Some random musings about SL business...

So I'm finding that the tough thing about business in SL is that there are no longstanding business traditions to fall back on like in RL. Even the most venerated of oldbies have only been at it for under 5 years, which in RL terms is barely out of apprenticeship. Much of RL conventional business wisdom does not apply to virtual trade. Plus the everchanging SL landscape renders any expert opinions quickly obsolete. What worked 2 years ago will not necessarily work today. Hell, what worked 2 months ago will not necessarily work today. So basically, when it comes to doing virtual business, we're all just making this stuff up as we go along.

Take freebies, for instance.

Conventional wisdom is that a good freebie will pay for itself in extra exposure and good will. People will see the freebie, and if they like it, will come back to the store to buy more things at full price.

That's the theory at least. Reality has been somewhat different. In the month since I released the Mellie3 Simply Nekkid skins for free, by sales have DROPPED by 30%. Transactions have risen 4x, accounting for all the freebies people have been grabbing, of course, but overall sales are down a third. Go figure.

I dunno, maybe its the recession. Or maybe it could be that there are so many freebies released every day that there is no real need for anyone to actually buy anything. On any given week, you could very easily find enough good free stuff to outfit 3 avatars. Just scanning through the fashionplanet feed, it seems like a majority of the stuff featured in blogs are freebies of one sort or another.

Is it possible to oversaturate the market in freebies? Is there a point where "free" loses its marketing power just because there's so much of it? I dunno.

Of course the drop in business could also be because I dropped the price on full-price skins from 1250L to 950L, which if everything else was equal, would account for a 20% drop in overall sales. But then that's another piece of conventional SL business wisdom that a lower priced product will sell more copies to value-conscious customers, and thus make up for itself in increased sales. The problem is, where exactly is that "sweet spot", where the price is so compelling that folks will flock to snap it up, but it can still generate a profit? When I first opened my store, I put out a set of Natural Beauty skins for 49L, and they sold like hotcakes. They easily sold more than 10x as many as my full price skins. Thing is, when I added up my receipts, even with far fewer sales, the full price skins generated 3x as much income.

So who's got it right? Bare Rose, selling huge sets at outrageously low prices? or Stiletto Moody, who shoes are the price of 3 entire BR outfits? Of course, its obvious what the typical shopper will answer to that; everybody loves to get more for their money. But then again, there's something to be said for luxury items. Is it possible that a pair of shoes that you have to save up a couple weeks for can somehow give you more pleasure than something affordable? Who knows? But I'd be curious to find out.

Of course, you might say that my experience is due to my product being crap. That's always a possiblity, and no sale or promotion will help that. "You can't polish a turd" as my grammy used to say. Anyway, nothing I can do about that but keep trying to improve my products.

Thing is, how much effort should one realistically spend? Sure I love making skins, and I would continue to make them for myself, even if I couldnt sell them. My primary compensation is being able to say "Look what I made." Thing is, while I do love creating skins, I really really dont like everything else involved with packaging them for sale. That part is real work, and its about as satisfying as doing data-entry at an accounting firm. (One of the reasons I don't really get too worked up over skinthieves stealing my textures is because i know that if they do, the jokes ultimately on them. They still have to rip them, re-upload, make new vendors, new demos, price them, name them, etc, etc, etc. Mainly, all of shitty gruntwork, but without the satisfaction of being able to say "I made this". Hell, its not even like they're huge sellers in the first place.)

Anyway, if its simply for creative expression, then surely one could get achieve without having to do all of the extraneous drudgework that goes into packaging products for sale and maintaining a storefront, right? If you count up the hours, it seems like the ratio of creative work to non-creative work is around 1 to 4, at least when it comes to making something that needs lots of variations on a theme like skins. And as far as drudgery work goes, the pay sucks. Now you could say that i need to do better marketing, put on events, sponsor fashion shows and treasure hunts and the sort. Find new ways to get the people into the store. But then that's even more time spent on non-creative work. Someone needs to make a JIRA to suggest a way that I could put newbies to work doing all of the non-fun production stuff that needs to be done to put my skins on the shelf. THAT is something I'd vote for.


Anyway, these are just a few of the random thoughts swirling around in my head lately. Regardless of the general hopeless tone of this posting, I still insist on spending my time making new skins. Just to show that i'm not all rant and no rabbit, I'll end with another preview of the new Tuesday skins. Here are a bunch of new makeups that I've made, but havent yet come up with names yet. Click on it for the larger size.