Virtually Speaking

Second Life along with the First.

Second Life Business 101

After several hours of frustration trying to create prim attachments for a new skirt design yesterday I was ready to unleash more bile on the horrid server performance and the half-assed building tools of Second Life. Then I realized that’s about all I’ve been doing lately. I am normally not a negative person. No, really. I simply have a low tolerance for poor software and crappy interfaces. There, spleen vented :)

What I really wanted to talk about was my experience in opening my own business in Second Life. I’m no expert, by any stretch. I’m still learning things every day. I don’t have the in-world visibility and economic clout to claim such a thing. What I am, though, is pretty much the same as most other small business owners. I make enough to cover my tier, my IMs aren’t yet so overwhelming that they cap very often, and it tickles me to death to get positive feedback from my customers.

But it was a learning process, and I found that some of my lessons were avoidable had I known of a common source of information. The official Second Life boards, particularly the Design, Scripting, and Business forums, were a huge help. So are the in-world groups to which I belong. But none of them could replace hands-on experience and the School of Hard Knocks.

So, I decided it might be helpful to offer Cindy’s Tips for New Businesses and perhaps help someone else avoid some of the problems I ran into. Here they are.

Tip 1: Branding. You could start a small store somewhere and just put your creations up for sale but you aren’t going to be very memorable. The object here is to have your customers remember the name of your store and associate it with a positive shopping experience. Catchy names are good, but sometimes it’s not the catchiness so much as the quality and service you provide behind that name. Come up with a unifying theme for your store, design a simple logo (or have someone do it for you), and take every opportunity to put that theme and logo out there in public. It’s easier to remember “Cin City” (my stores) than it is to remember “Cindy’s cute flex skirts and scripted chat toy”.

2. Know your targets. Who’s the most likely to be interested in your product? Scripters? Geeks? Combat sim fans? Strippers and escorts? Club-goers and partiers? This is important in two ways – first, it helps you determine where you should locate your stores, and second it gives you an idea of how to approach your marketing. It can even alter the thrust of your logo.

3. Rent or own? The vast majority of SLers no longer own their own land. Nor do they need to in order to own & run their own store. There are some advantages to renting, not the least of which is that it doesn’t increase your tier costs. Renting in a high-traffic mall can also boost your traffic and thereby your sales without much extra work. I suggest that you spend some time doing a search for rental properties. (Try key words like “mall”) Compare the per-meter rental costs to the traffic volume shown. It’s a rough gauge of what you’re buying — and usually the higher the rent, the heavier the traffic.

When you’re first getting started you may not feel that a $100-150L per week rent is justified. That’s your choice but it’s been my experience that anything lower than that isn’t going to buy you much.

The downside of renting is that you are at the mercy of the mall owner. I’ve been in business for about 3 months or so, now, and I’ve had 3 different mall owners quit from under me. Some will refund unused rent, some won’t. Some will give you advance warning, some won’t. It’s the risk you take.

The other option is to go with a Premium account and own your own store land. This, too, has pluses and minuses. For the cost of the tier payments to Linden Lab, you get the security of knowing that your shop can stay as long as you choose to stay.

4. Vendor setup. There are some nice vendor systems available – some, like Adriana Caligari’s or Hiro Queso’s, are free. Others like the JEVN cost money. If you’re prim-conscious you probably want a vendor setup that lets you put several products into one vendor and offers “next” and “previous” tabs for customer browsing. If prims are less of a worry, I highly suggest just making a box, putting your ad texture on it, sticking the item inside and setting the object properties as “contents for sale”.

I wanted a vendor that would create a new folder in the user’s inventory which contained the 6 or 7 items in one outfit, plus notecards and landmarks. I searched everywhere but nothing I tried worked quite right. Then I discovered the “Sell Contents” trick, and the problem was solved. The only drawback is that if you have multiple iterations of one vendor you have to update them all individually, but the only real way around that is to buy a system like JEVN.

5. Advertising. At the minimum you need to put your store location(s) into your profile under “Picks”. That way people can search for your name and teleport to your store easily if they forgot to get a landmark. It’s also helpful to include landmarks in the item folders you sell. I also have a scripted landmark giver at each store, right by the door, that reminds customers to landmark and gives them a one-click way to save the store location.

But we can do better than that. You can buy Classified space for $50L per week and up – the more you pay the more visible you’ll be. Renting in a high-traffic mall will also help. Owning land near a high-traffic club or mall will also help. Remember that your advertising dollars will eventually pay you back, so don’t scrimp.

6. Customer Service. How often have you IM’d a merchant with a problem and either not received an answer, or not gotten the answer you’d hoped for? How often have you lodged a complaint and actually gotten replacement items for free? Which of those stores will you give your business to in the future? Copies of my items don’t really cost me anything. I regularly download my transaction history from www.secondlife.com so it’s very easy to verify purchases, and I never hesitate to help my customers figure out a problem. If they want special orders, I’m negotiable on price, but if there was a problem with my items I go overboard to make sure they’re happy. Happy customers are return customers.

7. A word about permissions. I won’t go into the debate over copy/mod/no-trans versus no-copy/transfer perms. That’s completely up to the merchant. Personally, I opt for copy/mod/no-trans for most of my stuff because I use a lot of prims, and no two avatars are ever alike. My customers need the ability to modify the prims to fit. And modify means they also need to ability to make backup copies. And copy means I can’t let them transfer or it’s the same as giving away my items.

But one thing I did not know was that when you sell multiple items in one deal, the permissions you set on your notecard can possibly alter all the permissions of your sold items. Notecards should always be copy/mod/transfer to avoid altering the permissions of other items being sold.

I also make a habit of checking the permissions on all my items in all my stores almost every day. Second Life has a bad habit, especialy after patch updates, of changing permissions. If you don’t want a freebie floating around in the yard sales making money for other people, watch your permissions.

8. Web sales. I nearly forgot one of the most important things: put your business on the web! Listing your products on SL Boutique or SL Express is a great way to pick up extra sales – and you can optionally pay for a higher listing if you wish.

Owning your own SL business can be fun and challenging, and I can honestly say that starting my own business has helped me stay interested in Second Life much longer than I normally do with online worlds. Don’t go into it with the idea that you’ll get rich and retire and you’ll find that it can be something to be proud of and have fun with for a long time. And, if you have some thoughts you’d like to add to this wordy spiel, feel free to add your comments. If I knew everything about SL businesses I’d be retired by now.

-Cin

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November 6, 2006 - Posted by | Second Life

2 Comments »

  1. …interesting post regarding being your own boss.
    Keep it coming!

    Cheers,
    Chris
    http://www.nomad4ever.com

    Comment by Chris | November 26, 2006 | Reply

  2. ‘ello!

    This was helpful! Thanks! :)

    *hugs!*
    – Dawn, aka Iliana Paravane :)

    Comment by Dawn of "Love is there..." | December 3, 2006 | Reply


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