How do you price your creations?

I think often about how the economics of SL flow. I recently came to this question.

I currently offer two different stores: MoViLi my latest creation and Icon Technologies, my first. Moreso with Icon Technologies, I found that prices are all over the board, making it very difficult to mitigate instability. There are places to get scripts for $1. A lot of people give them away for free. Others charge all over the place.

I ask this after spending many hours on MoViLi and all the underlying concepts and work I put into it. I decided to go on an hourly model.. how many hours did I put into this? -- in order to determine how much it is worth. However, I've also negotiated price based on sheer talent/demand alone...

so my question is to the designing community.. how do you determine what your creations are worth?

Work out how much you're prepared to be paid for work done in SL. If the answer is "nothing", then sell stuff for free.

Otherwise, calculation is:

<anticipated salary> * < hours to make item> / <anticipated sales>

Azelda

Second life is funny this way.


People will buy what they like, quality is not always a factor and sometimes even the highest priced items are not perfect.

But anyways price it at the highest ammount you would pay for something like that. Then see how it sells, if its not selling lower it keep testing the waters.

SL economy such as it is is always in flux, changes with peoples tastes and desires at the time.

I price my clothing based on how much of it is my original design, how complicated the alpha was, whether it's from a swatch I photographed or a texture I painted, and the quality of the finished product. I also price on how 'exclusive' I want an item to be. Those will generally be more expensive because I would like said item to hold a little bit of 'specialness'.

It's really arbitrary for me. If an item doesn't sell well at one price, I may lower it to see if that makes a difference. Though sometimes, price isn't a factor and that particular item just isn't popular for whatever reason.

I started out with my first space suit avatar at $400. People seemed willing to buy it and even told me I was selling at a bargain.

Since then, I have marked up my avatars a bit, but usually it's related to how much time I put into them.

I price by a combination of 4 factors:

1.) amount of effort in creating.
2.) amt of exculsivity i would like the item to have.
3.) the amt of time an item will be available.
4.) is the item a coordinated set of garments like a dress/shoes/lingerie/jewelry combo, or an individual garment like a shirt or pants?

Hmmm... a few people mentioned the exclusivity of the design. Could this mean that SL is an economy of ideas, where the prices are subject to qualitative things like opinions, tastes, popularity?

With clothing in mind, is the cost of production not a factor? Given that a particular item may have taken several hours and many a frustrated upload to get just right... it may end up costing you say L$120. Would you then sell that garment for L$75? (Considering that the L$120 is a one-time cost) Or would you sell it for more than $120?

personally, i would not sell an item for *less* than what it cost me in uploads. thats sortof my minimum figure. sorry, forgot to mention that



It could mean that...but when I price for exclusivity, thats not specifically what I'm thinking about. If I price an item higher, its because I dont particularly want that to be a common item.
Now, if we had an option in the sale properties that allowed us to "sell X number" of copies of an item, then the price would probably be a lot lower. As it stands now though, the options I have found to be the most feasible are:
a.) make it expensive, and retire it permanently
b.) rez X copies of the item and set them to buy original
c.) stick them in a kiosk that is scripted to vend X # of the item.

my feelings about each of these options:
a.) this is what i currently do. it seems to be working fairly well. I have received no complaints about anyone feeling the item *wasnt* worth the money. If the customer does feel that way, they have two options: dont buy it, or IM me and ask about a discount. I do my best to accomodate those requests, but the customer has to take the initiative to ask me about it... and politely.
b.) i tried this with my first limited edition sale, it worked ok, except when you Buy Original it doesnt take it into your inventory for you- so what you end up with it 7 boxes that are owned by someone that you have to return to them, the remnant that are actually for sale hidden among these, and a lot of IMs about "I bought it but it isnt in my inventory? what gives?"
c.) I'm working on arrangements for setting this up. the only problem with it is, from the feedback i have recieved from my customers, apparently they detest kiosks.

so, in a nutshell, when I price high for exclusivity, its more because of a lack of other customer-friendly and easily implemented options.

all that said, it may line up perfectly with what you were asking, and i just misunderstood the statement? i would love to hear you elaborate on this economy of ideas and its merits and caveats.

Well.. once I'm done my analysis of the SL economy, I think I'll put up my first piece on the blog I created called, Second Space.

However, I don't think it will be anything short of a complicated matter when it comes to dissecting how we all make our L$...

I do a lot of custom texturing for objects and buildings... basically my formula is this:

minimum amount based on upload charges including mistakes. Seriously... I have to at elast make my money back.
Plus:
time to create and skill nescessary to create. If this texture takes three minutes and one setting change... its usually free. If it takes seven photo textural elements, three hours five uploads, measuring of prims in world and alpha channels... you better believe I charge for my skills.
Plus:
hassle or enjoyment of project:
Maybe Im just a jerk or flakey artist in this regard... but if I WANT to make a texture it knocks a whole lot off of the time. If their texture is boring and unchallenging it will be both more expensive and take longer. I want to do what I want to do and I want to challenge myself. (and make nice L$ for my skillz).
Plus:
amount of texture material... if Im making one texture, most of the time I dont even bother with pricing and just ask what they feel its worth... if Im doing a bundle of cooridinating properly named, well layed out textures... well its going to cost more.

I've made everywhere from 50l$ to 3000 L$ for texturing work. It all depends on the job, the lient, and the request.

It should be noted I am not really "open for business" I dont take every request, I dont have a shop, I dont sell pre-made textures. I do everything 100% original and custom upon request, and the texture stays exclusive to the buyer and I charge accordingly.

I price things so newbies can afford them. Some of the things I make are from pictures I've taken (I find taking pictures of my kids' clothes works great for SL clothes, believe it or not, and many people in SL are wearing a virtual copy of a pair of my husband's jeans ), some are original creations of my own from swatches and my own artwork, some are from other photos that have the bejesus manipulated out of them. I price them all the same - L$50 for separates (one pair of pants, for instance), L$75 or L$100 for a set (depending upon how many items are in the set), and L$25 for shoes.

I've tried to raise my prices on clothing I make, and I just can't force myself to do it. I like the idea that a newb can come into my store and buy items suitable for just about any occasion at a price well within what she receives on her first visit to SL.

I rarely take commissions because I have some mental block against it. I've flaked out on several commissions I've accepted; consequently I've adopted the policy of saying "no" unless it's something I really want to make. I much prefer making things according to my own whim.

This is really a very personal issue and something that each person has to decide for him/herself. It's not something that can or should be dictated by anything other than gut feeling. When I boil it all down, I'm still making SL clothes for the sheer enjoyment of creating something of a quality I'm proud to share with others, and that's the most rewarding aspect of texture-making for me.

I don't charge for my creations, but then again I don't sell them either.

Some questions then:

Is SL even an economy as we currently define them?

Is the GOM exchange rate even a consideration when pricing something? If not, what value do you assign to accumulated L$?

I like the response I'm getting to this. It out to be a great post... I just wish I wasn't so darn picky with what I write... on a side-note (yay for hijacking my own thread), are there any parties interested in writing for Second Space?

The arguement of if SL has an economy or what type if any is one thats been going on for awhile. It has what i would call a gamers economy, One that can be manipulated by outside money sources (RL$) in many ways.

Land can be bought. Money can be bought. The entire basis for land now is almost all RL$ and with GOM or IGE around its just made it worse. The money may not dissapear from the world but its almost exclusively with maybe 20% of the poplulation if that.

Why bring the exchange rate into what is sold ingame your not really selling it and its not realy money your using.

(My 10 cent Rant)

Well money is becoming more and more of a vague concept as we begin to lean more towards technologies that do not rely on physical mediums to represent money. However, in the real world, money is valued by the GDP of a country and weighted by the worth of gold.

So as money becomes more and more of an abstract 'valuable number' and more and more people begin selling services or other non-physical products, how do we determine the amount of 'valuable numbers' said non-physical things deserve? What is the value of digits, bits, and gigabytes?

The idea that sheer brain power and creativity is beginning to leverage power to create wealth from what seems like... 'nothing.'

> The idea that sheer brain power and creativity is beginning to leverage power to create wealth from what seems like... 'nothing.'

Actually it's just a phase.

Overall, we can identify three phases:

- we're-all-just-pawns phase. Intelligence means nothing, or very little. Muscle power is everything, but each person only has a finite amount. No-one can add much more value to society than anyone else, since work is basically agricultural, tending the fields, or military. The rich are the warlords and feudal leaders who dominate others.

- the bourgeois phase. Somewhere around the 17th/18th century, artisans begin to contribute significantly to society. By using their intelligence they can contribute significant value to society, and are rewarded financially for this. They become rich, creating a new class: the bourgeois.

The bourgeoisie create new philosophical ideas such as equality and liberty, because this helps them become richer.

- the back-to-warlords phase. Computer automation means that 2000$ computers can now add more value to companies than 80000$/year humans. Computers are increasingly used to automate things, and eventually what's left are the new warlords: basically CEOs, politicans and lawyers

Ideas such as equality and liberty are considered in today's world to be absolute principles of human existance, absolute rights. In practice, they were just a product of the rise of the bourgeoisie in the 17th/18th century, and they're a very temporary thing.

Azelda

I do everything for free.
I usually dont have any good ideas so I appreciate being given stuff to do

Does making sandwiches for people named Yuki count as being given a task to do, Eggy?

Eggy,

Can you make something so I can create persistent worlds within SL easily?

Ideally I could just point and click and a monster will appear, then I could right-click (or something easy) and select how many hit-points it has, how agressive it is, stuff like that.

Azelda

Currently my stuff has been priced in the afordable range for newbies nothing over 150 thus far.

However, with the recent set back and the loss of my two hard drives New product from me will be far apart and with much more quality.

Lessons I have learned will apply to the new product Line I will be putting out. I am also taking a lead from some of the other Top designers in here and my prices on the newer Items will be much more in line with what is currently being offered.

Noted from another thread here about menswear being boring this is unfortunate but true. However in the near future Jade Wolf Designs will be comming out with a new line up that will upgrade on what We currently offer.

Which reminds me about the mens wear at Jade Wolf since these Items were lost when the virus struck my hard drive I will only be holding them in world for 45 more days and then summarly cleaning up my inventory to make way for the new product line for men.

Sincerely, Shadow Weaver

Is this a personal observation or from a source? I'd like to read it if it's from somewhere available to the masses.

Anyhow, from my knowledge of things, wealth was developed by physically creating it. Economy began to develop when there were enough people doing enough things that their days began to become full enough for them to begin needing things they didn't have time to create themselves (ie: I start dedicating my days to raising cows, chickens, and a horse and tend my fields but have little time to make tools, so I trade some chickens for some tools and I give away eggs and vegetables to pay for the stuff I need to maintain my animals and land).

Money was introduced by the chinese. It was a radical concept at the time: a stamped piece of metal representing a certain percentage of the wealth contained in the emporer's treasury. So people began trading their goods for as much of that treasury that they could get.

Blah blah blah, development..

18th century hits. Max Weber writes "The Protestant Ethic and the Spirit of Capitalism." This book defines a set of rules and ethics to live by based on principles set forth by the Monestaries of the dark ages from which the Rennaissance sprang. It has pretty much defined our economy today and how we operate in our lives.

Money still has a value based on a countrys treasury and can no be traded for other currencies based on their treasury's value. The difference between the first originations of money and money back then is that we no longer base the value on how much gold we have in our castles... we base it on how much our countries produce from a base value set out be how much gold we have in our forts. Some nations do not even have gold and base it entirely on what they produce or against the worth of someone else's currency... essentially money is just a number.

It represents how much work we accomplish to gain what we need in order to live... and often these days, what we want to live as well.

Now as money becomes a liquid concept... it becomes less based on physical production and is starting to become based on ideas. Speakers and consultants get compensated for their ideas and how well they speak. People generate wealth from processes and systems rather than chickens and cows. Money itself is starting to become the transitive medium of value.

Enter SL... L$ is not based on a treasury. It's limitless. An infinite amount of L$ can be made any second. Thousands are generated every week. But in SL, we're trading ideas and creations that are not tangible and add no additions to our personal estates when we acquire them. Yet, we persue the accumulation of them so there is a value in them, isn't there? My first guess is that the value of SL is based on the virtual space that we occupy... that 'land' in SL is the 'gold' of $L. However, L$ are in endless generation... oiy... this is where the questions start flooding. I'm going to stop there. I may ask questions later. For now... more discussion!

Why do you produce what you do for L$? To acquire the ideas and creations of others around you? To occupy more space in SL? To gain a psychological sense of superiority?

Well...

First an observation:

> L$ is not based on a treasury. It's limitless. An infinite amount of L$ can be made any second.

Not true. The total amount of L$ is finite. A constant amount is added every so often by dwell and development bonuses. The only variable in L$ input is events, since yeah if 10,000 people held an event one day, then in theory you just pumped 5million L$ into the economy, but...

... by and large the L$ is fixed. L$ trading is between players which changes nothing. If you dont include GOM, then L$ are valueless outside of SL; if you do include GOM then actually L$ are just an intermediate form of money, and actually some people (eg myself) dont even use them, since it's introducing risk into transactions (you dont know exactly what exchange rate you'll get when you swap out to RL$).

> Is this a personal observation or from a source? I'd like to read it if it's from somewhere available to the masses.

Well, the second phase, about the bourgeoisie, is from "Cours de civilisation francaise de la Sorbonne" which is a course at La Sorbonne in Paris on French civilisation. You can choose different specialities and I chose politics and geography. In politics we studied a lot about the French revolution which was very interesting.

Random information: the French revolution wasnt actually started as one might expect by the peasants, but actually by the Bourgoisie who collaborated with the King against the Nobles. Well, that's how it started. What then happened is that the peasants saw this going on and thought "why cant we do the same?" The bourgeois had been spreading the ideas of equality and so on in order to get rid of the nobles, but the ideas proved a little too powerful.

Going back to my phases, the first phase is my own extrapolation backwards in time. The third phase is hypothetical, highly controversial, uncertain, but not entirely impossible either.

I personally believe computers will become effectively truely intelligent. Based on that, it seems reasonable to expect that they will supplant humans in the jobplace.

The gap between me and those who see only Utopia is that the Utopiists believe that Equality and Liberty are Inalienable Rights. I'm pretty sure that those in power are quite capable of abusing the others if they can get away with it.

Azelda

I started making SL clothing for myself, and then I started having people tell me I should sell it. So I did, and I still do. In my case, it's pretty simple.

Regarding the SL economy and the worth of L$s or anything created in SL, Tipsy is right when he said that the game can easily be manipulated with RL money. I've bought four plots of land in SL for RL money. (Of course, I then turned around and sold enough L$'s on the GOM to cover the RL cost.) Someone could buy up all the L$s for sale on the GOM and IGE tomorrow and hit the top of the net worth leader board through no real in-world effort.

I sincerely hope our economy doesn't go the way that There.com's has, with pretty much all the items for sale costing outrageous prices. I dropped enough real money on virtual stuff in There to forever turn me off of charging high prices for the things I sell in SL.

I'm of Beryl's camp on pricing. I price things according to what I think the average newbie can afford and might want to spend. I know that some folks, who are much more talented than I am, charge a lot more for their stuff and I know it sells. But I personally balk a little at ANY set of clothing (not piece, but Set -- i.e. whole outfit) priced above 500L. Maybe it's a reaction from my newbie days, maybe it's just that I feel, unless I'm getting an ACTUAL original of something (i.e. no one else in the world will own it or I won't walk into a party and find someone else is wearing it kind of thing), that the cost of creating an item could be made back via the overall sales life of the product -- i.e. I'm always selling copies -- it's like walking into the GAP and walking out not with the jeans on the wall, but with a copy of the jeans made at say, one of those machines from star trek that create tea, earl grey hot out of thin air. That makes it more attractive to me to charge a lower price -- there's no man hours in the dozens of copies -- there ARE man hours in the original -- i.e. I price over lifetime of sales and not individual sales.

Zana

I'm with Beryl and Zana here (and Shadow).

All my clothes are aimed at the newbie market, ranging from 50 to 150 or there about. To be honest, I don't really want to charge more, and I don't really consider myself good enough to warrant a premium price yet anyway. You may disagree though... If so, buy stuff and let me know.

I do have some furniture and fun stuff that costs more, but to be honest, the prim cost would probably put it out of newbie budget anyway (e.g. the 42 prim dining table)

Unlike Zana though, I do frequently spend more that 500 on outfits, if I think they're worth it. I think - not sure but I think - that maybe Nephi made something I haven't bought at some time... lol, though I have been known to whine about the cost... Nephi is a saint, I tell ya, to put up with me. lol