I’ve always been of the belief that a content creator in Second Life reserves the right to charge whatever they wish for their products, and it’s up to the customer whether they choose to purchase the goods at said price.
The economy will automatically adjust the retailer’s prices for them if they set them too high – customers simply won’t buy something they consider not to be value for money. The economy also caters for both cheap (free/dollarbies) goods, standard priced goods and expensive “high class” priced goods. Note that “high class” doesn’t make it so.
Essentially, a content creator is entitled to price goods at the price they feel is fair for the time, work and material costs that went into it.
Or are they?
I don’t dispute that the value of an item is what a customer is willing to pay. However, let’s assume the converse – that time, work and material cost has nothing to do with the price on the goods.
The vast majority of goods in Second Life are priced in accordance to the value of the Linden Dollar (L$) in relation to the United State Dollar (USD). That mutual understanding of value stops digital clothes equalling the same amount as the shirt on your real world back.
Equally, the price of bread in Second Life doesn’t equate to the cost of bread in real life. Why not? Because bread in Second Life has little significance to us – therefore, value of products in SL are decided upon the magnitude of importance to us.
If you’re stuck on the operating table needing a new organ, you’re probably going to pay anything you can to get it. Stuck in the middle of the nowhere, and the car is out of fuel? You’re likely to pay over the odds for petrol to get going again
Conversely, lets say the place you lived suffered a flood – then you’d have an excess of water, and would have to have it pumped out. That gives the water a negative value, as you’re paying to have it removed.
Generally speaking, a pair of trousers in Second Life doesn’t cost as much as a prefab house. That isn’t because a pair of trousers takes less time to make than a house though. It’s because the house is a going to be more of a necessity to the customer, as they will already have purchased land for the house to go on.
So thus is the value on an item is dependant on factors such as time, context, place and the requirements/wants of the buying public?
Or is it really as simple as the creator being able to name their own price, and the rest of us suck it up?
When a designer dares to charge a price that differs to their competitors, they always attract controversy. Stiletto Moody charges a premium price on her shoe ranges, and parts of the fashion community looked on in shock. Anshe Chung Studios created a range of 10L$ furniture, and the furnishing community wondered if the game was up.
Eventually, the economy restores balance. Retailers settle their prices to what their customers are willing to pay, and those stubborn enough not to adapt find themselves failing to draw in sufficient income.
So in conclusion, it really doesn’t matter what prices a retailer will charge, as the market will force them to revalue to what the customer sees as a viable price.
Loaf on January 29, 2009
Good post, and I agree, the value seems based on the value to the customer rather than time and materials, though sometimes you do find yourself paying for a name, much like the real world.
Still, I know a lot of designers will go way beyond the average in creating their products, and so I generally don’t begrudge paying a little over the odds for it.
A similar discussion took place in the comments of a video I posted recently: http://uk.youtube.com/watch?v=ERpqA_75u8s
Bailey Longcloth on January 29, 2009
I agree that what the customer is willing to pay does seem to set the value for an item and as Loaf said, we’ll pay a little more for a *name* provided it’s quality.
I wonder though if that’s not short changing the designers. If the prices for everything went up across the board we’d all pay for it. We’d have to as there would be little choice.
I also wonder how much the every increasing freebie/dollarbie market is impacting prices. When I started in SL freebies were awful. There may have been a few gems but most of it was crap if I’m totally honest. Not every store had them either, very few did in fact. Now, we have freebie groups and blogs and almost every store is giving away something. The quality of freebies has gone way up as well. If your on a limited budget and want to look good or live in a nice house you can do it with freebies.
I know what I’m willing to pay for things. Knowing the work that goes into making the clothes I wear or the hair I have on or the furniture I sit on I don’t mind spending my money. These designers deserve to get paid for their work.
Kade Klata on January 29, 2009
What I have a hard time with is when retailers/designers/creators make a name for themselves…a big name…and then produce something that is of far less quality and put the same high price on it and sell it more often than not, because of the “name”. I’ve found this with several items I’ve purchased over the last several months. I’ll purchase a pair of pants from a retailer that I’ve bought from in the past and expect the same quality and attention to detail as in the other clothing I’ve purchased..only to find that I’ve paid a high dollar price for something that looks as if I could have created it in Photoshop. I won’t mention names…but I feel like it’s up to the creator to “see” that it’s not of the same quality and set a price accordingly. Buyer beware, I guess.
Ryker Beck on January 29, 2009
As far as Stiletto Moody’s shoes go, I can honestly say I’ll never pay the $2500L or whatever it is to own a pair of them. This isn’t to say I don’t think they’re incredibly well made – quite the contrary. I think they’re beautiful, and they’ve done a good job putting them together. But as you say… they’re just not worth it to me, personally — mostly because I’d likely wear them once or twice and then forget they even exist in my massive inventory, like I do with so many things I buy.
What I WILL pay for, assuming I think it would be useful to me beyond just the clothes that I wear — are scripted gadgets. Maybe it’s because I’m a huge geek at heart, and I like cool toys. Woot and ThinkGeek are my best friends. But things like Luc Aubret’s translator and survey system, StoreCard systems, CodeBastard Redgrave’s CamFilter HUD, the IntelliBook or THINC Book systems, even the meticulously detailed board games in SL like SLingo and SLopoly… I have no problem paying the thousands of lindens for those items. Why? Mostly because I’ll get a ton of use out of them, I can use them to improve my OWN quality of products (for example… I use the IntelliBook in my portfolio and event photography packages), they’re fun, and they improve my quality of Second Life. Nothing beats hanging out with a bunch of friends marveling over who beat who’s ass in a game of SLopoly. Especially when you’re all drunk out of your minds. On voice. Singing. Loudly. *bahaha*
I guess to sum that all up… I’d sooner pay thousands of lindens for something that will entertain me or be useful to me in some way, than I would for something that’s there just to make me look pretty. It’s all in the eye of the buyer, I guess.
Elizabeth Hallstrom on January 29, 2009
Caveat Emptor
Less than zero « Second Life Shrink on March 6, 2009
[...] determines the value of an object in Second Life? I’ve been thinking about that since reading this article a few weeks ago. The answer given in that post – the market strikes a balance between what a vendor [...]