Business Musing: Mall rentals 101
After all this negativity lately, I thought it would be nice to do something a little more positive, and the idea was suggested to me by Jakkal Dingo to do a peice on getting the most bang for your buck out of a mall rental, especially if you are new to selling in secondlife.
It can be a bit of a daunting task to set up your first vendor or first store. There are a lot of questions and not a lot of people easily accessable or knowledgeable around to answer them. Where is the best location? How will I get seen? Do I need a vendor? Where can I find customers? etc, etc. A lot of newbies look to malls or other rentals to get them started, especially if they are on a basic account and don't have land to set their own store up on. Malls and rentals aren't a bad idea. They have some good things going for them in that having several vendors in one location is bound to attract more shoppers than just one unknown shop in the middle of Backsim Nowhere, but there is also a lot more competition for eyeballs. There is also the potential problems of lag, overwhelmingness of ubermalls, and the expense of renting.
So the big question becomes, how do you get the most bang for your L$ out of a mall rental.
This requires a bit of savvy on your part as a vendor to know your product and have an idea of what sort of audience would be looking for your products. Then you want to find out where those people shop. Obviously if you are selling furry items, trying getting a vendor space in a gorean sim is a bit silly. You have to find the right place for the right stuff. If you are a furry product vendor, do a bit of looking around on the larger furry sims and malls to find places where furries shop. If you sell BDSM/goth items, find out where those people shop, if you sell trendy clothing, find out where the hip fashion scenes are at. There is also the option of looking for a 'partnership' type business. If you sell shoes, find a clothing store that doesn't and see if you can set up near them. If you sell animations of fighting, find a good weapon store to set up next to. Half of marketing involves product placement. Do a little research and it will help you a lot.
Some malls are themed as well. Its a great thing to get into a good themed mall if your products fit that theme because likely the people that show up are going to be predisposed to buy things from you because they like that sort of style.
Aside however from appropraite surrounding businesses and themes, what else should one look for in a mall rental? Well the technical details are a good place to start. How many prims for how much a week, vs how much traffic does the mall have, and how much is that legit shopping traffic and how much of that is from other forms of traffic.
Whats the difference you might ask? Well a lot of malls also have clubs, casinos, or camping chairs attached or around them. This generally is used to drive up traffic numbers ( you can check an area's traffic by looking at 'about land'). However, in a lot of these cases the people who show up aren't generally there for the shopping. Yes, people will see your stuff, but unless you are catering to the crowd scene ( skins, hair, clothes, jewelry with lots-o-bling), you might not get the best value for your money here. For example, if you sell building textures, a club based mall might not be the best place for your store. Also, huge malls are not always the best and only solution. The larger a mall is, the more laggy and often ugly they are. I've also personally found the larger 'club mall' to be a bit on the expensive side. They have eyeballs and they know it, so they charge for it. For the right type of vendor it CAN be lucrative, but not all businesses will get the same bang for the buck. Sometimes smaller malls, themed builds, or tight partnerships are a better way to go, especially if your business is particularly unique or not easily defined.
You should also consider prim limits and how you sell when you are renting a space. Malls typically have one of two ways of limiting prims. Either you pay per the prim, which make things very cheap if you don't have more than a few, or you pay a flat fee for a number of prims, which is generally better if you have a lot. You can save on prim space if you use a vendor. There are lots of free ones out there. (Kayla Stonecutter has a particularly nice freebee, low lag vendor that I give out at the Realmscapes Mall that I run.) But there are lots out there. However, you do not need a vendor, you can set a prim to sell its contents, and clothing creators in particular tend to choose this method. However, this can add up to a LOT of prims and become very expensive if you have more than just a couple outfits to sell. Not to mention all that texture rezing takes a REALLY long time in a laggy mall. Both have their pros and cons, and its best to figure out what works best for your business. Once you've decided that, you can get an idea of what sort of prim limits you'll need to be working within. If you need a lot of prims, I'd suggest looking for a flat fee mall, while if you only need a few, a pay-by-prim model might be cheapest for you.
When it come to actual prices of rentals, it varies pretty widely. You might pay as little as 1L$ per prim, or you might pay as much as 1000L$ a week for 20 prims in a high traffic location, or you might not pay anything at all and sell at a commission location (this is where the mall owners take a small percentage of whatever you sell. They only make money if you make money.). Most malls rent on a weekly basis, however some rent by the month, and some even rent only in USD. (the ElvenMyst market is one such 'mall' if you want to call it a 'mall'.) So it varies. If you are starting in a new mall, especially one that hasn't been around too long, I suggest you rent week to week, for a little while to be sure that you aren't having any trouble with the mall management, and that you are selling enough to justify your existance at the mall. Also, some malls can just vanish, or management may be difficult to deal with for you. Its wise to be a little careful at first to ensure you are comfortable with your choice of location and method of payment. After you've gotten over that inital period you can start paying for longer stints to be at the mall. If you aren't making enough sales to cover your rent in a month or so you may want to consider looking for a better location. There is no point in paying a lot of money to rent a high traffic spot if that traffic isn't benefiting you!
Most merchants end up with a few key locations outside their 'main store' these days. Ever since P2P teleporting was instituted, having a main store has become a nesessity. Most merchants sell more from their main stores than malls because they can control keywords, classifieds, and other such variables from their own land parcel. If you are serious about your business, you probably will end up renting or owning land to set your main store up on. But while you are working up to that, you will need to do some work to promote your mall location. Its not unheard of to set up a 'main store' in a mall rental, but if you intend to make it big, you may have to negotiate with the owner to get sufficient space and prims to do so, as well as having the parcel description and keywords modified to help customers find you.
Just because you are in a mall with other vendors doesn't mean the traffic will flock to you, you will have to do some work to get people to your store. Also, having an attractive, easy to navigate display is important. If you can, show your products around. Get them into reviewer/blogger hands, and make sure you've got a classified set for your stores ( or at least in your picks) on your profile. Sponsoring events is also a good way to get some exposure, aside from just wandering around secondlife and talking to people. You can also buy advertising on places like SLxechange, SLboutique, the Metaverse Messanger, inworld, etc, etc. Posting your products in the forums and adding your store locations to your signature in the forums is also helpful.
For established vendors, malls can be a good place to get a bit of exposure. If you have a large product catalogue, you can often make a bit of bang for your buck by finding a good smaller spot and putting a selection of products that appeal to that audience with landmarks to your main store for more. It gets you out there, and provides just as much (if not more) presence than an advertisment on a billboard. Think of it like an 'outlet'.
One of the biggest complaints of malls has to do with the management and the lag. Many experienced or seasoned shoppers will avoid malls for the lag alone. There are several reasons for lag. The biggest culprit tends to be scripts. Its important for malls to keep scripts, especially ones with listens and triggers to a minimum. Poor building with extreme textures, lighting, or particles is another. There is also the problem of too many vendors in one place. A frequent problem with malls is what I call the 'filing cabinet' effect. A land owner will try to cram as many stores as they can in a particular area, but don't really build in sufficient buffer space. Some sims are also just inherantly laggy due to other people's builds in the sim. This can cause lag in a sim that isn't even related to the mall. Its important to check this out before you plunk down your L$.
The management can make or break a mall. Before you rent, its often a good idea to just talk to the mall owner and see what they are like. Ask how long the mall's been in business, what sort of traffic they have, ask about themes, and just see how they are. Like any business, Mall owners should be professional, courteous and helpful towards inquiries. Its also a good idea to ask for mall policies before renting. Most malls have a 'rental agreement' or something like it, which you agree to when you rent from the individual. A lot of them include clauses regarding 'no refunds', which you really should be aware of before you rent. Also be aware that malls can come and go with the tide. Not all malls do, but the transient nature of secondlife is a factor. One day, you might go to check your store and it is just gone, along with the whole mall. So make sure you check your mall store frequently, and keep an ear to the ground either via the mall's group or by chatting with the owner from time to time.
If anyone has any more 'Mall tips' or experiences to pass on feel free to post them as comments. :)