The marketing costs more than the sales would be worth?

Just based on a chat I've just been having in-world.

As the importance of search visibility, marketing, etc rises - is there the chance that some niche products may be lost entirely, because although they might make a profit in a "perfect world" where they would always be found, in a world where time/money has to be spent to make them visible, it just isn't profitable anymore?

I do know that there _are_ businesses which run at a loss due to marketing spend, so it's probably true in at least some cases..

I would have thought that niche products have less marketing overheads because there's less competition. Their problem is more likely to be whether there's a market for their wares.

I run a niche business and don't spend much on advertising and never have. The Vamp Collections has a large main store and one mall type outlet which I opened recently just to test. I think I have a Classified for about 200L a week and never have used a single camper or bot. I have had the business running for three years so that is a help, not sure how easy would be to start new now.

I think actually with niche you get more word or mouth and easier to find in search. It was actually setting up a specific halloween shop this year on our lands that really had me thinking about advertising due to the number of people who make for holidays.

There's a "niche" in every business, whether it's a niche business or not. Some times it costs absolutely nothing to market it.

In the start-up period of a business, marketing will cost more then the sales will justify for. But you are building your name, so that is no problem.

However, if after the start-up period, marketing costs more then sales justify for, why bother keeping open your store? After all, it is just costing money.

So when is the start-up period over? That will vary per business of course. Use visitor counters and store the data from them, so you can produce overviews. Combine those with sales logs. That way you know two things:
- how many people did your marketing efforts get into your store?
- what is the percentage of people actually buying.

Hardly people coming in? => adapt your marketing strategy.
Enough visitors, hardly sales? => take a good look at what you sell. Why would people take the effort to TP in, and not buy? Maybe you need more variation? Better displaying? Demo products? Many choices.

When I opened my plants store, I jumped in rather big for a start-up, as I had the profits from my furniture store anyway. Rented 1/4 sim, set up a couple of hundred plants, and started marketing. Spent a few thousand per week for that. And I managed to break even within a month.
Imagine that after 3 months I still would not have met the break even point? Then I would have seriously doubted my effort. Depending whether I got enough visitors, I could have adapted the way I display the products, adapted the price, and soon. Part of doing business, is making decisions like this.

Perfect worlds do not exist, and as long as you are not the only one creating something, you will have to compete. Which means, among other things,marketing. In my experience, having a successful business is 50% creating, 50% marketing, and business related things.

It costs nothing in terms of money to market products in the All search and XLS, but it does need time - not a lot though.

If a person spends time marketing the products that would not otherwise have been spent earning money, then the time used != money, and so the marketing cost in terms of time is nil.

If the person owns land for other reasons than selling the products, and there is enough of it to accomodate a store, then having a store/place to sell the products from isn't a marketing cost either.

Such a person can market their products for free, and it wouldn't matter what level the sales reached, or even if there were no sales at all. So in answer to your question, I would say yes - for such a person it is worth it.

Out of curiosity, Yumi....do you have any examples in your head at all.....where a business got off the ground in SL, without an investment? No names.....but do you have one in your head?

Well, the discussion we actually had was a different issue, which was this: there's a big, successful, well-marketed business which offers place in its store to people, but only if they have nowhere else to sell from. Is it worth a smaller business with only a small number of products, actually closing down its own existing store in order to get a spot in that business (assuming that the owner of the big business is OK with this)?

My belief was that yes, it might be - because if the big business is successful, it may well be making more money than the smaller business could ever make, even if perfect information was available to all about its products. That means that it can market itself better than the small business ever could, because it has access to more resources, and (if the big business is being enough to be professional in SL) more time, too.

I'm not talking about an initial investment - that will be necessary of course - but the ongoing bottom line.

Yes, it would definitely be worth it, if the successful business has real traffic, loyal following, and good marketing in place. But the successful business would have to be a philanthropist to offer this, as they are giving up floor space/prims that is more valuable to them than what a rent would cover. If that floor space/prim amount is not about 3 or 4 times more productive to use themselves, than taking in rent on it, then they are not that successful.

But no amount of the above is going to help out another business if they are missing the boat on a number of angles.

Perhaps I should say that the "big business ... which offers a space ..." is me, and I don't offer such spaces - not in general, anyway. What I have done is offer such a space to a few individuals who made good things but would have been taking a financial risk to commit to renting a shop or similar. They would likely suffer from the usual small start-up thing of any sales they made being been swallowed up by the rent, or even making a loss, and giving up the idea altogether. In other words, I helped them a bit. What I haven't done, and have no desire to do, is make that sort of offer to anyone who is already up and running, and has no real need for it other than to improve sales. There's an exception to that, but she's a personal friend.

My store is a brand with no real product. So far, a few styles of glasses, minimally scripted doll keys, and one piercing is all I have to offer. I've been in a HUGE creative slump along with some shaky friendships and loads of personal drama, so, my inventory has not seen any updates in a while. (>_<

But, my marketing has worked. I have my place listed in search with proper enough terms to attract customers and I have a mall space in Licolico. (^_^)

Now, the mall space makes me NO money, directly. It costs me L$600 per month and I probably make one L$25 sale there each month. What I DO get is visibility and a LM giver that goes back to my main store. (^_^)

Overall, the whole arrangement is self-sufficient and I've always broken even if not a bit better with what's available. If I were to expand and update more often, I'm very confident that I can see assured profit from my store. (^_^)y

I'm a little cautious about examples involving RP-based niches because they tend to be more focused on how involved the individual is in that community.

wanted to add that ive added a midnight madness thingy and im def getting more sales.

read something today that made perfect sense and sums up my view of marketing.

not marketing is like winking in the dark....YOU know you did it, but no one else does.

lol

"winking in the dark"? Anyway...

Funny you should mention midnight madness., Jojo. I looked at Jack's blog post (today) and one thing led to another in my mind and I looked at my ranking in the Places tab - first time for ages that I've looked at that. I saw that the very first girlfriend I had in SL is at the top for my main searchterm now that the biggest bot users have stopped using them. She has traffic that seems unreasonable, so I went over to have a look. Bots. I actually felt cheated. Imagine that - me feeling cheated because of other people using bots I hasten to add that it's not the same as people feeling cheated because of other people's bots when bots were allowed, because nobody prevented anyone using them then. But now I can't use them because of the ToS, and I felt my hands were tied while this person uses bots to tan my ass in the rankings.

So what has that to do with midnight madness? She has that there too and I could see that it certainly brought real people and, the more real people, the higher the traffic and the higher the Places tab rankings, leading to more real people, and so on. Also, the real people are bound to look around, etc. So it looked to me that midnight madness is currenly a winner.

Does that mean literally midnight, the time?

the device i bought allows you to have the prizes given out at midnight sl time or at a time during the day. you choose.