Raising prices?

Due to increased competition through out second life and the fact that my items were on the high side of the average. I have actually decreased prices in most of my shops and I am working on getting everything repriced at the lower rate with in the next two weeks at the rest of my outlets. since i use single selling boxes and and don't use server vendors this is a very time consuming operation for me. In the end it will be better for my customers and better for me. I have already seen an increase in sales with the lower pricing.

all the best

while SL doesn't have inventory, the products in SL are imported from another market. that is real world artists and scripters and event coordinators providing content and services in SL in L$ only to sell them for USD. the very basis for L$=USD was to encourage reliable participation from foreign businesses because the home grown businesses that operated entirely in L$ were of low quality and unreliable.

if SL is a country, it is a country who's pieces the have been sold to foreign businesses a long time ago by the king. however as long as the king continues to subsidize the lifestyles of his subjects through money printing/state enacted inflation, the smart and organized businesses must protect themselves by exploiting their power to increase the rate of inflation until, finally, there is no question, that like every other third world country, the local currency is completely irrelevant and it is the USD that governs the economy. because right now, even a momentary pause in immigration would likely cause the L$ to collapse.

the yuan does not fluctuate unless the chinese government wants it to.

Well, all that may be so. but it still doesn't affect the fact that my customers are ALSO used to shoppingi n Macy's and WalMart, and are ALSO not used to the items fluctuating up and down in price. It's them I'm thinking about, not what goes on in the international financial market, or whether or not that correlates to SL.

In any case, it's probably a moot concern of mine, since the idea that Lindens would ever start being worth MORE is beginning to seem more and more implausible to me.

In which case - with Lindens always being worth less and less, it would make sense to gradually increase prices. Which is the pretty much what happens in the real world.

CC

No, i have no plans to raise my prices based on the value of the Linden Dollar or the recent scare of it losing its value.

I will continue to charge as i always have, according to the amount of time and work i put into an item and what i think my customers would expect to pay. But then i don't depend on my sales to feed my family or pay my land fees although i am happy when it can (pay the latter that is) For me its the satisfaction of making something others can appreciate and use and that is worth more than Lindens and part of what keeps me here.

Thanks

I have not raised my prices in the nearly 3 years that I have been selling my boats and yachts. So, with the declining value of the Linden, my products are much less expensive to buy (in US$ terms) now than in the past. Thus making them more affordable to new residents. Competition has also played a factor (more competition in a given product market pushes the price the customer pays down). Those with a quality product and reputation can tend to keep their prices higher than their competition.

So. I have been able to maintain my prices structure even with the advent of competitors and the 'devaluing' of the Linden over time. This has been good for both me and my customers.

The arbitrary, mythical, and to some, sorely missed $250L to the US dollar rate is just that, an arbitrary number that has long since lost its original purpose and/or need to exist.

If you look at the fluxuation of the exchange rate since it was first possible to buy/sell Lindens, it has been pretty stable. The current trend toward what some would refer to as the sky is falling, is (in simple terms) the economy finding a new balance. A new norm that is sustainable, and given my perspective of being a 'business' and 'resident' in SL since January 2003 (there are few of us left with the position of having 'seen it all happen' since the beginning), the Lindens have made and changed policies that have allowed SL to grow to what we have today.

I am not saying that Philip and the Lindens are perfect, they have made policy blunders in the past, and they have corrected them, but they have trended toward policies that are needed for a US Corporation to become profitable (remenber they are a business), as well as taking the delicate balance of the needs of the residents into consideration (more than any other corporation I am aware of). When was the last time you were able to grill the CEO of another high tech firm (large or small) at a public forum?

How many of you know we used to be taxed, we used to have to pay to rez prims, we used to go around garbage collecting 'decayed prims' for L$, we used to have large plots of land that were unclaimed. We used to number in hundreds of residents, not hundreds of thousands. It took 3 years to get the first 100,000 residents, and only 4 months to get the second 100,000.

If you want to be here for the long run, Expect Change! This product, service, game, experience, or second life (in whatever terms you think of it), is ever evolving to meet the needs of both the residents(customers) and the corporation, without either there is no Second Life. So while we have the un-precidented gift of being able to affect LL policy in Second Life thru our access to them so directly, we must also consider and recognize that it is in their best interests to make SL work for us too.

I would but i think my costumers won't be too happy with that.

+ I have to compete and make sure my prices aren too high compared to others.

I dont change my prices. I have noticed some prices have gone up, im not sure whether thats related to $L or not but... why would anyone need to raise their prices? Why should hair that cost $185 suddenly cost $200? Maybe Im missing something.

I set the prices low, yet still adding in how much time and effort i put into it. (in case of my clothing resell store, i usually mark everything at least half off, sometimes i get too lazy and just mark things $100 if its more than $200 originally).

But I do feel like Im missing something. People didnt buy these things in bulk and go on to sell them at a profit (unless we're talking about land). Creators should base their prices on how much work they put into their products, upload costs, time, etc.

Everyone running around like chickens with their heads cut off certainly doesnt help things. Maybe someone can enlighten me. Are you losing money by not raising prices? how?

i dont mean this as an insult to anyone, im trying to learn something new today

185/272=.68*.965=.656

When the exchange rate was 272L/$1 hair that cost $185 got the creator $0.65US

to get the same money at 300L/$1 the hair would have to cost 204L

.656*300=196.9/.965=204L

It's the same con that fuel suppliers use.

They have 10,000 litres of fuel in the tank that they will sell for $2.50 a gallon.

The cost of fuel rises, so they put the price up to $2.60 to sell the 8,000 litres they have left in their tanks, as well as the next delivery of 10,000 litres.

But when the price goes back down to $2.55 a gallon, the price remains the same at the pump until the next delivery of 10,000 litres at $2.55/gallon.


Basically because the value of the L$ is falling, their 'real life' income is dropping, so a product that may have netted them $3 a month ago now only nets them $2.75 in profit.

So despite something costing them nothing extra to 'put on the shelf', they increase their price so they don't lose out, so they can get 120% profit instead of 100% profit based on their previous calculations.

It's only people who cash out for real money who will do these kind of things. Those who reinvest the money they make in improving their game life, buying other products, more land, donating to good causes etc, aren't affected.

Lewis

Ok but whats the point? The creator didnt do any extra work and claims to be in it for the fun of it. I don't begrudge people making money... but changing all those prices seems to be a waste of time (which equals money of course

Many people don't consider all the costs of making a product. These are the ones I think about when I set a price. It takes a lot of sales at $US 30 to 60 cents to break even.

1. time to create item
   
2. upload fees
   
3. advertising fees & time spent developing ad materials
   
4. % of software purchased for creation (Poser, Photoshop, etc.)
   
5. time spent distributing new products to shops and web
   
6. time spent on customer service
   
7. shop rental or tier if your store is on your land
   
8. employees, if you have any
   

I also take what similar products are selling for into consideration when setting the price. I also guestimate how many I think I will sell. That gives me a forecast break-even point. If the $L shifts significantly in value then I will adust my prices up or down to stay in the range.

I think the #1 thing that people don't think about is the value of their time. It doesn't matter if you are cashing out, or spending your $L in world. Your time is valuable. You can't get it back. Which is also why I advocate content creation if you get pleasure out of it as well as income. If it's drudgery, a RL job gives you better returns for less grief.

I should have read this first.
Im agreeing with you completely. I cannot see how raising prices does a thing. Unless someone can logically explain to me WHY (which I know you wont Lewis because reading your posts I have come to have a great respect for you and your contributions to sl... soon as sl is up ill be visiting your little area of sl again) all I can see is GREED GREED GREED.

Thankyou My store isn't much, to be honest... it has only a few basic things, but then again I'm not particularly talented in that way. I'm sure I'll get better in time, but most of my time seems to be spent rebuilding my structure instead of making stuff to sell.

The most expensive thing in my store is L$75, I think, because I spent a week tweaking the script, plus it has several textures I uploaded. I work on covering my costs in selling 3 or 4 of an item, then leave the rest to pure profit. That's why everything is so cheap.

Find three friends and you can test my new addition, a Laserquest arena although its still under construction.

I'm in Rosieri. You should be able to find Disco Inferno, Laserquest or The Nerd Emporium through "Search". Failing that, go to my woodland gathering place, Camp Wannahockaloogie, and walk down the road a bit. I'm just past the place with the toilet on the roof. No, don't ask.

Lewis

Is it greedy to value your TIME and WORK in USD? What about the cost of TIER(those greedy lindens charge in USD). I can't answer for your specific creator who says she's in it for fun you'd have to ask her. But I can answer for why prices would change that much.

I treat SL like a casino.

I spend $35 a month on SL in premium account and land tier. If I lose it all each month, that's what I was prepared to lose in the first place. If I happen to get lucky and make some money which I can then cash out, then it's a bonus - just like getting three bells on a slot machine.

If you don't, then just like making a living from gambling, you're at a serious disadvantage before you even put the first nickle in the machine.

Lewis

there is a spirit of entitlement amongst many of the residents in SL. lewis nerd is its fanatical evangelist.

is it greed for a graphic artist or computer to expect compensation for the work they do? is it greed for any skilled worker or artist to open their own business and try to make a living out of it?

or is only greed because unlike other games where there is a clear distinction between content creators (the company studio) and the consumer (players), SL has opened the content creation of their mmog to third parties who mix into the player community?

why can't i wear two hats in this virtual world without being called greedy?

Dhalia, feel free to drop in on mine too I personally refuse to raise prices because of exchange rate.

I was asking Dhalia, but I hate to inform you I DID make a living gambling for a while. Hint you don't just stick money in a slot and hope to get lucky. You should know before you put the dollar on the table how much you're making with that action. When you have the best of it your not at a disadvantage.

"i'm not raising prices" is a good forum strategy for up and comers to break into the market.

You know what would be nice? It would be nice if a chunk of Lindens created undisclosed alt accounts, put the time into making some products, and rented or bought land they have to pay tier or rent on like everyone else for retail space. And then marketed, placed and paid for classifieds, paid for rent or tier, and generally tried to make a go of it as a retailer.

Because I can see how from where you're sitting, this all seems like small waves in a big ocean, but it isn't. I think you look at big overall numbers every day and have lost sight of the fact that SL is a micro economy where financial success is based on accumulation of micro transactions.

You're not addressing the economic reality of overheads for retailers. I rent my space, and my rent for my land went from $8,400L to $10,200L to $12,000L in three sequential months. That's a difference of $3,600L from month 1 to month 3 due to the rising exchange rate. That's profit not going into my business, Lindens I'm not spending at other stores, and cash not going into my pocket.

People who pay tier on land they own are really taking a hit. A store owner who runs a large business and buys a sim to house it pays $200US per month in tier, and that money comes from the exchange of Lindens to US$. It now takes significantly more Lindens t to make tier than it used to. Business owners either need more sales or higher prices to achieve that.

Bottom line: In a micro economy, minor exchange rate fluctuations have a large impact.

And honestly, it would be nice to know the person leading that economy understood that.

oh not at ALL Sir, that was exactly my point! We should base prices on time and work! Im looking at rising prices and wondering WHY people who previously valued their time and money at one price suddenly value it that much higher.

as i said before, im really not criticizing people for their time, work, effort, etc... im just trying to grasp why prices should be rising. They've certainly gone up from a year ago.

I dont know if its a "sense of entitlement" to wonder why prices are being raised when no extra work is going into it. I may be wrong here and I readily admit to it.

And I think you are missing my point. I dont find anything greedy whatsoever in charging for time and effort and work. Not at all. Raising prices on something you've been selling in world for ages seems... I dunno. Im trying to make sense of this and not trying to attack anyone.

I ABSOLUTELY expect people to charge what they feel is fair considering all the work that went into it. I worked for a coupla days on an item, a lot of time and effort went into it. My friends asked me to sell it for 150+ ... i put it at 50 because I felt asking more was a ripoff. I guess we all have different criteria when we decide prices.

And everyone has to freedom to charge what they want! That doesnt mean im going to buy something that costs 800L unless its "super mega awesome". Everyone also has to choice to NOT purchase items. I wonder if we're going to see less people buying things?

drop me a LM when sl is up, ill be sure to... and tell all my friends i'd say drop by my store but unless youre into art or women's clothes... plus its a huge mess atm!

thank you! ill take you up on this! it sounds exciting and im sure i can find more than enough people to want to test it