Just How Bad is the SL Economy

So, does cashing out through a service like XstreetSL (at least in the past) count against PMLF since LL would see it as paying someone else? I would think this would effect the numbers signifigantly if it does. I cash out a fairly good amount (top 0.06 % based on how you figured it) per month even with sales being down from last year and have only used the Lindex once.

One thing I like about this thread is seeing the numbers of people posting that they actually cash out. So often we see posts that suggest that making money can't be done / is rare / the days have gone now, etc. It's good to see that it's happening (probably) more than we'd thought, and I know there are others who haven't stated it in this thread but who also make money/cash out.

It is still quite rare based on the percentages, really.

Thought I'd toss in my usual comment that Caledon is doing quite well. Not the humongo-massive waiting lists for land like in the first 2 years, but Caledon is still full and still quite strong, and land rental rights are still sold between users fairly frequently.

I'm not getting crazy with it, though; at 49 regions I am not going to add too many more, if any. Maybe one more

The focus now is on "be the best we can be" and as such there is now the new resident gateway at Oxbridge, there are harvestable plants and animals coming soon, minerals to mine, stuff like that. More news when it is ready.

We have quite a number of things like the Underground areas to explore, which are soon expanding (few seem to find this; people have visited Victoria City for years and not known about it).

Even though it is not (yet?) 600 dollar per month, I am able to cash out as well. Finally, after putting all money I earned back into my business, I did cash out last month, and probably will do the same more often. Business is still growing, but I do put a lot of effort in that as well. Indeed, making money is possible, but it is like real life: it takes quite a while (and effort) to make it happen. And you have to love doing what you do, because calculating it back to hourly rates would make me sad

to be honest, I do not remember why I removed it, and just forgot to put it back

I need to grab the slurl when in world then re-update the sig.

I make about the same as i did during the hayday of early 2007 ...before the Gambling ban when logins were around 15000+ without any Bots, very little content theft, no Full perms & Business-in-box items being sold and the land mass area was so much smaller..which made it easier to concentrate traffic!

In order to make those same profits, i've had to work that much harder to maintain the sales curve...by growing the Group companies and venturing in other business areas. Comparing like for like, the original business units are of course way down from early 2007.

There are 2 economies running side by side which behave quite differently - Land economy and Content economy....I can't comment on the Land economy as i've stopped adding any further SIMS to my estate since summer 2007....i do however have an opinion on Content. I would guess that RL recession would impact Land economy more so than Content , since the monies involved for land purchase and monthly rents or tiers are considerably higher than a bit of "play money" to buy occasional SL Content.

Aside from the obvious reasons why the Content economy is "generally" slumping -i.e Increase in content theft, introduction of FULL Perm and Business-in-box items, increase in competition within sector, increase in Land area making population density more sparce (particularly bad for Malls!), lack of effective marketing tools within SL viewer.....there's an additional reason which might be the worst of the lot!

I truely believe that the Content Creators themselves are unwittingly killing their own Content economy by dishing out more and more "freebies" and "dollabies".
Bear in mind these freebies will be of high quality as they're supposed to act as an advertisement of your own workmanship.....you cant' exactly give away "crappy" items as that won't attract future customers.

I know the likes of Jojogirl advocates doing regular "freebies" or "dollarbies" as a means of attracting new customers......but multiply that same function by several thousand other creators doing likewise.....and you can see where this is leading to! You have to look at the bigger picture and how it's effecting the SL economy as a whole.....which means stepping outside of your own Business cocoon.

In running a large mall, i do get feedback from fashion designers which is not a particular business sector i'm involved in. I have heard stories from some of these fashion designers on how dozens and dozens avatars TP into their shops...pick up the "Dollarbies" and then TP directly out again without significantly adding to the value of sales for that day.
Yes, I know, I know...some on this forum will say they spend 100's or 1000's of Lindens in a shop if they like the dollarbie or find the shop interesting......unfortunately that's not the norm behaviour by the majority of "dollarbie hunters"....more like 1 in a 100!

There is a group called "Fabulously Free in SL" with nearly 3000 members that actively hunts down any quality Designer freebies or dollarbies from around the grid by informing each other in Group IM. I'm a "sleeping" member of this group which provides me insight on what people are looking for. Its like a "rent a mob crowd" that jumps from shop to shop picking up freebies. In some cases they have the audacity to complain when not being able to locate the "freebie" easily!

So when "AdamnEve" offers a a quality freebie skin, how many of those recipients will end up never spending a 1000 L on another quality skin elsewhere during their SL lives ?

When 100's pick up a set of quality "sofa and chairs" freebie, how many of those recipients will end up never needing to buy another set again? Again a potential lost to the general economy.....and so it goes on, multiplied by 1000's upon 1000's of such instances.

A new player arriving into SL can practically acquire everything he or she needs without spending very many Lindens. You have a group like "Vienna Freebies" with over 10000 members, you can see how perceptions have changed!

Perhaps the most damaging of all...is the change in mindset within the shopping community due to all of the above. I often get avatars arriving at one of my shops asking for "freebie" this or "freebie" that. They're absolutely clueless to the amount of time spent in something like Photoshop to create a quality skin.

Aside from community workers, aid workers, charity workers, good Samaratins.......who in their right mind would work 100's of manhours for free in RL? Why should i make my Skins free or any of my products for that matter?

I foresee many SL businesses closing and many new ones replacing them....but only the strongest and "well run" are here for the long haul!

you made mention of people who complain because they can not find the freebie easily enough.

The only time I ever had issues with no being able to find something, is with a hunt, and after searching for over an hour I gave up... (hunts are supposed to be fun LOL)

anywho... the point of this post is...

I have had people complain about free items too, and had the audacity to complain that it was not transferable... or not in a color they wanted, or did not have specific scripts in it (shoes without sexy walk script) stuff like that...

people are getting spoiled with freebies and now thing they have the right to demand what the freebies are or what the permissions are...

as if I would make a freebie transferable... sheesh

So true.

I also agree about the freebies.

Nowadays a new SL resident can dress themselves, get a home, furnish it and have all the little toys and accessories they want for free - and not look like it is all free either.

Of course this has undermined the SL markets - how could it not have?

I totally agree on the freebie issue.There are far too many out there.Since LL took over Xstreet I have removed my few freebies from the site.Last week for example these cheapo freebie hunters took about 50 xmas and halloween freebies from me .What a joke at this time of year.It seems some people just fill up their inventories with free stuff.
I have for a long time thought that LL should get rid of all the old freebie content that's been knocking around for years,all it does is clog up the system.As for buisiness in a box and all the other rip off free stuff that is sold for money Xstreet must be the biggest culprit.LL must clean up it's act in that department.Just for example check out the scripts being sold there.most are blatant rip offs . Please stop this freebie madness.......

It's the "mindset" that has changed Rha. I have been running an SL business long enough to see the changes to that "shopping culture".

I have responded each time LL has made a fundamental change (gambling ban, introduction of All Search etc).....you have to inorder to remain successful.!

My very 1st business here in SL is still my flagship company.... it only makes around 30% of the sales it did during Winter 2006/Spring 2007 when logins were 20-25% of what they are now....go figure! That's largely due to a combination of events....hence why i have had to bolt on more businesses to maintain the same level of overall sales. It does help spreading the risk more evenly....often when a couple of business units are down on monthly sales, i find that maybe a couple of others have increased their sales during the same period...thus smoothing out the sales curve...hence less exposure from any single business unit including my Estates. (100% occupancy at the moment)
That is my continued strategy based on "Richard Branson" business model.(owner of Virgin Group of companies).....which means having your finger in many pies!

I undertook a survey of one of my main business units to see how people were finding us. I had about 14-15 options listed and my models (not Bots) carried out this survey over a 2/3 week period. It made interesting reading to find that particular business was found mainly due to "All Search" and "word of Mouth" options. I was particularly pleased to see that "Places" search was low on my listing of 500+ sample replies...this meant i didn't have to worry too much about traffic or excessive campers or bots all of which i'm not too happy about! Then again it could mean that i was so far down in "Places Search" that hardly anyone
arrived at the shop that way...so the result would for that category would be misleading as its not a level playing field.

I guess one needs to take a certain amount of risk in order to grow...but they should be calculated risks. I feel being a RL Accountant and working in the Advertising/Marketing sector for over 2 decades has helped me here in SL...i'm able to crunch the numbers very quickly to see if any new potental business proposal is feasible or not. Sometimes being a bit conservative pays off as opposed to jumping on the "latest fad or bandwagon". Open Space sims was a classic example...even though i was sorely tempted to add a few OS sims myself. Many have lost tons of dollars during that particular fall out!


Some of the things i have found that has helped :

-To the best of your ability create & provide "quality" products, theres no long term substitute. Don't sell crap...it will harm your reputation as a creator.

- Reputation in SL is everything, don't get involved in unscrupltous activities for short term gains...not worth it!

- Customer service & support is so important. You do a good job in this area and you'll increase your amount of customer "referrals"

- Grow your own Customer Group. I don't use automatic Group Inviters, i send each person that buys a product a Group invite. I know 100% that my Group only contains those that have bought my products somewhere down the line. Here is where you could send out your "Freebies" by rewarding your past customers...the people that have spent money in your shops..... not any old Tom, Dick or Harry!
I find that about 20% of my Group invites are accepted. My 1600 members is "real" and taken 13 months to grow and has not been generated through auto Group Inviters....and i'm happy with that fact! In reality, it does not matter how you grow your group...it's just I prefer to do mine organically. Sure by using an Auto inviter it probably would have reached 4000 or 5000 by now...but i don't see the benefits of rewarding everyone outside my genuine customer base!

- I use "Models" which are not bots, they are real avatars that interact with the customers, they double up as "Sales Assistants". They help with general customer queries which frees up more of my time! They add value by converting
those 50/50 type customers into sales...so they add to the bottom line sales!
Along with their modelling camping money...i pay them monthly bonuses depending on how well that shop has done over the month. They ask satisfied customers whether they would add the shop in their Picks"...again it adds value eventually via All Search rankings. They conduct my surveys as previously mentioned. I have recieved numerous Notecards from happy customers that
have complimented the attitude and help received from my Models/ Sales Assitants....that makes me real happy!
So you invest a little...and you get back more!

-Because of my business model, i benefit greatly from "cross marketing" & "cross traffic". I can advertise my other business units at different locations. This costs nothing extra in terms of expenditure. Also due to the layout of my commerical areas....i find that a lot of time someone TP's in one particular shop will eventually walk around and visit my other shops. Lots of additional sales have been generated this way. This is not a new concept as lately i have seen many more creators banding together to make a single common commercial area which benefits from such cross traffic. The only difference here, whilst they split their sales amongst themselves from cross traffic....i get the full benefit as they are mostly my own shops being independently marketed in the same area.

- Aside from creating products...one really needs to spend a significant amount of time in marketing, admin and researching. How many here keeps a Excel spreadsheet to monitor their "Classified adverts" and calculates how much the advert costs per TP? I do...and it allows me to make changes to more effective keywords in order to gain better results. How many have visitor counters placed in all their shops....again I do. It allows me to respond or investigate changes. This is particularly useful in Malls e.g seeing a drop off in traffic allows you ask the question to the Mall owner about any significant changes to their marketing (e.g cutting their classifieds. less events organised) or Mall layouts (e.g change to main landing point)

- Don't be afraid to partner up to create a new business. If your qualities are that of making sculpites or building, theres no harm teaming up with a animator or a scriptor to create a viable business model. Obviously the "Trust" element comes into play pretty much the same as in RL

Bottom line if you're serious about SL business....you need to start thinking about wearing many different hats. If you think you can buy a piece of land, build a shop, fill it with content and sit back.....and adopt a "and then they will come" attitude, you're sorely going to be disappointed.

A point about freebies...I do not agree that they are killing SL biz. But i do agree that just putting out freebie items for anyone to take is not an effective marketing tool. All of my freebies are given only to my groups and the person must come into the store to get the freebies. Yesterday i changed my weekly freebie group gifts and had sales of over 7K...that also included sending the note about the free group gifts to 6 freebies groups. In the note I also mentioned other items that were at a reduced price and some things that i will taking down as of today.

Just throwing freebies out into the world is not the best way to use them. However if you do it with some strategy, it is extremely effective, can generate sales and endear customers to your groups who never want to leave and who routinely buy in your store. I also believe that freebies are the best free advertising you can get. Anyone who has one of my items out in the world has placed an ad for anyone who clicks on the item to see who the creator is. This does not work the same for clothing since someone would have to ask about who they creator was.

But an example...i got a notice about an in store freebie yesterday, went to the store, picked it up, bought several other outfits including a dress that i wore all evening. went back to my store where someone asked me where i had gotten the dress. i told her, gaev her the lm and she went immediately to look at that store.

i agree with much of what rene has posted about customer service, etc. but while spreadsheets give info...the biggest key to success is making sure people can find your store and know what you sell. in a previous post someone told rha that it was hard to find her store....that is HUGE info and anyone who was not persistant would have given up looking.

I run a fashion boutique and I honestly haven't noticed any "slump" in business. Like Jojogirl Bailey, on top of the tiers I actually take in enough to pay for half of my mortage each month. Even though making money was never my objective, and still isn't.

I don't waste money on advertising or search listings. I solely rely on word of mouth and independent bloggers who write about the shop because they like the products. I also give out free items regularly (items I will happily sell in full retail price, not leftovers that have not made it to the commercial line) to both members and non members and I get a lot of sales in return. I'm not convinced that the recession in RL has great impact on day to day sales in SL since the transactions are so small. If your sales are going down perhaps you need to look into other factors. The quality of products on offer in SL is growing at an amazing rate, you need to constantly raise the bar in order to be noticed. Perhaps you need to worry a bit less about the sales for now and concentrate on creating good stuff. And sales will follow.

Again, you're falling into the trap of thinking what is good for your business regarding "freebies" and not at the bigger picture. Sooner rather than later there will be a saturation point with all these freebies circulating inworld....its bad enough that the "mindset" of your average new SL'er has changed....with an expectancy to free products! When i travel back in time and see how things were....and how things have now developed....it's quite sad to see.

Again your visiting a shop and picking up a freebie and spending a bunch of Lindens on several other dresses is not the norm behaviour or shopping patterns of your average "freebie & dollabie" hunter. You only have to be a member of a group like "Fabulously Free in SL" to realise that...or alternatively from the horse's mouth i.e other Fashion designers.

I personally only ever held 1 open freebie session in over 2 years. I had 384 visitors pick up those specific "free" items in the space of 10 hours and at one point nearly crash the SIM with bodies arriving. I calculated approx 120K worth of items were given away in those 10 hours...very little additonal sales were made during that period, so wasn't a worthwhile exercise for that day. It could be that people retained my LM's and made additional purchases in the days after. Since then,I have never ever offered "freebies" to the Public, other then sending an occasional item to my own Group. A lesson learnt and my business has never suffered because of lack of such events!. Handing out "freebies" is not part of my overall marketing strategy

What is happening in SL right now kind of reminds me a bit of the RL situation regarding Banks & financial institutions....who were driven by the requirement of making ever larger paperless profits with very little accountability. We can all see where that has led us! Self implosion of the world economy fueled by greed!

If i were to base my opinion purely on my own sales...I would also have to say"I haven't noticed any slump in business"...however by having my ears to the ground and listening to what other business owners are saying my opinion is a bit different. What is good for today....might not be good for tomorrow!


I agree, I don't think the RL recession has impacted the Content economy (thank god!), but i think eventually it might effect the Land economy if it hasn't already.

I don't quite agree with "worry a bit less about the sales for now" and just focus on creating content. I think you always need to split your time between marketing, admin, research and creating. Just creating won't necessarly increase your sales. I occasionally map SIMs of other businesses (out of curiousity)....and on numerous occasions seen empty SIMS with their oversized buildings probably displaying 100's of products for sale....but with hardly any green dots present!

Rene, if that is the case then you'd have to stop marketing too because the upward spiral of marketing costs is what has made RL creative markets unappealing IRL, no one can have creative freedom when it costs tens of thousands to even have a chance at getting noticed..

still dont agree about the freebies....saying that folks like me who offer them are doing it out of greed is a bit of convoluted logic. and i am part of the freebie groups, market to them, and also a consuming member of them. i see what happens in my own store when i offer freebies and how my sales skyrocket. i know for a fact this is also the case for many other folks as well....i could name several who use freebies as a key part of their marketing strategy and who do very well because of it.

using freebies carefully is extremely effective marketing, creates a great deal of goodwill for customers, gives them items they want and use and adds free advertisign for a creator's product out in the world.

i sincerely believe that the people who whine about freebies killing their biz actually have other issues that are impacting their success and are just looking to something outside themselves to place the blame on.

if freebies were truly killing sl biz, then many many great stores would already be gone, since the freebie market has grown so much in the last two years. i dont see it impacting or effecting stores that effectively market their products and offer quality items that fill a need. besides...manyyyyy of the freebies being given out are total crap. i just received an im from a freebie group with folks complaining that one of the huge hunts going on right now has so much in it that is not worth even keeping. i also find that i get alot of freebies but keep very few for exactly this issue. so while the volume if items taken may be high, the number of those actually used i suspect is very low...making a necessity to still either make you own items or go buy what you really want.

BTW - i teach classes and interact with many biz owners on a regular basis, so my "input" is not just from my own experience.

There lies my main gripe about SL in general, the lack of marketing tools that can allow you to hit a wide audience simultaneously. Aside from spending 400K+ for a top-8 classfied to appear on the front of the Search Engine....there are no real means of me letting 20-30% of the grid know ..that i'm about to release a super duper product today!(i'm not, but you get my drift) . Being blogged, or sending a notice via several large groups or taking out several medium size classifieds...only tickles the tip of the iceberg in terms of overall audience. Yes its a real chore to get yourself noticed in SL. I have looked into several different mediums in and out of SL.....but you're really only ever hitting 10's or 100's.......instead of 1000's or 10000's no matter what you try.

How much would it cost you to hit 30-40% of the population of a city the size of SL in real life?

I firmly believe that if you get your priorities right ( i.e. creating the best products possible while thoroughly enjoy the process) the rest will take care of itself. My "marketing strategy" is basically what I think would entertain me and my customers that particular day or week. I spend L$50 a week on search listing. And that's the full extend of my marketing budget *grins*. I have no magic formula. I'll leave the clever stuff to others.

well it would be very expensive if you used TV advertising during a prime time event for sure.

There might come a time when LL develops a mini viewer inside the main SL Viewer (say a top corner) that features SL news and runs adverts. I'm thinking of something similar to what Real Player has done.
I think as technology progresses and the platform stabilises...that could happen several years down the road if SL still exists. Should that happen...yes i would consider using such a medium and be prepared to pay the related costs.

This might actually be a good thing. If there is a channel that reaches 100% of the population then every single business must compete for it and the cost will skyrocket. If you can reach 20% with a channel but different channels reach different 20%s then you may actually make more net profit because marketing costs will be so much lower.

Just to clarify...i think rewarding your existing customer base (own Group) is fine to send out the occasional freebies....which is quite different to flooding the grid with more freebies which in general is not a good thing in my opinion. It doesn't interest me on how many businesses benefit from using freebies as part of their strategy and that sales are great because of it....what worries me is the mentality change of these new SL consumers.....and their expectancy to freebies because of it!

Great stores or great brands are more inclined to survive changing markets than the smaller or less known businesses trying to gain a foothold in establishling their own customer base.

Besides "quality" is subjective....an item that you might consider crap or badly made might be considered awesome by someone with different taste.

People complaining about the quality of "freebies" really make me laugh.....its "free" for christ sake! It probably cost them 1 valuable minute of their SL life to TP in and then back out again! This all goes back to the issues i have with the mindset developed by consumers.

Time will judge which way was correct.

lol- Unless LL takes over your screen by running a full size commercial over the top of your viewer...nothing will ever hit 100% of logged in population.