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Managing Possible Down-Time during Peak Season


Mickey Vandeverre
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Ann Otoole wrote:

How do you advertise your rebate promo?

Actually Ann its very easy.  among all the products I sell, my biggest bread-winners are my 6 landscape terrains sculpty map builders packs.  In order to give potential customers a taste of the quality of my sculpty map designs, long time ago I created an Xstreet / MP Free DEMO Pack of sample sculpted prims from each of my 6 packs.  The Demo pack also has demo photos, product info, and LMs to my store.

Well it seems when you use the word FREE in your Demo Pack, it attracts a ton of bees to my honey.  On MP, since I released my Demo Pack, this free pack has been my #1 seller.  In fact it outsells my most popular paid product by 3 times.

Using my ever-popular Free Demo Pack listing on MP, I promoed my Rebate offer.  The listing title prominently advertised my rebate offer on any of my Sculpty Map packs.  Any customer that bought the free MP sold Demo Pack would have received in this pack a rebate coupon (a notecard).  If they subsequently went inworld and bought one or more of my packs, they contacted my by IM or notecard telling me they have the coupon and they bought the following packs from my inworld store.  I checked my history to confirm and then I IMed them back and paid them their rebate.

Over the ~9 months of the rebate promo, I paid out several rebates.  But strangely I noticed that I sold my MP Demo packs to customers that ended up buying my packs inworld and didnt even ask for the rebate.  This happened VERY often and was a bit surprising to me.

Anyway, my free MP DEMO Pack has always been a powerful sales tool for my landscape terrain sculpty packs.  Using it as my tool to promote my rebate promo was one valuable tool.

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Profit margins alone tell you very little.

 

Income of $200 a month + tier of $15 gets you 93% profit**, but it's barely going to buy you lunch each day.

vs, say, $400 a month income +$195 for a sim -- 51% of $400 is still more than 93% of $200.

 

Keeping expenses low is always nice, of course, but profit matters in terms of quantity, not proportion.

**Assuming a oversimplified concept of profit based on income minus cash expenses.

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Sassy Romano wrote:

I have a great idea to guarantee 100% shop inworld... don't list on Marketplace!

(i'm so smart at times)
:)

The only problem with this, Miss Sassy, is that inworld shopping is almost dead.  People have gotten away from going to malls and inworld stores to get the things they want.  Now, they just go to the Marketplace, look at a couple of photos and buy from there.  I have a strong suspicion that in the near future, inworld shopping will be cut down to texture and sculpt stores and just a few prolific clothing stores. 

All of my sales come from my Marketplace store.  I have very little traffic in my inworld store.  If it weren't for the hunts I'm currently a part of, I wouldn't have any traffic at all.  And yet, I still have a quarter sim with a big store and a lot of displays. 

This is why I was considering trying Toy's rebate program.  Heck, I even made a rebate coupon in Gimp that looks nice to post on my Marketplace store.  In truth though...I'm having second thoughts about it.  I'm not sure it would do any danged good.

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Well each of us has different results but consider this, how do non smokers stop smokers smoking in the smoking area of restaurants?.  Occupy all the available places.

Hypothetical but the way to influence purchasing back inworld is to not have any alternate, i.e. don't list on MP.  Of course it has to be unilateral action to succeed.

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I really cant believe we are getting into these semantics but if we want to play this "what if" game than fine...

I think it doesnt take a corrupt wall street financier to tell you that a % of a much larger number will give you much larger actual numbers. But sure, based on this line of "obvious" Grade 5 math thinking...

0.01% of a $100,000,000L = $10,000L

93% of $200L = $186L

WOW  Amazing how that math works.  Not sure how that matters for this topic but that is cool huh.

In the meantime if we want to look at the scale of operations.  I were running a business RL or SL and only generating a 0.01% Profit margin, that would be deemed an unhealthy business operation since regardless of your size of business operation - .01% profits tell most analysts you are a hair from losing money.  It tell ppl like me that what you are selling - no matter how much of it you are selling is barely profitable OR your business operation is not efficient and could go into a money loser in a heartbeat.  It also tells me that you all you are making is $10,000L from $100million in sales, there is not much profit to spread around a business of this size.

There is a lot more to any business than a couple factors but PROFIT is pretty much on top.  If I have to spell it out for those that cannot tell that this thread is talking about a small scope of a much larger topic, then I will spell it out for these people.  I didnt think I had to go into more details of business operations.

So to conclude for my business in SL (since others are too afraid to admit theirs but are more that willing to stab at mine), I make 93% margins on about an average of $80K - 100K L a month.  I accomplish this revenue and profit margins with about 10 hours of business effort a month on products that are still selling well over a year after I created them.  It allows me to spend most of my SL time doing other things I love like creating art, building / running my art gallery, singing karaoke, and hanging with my SL friends.  I posted this all to you on my $2800 Alienware laptop that was paid for from my SL Sculpty Business and as I prepare to take more art photography with my $2000 camera equipment that was paid for by my SL business and on my SL parcel of land that holds my store, art gallery and home that is totally paid for by my SL business.

Amazing what MY 93% profit margins are doing for me.  :)

and ... OMG!!  I guess as Mickey predicted... me telling you all this means my SL business is doomed now!! :0

Not sure how...  /ME waits for doom to arrive.

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Marcus Hancroft wrote:


Sassy Romano wrote:

I have a great idea to guarantee 100% shop inworld... don't list on Marketplace!

(i'm so smart at times)
:)

The only problem with this, Miss Sassy, is that inworld shopping is almost dead.  People have gotten away from going to malls and inworld stores to get the things they want.  Now, they just go to the Marketplace, look at a couple of photos and buy from there.  I have a strong suspicion that in the near future, inworld shopping will be cut down to texture and sculpt stores and just a few prolific clothing stores. 

All of my sales come from my Marketplace store.  I have very little traffic in my inworld store.  If it weren't for the hunts I'm currently a part of, I wouldn't have any traffic at all.  And yet, I still have a quarter sim with a big store and a lot of displays. 

This is why I was considering trying Toy's rebate program.  Heck, I even made a rebate coupon in Gimp that looks nice to post on my Marketplace store.  In truth though...I'm having second thoughts about it.  I'm not sure it would do any danged good.

Marcus I fully assume Sassy is just being.... SASSY and sarcastic.

One never really knows if she believes this is a sound offer of advice or joking.

I will just take it as a joke and if I were you I wouldnt waste too much time posting against her suggestion.

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Toysoldier Thor wrote:

Marcus I fully assume Sassy is just being.... SASSY and sarcastic.

One never really knows if she believes this is a sound offer of advice or joking.

I will just take it as a joke and if I were you I wouldnt waste too much time posting against her suggestion.

Maybe, maybe not.  Ask yourself would it work?  If no products were available for purchase on MP, where would people shop?

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If you are serious about the concept of shutting down MP in hopes to bring life back into the SL Inworld grid (which is a noble objective as its clear that MP has been destroying the inworld mall / store economy - and of course as a result hurting LL directly in a speeding up of abandoned sims) then you have to look at this concept in a much larger macro-economic perspective.

Sadly, one of the most fundamental flaws of the inworld merchant / shopping enviornment which Xstree / MP have always been the true leader on is effective SL products search.  Forget about the benefits / function of MP being able to sell a customer and deliver to a customer a product that is bought on MP.  To me, the #1 most powerful feature of MP is its product index/search service for customers.

In fact, many customers in SL use MP only for the purpose of finding a product they want to buy and then going inworld to buy the product.  This tells you a lot on what is the most important function of MP.  If buying the product was #1 then why would ANYONE search in MP and then leave the "buy now" button right in front of them to go to the store to buy?

So... sure we could consider shutting down MP completely (it couldnt be just one merchant - it would have to be to shut down the service all together).  Residents would surely be forced to buy inworld until one of the 3rd party online stores pop up again to fill the MP void.  But without an effective inworld product search index, all our sales would plummet - even for those that make most of their sales inworld and not on MP.

That is why I didnt take you serious Sassy.  Since you and most merchants know that MP search is the only critical function of MP and tearing it out mean most merchants would disappear inside the grid of SL.

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Toysoldier Thor wrote:

That is why I didnt take you serious Sassy.  Since you and most merchants know that MP search is the only critical function of MP and tearing it out mean most merchants would disappear inside the grid of SL.

It's not critical to me because I make sure it is not.  88% of my business is inworld.

Further, I doubt anyone finds me from search either inworld or MP, I concentrate on putting products in front of my demographic market, old school methods.

(I accept that different businesses will be exposed in different ways to the success or failure of LL's search engine)

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I'm not sure why after a couple years of posting here, that you don't have a clue what I sell.  Perhaps it is because I don't drop a store promotion into every single freakin' post like you do.

Have a hunch that this particular thread only serves one purpose now - and that's to massage your ego and advertise your product.

ummm no.....wrong, wrong, wrong.....on most of that post of yours.

How many business have you owned in real life?

 

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Honestly, I really dont take any time at all to investigate what all my fellow posting Merchants create and sell. 

There are a few that I know what they make because they sell similar products to me and are somewhat my compeitiors (i.e. my fellow sculpty makers).  We often end up in similar forum topics of interest for obvious reasons. But even among this small group of merchant forum posters I just generally know they sell sculpty mapped products - most dont sell the sub-category of what I make - landscaped terrains. :)

I know what a few others sell because they open talk about their products in the forum posts - like Pamela and their bottom signature is pretty clear what they sell.  And more power to her or anyone else that does this.  She does it subtly and like me she does it primarily to prove what she is trying to say by proving a Real and personal example.

But see, unlike you that even in your post to me just now that seemed to show a sign of anger and contempt that I would include my business and selling products as example of what I am trying to say in my post, I dont see anything wrong with that AND moreso this is yet another subtle yet powerful form of marketing.  Guess why?  Most of my fellow merchants are a large part of my customer base.  I build input materials for a lot of the finished products that are sold in MP by many of you merchants. 

So ... hmmm... to make my point in the merchant forum posting and to legitimately use my own product as an example WITHOUT providing a link or promoting it (which means I am not in any way violating forum posting TOS), this goes toward a couple of the key ingredients to making a PROFIT... increase revenue by effective/advertising to my target markets... and find innovative ways to reduce cost of operation (i.e. lower costs of marketing).

As for the rest of the merchants that post in SL, in the past two+ years of posting, I have only visited a handful of your businesses.  Is there a rule that says I am supposed to investigate and understand your business in order to be a participant in this forum?  I missed that line in the TOS.  ;)

PS... I have owned / own 4 Real Life businesses (including a patent holder of a product that I brought to market from scratch in my basement and now distribute nationally).  None have lost me any money.  Also, I hold down a career in servicing countless other businesses - including most of my time as a Business/IT Consultant & Systems Architect vendor for companies like IBM where my job was / is to understand countless customer business models, business and IT operations and problems, and to come up with solutions to fix their problems.  I have and still do work as solution architect on solutions in the scale of $millions on very large deployments.  (this is the reason when I look at LL's business model and operations - I shake my head at how immature an operation they are)

From your postings on your understanding of business operations in SL I would assume it safe to say you dont have that same background, but you dont have to answer as I really dont need to know.  You already stated you were even scared to tell us what your SL business profit margin actually is.

So... more power to your business and feel free to dismiss my rebate promotion idea that I used for my business.  I did not post it to convince you to use it as well.  Each business is unique and has different needs.

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Not enough to know that a corporation that can buy SL many times over typically operates on a gross profit margin of 10% or so. ;)

Couldn't resist, sorry.

Also, that the only real place anyone can dictate whether your business should run on profit, is when you have a corporation that doesn't show profit for a number of years that must lose its corporate standing and must be bumped down to personal income or hobby.

Or that profit margin is a floating number, which is but a piece of the puzzle. Agree with you here that gross profit outweighs margin. The higher the volume the more wiggle room to trim the fat and play with the margins. Or lay off say a third of employees and still keep on ticking merrily away. There's more safety in that sense in volume than margin.

Or lower margins, but higher investments as assets that increase the base worth of a company as opposed to a company with great margin but no assets (who's going to get a loan more quickly here?).

Or entrepreneurs that quit their more lucrative day jobs for "feel good" businesses, with low profit margins, high risk, long hours.

Businesses are organic beasts.

Buy my book!

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Interesting.  Because it sounds like you don't have a clue.

I did not start this thread to advertise your "rebate" which I find awkward, btw.

Let me try again. (the following not addressed to Toy)

There are some merchants who run the SL business to keep a roof over their head and to put food on the table.  If one is in that position, then a down-time is pretty scary and threatening.  Been there a few times and also messed up big time by not having back-up plan.

All indication of how this entire process is being handled here....does not look all that great to me.  You be the judge.

On top of that...I'm watching retail sales in a few other venues....and it's not looking all that great right now.

Even a back-up plan in another venue has it's issues because of the economy.

Having the social networking and blogging already in place is crucial now.  It gives an edge where one can manage in spite of some hurdles.  It provides control, when other systems are down or just non-existent or non-functioning.  Practicing it on SL and getting in the groove of it on an SL business will transfer to any other online (or even offline) business.  That knowledge and routine is not a bad skill to have in a pocket.

I'm technically challenged, but it seems that it has taken almost a year to implement the direct delivery system, and they've indicated that all focus is on that.  To me....that's scary.  Sounds like it's major complicated.  If it is that complicated, to take a year to develop....to me, that implies that there could be serious complicated functioning issues along with it.  Maybe that's wrong.

Personally....already on the edge based on lack of tools here, and am not going to survive another major setback.  Not sure about the others - just thinking out loud.

I want to survive it.  I love this opportunity.  It's amazing when it's functioning.  (and I wish someone at LL would grasp that)....Watching retail activity in other venues I just keep coming back here wishing the tools worked, because when they work - it's awesome.  And it's a smart business.  Those who manage well in spite of the hurdles are on to something brilliant.   No packing and shipping and the product sells over and over again after creation.  And there's not a ton of competition.

Plus - a person gets to use their creative skills...which not every single person gets to use when they arrive at work each morning.  That's where that love of what you do ranks right up there in the top 3 important things and kicks in.

Rather than fold during a complicated time....I would rather just make it through somehow and keep going.  I think that's possible.  I don't want to see people fold like they did during that inworld search dilemma for months.  That lasted months - and that was valuable message on how another dilemma will be handled.

I think that if you continue to survive - - you might just come out with a great real life business, and a couple of years ago, I would recommend it to anyone who needed extra income.  But it's tricky. (can't really recommend it to a new person now - too risky)

I hope it gets past that risky stage.  But maybe no business will be able to currently.

Original post - did not really have someone in mind that was buying fancy toys with a couple hundred bucks a month - but was thinking of someone who relies on their business to be consistent for roof and food or even emotional/creative attachment/needs.

 

 

 

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LOL

Gotta love it when those who use an isolated figure to support one strand of rhetoric are morally outraged when another equally relevant accounting element is introduced to the discussion, and then it's suddenly a matter of "semantics" (and you might want to check with Mr Dictionary on that).

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Been stewing on this today and had a related conversation with someone today also. Didn't want to appear to be a Mickey groupie (although you're certainly worthy of err ... grouping?), but you know I'm a sucker for a business chat and coffee.

This is priceless advice, especially when I hear that people are sometimes instantly and dramatically affected by search and such.

Not an anti-SL statement, but putting food on the table (and life in general) should always come first.

To that end and back to your topic, I think you're touching on something that might be useful, and that is reusable skills and content.

SL is an absolutely awesome business testing ground, and a great place to try out concepts.

Perhaps a wise move would be to think about honing skills that translate well to other income. We've got graphics work, which are skills that can be used elsewhere as well as a great place to learn programming for the technically inclined, marketing skills that all merchants tend to learn, branding, etc.

The other point is reusable content which can include graphics, but is particularly suited to mesh and 3D. 3D skills and even the content itself is usable for generic sales (turbosquid and friends), game and film content, etc. Local advertising and television is another place to possibly explore for these.

Music and DJ skills may also translate to other vehicles.

Thanks to your post, I'm kind of brainstorming ways to (with the least amount of work, effort and content) find those things which can be used in the most amount of areas, in and out of SL.

As much as I love SL, when it comes to financial security, I have to say that it's best to spread the investment over a wide array of venues, in order to weather the storms of SL change.

Thanks for getting those juices flowing, hopes that a merchant forum can one day scratch that business itch more than providing a place to poo where we eat.

Yes, Dart said poo.

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So Dart....

in the other thread you pointed out how its ME that makes personal attacks in these threads.  Of which I pointed out the "lack of class" is evenly shared by even those that supposedly appear beyond reproach.

So you want an example?  Look at this thread.

I am having a discussion with Mickey.  Someone chirps in to Mickey's defence with her logic on how profit means nothing vs. revenue.  No problem there.  I respond to her in detail why her logic is flawed.

And what is her response to my response explaining the flaws to her logic... Well let me post it for you now...

 

Reply to Toysoldier Thor - view message

yesterday

LOL

Gotta love it when those who use an isolated figure to support one strand of rhetoric are morally outraged when another equally relevant accounting element is introduced to the discussion, and then it's suddenly a matter of "semantics" (and you might want to check with Mr Dictionary on that).



It doesnt bother my about her non-relevent to the topic, no valid content to the post, personal attack.  Personal attacks dont bother me.  Responses like this from her and others like her just tells me that I put her in her place in logic and she had no valid response other then to say "ohhh yeahhh welll you are a poo head so there!".  Somewhat of a childish response on an adult discussion thread.

Anyway Dart, when you are going to critisize base on observations, maybe keep your mind and eyes open that a paintbrush strokes both ways.

 

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Some elements of sarcasm there sure, but to be blunt, I got the same vibe about the semantics bit that you were trying to force your side as the only right way to handle business. Also got the vibe that your points were challenge-and-response, down to a contest of who makes more money and who's right or wrong.

I'm not the best person in the world to play judge, I've had my moments of both sarcasm and brute forcing an opinion too, as you know. Helped myself get over that a bit with my signature, it's a constant reminder that no matter what I say, unless I back it up with fact, that it's just my opinion.

Point taken, that no one is perfect, but you're kind of doing it again by singling out the person rather than the content of the opinion. For instance, is one accounting principle as good as another? Does it matter in the end if one person uses one method of business over another?

I think that if we were to meet in RL and have a business conversation that none of us would come across as combatant and obnoxious, but you do come across as if you're trying to pick a fight and force people to choose sides, at least to me. And that's ok, for people who aren't thin-skinned, a good debate and some verbal sparring can be healthy, but maybe not ok for a public forum if that's all it's about in every conversation.

I actually liked the direction that the conversation was going aside from the tone, I could talk business and theory all day, talking shop does it for me, Poor Mickey here can't keep a thread on topic to save her life thanks to our antics, though. ;)

For what it's worth, wouldn't be the same forums without your input, but you don't need to hold a blow torch to someones feet to have a conversation.

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I was already painted as EVIL in the forum.  I was just pointing how how the whitecoats are as personal an snarky in their posts when their logic in their posts are debated and their logic / facts questioned.

I too was enjoying the initial topic about how to protect ourselves when LL eventually (and likely in the peak of our holidays season) deploys DD and once again disrupts the MP service for days or weeks.

We got a bit dragged down because of those that challenged if a "buy inworld" rebate promo was a wise idea... one that I had already very successfuly ran and completed and had successful results.  But that was ok.  I also liked that we got into what really drives business in SL ... ie the discussion of profits, revenue, personal investment / passion of just RP a creator/merchant, or to be philanthropic.  As you... I love talking about business stragegy.

Anyway... nuff said.

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Dartagan Shepherd wrote:

Been stewing on this today and had a related conversation with someone today also. Didn't want to appear to be a Mickey groupie (although you're certainly worthy of err ... grouping?), but you know I'm a sucker for a business chat and coffee.

This is priceless advice, especially when I hear that people are sometimes instantly and dramatically affected by search and such.

Not an anti-SL statement, but putting food on the table (and life in general) should always come first.

To that end and back to your topic, I think you're touching on something that might be useful, and that is reusable skills and content.

SL is an absolutely awesome business testing ground, and a great place to try out concepts.

Perhaps a wise move would be to think about honing skills that translate well to other income. We've got graphics work, which are skills that can be used elsewhere as well as a great place to learn programming for the technically inclined, marketing skills that all merchants tend to learn, branding, etc.

The other point is reusable content which can include graphics, but is particularly suited to mesh and 3D. 3D skills and even the content itself is usable for generic sales (turbosquid and friends), game and film content, etc. Local advertising and television is another place to possibly explore for these.

Music and DJ skills may also translate to other vehicles.

Thanks to your post, I'm kind of brainstorming ways to (with the least amount of work, effort and content) find those things which can be used in the most amount of areas, in and out of SL.

As much as I love SL, when it comes to financial security, I have to say that it's best to spread the investment over a wide array of venues, in order to weather the storms of SL change.

Thanks for getting those juices flowing, hopes that a merchant forum can one day scratch that business itch more than providing a place to poo where we eat.

Yes, Dart said poo.

I've seen some people using twitter who have taken the graphic design to some other venues.  I wasn't really sure what they were doing in SL - wasn't super clear on their bio, but they had SL listed.  Maybe they were making textures.  In the other venues they were selling graphic design.

Even something as simple as learning to photograph your objects, then post and list, and manage an online store will make attempting another online venue a breeze - pretty much to the effect that you could whip up another online store overnight practically.

The part that doesn't happen overnight is the marketing stream.  But if you get into the practice of using a blog here, posting two or three times a week (I'm on hiatus right now for SL blog) - but to be effective that needs to happen weekly, to stay in top position on google search.  That practice here is exactly the same as what one would do with another business.

To get even more of an edge for both businesses - would be really cool to mesh your followings a bit.  If one built a following for SL product, would be cool to tap into all that work, then transfer to sales in another venue.  You would have a percentage of market already built in and ready to go - people who already know you and trust you.  In that case, then certainly your time and efforts were not wasted with what you built here. 

That's a bit tricky, though.  You've got to mesh RL with SL.  Not there yet.  For someone just getting started they could probably pull that off by playing it right and staying away from some bad seeds in SL.  I did not play that right.  Stepped through poo and stomped on it the entire duration here.  Wish I could play that part over,

Another aspect is the environment.  I don't think I'll go into that - but it's really cool to participate in an environment a few hours a day, where you can walk in, and not have to scrape poo off your shoes. 

 

 

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oh, and in reverse....have met some people on twitter who sell real life product quite well - variety of things, mostly in home design or art or interior design services and they are fascinated by the creativity that comes from SL and by the marketplace too - all those different products offered.  I would imagine that if you had never set foot into a virtual world, browsing through the marketplace to see each niche that someone carved (some quite interesting!) would be intriguing to say the least.

A good while back, I had several come inworld to talk about it, and showed them the store....and they really wanted to get involved.  But some issues came up that did not present well in public, and I can't exactly smooth those over right now and encourage someone to give it a shot.  Which is a huge bummer.  That's why I get a little anxious about this tool functioning thing. 

Waiting.

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Dude, get a grip.  Take your freakin' 200 bucks and buy yourself a real life whipping post.  I ain't it, and neither is anyone else.

We weren't having a discussion - I was merely responding to each of your posts that were chock full of misinformation with my name attached, as is this post I am responding to which is chock full of stuff that did not happen.

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