Tips on Operating a Profitable Business in Second Life

Original post 2013 by April Wilde (AKA April Looming), Designer of Wild Style Fashions

BASICS
----------------
This class is about maintaining a positive cash flow.  That means profit.

Back in 2010 and prior, SL published stats about income people pulled from SL.
Copies still exist at http://www.gridsurvey.com/economy.php

Back then, 72,000 people had a Positive Linden Dollar Flow. So you can too!
But if you're expecting to live off your income, you may be disappointed.

Only 3% of those people earned $500usd or more.
83% earned less than $50usd a month.  So odds are against using SL to pay your rent in RL.

To maintain a positive cash flow, you need to earn more than you spend.
Maximize sales and minimize expenses.

To maximize sales, you need to:
✰ Make what people want (know your customer and competition)
✰ Make it look good enough to buy (staging)
✰ Get the message to people who might want it (marketing)

There's two other important factors to consider in that first star:
✰ strive for the best possible quality
✰ be attentive to your customers and build a reputation for customer service

It's amazing how many businesses don't take full advantage of all these principles.

Minimize every fixed expense:
✄ Minimize land expenses
✄ Minimize ad expenses
✄ Minimize employee expenses

Some people may say "you need to put something in to get something out."
That's true.  But you need to be smart about expenses.
You don't have to put L$ in.  You can put in "sweat equity" instead.

Quoting http://www.businessknowhow.com :
To be successful - and profitable - a business has to be something that matches up with your abilities,
interests, skills, lifestyle, time available to work, personal contacts, ability to find new customers
and the money you have available to launch the business.

Next, we'll drill into the specific choices that can affect your income and expenses.




KNOW YOUR COMPETITION
-------------------------------
It's not wise to go into business in a vacuum.  You need to know what options customers have.

Why should a customer buy from YOU?
Before you even open your doors, you should know what products are out there.
You have to shop!!!

Exploring SL can be fun.  Go in search of stores carrying what you intend to sell.
Take landmarks.  Check profiles of the owners.  See what groups they're in.
See what groups their customers are in.

To define your competition, you're going to have to make some decisions about your market segment.
It will be easier to market to people if you position your brand in a limited market segment, e.g.:
- wearables
- pets
- furniture/furnishings
- animations

If you split your attention to multiple market segments, your brand's identity will be confusing.
Not having a distinct market segment is going to keep you from effectively analyzing your competition.

Look at your competition, and ask yourself:  Can I make something like that?
Could I do better?
Could I be different enough to be unique?

You never want to copy another merchant's items; even making the same style with your unique textures.

First, it's a potential DMCA issue.
But mainly, it guarantees your things aren't unique.
If your products have to compete with something identical, the only thing you can offer to get the sale is a lower price.

If you're already open for business, ask yourself some questions as you explore other stores.

How do your products compare to the competition?
How does your pricing compare?
How does your presentation compare?
Are you aware of trends that might impact you?
Do you adapt well to trends that affect you?
You owe it to yourself to explore SL and see if you can find the best of your competition.

- Search Marketplace by "most popular", and filter selections to your market segment.
- Talk to bloggers and people who keep track of trends.
- Attend the weekly Linden creator meeting.
- Watch the forums for news on Snowstorm updates

THIS IS CRUCIAL:
Try to make your store unique.  Make your store stand out.  Make your products stand out.

EVEN MORE IMPORTANT:
Your quality should be the BEST you can manage.  Put EVERYTHING you have into making EVERY PIXEL count!

If you leave visible glitches, customers may notice, and be dissatisfied.
If you can do better with another hour or two and another few uploads, then...
DO IT.

TIP: Always use TEMP Uploads or LOCAL textures to test.
For mesh, always use the BETA grid (Aditi) to upload and test.
Don't pay L$ just to upload a test - that's just throwing money away.

It helps a lot to be first to market with any product.
It also helps to have the BEST of a particular product.

If you have the best/only product at a reasonable price, people who want that type of product will seek you out.

Read more at this link:
http://www.entrepreneur.com/article/204092



KNOW YOUR CUSTOMER
------------------------------
Your customers tell you things all the time, whether you know it or not.
You can gather information about your customers and use it to make decisions.


☯ How many customers visit your store each day?
If you don't have a visitor counter or greeter, you're missing out on the opportunity to know who was in the store.

☯ What do you know about your visitors?
If you have customer names, you can investigate their profiles to see what they like.
If you have a small niche product, it will help to know what groups your customers are in.

☯ What are customers buying?
If you have not visited this page yet, you must.
https://secondlife.com/my/account/transactions.php?lang=en-US (page shown here)
You can view your transactions for the last month.

Make sure you download this information regularly, as sales older than 30 days drop off.  Marketplace sales show here, but unfortunately are not as good as inworld sales when it comes to the description.

Data mining may still be necessary on your Marketplace Merchant Home page, where you can run reports on items and have them listed in order of popularity.

If most of your sales are on marketplace, this spreadsheet won't have a level of detail that will compete with the Marketplace reports.  SL sucks in that way.

DOWNLOAD to XLS format and keep a running spreadsheet.

In your spreadsheet, use a "pivot report" (or "Data Pilot" or whatever) to show what items are selling, and when.

You can pull items from your store if they're not performing well, or re-design them.
You can increase marketing for the items that are selling better.
You can make more items LIKE your best seller.

KNOWING YOUR CUSTOMERS IS A BIG DEAL.

If you don't have a Store Update Group, start one.  It's really cheap (L$100), and will pay you back 1000x over.

A store group lets you know who's interested in your stuff and lets you reach them in notices.
A subscribomatic or similar can reach additional people who don't want to use a group slot.

It's not enough to know your customer.  You need to reach them with news too!

TIP: Use people's profile page to make notes when you interact with them.  It makes them feel good when you remember them.
Who can blame you for using a little crutch to help you remember?

Read more in this USA TODAY article:
http://usatoday30.usatoday.com/money/smallbusiness/startup/week4-know-your-customers.htm

Book: "Passion to Profits: Business Success for New Entrepreneurs"
http://www.planningshop.com/products/ptp.asp

Harvard Business Review: "Know What Your Customers Want Before They Do"
http://hbr.org/2011/12/know-what-your-customers-want-before-they-do/ar/1




BRAND IDENTITY
-------------------
A very important decision you'll make when you start out is crafting a BRAND IDENTITY to identify your "body of work".
If something of yours is really good, people may want more.  How will they talk about your stuff?

Most often in customer and help groups, people identify with BRANDS: COCO. Maitreya. PREFABRICA. GothiCatz. BARE ROSE.

What does developing a BRAND do for you?

- Brands have "brand mystique": an aura of heightened value or interest or meaning surrounding them.
To have mystique, be unique!

- It's a commitment to a certain style and quality.
- You can transfer ownership of a brand if you get tired of doing all the work at some point.

- You can get partners and share the load, while still using the same brand. (like BARE ROSE, KALNINS - now part of REDGRAVE, etc.)

- It gives your business a character of its own.

The more quality you can put into the definition of your brand, the more successful you'll be.

When your items are placed in a mall with lots of other designs, putting your BRAND on your items distinguishes them from everyone else's.

Make sure your BRAND is (1) memorable, and (2) easily found in SEARCH!
TIP: Try searching for your store name in SL search.  See what comes up.  If your current store is not #1, or your proposed brand name has 20 or more hits, think about how hard it will be to find your store.

Two-letter brand names are not memorable or searchable.  Ditto single-word names that aren't unique like:
"Shoe". "Babe". "Zombie". "Christmas"

Are there exceptions to the rule?  Sure.  Yes.  A couple very successful ones. ("Truth" and "69" come to mind...)
But you have to work harder to be awesome when your customers have to dig to find you.

Avoid odd characters too:   ..:: BяⒶηd χ ::..
They look cool, but if someone searches for "Brand X", they won't find you.

Your brand could be lyrical, funny, teasing, provocative.  Chat with friends and toss around ideas.  Make sure to test the search response.

LOGO QUIZ TIME!
Think about these logos.  Without even seeing the merchandise...
Which brand do you think will have the highest quality merchandise?
Which brand would you choose to shop at first?

In my classes, given to over 500 residents of SL, the popularity of these 5 came as follows: 2,3,1,5,4.  Every class was different, but those were general trends.  Note that logo #5 here represents a type I see a lot in SL, but seldom in RL for real stores.

Reality check:
To get sales, you need exposure.
To get exposure, people need to choose you before they choose another seller.
Potential customers in SL may only see your parcel image (logo) in SEARCH.
Will your logo lead them to visit your store?

What about in RL?  See the quiz formulated again, this time with RL logos.  We already have a sense of the value some of these present, and can guess even without other information.  For instance, I would expect to find #1 and/or #2 in Beverly Hills, but not #5.

Big name stores invest lots of time an research into developing their brand.  Note that high-end RL stores do not have "Creations" in their name.  This is a common SL business name construct, but I think it should be avoided.  I could have named my store "April Looming Creations"; but that doesn't have the same "Brand Mystique" as something like "Wild Style Fashions".

You can read more about marketing in Bryan Smeltzer's blog: http://bryansmeltzer.wordpress.com/

http://en.wikipedia.org/wiki/Brand#Brand_identity

Slide show: http://www.slideshare.net/projectxmedia/brand-strategy-creating-value-through-image-identity

Logo creation resource: http://99designs.com/beta/logo-design





NETWORKING
-☎-☎-☎-☎-☎-☎-
SL Groups are a great way to Network.  You can also network outside SL via:
☎ Facebook
☎ Flikr groups
☎ Plurk
☎ Twitter
☎ Google+
☎ etc.

There are great benefits to networking:
☎ Learning,
☎ Selling, and
☎ Creating Goodwill
☎ Making friends

Membership in a market groups / fashion groups / hunt groups, etc, will help you find customers.

Look for groups where you can send notices and participate in HUNTS.  For these, you'll need an inworld store.
Most of these groups allow you a FREE way to reach customers!

Some charge to have a "designer" tag.  For these, research the benefit to see if the cost is worth it.

Have a store group!

Fun additional reading:
http://www.inc.com/karl-and-bill/networking-for-introverts-3-tips-for-success.html





HUNTS
-----$-$-$-$-$-$-----
Exceptional hunts can send 1000 avatars a day into your store.
Well publicized hunts might bring in 100 avatars a day.
Poorly organized or advertised hunts might bring in 10 avatars a day.

Hunters fall into two groups:
✪ People who want something fun to do, and like exploring/shopping SL with the challenge/excitement of the hunt
✪ Scavengers/hoarders, scooping up every freebie they can get.

Ignore the scavengers, and focus on the explorers.
What can you do to drive a sale from an explorer hunter?

✪ Make it easy for them to buy something!
✪ Your hunt item should contain an LM to your store
✪ Your hunt item should be representative of your skill level
✪ Your hunt item *could* be part of a matching set that they could come back to buy
✪ Your hunt item should include a notecard with info about your store and other items.

How do I find hunts?
❀ http://slhunts.wordpress.com/
❀ http://fabfree.wordpress.com/sl-hunts-advents/
❀ http://seraphimsl.com/
❀ http://huntsl.com/
❀ announcements on social networks or invitations from contacts
❀ Google



EVENTS
-----$-$-$-$-$-$-----
Events like "Hair Fair" or "Shoe Fair" or RFL or various others (monthly showcases also)
can put your business head-to-head with the big names in your market segment.

These events usually have a huge cost associated with them; like donating a significant percentage of your profits.
Or they might cost 10 times normal mall rent.

Why participate?
✪ Events generate a ton of traffic, all shoppers.
✪ Event sims can be packed to capacity for a week or longer
✪ You get TONS of exposure

Remember all the previous lessons here:
✪ Know your competition
✪ Know the customers
✪ Be true to your brand
✪ Make sure everyone you network with knows you'll be there

Make sure that if the event charges RENT, you can afford that rent as a total loss;
because the event could generate L$0 for you.

Commission events guarantee you a profit, so they're less risky for YOU and more risky for the event organizers.
Typically only charitable events are based on commission.

Every sale is a lead, and potential blog exposure.

Examples of regularly recurring showcase events (more than 40 exist) :
✪ Collabor88
✪ FaMESHed
✪ fi*fridays
✪ Zodiac
✪ See "Blogging Second Life" blog for complete list

Where do you find out about upcoming events?
http://bloggingsecondlife.wordpress.com/events/
http://seraphimsl.com/
Plurk
Flikr



FREEBIES
~-~-~-~-~
Freebies can be a good way to pave the path to future sales.  So how can you use freebies to generate sales?

❀ Make sure every freebie includes an LM to your store
❀ Put in a notecard with pics of other items that might even match the freebie
❀ Make sure the freebie vendor has "show in search" checked, and that the item name or description is enough to know it's free and awesome
❀ Offer "logo gear" (T-shirts, etc.)
or the best way...

MAKE YOUR FREEBIES "GROUP GIFTS"!  ❀ ❀ ❀
This can have a massive impact on your group size.

People tend to stay in groups, even when they're not "active".  This lets you send them notices about new releases.
...Which can generate more sales.





FRANCHISING
---------------
There are 2 ways to franchise.  You resell other people's creations, or they resell yours.

YOU AS FRANCHISE SELLER
✪ Other people do all the work for you, set up your vendors, and pay rent on space
✪ Franchise systems available by CasperVend, Hippo, and others, tested by millions of people.
✪ If you're REALLY script-savvy, you can script one of these systems yourself.
✪ Every franchise is profitable!

You have to be very careful about how you set up your vendors, so they will maintain your brand image
...even when set out in "sketchy" places by people with no marketing savvy.

Suggestion:  Have a EULA (End User License Agreement) where resellers agree not to set up
your vendors in a way that makes the brand look bad.  See if you can have the vendor alert you
or register with a website with its SLURL so you can confirm that the vendors were set up
in accordance with your wishes.

Problem:
The day after you check, they can surround your vendor with things that disparage your brand.

Downside:
✪ Your brand image can get "diluted"
✪ You are in competition with your own resellers; and they take a significant % when they sell your item.
✪ Reseller systems can go down (system-wide, due to server outages, etc)
✪ Reseller systems have initial cost
✪ Reseller systems may charge 5% commission

YOU AS RESELLER:
Do you trust a vending system's designer with your debit permissions?
"No problem!" you say.
ok then!

Warning about debit permissions: When you click that button, to give debit permissions:
☢ The object can drain your L$ account for any reason, forever ☢

So, trust is a huge factor.  Don't purchase or use a franchise vending system you don't trust.
Use an ALT account regardless, just in case.

Things to consider when reselling other people's work through their franchise...

✪ You should not mix your own work on the same floor/ same room as reseller vendors.
  This dilutes your brand.
✪ You are competing with that designer's main store
✪ You won't necessarily have the designer's most recent releases
✪ You're paying rent on prims that only pay you 25%-50% of the sale

If you have spare prims, and want to franchise other people's designs in a separate space,
look for items that you like which have little or no "buy-in"/"setup" fee.






SPACE FOR YOUR STORE
------------------
Having an inworld store is necessary for many groups, especially hunt groups.
But stores can be your most significant expense.

Most stores I've seen are bigger than they need to be for the merchandise they're selling.
Even the top sellers.

Stores using less than half of their prim & space capacity have more land than they need; and could be more efficient.
Prims cost L$ to display in-world, so if you have a low income, look for ways to economize.
Use temp-rez or arrange to meet buyers in a sandbox sim if prims are too pricey.

Over-expansion is one of the main reasons businesses fail.
http://www.businessknowhow.com/startup/business-failure.htm

Inworld stores can be free (commission based), or range from 74￠ to $295 per month.

Now, let's look at your options for a store.
★★★★★★★★★★★★★★★★★★★★★★★★★

OPTION Zero. Marketplace:
------------------------------
Your rental cost is zero.  You MUST put your items on MP.   If you don't, you're losing INCOME.

You have to pay commission, but no matter how much (or little) you sell, your Marketplace store will ALWAYS be profitable.
Marketplace can act as a "yellow pages" too.

Not having a "website" (in this case a MP store), is one of the main reasons businesses fail.
http://www.businessknowhow.com/startup/business-failure.htm

OPTION 1. Purchase an entire Estate/Mainland region:
-----------------------------------------
This is the most expensive way to run a store, and the quickest way to kill your business if your brand is not profitable.

Mainland Regions cost $195usd/month.  That's approximately L$1600/day!
Estate regions cost $295usd/mo!  That's about L$2400/DAY.

OPTION 2. Rent part of an Estate Region (or mainland):
-----------------------------------------
Estates have the benefit of management and a Covenenant, preventing your neighbors from putting something obnoxious next to your high-class store.

If the Landlord enforces it.

Rents can range from L$2/prim/week to L$10/prim/week (or more!)

The problems with renting from a landlord and not directly from SL are:
☠ The landlord can "accidentally" return all your prims
☠ The landlord can sell the land out from under you
☠ The new landlord could make your life hell

☠ Landlord disputes could get you ejected and banned from your own store with no recourse through LL
☠ If things go bad, everyone has an LM to where your store *used to be*

TIP: MAKE A BACKUP of your STORE into inventory,

Research the landlord.  What's the chance he/she will take your money for a month's rent in advance,
...and then sell the sim out from under you?

You're saying "April, that stuff never happens.  Landlords don't take your money and run."
It happened to me.

OPTION 3. Purchase Mainland:
-----------------------------------------
If you're ok with paying LL directly in USD$, this is your LOWEST COST OPTION.

Benefits:
㋡ Nobody can ban/eject you or sell your land out from under you or return your store.
㋡ All mainland tier rates are between L$1/prim/week and L$2/prim/week.

On the other hand:
☞ You have no control over your neighbors.
☞ Screens can block out almost everything around, but not quite!
☞ Take measures to prevent or counteract griefer attacks.  On your neighbors too, if possible.

TIP: start a group and have the group own the land.  You get a 10% bonus to land use limits if owned by a group.

You get a FREE 512 m FOR PREMIUM membership!  Add 10% to this if group-owned.
Note that Premium costs $6/month if you pay annually; but you get back L$300/week;
...so your net cost for Premium (and the 512 sm store you can get with it) is really only 74￠ per month.

OPTION 5. Commission Stores
-----------------------------------------
You pay a landlord a % of your sales and control the store yourself.
To do that, you'll need scripted vendors that will pay a % to someone else.

You'll have to negotiate the commission % with a prospective landlord.
Commissions can range from 5% to 50%

Benefit = zero rent!!!
Cost = hefty commission compared to Marketplace.
EVERY COMMISSION STORE is PROFITABLE for YOU.  That's what matters.

Bottom line:
--------------
My recommendation is: Try not to spend more than 30% of your AVERAGE income on tier/rent/commission.

You have to plan on your income fluctuating.  A LOT.

The more "budget buffer" you have, the better.
Rent and Tier on your main store are FIXED expenses with a long term commitment.

Your location can affect your sales.  Moving a lot can reduce sales.
People have to be able to find you.

IN-WORLD STORE BASICS
☞ You want people to find you.
☞ You want people to find your store.
☞ You want people to hang out when they get there.
☞ You want people to come back.

A bad location (or hard to find store) is one of the main reasons businesses fail.
http://www.businessknowhow.com/startup/business-failure.htm

How will people FIND YOU and your store?
☞ People might "Inspect" your creation and follow your profile PICKS
☞ Use SL search for a specific "keyword" for a type of item
☞ Ask a friend
☞ Ask in a group
☞ Discussions in forums/blogs/Facebook/Twitter/Plurk/Flikr/etc.

What can you do to make each of those paths easiest?
☞ Put everything about your store in your SL profile!!!  It's a free ad that shows in search.
☞ Make sure your profile isn't hidden.
☞ Use your PICKS to talk about your items and store policies.  Repeat your brand name in there.
☞ Create a "Classified" with the minimum fee to show in search.

I can't tell you how many creators FAIL to use their profile!!!
They're only shooting themselves in the foot by making it harder to find their store.

☞ Make sure you pay whatever fee needed so that your "ABOUT LAND" on your store has the "☑ Show Place in Search (L$30/week)" CHECKED
☞ Make sure EVERY VENDOR IN YOUR STORE HAS "☑ Show in search" set, and a descriptive NAME (for keyword search).

☞ Spread the word about your store by giving incentives for people to put it in their PICKS
☞ Make sure people feel good about YOU and your store so they want to tell a friend.

☞ Join groups related to your market and customers in general, to advertize your store in the groups.
☞ Have a STORE GROUP and Subscribo to keep getting the word out.  That will help get people to come back.
☞ Get out there and meet customers, ask them what they want, and make it happen if you can.

☞ Use SL Events to draw people to your store: https://secondlife.com/my/community/events/index.php?lang=en-US
☞ Investigate registering your store as a "Destination" https://secondlife.com/my/forms/destinations.php

☞ Consider hanging out in your own store parcel to bump the traffic numbers up, and invite a friend.
If you're concerned about scaring away customers, make a skybox above the store.




STORE LAYOUT AND DESIGN
----------------------------------
Your store should present your items in a way that showcases them in the best possible light.
If you want to draw people in, your store needs to have visual interest.

Stores which look "RL - realistic" and have "character" tend to get more attention from average consumers than stores which look like a big open box.

The "Buy vs. Build" debate:
----------------------------------
The decision to build yourself, buy a prefab, or hire a custom build, can be simplified to one factor:
If you want to remain profitable, use your available L$ from sales as your budget.

Navigating your store:
-----------------------------
Your store should be easy to navigate, so buyers can find stuff.

Consider using a teleporter in addition to making separate spaces available via walking.

Put group gifts for your store group front-and-center.  This will bring more people into your store group.

Sophisticated Look:
-----------------------------
This is purely subjective, of course; but the stores I hear the most chatter about are ones with an RL look and feel.
Meaning: Baked shadows and light effects.  Maybe mesh.  Reminiscent of an RL store.

Screen Shots from around SL:

This shot is from Alieda, a store that was closing.  I interviewed the designer, and she said that even though the brand was profitable, she didn't have time for SL anymore.  Note the RL look of the store: a mesh prefab from Abiss.  The parcel had lots of extra prims and she probably could have housed it in half the space; but profit is profit!


One of the biggest names in SL fashion, *COCO* has a very stylish store, with high ceilings to accommodate the SL viewer's high view angle, but avatar-sized vendors arrayed with a great sense of style.  COCO has about 25,000 members in their store group.  The numerous high quality customer group gifts may have something to do with that.  The store only used half the prims of the sim it was on when I checked last year.  If that's still true, COCO could be more profitable with a smaller parcel.

This is a newbie store I ran across while exploring.  It's on a very small parcel, but note the empty space on the walls.  This store could be more profitable on a smaller parcel, or might want to wait to open until the designer had a few more items.  Or decorate!

Also a problem: The store name came up with 49 unrelated hits on Search.  Nobody can find this store!

DeLa - a very stylish store, with good vendor density.  Has a whole sim.  This pic was taken a while ago, and new items are there now.
DeLa uses 7120 of 15000 prims on their Estate region (which costs $295/month).  The store could use half the sim and save about $150 per month.  Do they need to?  Probably not.
Note vendors use mix of box and alpha 2d-representations

Doppleganger went out of business.  I think that prim parcel usage was less than 50% of the max.

This mall is vacant, as many are in SL.  Mall rental can be expensive, and landlords need to establish a trust level with potential renters.  When evaluating a mall, consider not only the traffic, but the potential loss for setting up a store.  If you set up commission stores, the landlord will have the burden of bringing in traffic and you have no L$ risk.



This is a typical SL store.  Note the textures and decorations.  This store was gone the next time I went exploring the map at this location.







This is a store I love, but purely from the perspective that it's bare bones functional.  The clientele are not fashionistas looking for coordinated outfits.  They're rough-and-tumble builders who are all about DIY.  So even though the store is completely unsophisticated, it speaks to the customer in a way that another build would not.  A fancy store in this case might be considered "pretentious", "superfluous", a waste of prims...




Gizza - one of the biggest names in fashion, with so many members in their group that it breaks SL.  Do they need a whole sim for the store?  Nope.  If they're hurting for cash, I'd be surprised.  In any case, Gizza does have an awesome yet huge store that could use half the space and save half their land expense.

Gizza's stylish (and very spacious) interior.

Note vendors look like RL clothing racks.










Grasp is a brand with a great sense of style, and great details.  Note the vendors and stylish interior.

Vendors are not simple box, but also do not look like clothing on a rack.

Lelutka's booth at hair fair used mesh and baked in shadows.  I found it to be totally amazing.










Maitreya - another famous and really well designed store.

Note vendors look like RL clothing racks.

Mon Tissu and Lamb in their old location was pretty cool:








Mon Tissu had efficient use of the small space in their store:
Note vendors look like RL clothing presentations.

But they apparently outgrew their store and decided to go bigger.

...and when they went bigger, they blew SL away.

They created the Mayfair sim:
Which I think is hands down, the most awesome shopping sim in SL.  They're using 7982 of their 15000 prims, so they're over the half-way point and could not move to a smaller parcel; and besides that, the space is needed for the buildings.  This leaves plenty of capacity for rentals, or room for expansion.
(Update September 2015: Mayfair closed, and tenants Lamb Hair and Tres Blah recreated the old store. Was this too expensive?

This is a really cute store called "So Many Styles"
It's on a really big parcel for the inventory offered though.  I'd think that this store could cut their land use in half and save money.  Again, maybe not necessary; but just an option.
(Update Sept 2015: Store closed)




Does your store use less than 50% of the parcel prim capacity?  If so, look at the next tier down and ask yourself if saving the difference in tier rates would help you stay profitable.



VENDOR BOX DESIGN
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Vending boxes are used to sell your stuff.

Vendors either use a script with a "Pay" price, or are set "For Sale" with a "Buy" price.
An unscripted vendor allows the buyer to see the contents when choosing to "buy".
A scripted vendor allows you options for commissions, etc.

Unscripted vendors should be set to sell "Contents".
"Sell Contents" has two benefits:  The buyer doesn't get a copy of your vendor, and the buyer doesn't have to unpack from the vendor.

Pay scripts can fail or cause lag.  If they fail, your store fails.

Scripts can pay commissions to salespeople, give discounts to frequent buyers, or take gift card purchases.
Scripts can discount the "Pay" price for Store group members, or give freebies only to group.

These special options cannot be done with "For Sale" items.

IMAGE:
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Textures should be awesome.  Some stores make their vendors look like RL stuff: like a jar of hair color, or a shirt hanging on a hanger, or a shoe, or such.  This is an emerging and popular trend, moving away from traditional "box" vendors.  See the previous screen shots from various stores.

Traditional vendors use a "box" prim or scripted system vendors with a square image on the front and possibly back face.

Vendors look very low quality if they're a cube, so most vendors are more like "pictures on the wall".  In some cases, merchants might have a mix of cubes and "pictures on the wall" as this store does.  It also has the landscaping showing through the floor.

Regardless of vendor format, your product ad texture should do the following:
♡ Load quickly! (ideal pixel sizes: 256x256, 512x512, 256x512)
♡ Show the buyer what they're buying
♡ Show your LOGO/BRAND (if elegantly applied)
♡ provide all necessary info, unless you have separate notecards/images for info
♡ Have the correct ASPECT RATIO

Aspect Ratio:
http://en.wikipedia.org/wiki/Aspect_ratio_(image)
The aspect ratio of an image describes the proportional relationship between its width and its height.
It is commonly expressed as two numbers separated by a colon, as in 16:9, 4:3, or 1:1.

The vendors shown here have the correct aspect ratio.  They do not appear stretched.
If your images for your vendors are not designed with the same Aspect Ratio as the vendor, then your images will look distorted.
This will hurt the perceived value of your item.

Keep most images at or below 512x512 pixels in size, to reduce the amount of time it takes to rez your store.
As a test, CLEAR CACHE and restart SL in your store.  The load time will be what your customers will experience.

The vendor can show various things to a potential buyer, or not.
> A product name could be shown
> Price could be embedded in the image; but it will cost you L$10 to change the price.
> Permissions could be shown
> A product description could be shown
> Fonts used might contribute to perceived value
> Effort spent on staging the product image might impact perceived value

Note how this vendor uses a barcode and product identification as you might find in RL to show the information beside the product image in a really creative way.  If you're doing this type of vendor, look at making or buying a mesh low-LI prim for the vendor.





EMPLOYEES
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Employees are an expense.  So, we'll try to minimize expenses.
But sometimes you want to take on more than you can manage alone.

The types of employees you might need for your business might include:
☞ Content creator (where you're sub-contracting)
☞ Model
☞ Customer Service Rep (CSR) / Manager
☞ Salesperson / Agent
☞ Builder ($10usd/hr or more)

Builders and Scripters can be very expensive.  Store models and hosts/ dancers/ salespeople typically make a lot less.

How do you find people?
http://community.secondlife.com/t5/Inworld-Employment/bd-p/InworldEmployment
Social networks like Plurk, etc.

Tips:
❀ Make sure you know the person you hire, or at least get to know them a little.
❀ Check references/ samples of work.  This is especially important if hiring a Builder!  You need to be able to agree on taste/style/vision...  and budget.




CLOSING REMARKS
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This class is all about working towards greater profitability.  To optimize profits:
☑ Provide Quality, Value, and customer satisfaction
☑ Build relationships to retain customers
☑ Know your market
☑ Network
☑ Take advantage of every marketing opportunity you can afford
☑ Keep on top of new trends
☑ Act ethically
☑ Manage expenses!!!

So that's it for this class!
If you have any additional questions or comments, let's hear them!

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Update May 2022:

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Here's what my store in Cheonma USED to look like. I reduced the size when I cut back on my SL presence circa 2014 to a bare minimum store. No more fancy bridge and extra mall with vendors. They weren't driving customers to the store; so I downsized.

Store spanned the mainland highway and encompassed two parcels. Had tons of prims to play with for trees, etc. Looked awesome! Cost a LOT.






Here's what the store looks like since downsizing. It's now a "basic box", but I made it as elegant as I could and still keep it low prim.

Note that the store uses my mesh doors (available on the marketplace!) for a high-class touch, and I have Bartender Bob, my scripted noob bartender as one of my greeters. The other greeter keeps a tally of visits and I used to use that for tracking customers. I don't have time anymore, so kind of dropped that.

The interior uses a 3-prim winding stair (extra points if you can guess how it's made), one prim for the outer wall, one for the ceiling surround for each floor (the bit that makes it look like embedded lights are shining down), one prim for each floor, and one for the ceiling. The entrance took a few prims, including the doors, mat, and door frame. Then it's just signs and vendors!

I'm not claiming to have the best designed store or even suggesting that you follow this example. It's just one approach.

Best of luck on your SL business ventures!

-April 
2022.05.20