  about 30 minutes a day.

Guess I got confused at what you were saying here:

 "Well, I'll agree with Ralph, but not fully. If many insecure merchants panic everytime they have a bad week, it is not good for the economy as a whole. From an individual stand point tho, ultimately, merchants will only make themselves less and less relevant over time. Of course, you can't really paint with such a broad brush, but in general term, this is true. Even if they make the best products on the market. Why? Because, the lower they charge, the more they flood the market with their products. So, they make no real money, and the market is saturated with their products. Eventually, they will dry their own business up, and have to rely on an influx of new customers just to pay rent,unless they keep pumping out new stuff on a regular basis. It's just not a sound business plan. When your customers walk around and see every1 else with the same thing, you can bet they will likely seek out another creator who does not sell so cheap to ensure they don't walk into a party wearing the same dress than half the girls there, lol.

Personally, in 5 years, I've only lowered the price on about 4 products since i started, and most of that happened the 1st year. I would much rather add more to the product, than lower the price, mostly to respect my past customers who paid that price for the product. Oh, and, of course, I send all the past customers an update." 

 

If you've not experimented with different price points....not really sure how you can make some of those statements.  On the products that I have go out every single day....I have no problem with all their friends seeing it and wanting it as well, so not sure why one would knock that type of plan.

Lots of times when this discussion occurs....many assume that those testing different price points are taking other merchandise and marking it down, and I think that's a wrong assumption.  Some run promo prices on new products, and market it specifically at the promo price for the duration....and gotta say, that's a ton of fun!

Also, you called Chelsea's statement on BS....and I thought she was spot on concerning a few things.  I guess we will never know the picture as this forum has become like a club for a few folks, and we never really get the entire picture.  I would love to hear from others.

But I suspect that the new arrivals now have different spending habits and different lifestyles than perhaps two years ago.  Not convinced that they are settling in and establishing as many residences as they used to....but perhaps just exploring and socializing without all the trappings.

And perhaps the homes are becoming smaller.  Sounds like they had an increase in the offers for the Linden Homes.  I remember the old days when people used to bust out for mansions all day long.  In fact, had a really good business selling those.  Not the case any more, though.  Certainly not for that price I used to get!

But we'll never really know for sure...not enough people participating in this forum to get a decent picture.  That's one of the reasons I went on to other things.  Not a ton of fun if you are isolated in your workshop without input from peers, and all the collaborating.  Most true business people I know left, and it got really lonely on that part.

So anyway...was having hard time figuring out what your dilemma is, since you say you are a top earner.  What's your dilemma?  Why would it concern you what the others are selling their products for? 

[Pamela Galli]

But we are getting robots!

 

:matte-motes-bored:

[Medhue Simoni]

First, let me say that I hope that I don't rub people the wrong way some times. Calling some1's thoughts BS does sound a bit harsh, but consider that I am from Detroit and I'm used to talking this way without people getting offended. I very much enjoy communicating with fellow merchants and exchanging thoughts. Especially since we can all have some tunnel vision at times.

On experimenting, I didn't say that I only had 1 price point, only that I don't change the price once set. Plus, with animation, there are always lots of different price points, just by the nature of what it is. Some animations take alot of time, some are just highly sought after, some are very obscure, some are just a few frames or poses, and don't get me started on motion capture. There are lots of different ways to sell animation, sets of animation, and different animation markets. I'm not saying that I hit all the ranges and can determine exactly what is going on all the time. In many ways I'm lucky tho, because I shot up fast and now have some 4-5 years of data to compare things to.

Changing habits, hmmm, that is a tough 1. Hard to say. I don't see any real major differences, as things happen so gradually. I'm kind of always changing what and how I do stuff. I watch every1 and try just about everything, at least within my given markets. Moving forward and doing something new all the time is kind of my strategy, but still making sure my bread and butter gets updated and refreshed every so often. Again, I think i got lucky and made some good choices early on. In my head, I make alot of predictions and try to move toward those. Like, my new project, besides animation, is a combat system, with hunting, npcs, farming, and such. @Pam - Yay!!!! Robots. Like I said, I kind of get lucky. This is quite funny too, because I've spent the last few months thinking with Roberto about getting our animals and npcs to wander around the sim. Right now, I'm very happy with how our NPCs move around, but Rodvick's new features should really help us alot. My thought process a year ago was that we needed to start making fun game like things, which resulted in this combat system. Plus, i thought this is what SL needs more of.

1 thing that seems to be mostly related to personalities, is having a certain attitude. Some chase markets, and others create markets. A certain market may already exist, but chasing it is not going to get you very far. Deliberately trying to change that market tho, that brings you eyes, irreguardless of how you attempt to change it. I'm not saying it always works, but like I said, chasing the market rarely works out for you. It's kind of like exerting your presence, but not to the extent that every1 is watching you.

Why would it concern me what the others are selling their products for? Well, economics has been of great interest to me for a very long time. I started creating in SL because i saw the benefits and a very sound economic environment. What troubles me right now, is that people are not acting in their own interest. This is extremely unsound economics, and it is not just a few small players, but the largest player, which is LL. Freebies showing at the top of search is not in LL's interest, yet there it is. When major players act outside their interest, it starts a snowball rolling, as we can see by so many merchants going the super cheap road or making freebies just to get eyes on their stuff. Even extremely large merchants, much larger than me, have jumped into that boat. To me, that is not a good trend. LL could easily fix all of that by acting in their own interest.

I hope that all made sense.

[Harm Xue]

The thing is...

 

Unlike with RL, where an item you want to sell had an initial cost to you, so you can't sell it for less than, at least, as much as it costs you to buy more, or you will just eventually have no money and close shop.

 

In SL, for a lot of people, all the item costs, is time. And often, spare time.

So, in fact those people could sell their items for 10L or less.

 

It's a simple fact that, just like a RL merchant has to be aware than some day, someone might open up a similar shop right next door to you and drive the prices into the ground (and it happens often). A merchant in SL has to be aware of the same thing.

 

Is this bad? Yes, there are several instances where this only harms everyone. But that is the reality of a free market, and ultimately, it is still the best option over any regulated one.

This is where merchant and marketing tips come to play, business plans and, in the long run, making the best item you can. Quality matters. And people will hunt for the freebie items and buy them in crates, but they will also want that quality item they know it's not free. And they buy it.

 

It's a jungle out there or in here. So stay at the top of your game, improve, offer better and more. People will still buy your items and the 10L merchants will become your customers.

 

Last, which I believe someone else pointed out, SL will only be here for as long as we can attract new users, and a 10L or freebie item can give that newbie that is just trying out SL some sense of accomplishment, giving him/her time to grow into SL until they are ready to invest their RL money into more and better things.

 

I'm not sure where I read it but someone said the "basic mode" of the new viewer didn't (or doesn't) allow a user to change clothes?! And who ever decided this to be so is STILL working at Linden Labs?!!!

It only takes a quick look at any virtual world to know that character customization is the first thing any user will play with!

[Josh Susanto]

While we're all going around the same issue again with ralph, people's SLM funds are becoming discrepant with their in-world funds.

But addressing, AGAIN, ralph's complaint is way more important than addressing the possibility that people are being robbed... is that right?

[Mickey Vandeverre]

to be honest....no, it really doesn't make a ton of sense. Keep trying to remember a venue I've been involved in concerning retailing or wholesale or marketing where a group of people get together and insist that there must be certain price points...but just can't come up with an instance. So find it really odd. I suspect that Ralph does it for entertainment. Not sure what you mean by people "acting in their own interest." Would think that people act based on what brings them fun or joy or money. Different needs for different people. Different price points bring different experiences for buyer or seller. Again....if you're doing great, then it shouldn't be too much of a concern for you.

[Nefertiti Nefarious]

And Ralph appears once again with his rant about freebies destroying SLAWKI (Second Life As We Know It).

But when I check the marketplace, I don't see what the problem is. 

1,695,433 items found. (I removed the Real estate listings, which are all ZERO, and it's PG and M listings)
L$0 – L$ 10  > 148,919
L$11 – L$100  > 627,625
L$101 – L$500  > 752,051
L$501 – L$1,000  > 110,289
L$1,001 – L$5,000  > 52,827
Over L$5,000  > 3,716

8.7835379% of the listings are for 10L or less. Yes, imminent doom is upon us. REPENT!!! REPENT!!! 

[Nefertiti Nefarious]

---

ralph Alderton wrote:

10L$ content is bad for everybody including the people who make it. It degrades the value of virtual goods and is degrading to  content creators.

---

OK, I'm degraded! 

But my mostly $9L products are paying the rent on my parcel, paying my premium account dues, and I have lindens left over to upload more cheap products, buy things from other creators, and donate to sandboxes to keep them open.

[Josh Susanto]

(Right there with ya, Nef.)

His complaint actually seems to be more about the consequences of the 8-something percent, not the actual percentage.

This segment of products may be less than 9% of offered items, but this would not necessarily mean only 9% of sales, even measured in $L rather than number of transactions (it could; I'm just saying it's not a given from the immediate figures).

Because of copy permissions, it also would not necessarily account for less than 9% of the kipple that slowly churns its way across the face of the Mainland.

Let's be clear; I still think his assumptions about effects on the total economy are wrong, but we should try to understand what he says he thinks, or we might be addressing the wrong questions.

[ralph Alderton]

Nice stats Nefertiti.

So out of a total 1695427 marketplace items, approx 45% of them are listed at 0 to 100L$.

Nearly half of the marketplace items are valued at less than 100 L$

That's not good for Linden Labs and not good for creators

Digital goods and the skills needed to create digital goods are being devalued.

But the main issue with 0 - 10L$ content is PRODUCT PLACEMENT. This low quality, low cost content should not take up the first pages when searching Relevance.

Free and cheaper content should not be given priority placement. Linden Lab don't make any decent commission from it and the merchant themselves don't make any real money.

It's all bad. It devalues the marketplace and obscures good quality content.

What other web marketplace would put the worst content on the best shelves

 

 

 

[Mickey Vandeverre]

You are pizzing into the wind unless you give some examples.

[Ciaran Laval]

---

ralph Alderton wrote:

But the main issue with 0 - 10L$ content is PRODUCT PLACEMENT. This low quality, low cost content should not take up the first pages when searching Relevance.

Free and cheaper content should not be given priority placement. Linden Lab don't make any decent commission from it and the merchant themselves don't make any real money.

 

---

Agree and disagree, the low cost content, quality is subjective, should appear if it's relevant, however it certainly shouldn't get priority placement, unless of course someone has paid for a featured listing.

---

ralph Alderton wrote:

 

What other web marketplace would put the worst content on the best shelves

 

 

---

You mean cheapest content, Ebay certainly would if it's relevant to your search, there have long been arguments on Ebay's boards about this, but for example they have in the past given priority to people who list with free shipping, the argument largely centres around there being no such thing as free shipping, or another factor is what they call competitive pricing.

 

 

[Josh Susanto]

What would make the most sense for LL to use as a criterion of ranking priority would be which products are the most profitable for them to list.

This would seem to me to be not a simple function of price or of the number of sales, but of the total amount of revenue the object is projected to generate for some future period of time if the ranking were left as-is, all else assumed to be equal. 

I'm not saying that that is or is not what they're using (OK, probably not exactly), but it would satisfy the question of why certain types of items predominate; any item for which the price already approaches the optimum in terms of what the consumer perceives it to probably actually provides, and items that have the broadest possible appeal.

If this were the system, then an incredibly cheap item would rank high even if it were nothing very impressive, provided that enough people wanted it at that price. Likewise, an item that very few people want could also rank high, at least for some period of time after a sale, if it were merely expensive enough to throw the numbers. Everyone might like something expensive, but maybe not at such a price; among other things, the risk of disappointment is higher because of the greater potential of a gap between the item's price and the item's utility measured in $L. Bu,t really, most things that are very expensive, very few people want becaue the more sophisticated is the design the smaller the number of people who will really be able to make use of it.

If there are more cheaper items than expensive items, that alone would cause some congestion of the high ranks by cheaper items. If they depended, also, for their ranking on a comparatively steady demand, they would also stay ranked more continuously than items which had merely popped briefly due to one or two recent sales. The result could be a counter-hiuristic in which items contunue to rank high because they are porofitable to LL and they are profitable to LL because they rank high. In such a counter-hiuristic, the listings that sacrifice per-unit margins in order to acheive market share might have the advantage, simply because they scroll off and back on less frequently, and are easier to find in similar position when people look for them a econd time.

Again, I don't know what they're doing, but if you consider this idea, you may find that this idea makes some kind of sense. What's actually happening might not be completely different.

If that is what they're doing, it's not particularly smart without at least one tweak I'm pretty sure is absent.  LL's profits are from commissions, and if someone just orders one item at a time at 9L or less, LL gets nothing. (OTOH, this might explain at least some of their resistance to shutting off the shopping cart or reducing its volume).

Now that ralph has escalated his rhetoric from 10L to 100L, I think I can specifically address a problem with his argument that becomes clearer in this way.

ralph almost certainly has to be selling finished objects, and not components. As a person who sells components, I can tell you that the formula for component sales that has worked best in my case is to keep everything unbundled and make the risk of committing to any one component smaller for the consumer by not attaching it to a commitment to some other component in the same package that merely drives up the price. Added cost is not always added value, and I don't see any reason to expect people to pay for features they do not intend to use. 

You can buy a box of nails at practically any hardware store in the U.S., sure. But at the ones that want to serve everyone who needs a nail, and not just professional builders (who might as well order them online these day anyway- right?) you will be able to buy exactly the number of nails or of various other types of components as you want. 

The individual nails may actually cost more, but people end up paying a lot less for nails they don't expect to use in the foreseeable future. And if the nails are just plain wrong for the job, finding that out will be less expensive, too.

At 100L, it's clear to me (by analogy) that ralph doesn't want people buying individual nails. In ralph's chain of stores (and yours is not welcome in his town unless you comply with his own policy, so get lost) you either buy a box of nails or you buy a replacement stool for that stool that just needs one good nail. 

Aside from whether that's supposed to be good or bad for the economy, how is it specifically good for consumers?

ralph may say that my items at 9L are either undervalued in terms of the production costs, or he may say that they're a waste fof data space. In some cases he might be right. But in a lot of cases the market, itself, says otherwise.

A slab of rock that takes less than 2 minutes to sculpt out and maybe another 2 minutes to load and list costs 20L up front. If it sells 1 copy a day for the next year, it's doing OK for me, absolutely; especially if the sales continue. Then if someone wants to build a structure out of the same or similar rock slabs, they can probably do it at a fraction fo the price someone like ralph would charge for a similar finished product. The consumer substitutes his own labor for that of the merchant of finished products, for which he will not have to pay if he uses my products. And this is a good investment because he's at least about equally likely to end up with the structure he really wants in the long-term. If not, he can keep fussing with it instead of just staring at it forever and wishing he could get the designer to mod it for him and "mod it correctly this time".

But, as I said, I'm pretty sure ralph's products must be very different from mine, and not only in price.

Someone who works primarily in animations, especially, would be in a position to fail to appreciate that anything selling on the SLM could possibly take 2 minutes to produce, or that something produced in less than 2 minutes could be of any value to consumers, or of a total annual value of thousands of $L.

A reason he may not understand the value of micro-transactions is that he may not understand the value of micro-products. 

 

 

[Mickey Vandeverre]

I think that Ralph is just after our marketing secrets

Be sure to leave the most important parts out, so that he gets thrown off track when experimenting. 

Just tid-bits.....toss him a bone or two....

[Josh Susanto]

Well, he's completely welcome to my own marketing "secrets".

ralph-

Step 1: lower all your prices to 9L or below...