Welcome Merchant Display

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Snoots Dwagon
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Re: Welcome Merchant Display

Post by Snoots Dwagon »

Follow-up: something to consider from Ilan's post (because he brings up two really good points)... I do not own a world on Kitely. However, I was asked to create Weefolk Township, and a theater at Sendalonde Library. Weefolk Township covers more than a region of land space. Sendalonde is slated to become a major area of future Kitely events (and was a huge attraction on Inworldz before coming here). I regularly work creating items for Alex and Prax on Wellspring... which is a Megaworld. The three of us have established the first Wee / tiny community on Kitely, and along with Ada have brought two new tiny avatars to Kitely Market. Ada-- a resident of Weefolk Township-- was largely the driving force for the creation of an entirely new category on Kitely Market.

So as Ilan points out in his message... am I to be considered a lesser merchant just because I don't personally own a world? Do I support Kitely? Does Kitely still get a 20% cut of each sale I make on Kitely Market?

Just some things to consider. Ilan asked for feedback... and dere it are. :mrgreen:
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Re: Welcome Merchant Display

Post by Gregg Legendary »

Snoots my friend I guess I view this a wee bit different as I tend to separate those who just use the market as a means to earn income and those who have a presence inworld by owning land and or participate in the the development and use of said lands. Aye ye do not own land but I considered you in the group of "Land owners" as you spend relevant time in world developing and supporting those who do. This was my real point though I doubt I explained it as I intended to... there are those who live elsewhere Sl or on other grids who take advantage of a presence in the market place and those of us who choose to place our eggs in the Kitely Grid basket through land ownership and or the support of land owners. The kiosks at the spoken of area are inworld so I suppose I'm a bit of the mind they should belong to those of us who are HERE not on other grids. In closing I'd like to say time is money so spending time here supporting these lands is as relevant as spending money to have land and those of us who do one or the other or both should receive preference over those who do not...
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Re: Welcome Merchant Display

Post by Ilan Tochner »

Hi Snoots,

First, as you said, Kitely is a for-profit business. As I've said many times in the Kitely Community meetings, Kitely Market is heavily subsidized by our world hosting revenue. The 10%-20% we charge for Kitely Market sales (of which PayPal keeps up to 40% due to their own fees) hardly justifies the amount of work we have to spend on customer support for running Kitely Market (especially for supporting buyers from third-party grids). In other words, Kitely Market is a loss leader for us, not a revenue center. Despite being the leading marketplace of the entire Hypergrid ecosystem, it remains highly reliant on our other revenue streams as it is not a self-sustaining line of business given the transaction volume that the OpenSim ecosystem currently has.

As such, paying Kitely for world hosting or for advertising in Kitely Marker IS supporting Kitely. It is literally what is keeping Kitely in business. We don't force Kitely Market merchants to pay us for world hosting, but if they are spending money on getting land on some other grid instead of in Kitely then they are relying on other people to pay us for worlds to keep their Kitely Market stores open. Kitely Market is not the first marketplace that has tried to be multi-grid. Others existed before it and they have all gone out off business because the transaction volume the Hypergrid supports is not viable and it isn't growing at a sufficient rate to justify keeping a standalone marketplace going.

Now, having clarified that, there are three ways to reply to your comment:

The first is looking at it from a potential buyers perspective. Potential buyers who visit the merchants showcase in the Kitely Welcome Center want to see signs (which are basically ads) for stores that are most likely to interest them. The stores that sell the best are the ones that interest the most buyers and thus are the ones that are most likely to interest a random person visiting the Kitely Welcome Center.

The second is looking at this from the merchant's perspective. Every merchant that sells in Kitely Market would be happy to get a free ad in the Kitely Welcome Center. However some merchants pay for ads in Kitely Market (website) while others do not. Similarly, some merchants have stores that generate a lot of business for Kitely while others do not. Lastly, some merchants pay Kitely for hosting, while others do not. In other words, giving all Kitely Market stores an equal amount of free advertising in the Kitely Welcome Center regardless of how much they contribute to Kitely's bottom line is not fair to the merchants who are responsible for the great majority of sales in Kitely Market.

The third is looking at it from Kitely's perspective. We want potential buyers to find what they are looking for, we want to keep our best sellers happy so that they keep their stores open and we want to encourage people to order Kitely Worlds so that we'll be able to keep Kitely Market open (which ultimately is also in the best interest of anyone who uses Kitely Market to sell or buy content).

Lastly, please keep in mind that we already sell advertising slots in Kitely Market so it's not unreasonable that we start preferring our paying world owners when we decide who we give free advertising to inside Kitely Welcome Center. As Gregg has made very clear, that isn't currently the case and it is unfair to those Kitely Market merchants who support our business by also using it for their world hosting needs instead of spending their money on getting land on some other company's servers.

To be clear, while we value every Kitely user, and especially those that help create communities inside Kitely, that doesn't change the fact that it is still the people who pay us for world hosting that enable us to continue providing our services to all those who do not. Without them there is no Kitely grid and no Kitely Market for anyone.
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Re: Welcome Merchant Display

Post by Zed deTremont »

Following the different posts as I do on a as good as daily base and read the list of Gregg as it regards people active or not.
Little side note as it regards the list of Gregg, with all respect Gregg and just as comment no bad words.
Just by looking who has land and not is not a good criteria. As Dot Matrix correctly mentioned some people have land if for example they cooperate for example Catherine and I. Handy's Tools indeed has no shop anymore but I do know that the person behind the avatar is pretty active in Kitely under an alt. If he has land or not I do not know.
Of course I do also know that some people sell on the market without being active... so as "active" members... no not really, on the other hand, although the market is increasing in volume compared to for example sl the quantity is relatively small (polite said).
As for Catherine and me, sorry, we're probably not the most social people around. Our fun in virtual worlds is creating stuff. Almost all our time we're doing just that and unfortunately most of the time that by using 3D programs.
Just using top sellers... doubtful in my opinion I absolutely agree with Snout there. Some articles are just more popular than others. Also newcomers have to enter the market and of course don't have the sales to be on any top list. By experience it is seriously difficult to convince people to come and stay (and propose there products) in Kitely or Open Sim in general. Mostly they leave pretty soon with following main comments.
1. Lack of population
2. Lack of variety of products
3. Lack of good mesh bodies
3. And unrightfully afraid that their items will be copied (I do know and always say that this is not true and Ilan does all he can to stop that asap) Of course items can be copied and that counts for sl for sure too.
These are their words, true or not but are the main criteria for them not to enter open sim.
Little remark: we haven't been a lot in any world for a good month. Simple reason I'm studying once more and getting my mind around the creation of clothing. The program itself is not difficult at all. Patterns, well as a guy it's usually not one of the things we learn to understand thoroughly. Problem there is that the agreement with Maitreya forbids to bring in clothing that is rigged to their avatar. A few days ago been discussing with somebody to get her mesh body in Kitely, decision will follow in the coming weeks.
If you read this Koshari, you asked a long time ago for Victorian clothing. Apart from other clothing, yesterday I started making such a dress based on patterns of the 1890ies.
Finally, Catherine love Kitely and it's the main grid we use for testing and developing our creations. I do agree with Snout that no grid has a really impressive welcome area which is a pity. Although I believe Ilan if the creation of a new one is very time consuming and can invoke some drama. Fairly good chance that there are other priorities and can live with that.
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Re: Welcome Merchant Display

Post by Ada Radius »

I'd vote for automating the Merchant Display, based on whatever criteria makes business sense to Ilan, so it doesn't take a lot of setup and maintenance, and that the criteria are transparent, published and hard to game. So he doesn't have to spend time on it, other than tweaking it as time goes on. One of Ilan's skills is analyzing data to figure out just this kind of thing.

Even if Kitely Marketplace's worth to the company is merely name recognition in opensim hypergrids, that's not a bad thing. Harder to measure, maybe, than virtual land rentals. But important.

Possible criteria for the Merchant Display:
Ratings at KM - easy to game, but could be a factor
Total sales at KM - less easy to game, but not impossible
Value to Kitely development, such as optimized landscaping, scripting and avatars, e.g. a score of the technical competence of the seller.
Merchant investment in Kitely, measured in land rental - though that doesn't take into consideration collaborations such as Snoots describes.

Might want to consider other payment options along with KC and Paypal, to cut down on fees. https://www.oberlo.com/blog/best-paypal-alternatives
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Re: Welcome Merchant Display

Post by Ilan Tochner »

Thank you Ada,

We've investigated various alternatives to PayPal, unfortunately the ones that are available to non-US companies that also process billing internationally are also more expensive than PayPal (in direct fees, or indirect fees such as chargeback fees, fraudulent transactions, etc). Our automated billing is also very complicated so any changes that we make to it are very time consuming due to all the testing that we need to do.

Regarding the point at hand, any choice that we make will cost us some existing users as there will be those who will get upset because the thing that they aren't getting now or have been given for free for years will be given to someone else based on some objective criteria that they disagree with. This is the type of drama-creating issue a business owner never wants to have to deal with and why we try to avoid dealing with such features in the first place.

At the end of the day it's my job to do whatever will help Kitely survive and grow in the long term, even if there is an immediate cost to doing so. Opting for an option that gives an additional incentive for people, who currently pay some other service provider for land, to do so on Kitely instead, would help us continue financing Kitely Market and could help attract more content creators to be active Kitely community members. That would be a win for all Kitely users, even for those who won't get free advertising in the Kitely Welcome Center as a result of the TBD criteria.
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Re: Welcome Merchant Display

Post by Gregg Legendary »

I feel I may have ruffled a few feathers with my list and sentiments in this thread...
Because it took me about 3 hours to do the list and I was physically and mentally worn out from doing so as I can only sit up about 3 hours before it's time for me to lay down for a couple hours I neglected to gather and include the data on those who "Participate Actively" in the grid and just mentally assumed everyone would get that... silly me I forgot rule one... always write with a big crayon...did I miss a few who have land... indeed I did... but I did try to find out who did and didn't have land and in a couple of case I thought they did from my walkabouts on the grid but could not find them at the time of making my list.
Why was owning land or even having a shop weather it was rented or a freebie on the grid important to me?
1.As a consument shopper I always like to see an item inworld before I buy it.
2.It is important for the survival of a grid to have active residents who interact as well as places to visit to see the beauty of creations be they for sale or not... because if visitors come to a grid and find no one and nothing to interest them they will not return or take up residence.
3.My personal feeling was to just have a merchants area reflecting the Kitely Market and not the merchants who reside here was actually damaging to the Kitely Grid as many in the metaverse are seekers of something for nothing and will not invest time or money in Kitely Grid if they can have a free kiosk here.

Back in the days of inworldz after paying my fees for land roughly 75usd per month I would turn a tidy profit of 75 to 100 usd per month.
Here that is not feasible... all my sales and cash from my pocket go to pay for my lands here...I am not a healthy man and hospital and nursing home are in my near future so unless the grid grows and sales grow the regions I have will disappear and I will sadly become a market only merchant...

For those who invest their time in the grid that is an important factor I wish I had taken the time and thread space to include.

The most important thing I believe my list showed is the area was woefully outdated with merchants who no longer have shops on the marketplace while others of us who support the grid clamor to be there...

While I do not always agree Ilan's business plan and decisions I am sure he will do what is beneficial to grids survival...

To those who do support this grid financially or time wise I salute you
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Re: Welcome Merchant Display

Post by Dot Matrix »

Thanks, Gregg, for all the work you did in compiling the list. I'm sorry to hear of your health issues, and definitely understand how much effort it takes to compile information like this.

I didn't get the impression that "feathers were ruffled" -- more that people were adding to the discussion, as requested. The list was a very helpful starting point, and showed we do need to address this somehow, as a community working with Ilan and Oren (it's just not possible for them to do this on their own).

So that you know, in the past I was the volunteer from the community who maintained the boards; they were updated a couple of times at Ilan's request and in accordance with Kitely's specification, after the welcome centre was set up. It all takes hours and hours and hours to update, gathering the images, checking the market store details, creating the textures for the boards then uploading and changing them, updating the script settings on each board, checking they work when updated, etc etc etc.

Because of the amount of work involved, it's not a task I would like to take on again. I don't think any of us would be able to do it justice now, anyway. There are so many more merchants and so many more products that might be included.

So if there is a way of developing the boards so that they can be updated automatically according to some sort of weighted algorithm, that would be good.

So again, thanks, Gregg and Snoots, for setting this discussion going, and all the other contributors. Thanks, Ilan and Oren, for working so hard and trying to meet so many different calls from the community.
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Re: Welcome Merchant Display

Post by Snoots Dwagon »

I agree with Dot: no feathers ruffled here. This has been an open and interesting discussion. We've seen points presented from multiple sides... which is what such forums are for. Ilan has replied. Good forum! :)

Regarding the rest of this, I'm making some points-- but I don't know everything. So just chatting here.
Ilan wrote:The 10%-20% we charge for Kitely Market sales (of which PayPal keeps up to 40% due to their own fees) hardly justifies the amount of work we have to spend on customer support for running Kitely Market (especially for supporting buyers from third-party grids). In other words, Kitely Market is a loss leader for us, not a revenue center. Despite being the leading marketplace of the entire Hypergrid ecosystem, it remains highly reliant on our other revenue streams as it is not a self-sustaining line of business given the transaction volume that the OpenSim ecosystem currently has.
I was under the impression that by selling on Kitely Market I was helping to promote Kitely... and providing Kitely some profit via a cut of my sales. Are my sales instead costing Kitely profit? Hmmmm...

Before I comment on the following, a disclaimer: I have no idea what all goes on behind the scenes in running Kitely Market. I probably can't even imagine. So let's take it for granted Ilan knows a bit more about this than me. :D

That said, the statement "PayPal keeps up to 40% due to their own fees" is a bit exaggerated. In my lifetime of business with PayPal there was one time they charged me a 35% fee... and having learned that lesson I plugged that hole very quickly and never experienced such fees again. PayPal charges 2.9% for online sales plus a .30 transaction fee (unless the business has a bulk agreement... which it should). So Kitely's 20% cut of sales should be more than sufficient to cover PayPal fees and still make a good profit.

Kitely makes all initial sales of KCs and gets the profits therefrom. Is Kitely selling KCs somehow not profitable? So I don't understand how Kitely Market, which makes money either on US$ sales or KC sales, would be operating as a loss-based system.

Regarding selling to people on other grids: I would think that would not be happening if it wasn't profitable. People on other grids still have to pay either by PayPal (Kitely cut: 20%) or by purchasing KCs from Kitely (ka-ching!). How could such sales negatively affect Market profit? Requiring support: sure, that's part of conducting business. All such things have behind-the-scenes time requirements. But it doesn't reduce profit.

Ilan wrote:Every merchant that sells in Kitely Market would be happy to get a free ad in the Kitely Welcome Center. However some merchants pay for ads in Kitely Market (website) while others do not. Similarly, some merchants have stores that generate a lot of business for Kitely while others do not. Lastly, some merchants pay Kitely for hosting, while others do not. In other words, giving all Kitely Market stores an equal amount of free advertising in the Kitely Welcome Center regardless of how much they contribute to Kitely's bottom line is not fair to the merchants who are responsible for the great majority of sales in Kitely Market... Lastly, please keep in mind that we already sell advertising slots in Kitely Market so it's not unreasonable that we start preferring our paying world owners when we decide who we give free advertising to inside Kitely Welcome Center.
This is a valid point. So based on these concepts, the only ads we should see at Kitely Welcome Center are from merchants who own land or pay for advertising on Kitely Market. No other merchants would ever be listed. While I'm not crazy about such preferential treatment, I admit that Kitely has the right to set such criteria, and it's not without reason. That's how marketing works. So I'll concede that point, based on real life marketing practice.

However, there are other things to consider: 1) Virtual worlds are not real life. 2) Virtual worlds often operate on different principles than real life. 3) A great deal of what exists on OpenSim and the Hypergrid is free in order to promote Opensim and the Hypergrid. (For example, people aren't charged every time they use the Hypergrid to port to another grid. That freedom is of benefit to everyone, including Kitely.)

Consider as a very good example: Kitely Forums. We see no preferential treatment here. No requirement of owning land in order to post here. Everyone is treated equally. (Even troublesome dwagons can post. ;D) The same holds true for Kitely weekly meetings; everyone is invited to attend, not just land owners and merchants. Ilan invites all manner of comments, from anyone (even newbs). Sometimes free and equal is the way to go.

Perhaps changing the Welcome Center Market Area is not a high priority. We've been asked for suggestions on how to improve Kitely; as I said in the OP, "It's something I'd like to see." Why did I recommend it in the first place? Because every day lots of people log into Kitely Welcome and stand there waiting for their world to load. Wise ones have gotten in the habit of adjusting their inventory during that time. Others just stand there with nothing to do... because the market listings never change. Seemed like a nice idea instead to log in at the market listings and window-shop until my taxi arrives. : )

Perhaps updating the Welcome Center is one of those back burner things. As Ilan said, it's been overhauled four times already.

Made for an interesting discussion though. :mrgreen:
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Re: Welcome Merchant Display

Post by Ilan Tochner »

Hi Snoots,

When people buy Kitely Credits, those KC are used to pay us (eventually) for one of our services instead of paying us using USD at the time the purchase is made. This means that the KC that people buy are simply a form of upfront payment for whatever services those KC will eventually be used to pay for (i.e. Kitely Market commission, Kitely world/organization hosting, or advertising in Kitely Market). In other words, when a person pays for one of those services using KC they are doing it instead of paying us using USD. This means that no real money is added to our bank account when we're paid using KC and that the payment people made when they bought the KC replaced the PayPal payment they would have needed to make had they not used KC to pay us.

As a result, the real money value of the commission we charge for sales in KC is only 10% of the KC amount of the transaction. In accounting terms, when people buy using KC in Kitely Market our books show no revenue and the gain is only in the reduction in our obligations column (the KC float that our customers will eventually use to pay us for services which have a real-world price in USD).

Now, let's look at how much money we actually get to keep from our sales commission and how much the PayPal fees reduce that amount.

Kitely is not a US-based company so our PayPal fees are higher than those that US-based companies pay. PayPal charges up to 5.4% of the transaction amount in cases such as ours. We get a bit of discount for our transaction volume but that still amounts to more than 4%. See: https://www.paypal.com/il/webapps/mpp/p ... le.x=en_IL

Note how PayPal fees are from the total transaction volume and how our sales commission is also from the total transaction volume. This means the PayPal fees we're charged come from our 10% / 20%. In other words, Kitely gets to keep between 6% and 16% of the ticket price so PayPal fees do in fact cost us as much as 40% of our earnings from Kitely Market sales.

Now let's consider the costs associated from running the market. This is where there is a big difference between sales to Kitely users as opposed to sales that are delivered to third party grids. When we sell to a Kitely user it hardly costs us anything in storage or data transfer costs as we only need to make a small change to the buyer's inventory to reflect the purchase. This process is almost 100% error free and we have very few customer support requests because of such sales (other than people complaining to us about merchants who aren't responsive).

However, when we deliver to a third-party grid we need to transfer all the assets to the recipient's grid and those can amount to hundreds of megabytes per order (in some cases). That bandwidth costs money. In addition, since many third-party grids have slow internet connections this can take a long time and may require multiple resends. Third party grids are also often misconfigured, have inventory server issues, crash or are started from scratch, etc. so we can easily need to resent orders to such grids multiple times, each time having to deal with supporting buyers that use those grids, talking to grid admins to help them resolve their grid issues, etc.

In other words, the 6% - 16% that we get to keep after PayPal takes their fees is not net of related datacenter and customer-support expenses (my and Oren's time has an alternative cost associated to it). If you take those into consideration our margins become very small and we can even lose money on some of our Hypergrid deliverers. To be clear, there is a small direct net monetary value to running Kitely Market even considering the high expenses attributed to Hypergrid delivery, but it is not sufficient to make the marketplace viable if we discount the advertising value it provides for our world/organization hosting line of business. Stated in business terms, the Hypergrid delivery part of the Kitely Market is a loss leader for us, not a revenue center.

As for what criteria we'll use in Kitely Welcome Center, that's TBD. But our justification for investing the time to implement that automation has to be that it will have a bigger positive ROI for our business than working on one of the other many (many, many, ...) things on our todo list.
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