Prices in SL

Hi folks, I have a question for you.

As most of you know, I make and sell furniture and clothing. I try to keep my prices (as does my partner, Julia) within reach of a newcomer. There are a few more expensive items, but I think our most expensive item is around L$200-L$250.

Some of you like what we make, some of you don't... but I think most of you have seen it at one time or another - if not, please feel free to visit at Mocha 21, 126, or one of our outlets.

My question is... are my prices right? Am I charging too much for what I make, or too little? I see a lot of clothiers especially raising their prices lately. Only a few months ago, I'd have been loathe to spend L$450 on an outfit by Chip, or Damien... yet now this level of pricing is commonplace (and yet the above two designers, who are better than most, have kept their prices about the same). Inflation yes, maybe...

So, can I get some advice please, in particular with regard to my own lines, but also overall.

Thanks in advance for your opinion.

Sio.

Charge what you think it right

Actually Sio I have been working on dropping my prices.

Most of the old stuff I have is still selling mind you but, instead of raising prices I have opted to lower them.

For instance Pahoa and I have a set pricing scheme we use. typicaly its based on a few things.

The cost of upload of the texture being 1.

This sets our base as most uploades at a minimum back before preview. Were up to 6 to make it right and a lot of minor adjustments.

Now considering the preview for textures we start our base at $10 as the begining of our calculation.

From there we determine the dificulty to make that article.

For instance if you have noted most of our x series bra and panties are just $35 each thats a base of $10 for the actual texture for clothing and then $10 for the box texture cost and $15 for actuall work cost to get it made in the vendor.

If the Item sells one time we have recouped our expenditure if it sells multiple times it means in the future we can reduce the price on it. Thats the lovely trait of being able to have a vendor that spawns duplicate copys repeatedly.

However, as we have grown and started producing actuall hand drawn hand detailed clothing we are setting our prices higher on newer product. But this is soely due to the time it took to produce. We still work from the base of $35 total but we are adding to it based on complexity. For instance the Spider out fit that I put out recently is $65 per piece. I don't feel that its too much to ask for because its per piece and in a Mix n Match Vendor style set up. Meaning a person can just buy the top...or just buy the pants (2styles) or they can buy a set but the cost is based on what they choose not totaly what we dictate. A prime example would be...if a person just wanted the top its $65...if they wanted a set (pants/shirt) then its $130 total...if they wanted the full compliment it would be $195.

I guess in essence we develop our prices based on the actuall number of textures used to create the outfit so that we can recoup our losses on the upload. Other than that after a specified period of time we reduce the prices permanently.

another example would be my Tshirts I made a year ago. Some of them have never sold however, I maintained the price of $35 for a long time. Just Monday I pulled them from the shelf in Lusk and have been redoing the vendor to show a reduction in price to $15 each.

We try to sell individually because selling the outfits combined may not be what the customer wants. They may like the skirt with an outfit but the blouse from another but dont have the funds to pay for both outfits so we set it so that they can buy each individualy giving them a greater option to their wardrobe. This is also why our combined inventory is well over 800 Items in world.

But again that is how we do it and a basic reasoning why. I hope this helped you with a new view point.

Sincerely, Shadow Weaver

Thanks Shadow, a very good point.

I'm hoping to get a view on furnitures too, by the way, so if anyone would like to comment...

And Ryen, yes I know... but I don't want to price myself out of the market... in either direction.

I suppose one way to look at it, especially with my high-prim furniture pieces is that the owner will need a fair bit of land to rez them anyway (not all, but I do have some 40-50 prim pieces, and will probably have some a lot bigger), so pricing those for newbies is self defeating...

I dunno...

Sio (seeking inspiration)

Edited for spelling.

g

I find that only those who have been around awhile or have L$ coming in can afford higher prices.

Its the age old question and in RL too.

Agreed.

I like pricing for newbies, but since the only time a newb passes my PG home it to get to the nearest M sim... lol I rarely see them.

It's the *slightly* more established players I end up selling to. Beyond newbhood, but not yet able to afford the exclusives like Nephi.

As to what I think my stuff's worth... well, a lot more than some of what's out there... but less than some that carries a similar price to my own.. see Shadow's post above...

Well being a merchant myself of a variety of things I can tell you this.. That if you have a reasonably low rate, you will keep people coming back for more. On Average for a Themed shop in Dore and DarkWood, I do between 5 and 7000 a week. Not bad, considering I think the highest thing I have for sale is a ladies dress for $350. but it is because it took quite a while to make it. I say charge what you want but think about your market too. If your furniture is prim intensive, it may not be reasonable for the newbie who may have a limited amount of prims. But back in post 1.2 I had a furniture shop in Tan and I did very well selling my things within reach of anyone. Back then of course it was 10 a prim everytime you rezzed one. So what I did was charge 10 for each texture used and 5 for each prim used. Now I would simply charge 10 per texture and look at the item and think about the value of your time.

Soren

I'm in a quandry about my prices too -- I recently switched formats with my shop and went to all limited editions, which raised the prices. My sales are about the same in money but fewer of them . . .which makes me think I'm probably pricing too high. I switched from a relatively low priced shop to a "medium" range shop after much discussion with my business partners and friends. They encouraged me to raise my prices, but they aren't newbies either and they are well established.

On the one hand, it is true that if your stuff is good and is priced higher there is the "prestige" effect that follows. I know there are some serious clothes horses out there ( ), who won't even go in a shop they think might be low quality -- and just like in the real world, people often equate price with quality, whether that's actually true or not . At the same time, I do think my experiement with my own price increase is showing, right now anyway, that I ought to consider lowering my prices a bit with the next set of limited editions. But the month isn't over yet .

I also think there's some kind of marketing method that is clearly working for other folks that my partners and I haven't figured out yet. How do you get the word out about your stuff? I'm curious! hehe.

After all of that, though, my gut tells you me you should charge what you feel is a fair price and adjust as the market will bear it or not.

Zana

Zana the thing I have found is a lot of people hang around in the newbie welcome area thus they get the newbs talking and wala the hey lemme show you something falls into play and boom they are sumarly hooked on that individuals stuff.

Pricing wise Im learning that the "prestige" names get the clamoring newbs to their stores but alas they cannot afford those Items.

I know we all work hard on everything we do and here is my view point on getting the word out. Since all of JJW prices are fairly low people buy and enjoy the product that we offer. Then boom they start meeting newbs and whats the first thing on thier list if they are looking for clothes ...the first cheap store they went to and wala repeat sales.

Word of mouth is the greatist tool for advertisment. Customer satisfaction keeps them comming back.

Talk to you all soon

Shadow

As a maker of japanese things I first started with simple art frames and have now moved on to highly detailed lanterns, fans, boxes, cabinets, furniture, and many many other things.

I run a physical Bazaar type shop with high prim and low prim items all on size and see display. No vendors as yet. Pricing I have tried to keep what most now agree is probably too cheap for the work i put in but i prefer to sell it and spread the interest in eastern arts than achieve cult prices.

I often price for my unique japanese and chinese textures and the work i put in rather than how many prims, but use prims also as a guideline. I have very little indeed for sale over $100 even tho I make high quality stuff. I am too cheap probably but I aim to get regular buying.

MY range is as follows generally

Plant pots and planters $30-45
small chests tansu $35-45
medium chests $50-55
large chests etc $65-75
special large tansu $100

house lighting $35-65
Garden lighting $15-35 plus bulk prices

Lanterns paper $35,
lantern wire free, lantern poles between $5-15
detailed lanterns 15 prims $75
Detailed parasols 15 prims $75

wall fans $35-65
carpets $20-50

screens 3 panel shoji etc $35-65
art small $35-45
art medium $50-55
art large $75 - 100 max (rare)

art adult erotic $69 ( ha ha)

bamboo poles sized.. $5-15
bamboo fences $20 plus bulk buy prices
planters $20-35

fireworks and incenses $35

I also offer regular buyer discounts, bulk prices and will bargain on most items.

Custom waterfalls, landscaping, gardens and houses on request.

This is a really good topic and one that I gave a lot of thought to when trying to decide what to do "for a living". Ultimately, I decided to produce high-quality "originals-only" artworks.

Not only do I mean that I have created original works of art (as opposed to just selling works by other artists which has all sorts of ethical and legal problems), but that the ones I sell in-world are original-only - when someone buys one of my works, it's the only one in existence in Second Life. I don't even keep a copy of the original object. I do keep the textures, but only as a backup in case one of my clients has a disaster of some sort. Additionally, I provide clients with complementary customization for things like framing, matting, etc.

Consequently, my prices are higher since I don't have the potential for multiple-sales. I only do one series of 3-10 works per month, so I price each series according to how good I think the works are, how many are in the series, and how much time it took me to create everything. Typically, they range from L$400 - L$1,000 each. I anticipate prices going up in the future as demand increases.

An unfortunate side-effect of this model, however, is that nearly all of my works are out of the reach of new SL residents. I've been fortunate enough, however, to sell-out each series I've done with the exception of the first before I had attracted any collectors.

I'm considering a future line of repro works with limited runs (~50 - 100) and making them significantly less expensive, but since there's not yet a way for me to automate this, it's not high on my priority list.

(As an aside, I'm kind of glad that many things were out of my price-range when I was first starting... it made me step back, learn the world, and make intelligent purchases once I had saved up to buy what I wanted)

Ideally, you want to set your price to maximize your revenue!

To determine the price which provides the maximum revenue, you simply need the demand curve. The demand curve tells how many items are sold as a function of their price. Here's an example of a demand curve.

If you price an item at $1, 10 people will buy it.
If you price an item at $5, 3 people will buy it.
If you price an item at $10, 1 person will buy it.

As you can see the total revenue for each price point is the following:

If 10 people buy at $1, the revenue is $10.
If 3 people buy at $5, the revenue is $15.
If 1 person buys at $10, the revenue is $10.

Thus the price for your goods should be set at $5 to maximize your revenue! (For those with economics backgrounds and who like Calculus, you simply take the derivative of the revenue function (the marginal revenue), set it equal to zero, and solve for the price.)

Thus you shouldn't set your prices to what you think feels right, rather you should set them to maximize revenue.

OK! So how do you find the demand curve? Well the easiest method is to create a survey which asks people how much they would pay for a given object. Bam! Instant demand curve.

Of course, before you do that you'll need someone to code that up for you. Out of curiosity, how much would you pay for such a script?

~Ulrika~

Im coming from There, so im a little lost with priceing, so here are my prices

top and bottom dress 250-300

i dunno if its expensive but i need between 6 to 20 hours of work so i think tis worth of it , and i spend around 100L$ for all the ingame tests like doing the seams between top and bottom of my dresses.

That's a good price Kyrah. I sell my full length dresses for $300-$350

I sell all of my items for $30-$100. Most have been around for some time and anyone with any cash probably has them. I price for newbies.

If I ever find the time to make some new items I may reconsider this but at this time, it's what works for me. If you are new and want basics like shoes or jeans or if you are forming an army, come on by.

Slight thread hijack, but in the general vicinity of the original.

I've seen the revenue maximizzation example used a number of times in the forums and in world. Economically, it is correct, and in many cases in SL, absolutely appropriate.

The thing to recognize with that case though is it is an optimization of a monoply market. This seems somewhat true of almost all products in SL of late, some should be this way (very distinictive items with nothing similar by other sellers) but plenty of products have reasonable substitutes but info on other products is patchy at best, especially for new folks (this lack of info is a root cause allowing the selling of free items).

In a truly competitive market, price should be marginal cost. Now this doesn't make complete sense in SL as there really are NO marginal costs (except perhaps selling costs). Time to build, texture uploading, all fixed costs. Fortunately we aren't buying wheat in SL, so there will usually be marginal differences at least to get a price premium (branding, design, texture originality, whatever). The exact premium is still very much in flux, depending on the amount of competition and info of said competition available.

I am absolutely NOT judging anyone who uses the monopoly pricing model. If you can get it, great. And it will work always for some items in SL, and probably most for a good long time (because most folks won't know of substitutes). I've just been seeing this become economic "truth" but ignoring the implicit monopoly assumption. And that just bothers me in some way, yeah, it's a quirk.

EDIT ADDENDUM: Again, I don't want to come off as disparaging. The suggested RevMax model works in SL, it's a handy shortcut. Just that in time perhaps someone might build an Ikea with slightly cheaper knock-offs and then the model can fail. All I'm trying to say. I'll shut up now.

Hi all,

My name is Trent Hedges and I run Trent Cycle in Callisto (with vendors in other spots around SL)

No one has talked about vehicle pricing and I thought I woudl talk a little about it for perspective.

I came back to SL after a 6 month hiatus (i left in 1.0 and came back in 1.3) so things were reallly different. I noticed that globally prices were lower - and have continued to trend that way in my opinion.

I make what I consider to be a very high quality item (motorcycles and various vehicles, some entirely custom) and I charge up to $550 for them, sometimes more for specific custom designs. These custom works are absolute 100% SL originals, and I feel justified charging more for those specialty items. Owners will literally be the only person to own one of my customs and I will never resell it (ie. the 1 person buys at 1 price economics example, so i have to make my cash ONCE)

As for my catalogue bikes, jetskis and ultralight aircraft, I try to be fair but want to keep a level of prestige to the items, as they take a great deal of design, texture work and extending scripting to produce.

If you'd like to take a look stop by my shop in callisto (near the pandora vehicle rez location) and I'd love to have some feedback on my pricing.

Bikes run from $350 to $500 stock and up to $800 for custom designs...

thanks! great thread!