November 20, 2009

The death of XStreetSL?

Is Linden Lab going to unintentionally kill XStreetSL? It seems that way. They just announced a new fee structure that will certainly hit merchants and customers alike. First there are new listing fees. Freebies will cost the merchant $99L/month and regular items will cost $10L/month. Then there's a new commission structure of $3L or 5% whichever is greater on every sale. The rationale from the Lab for these changes is that it will reduce clutter and "improve" the shopping experience. I quote:
We've received feedback from our users that the volume of free, cheap (L$ 10 and under) & stale listings in the Xstreet SL Marketplace did not make for an optimal experience for shoppers or merchants.
Huh??? Free and cheap items aren't a good experience for shoppers?? That's corporate double-speak if I've ever heard it!

The real problem with XStreetSL is not the items, it's the site itself. Search doesn't work right so you get junk no matter what operators you use. Keywords are spammed. And, most importantly, there is no way of organizing items that vary only in color or size into single listings. So if a seller wants to offer a dress in red, blue, green, yellow and purple, each has to have its own listing. There are other things that could help like allowing seasonal listings (no penalties for takedowns and relists), better categories and even moving freebies off the main site.

But, instead of solving the underlying problems, Linden Labs has chosen a route that makes little or no sense from a business perspective but certainly is probably a lot easier to implement. "Let's charge a bunch of fees and see if we can make more money and have XStreetSL clean itself up!" Poof, no more freebies. Poof, marginal merchants are gone. I've never had a problem with the post-sale commission of 5%, but the upfront listing and maintenance fees will discourage innovation and new products.

And, it's obvious that Linden Lab has NOT been listening to either its merchants or customers. The outrage being expressed by both on the Lab's official blog and forums has been deafening. Many merchants, like myself, have already started deactivating their listings. Some may move elsewhere (some options include, Meta-Life and Some may close up completely. Some may move completely in-world. Or some, like me, may keep a few items on XStreetSL while the remainder are in-world. I have already deactivated some 60 items in preparation for closing out most of my XStreetSL presence.

I have to believe the end result will be a greatly reduced XStreetSL shopping experience and one dominated by large merchants. A lot of really creative "nichey" items will go away. And, with the reduction if freebies, I think general traffic is going to crater. I can't tell you the number of times I've wandered through looking for freebies and bought something expensive that looked cute. But now, no more. Linden Lab MAY end up with a few more incremental $L but I doubt it. The real losers here are the Second Life residents.

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