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How much rental to charge for shop unit space?


Kiska Juliesse
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Hello everyone,

Just thought I would ask some of you retailers and land owners for a bit of advice.  Can anyone tell me or give me a rough idea of how much you pay or charge for shop unit space?  From what I understand, this is determined by the amount of prims available for use by each store and the traffic levels on the sim, but I am not quite sure what I should be charging my retailers and want to set a fair price.  Thanks for your help.

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I can't really tell you what you should price at, specifically. But I can tell you what I would look at, as a merchant, in deciding whether or not to rent from you.

Is the cost less than $2L per prim?(preferably $1L :P but even $1.5L per isn't all too bad, dependent upon the other things here of course. $2L and up is my cap and I won't pay that price no matter what. I WILL pay *up to $2L, but you better have a darn fine place that fits my criteria perfectly if you want more than $1.5L).

What else is on the sim? A club?(that will almost always cause less merchants to rent from you unless/until your club is very well known and your attendants do actually shop at the locations around it-which is pretty rare these days), other large stores? breedables?..the list could go on but this is a pretty big one.

How many other merchants am I sharing a spot with? I don't mean my particular spot, but rather the sim, or at least this area. Too many and it's not likely worth it, people get tired of walking around aimlessly so places won't likely get as much random foot traffic, only traffic they actually direct themselves.

What, if any, advertising will this owner do for me? Not a dealbreaker by any stretch but it's definitely a nice touch and honestly I think it's actually needed for most who rent out shop space, these days.

What are my limitations? Speaking mostly of specifics like scripts(vendors and whatnot), design and such. Do you allow your tenants to put up ban lines(I walk away at this too)

Do you have a forced landing point? If so, it doesn't matter if you're giving me the spot for free, I won't rent it. I loathe these with every fiber of my pixel being and refuse to even vist places that have it, much less pay them to use it. You'll find more people that dislike forced landing, than those who don't really care. But this especially applies to places like malls, shopping centers and the like that offer different services or venues all over the sim. It's stupid to make people land in the one spot you think is the prettiest. People won't be able to teleport in friends. They won't be able to return to their favorite spot. If they crash they can't return where they left off. There is just rarely any need for this option-and most definitely no need for it in a shopping location.

What does this plot look like? Did you put a little too much attention into decor? Is it subtle? Does it feed into the atmosphere without yanking away attention from the shop/s? It's entirely possible to overdo it on decor, in fact, a ton of people do it(far too many, even some of the most famous/popular makers make this terrible mistake). It's nice to have a well layed out location, and great decor. It's terrible for the customers that might not have machines that meet your machine's specs and therefore can't really enjoy what you've got out(but will more likely suffer client side issues)

What sort of person is the landowner? Will he/she be around if I need help? Does he/she require ncs, IMs, or both? Is there other staff available should the owner not be on? How long has this person been on the grid? What sort of experience does this person have?(yeah those are actually important to me)

Those are just some of my main ones. I've got little quirks too but they're pretty irrelevant for most, and some might even be uber petty.  I am VERY picky. I've only had a few satelite type stores/locations in the last couple of years. One I'd still have if the owner didn't lose her battle against a lifelong disease. She was an awesome land owner. The others, eh, fizzled because I saw them starting to make a lot of the same mistakes others made. Rather than get in too deep and be stuck, I got out(at least one of those sims is now gone). So I am EXTREMELY picky about where I would even look, let alone rent(it's even worse when I am the shopper, if it's even possible to get pickier, I pull it off)

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A few years ago I had a lot of satelite shops all over the grid. Nowadays I only have my mainshops, the marketplace took over the function of my satelite shops. But in those days I was often travelling the grid to find new selling places. For me the price was never what made me decide to rent or not. I have been paying prices between 1,2 linden and 20 linden per prim.

Actually when I searched for new shops, I was not so much looking for space, space is not rare, space is everywhere. I was looking for traffic, traffic which I could not reach with my main shop, and I paid prices according to the traffic landowners are able to bring to the place.
The best places for me were places where the landowners bring entertainment that attracts new traffic all the time. But those activities bring costs and those costs will be reflected in the rent prices. And I was happy to pay very high rentprices as long as traffic that justified these prices kept coming.

So take that in consideration. People who run shops are not so much in need for a space, what they need is shoppers. Shoppers that buy enough to at least pay you the rent.

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Oh yes that's another great point, traffic. I'm surprised I forgot it haha, that's a big one on my list. I look at places for their *actual traffic too. If I stop by a location a lot in a week's time and never-or rarely-run into another av yet they have traffic in the thousands, I know something is askew. It could be SL, it could be that the landowner is gaming traffic. I keep an eye on places like this. If I see it as a pattern for a few weeks9traffic way higher and not really indicative of my experience there), I simply walk away. Sometimes those numbers aren't all they're cracked up to be.

But if a place truly brings in that traffic, and most especially if that traffic is actually productive(in other words buying, which you'd likely have to talk to other merchants renting there to find this out), then this is a place I definitely want to put on my list of potentials.( I create lists for lots of stuff, lol)

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I closed all my rentals at the beginning of 2010 as they were no longer profitable enough so I can't comment on how much the going rate for space is nowadays.

However, regarding "true traffic" I thought I would add to what Tari said. Allot of people who rent space commercially, do game their traffic as traffic is one of their key selling points. A good way to find out the true traffic and potential passing trade for a specific rental spot is to bring in an alt, put a radar on it and leave the alt floating above the rental spot. Set the radar for about 20 to 30 mtres or so, basically far enough to cover the rental spot you are interested in plus a few on either side. Make sure the radar reports the presence of other av's either via IM, email or just in the alts local chat window. Leave the alt to go idle then log into SL with your main AV and go about your business. When you check back on your alt you should have a list of everyone that's that's been within spitting distance of the rental spot during that period. Log in at a variety of times and days to get a better picture.

I found this to be a really effective way of determining the true traffic for specific sections of a mall. I found some incredibly busy and profitable rental spots using this method in the past.

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Nice method you develloped there, Porky. For me it was more a method of trial and error when I started renting shop space. And step by step I developped a nose for real traffic. You find out how to discover the botfarm, you learn to recognise the patterns of bots versus real traffic.

What also worked well for a while for me was to follow the destination guide. As soon as something was new on the destination guide I visited the sim to see if my brand would fit there and if there were rentals, and then I took one. At least for some weeks you had garanteed sales, because of the traffic that the destination guide listing brought. Some places were not able to keep the traffic after the listing sunk lower in the destination guide, and then they lost me as a renter as well, but some turned out be very profitable rental spaces that survived for years, till the marketplace stepped in between.

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I have one of the longest running malls in Second Life.....6 years this January. I've kept the rates the same throughout i.e 5L per prim (e.g. 200 L for 40 prims). Once upon a time that was at the cheap-end of mall rentals....nowadays with the way in-world shopping activities are heading, it's nearer the expensive end.

Historically the 2 malls (Fetish & Gothic) that are joined together....were always full with Renters. (over a 100 rentals)  In fact I normally had a small waiting list, so it was never a problem keeping both sides full. I'm in the process of re-working those Malls (i.e. for search engines & Classified ads).....and might have to revise my pricing along with the overall model....and maybe include commission based Renters instead of flat rental fees.

The tide turned when Marketplace was given prominence in the SL viewers and traffic shifted away from in-world shopping. (Mar-Apr 2011)  I've look down the list of ex-Renters....and noticed most are out of business or have left SL ..or closed down their Mainstore and no longer creating items to sell. It's very sad to see...instead of having a vibrant in-world activity...we see more commercial areas that are void of Avatars (traffic) and become Ghost towns.....not to mention the lost of some very talented creators.

In the good old days when both Malls were always full of Renters...if any spot became available, I'd either refer to my "waiting list" notecard or approach particular creators that I'd like to see in the Mall. Those days are long gone....and beggars can't be choosers. I didn't allow re-sellers or BIAB vendors.

The Malls were successful for a very long time, as I actually spent a fair amount of money on marketing & advertising. I had about 10 classifieds running each week with different landing points around the Malls (and I'm not talking 50 L adverts....it was a mixed bag with some nearer 2000 L pw and some around 100 -200 L pw). I cut 110 plots of land, so that each Renter could have their own logo, unique keywords and landing point. That alone cost 3300 L in Search fees each week....that's when 144 -256 sqm parcels were visible in All Search ranking lists.

Yep, so even with all 110 rental spots full (nearly 400 USD p/mth in receipts), I was running the Malls at break-even level as I was spending 40 -45k p/mth on Search fees and Classifieds. On some occasions I  tried Radio advertising, Magazine advertising, 3rd party website listings...hosting games inside the Mall.  My actual profit came from 5 nearby residential home rentals on the same sim.....as it all blended in with surrounding forests and lakes etc. Again the home rentals were normally fully occupied.....so the entire business model for that Mainland Sim ( 1.25 sims actually) worked well for a good number of years.

Ahh...the good old days of vibrant activity in-world! :smileysad:

 

PS Throughout  the 6 years, I never used false traffic methods like campers or Traffic bots..I was only interested in attracting real shoppers, so I never had 10k or 20k traffic units showing up in Places Search. However most of the Renters were able to make decent sales with a lot less traffic units because those that TP'd into the Malls were invariably genuine shoppers willing to spend money.

 

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