I woke up two mornings ago to my Plurk timeline exploding all over LL's announcement of new XstreetSL pricing policies. Apparently LL has decided that all freebies are "marketing/promotional tools" and as such, designers should pay for the privilege of promoting their store. Therefore, in future, designers will be charged 99L per month just to place their freebies on Xstreet. That's 99L per item.
Unfortunately, free listings will be shunted off to their own section and will not appear in browsable categories or keyword search results. I'm not sure how effective they'll be as a form of promotion when people can't even FIND the type of freebie they're looking for, hello?!
And then! LL has decided that even though other items are not marketing/promotional tools, designers should still pay for the privilege of being able to sell them on Xstreet. Thus, content creators will be charged 10L per month to place their products on Xstreet. Yes, again that's 10L per item. Not to mention that when a creator sells any of these products, they will continue to pay commission to LL on the sale, as they do now.
Without that 10L listing bit, LL might just have looked confused and ridiculous but more or less well-meaning. But with the additional 10L listing charge for all items priced 1L & above, they've been called greedy, money-grubbing and a host of other uncomplimentary things.
I've read on plurk that a number of content creators are pulling out (or talking about pulling out) from Xstreet and moving on to other services like Apez and Slapt.me, but I don't really think that's smart: Xstreet is owned by LL, thus LL will be pimping it to residents, and the bulk of residents probably do not know that alternatives to Xstreet exist.
Content creators need to think of their target market. They need to remember that SL is larger than the circle of people they know on Plurk, or the circle of people they know though blogs and Flickr. They need to remember that not everybody reads blogs and fashion feeds or even the LL blog. Otherwise, there would probably be a lot less fodder for WTFug and a lot more people would be savvy about buying from BIAB (business-in-a-box) outlets or purchasing items which were possibly copybotted and stolen. I have a sneaking suspicion that you and I, my dear readers, are not the average SL resident.
Having said that, I commiserate with the content creators. You can't deny that there is a whole lot of junk on Xstreet, but not all of it is free. Besides, the lack of sales on Xstreet doesn't mean that an item is "stale" or clogging up server space. Many residents, myself included, use Xstreet to search for something, then go inworld to view & buy. It's just easier to look for something online than it is to go to a store, wait for everything to rez, then walk around trying to see if it has what you are looking for.
Here's what I think:
- It's reasonable to want to charge a listing fee for freebies, but a monthly fee of 99L per item is a little excessive.
- If LL truly wants to charge 99L monthly for listing a promotional freebie, the least they could do is to MAKE THE FREEBIES SEARCHABLE so that customers can find the damn promo item in the first place. It's hardly going to be an effective promo item if it won't even come up in searches and you can't browse the freebies by category. This doesn't take a genius to figure out.
- Listing fees & commission together is a double whammy; it would be a lot more palatable if commission could be waived should it be less than the 10L listing fee, or the fee rebated from the commission if the commission is more than 10L.
- If nothing in the "roadmap" changes, hopefully only serious merchants will remain on Xstreet, and that's good because it might get rid of the BIAB stuff, at least. By "serious" I don't mean "established", mind you. I mean people who make things and want to sell their stuff.
- Merchants will have to re-think the way they use Xstreet. And that's okay; for example, listing one colour of an item with pictures of the other colours available, stating, "Other colours available inworld". Ari Blackthorne suggests offering the fatpack on Xstreet, letting customers know that individual colours are available inworld. Either way works.
- Merchants may have to re-think the way they use inworld space. Previously, some merchants used Xstreet to offer products which they couldn't offer inworld due to lack of prims for vendors, especially when it came to old inventory that had been retired. There are ways to get around this problem. For example, instead of having 10 prims for 10 different colours of an item, you could put all the colours in the main vendor ad and use a script to allow customers to choose the colour they want when they click on the vendor to purchase the item. Jess Riederer has written a script which will do exactly that.
When I first read about the Xstreet changes I was dismayed, because I've long thought about making stuff myself and selling it, and I thought I would list on Xstreet first instead of committing to an inworld store & having to pay rent, when I don't have much store inventory to start with. But after spending two days thinking about LL's proposal, I don't think it will necessarily hurt small or beginning creators. If I wanted to start a business in SL, I should be willing to put a certain amount of investment into it, like renting land for a store, for example. I should also expect to have to do some amount of marketing & publicity for my brand and my products, not just list them on Xstreet and hope they will sell by themselves (I do realise a lot of creators work hard at marketing & publicity, by the way!).
In RL, businesses pay ad agencies to create ads; they pay newspapers, magazines, broadcast companies and billboard companies to show their ads; they pay PR firms to generate buzz about their products and keep their brand visible; they pay landlords rent for their business premises (if they hadn't purchased the building); they pay overheads to various utility companies; they pay taxes to the government on the sales they make. They have just as many, if not more, expenses that an SL business might have.
The only difference is that in SL, Linden Lab fulfills most of these functions, so it feels like we are paying them for everything. And it feels unfair. But if you were paying 5 different people or entities for all these things, would that make it different? You'd have the same outflow. That's something to think about.
Well considered arguments all.
I concur about the 'investment' and 'overhead' points as well. Linden Lab has allowed "business" in SL for no cost whatsoever for so long that people have become complacent in it and have taught themselves to 'expect' such entitlement.
However, with the mess that XStreet SL has become, *something* should be done. I really don;t believe this is just another Linden Dollar "sink" (a way to remove money from the economy in order to maintain balance) LL has dreamt-up.
I seriously believe it is an attempt to help control the *quality* of listings on XSL through the attrition process.
Like you say, and I repeat: if you are serious about doing business in SL, then XStreet SL is simply an additional venue for doing that business and there should be costs associated with it - and I don;t mean commissions.
With commissions it is kind of a "throw it against the wall to see if it sticks" - and there is "no cost to me, so I'll just throw anything up there."
I am not saying I agree with the fee-amounts, but I do agree with the ideas as presented. I a also feel the freebie stuff should be included in search, but always sent to the back of the list or something.
What it comes down to now is for these merchants to seek out and use new tools, new ways of thinking and overall 'shifting gears' to adapt to "market changes" as they come along.
The good news is this: Linden Lab has given 60-days to consider what is coming and thus allowing plenty of time to consider these changes and evaluate how best to shift your own marketing, selling and overall business paradigms with regard to how (or not) to use XStreet SL in your business plan and operations.
At Common Sensible I have been passing two selling tips a week and on Friday I threw-in a bonus tip - for example how to sell multiple items through a single XStreet SL Listing.
And to clarify - the L$10 per month fee is not per *item* as you describe... it is per *listing*. I simply wish to clarify that you can have multiple "items" is a single "listing" and none have to be related to each other in any-way. The trick is how do you allow the buyer to choose which item they want from that single listing. That's where my "bonus selling tip" comes in. :)
Very well done, Quaintly and Ari!
@Ari: Omg you agreed with me! I am going to faint :P
I know about your bonus selling tip. I linked to that post!
@Pay: Thank you :)
This turns XStreetSL from a webshop into a marketing tool. The fee for freebies are not 99 it's 99 + 10, Listing fee for as freebie is 109, for an add that isn't searchable, isn't listed in the browsing and form where you can't link to your main shop.
I do think a webshop is the best option as that lets you keep a large stock of low selling items. With out any real extra cost. This is a trend you see all over RL now. Small specialised keep huge collections of the low selling parts takes over more and more market from the large chains stream lined mass sales shops. The in-world interfaces for looking large markets over are, bad at best, yes vendors can have tons of items. But listing them all is much harder to browse that on a web-site.
As XStreet now is going to be an advertise platform, you have to think about, what traffic comes that way. How much does they spend. Xstreet will no longer be the webshop where you can find everything you like to find. The system that takes that role, and taking that role is something that need creators, it needs to run on sale commotion. The place that gets that will be what all merchants need to be on. I don't think that place will stay XStreet in a year. This have gotten me and many more to look for alternatives. I really like meta-life, it works good in world and on the web. If it have the shoppers, well I don't know yet. Meta-verse exchange and slapt have good potentions, Apez. Maybe the best looking site,
terrific post and comments! thanks for a thoughtful analysis :)