This is a flagrant cut and paste, from the SL forums (which can't be accessed, unless you give SL payment information, so I'm posting it here for newbies.)
============== CONTINUED, PART 2/2 ==============
Angel Fluffy
Helpful Fluff
Join Date: Mar 2006
Posts: 785
Two very quick ways to save/make L$
1) If you're going to sell Lindens, use a limit sell, timed so you catch the market when it's going down. Your Lindens may take you a few days to sell rather than being instant, but the effect is that you get about 6% more US dollars for your money. Getting a 6% bonus for 5 minutes work reading the LindeX is a very worthwhile thing to do! If you're going to buy/sell L$, you should check out the different currency exchange sites listed at the top of this article, as their fees vary, and you can save yourself money by shopping around. The principle of "shop around" works in your favour here. Other principles such as "where possible, cut out the middleman", and "buy low, sell high" may help, but they depend on shopping around... you don't know what's out there unless you shop around.
2) If you're not going to sell your lindens, yet, and you can afford to lose them entirely, stick them in Ginko or another high risk / high gain savings account. You might lose your money, there is always a chance of that. On the other hand, if you use it right, you can earn 3.3% interest per month on your balance, which almost offsets the 3.5% fee for selling L$. I'm not sure if this is a good way to make money or not on its own, but I think that if you get that 3.3% interest on all L$s before you sell them, AND you time your selling of L$ to sell when the market is right, using a limit sell, I think your chances of making money are much better.
3) Encourage your customers to pay you in L$, rather than using sites like paypal. There are several reasons for this. Firstly, PayPal are more expensive to use for business transactions - they charge a 2.5% fee for handling currency exchange, for example, which can be very significant if you're running a business in SL but aren't based in the USA. Secondly, PayPal will share your RL name with your customers unless you pay them extra for a business account. Thirdly, PayPal effectively lock up your money for awhile by taking what I consider to be far too long to process withdrawals. Fourthly, I used to use PayPal to process payments for another online business I have, but I pulled all of my money out of my PayPal account and then closed it completely after they charged me substantial fees for something that I felt was very unfair. Finally, people are more open to spending L$ than they are to spending USD, because they don't consider L$ to be 'real money', psychologically. Getting people to buy your product with cash is hard. Getting them to buy it with a credit or debit card is easier, because it doesn't *feel* so much like they're handing over money. Getting them to buy it with L$ is even easier still, as to them it feels like they're dealing with something akin to monopoly money... "game money" that isn't serious. So, when you can, set prices in L$. The only exception to this is when you are dealing with large-value items, in which case you don't want to set prices in L$ because the resulting numbers are huge, and it shatters the illusion. It is also rather unethical, as frankly if you're setting your prices in L$ to disguise the fact that you're asking for a lot of USD, you probably ought to be spending your time improving your product, rather than trying to fool people with marketing. So, to put it simply : set your prices in L$ where it is convenient, and especially for low value items. For high value items, setting them in USD is probably more ethical and protects you from market fluctuations.
4) Never, ever enter "lotteries". Similarly, never gamble. The reason is simple : the odds are always against you in the long term. The longer you play, the more and more likely it is you will lose a lot of L$ this way. Ultimately, in gambling, the house *always* takes your money in the long term. Remember : if you gamble - don't expect to win.
Lotteries are similar : at most they pay all funds paid into the lottery to a single lottery winner. Usually they pay a portion of what is paid into them. That means that when you enter a lottery you are trading L$1 for a ticket that is worth much less than L$1. You almost always lose money *and* value instantly, as soon as you buy a lottery ticket. For this reason, I would suggest that you never gamble and never buy lottery tickets, ever. I personally consider lotteries and gambling in general to be nothing more than a waste of money. I can see their appeal - they give you hope of a better situation in future - but it is false hope - they almost always make sure you end up poorer than when you started. In order to buy enough tickets to be in with a meaningful chance of winning a lottery, you have to spend so much on tickets that it is not worth entering. For example, lets say a lottery pays out 90% of its ticket sales in a jackpot. To be in with a 50% chance of winning a L$90 jackpot, you'd have to pay $50 in tickets. It's pretty easy to see why buying 50% of the tickets in that lottery is a bad idea : you have a 50% chance of getting L$90 and a 50% chance of getting L$0. That averages out to L$45, which is less than what you paid in the first place. Effectively, any time you are buying a lottery ticket, or gambling, you are trading L$ or real USD money for a 'chance' which is worth less than what you are paying for it in terms of L$ or (in the real world) USD value. This has been called "a tax on people who can't do math".
Put simply : don't gamble or enter lotteries unless you enjoy losing money.
Doing business ethically, and why you should
Put simply, most human respond to kindness with kindness and unkindness with unkindness. As a business owner, you are dependant upon your customers. Therefore, you should always treat them well, because if you don't they will leave you in the lurch.
Basically, you're dependant on your customers, and so if you wrong your customers, your business will suffer. Always be nice to your customers - without them your business will fail.
A few ethical business tips :
1) Be honest and accurate. Avoid mis-representing your product, your fees, or anything else about your business. Never, ever lie to a customer. You can emphasise the good qualities of your product, but you can never lie. You can say that "in my opinion, this is the best product for ______", but you cannot say "everyone thinks this is the best product", unless you have some kind of independent proof that *everyone*, without exception, really does think that.
2) Be reliable. Keep your prices steady to hold customer confidence. Make sure you or someone you appoint can handle customer enquiries in a reasonable time. Make sure if you promise anything, you keep your promises!
3) Be a team player. Work with other businesses. Try to learn from them... ask "what can I learn from _____?". Same with your customers. A lot of customers have this idea that the maker/customer relationship ends when they hand over the money. It shouldn't. You should give your customers an incentive to keep you in mind - that way they're more likely to mention you to other people and give you free advertising, and much more likely to feel like they had an enjoyable buying experience. Being cold and distant is not good for you emotionally or for the sales of your product. Personally, I reach out to my customers by offering them L$, from L$50 to L$500 for pointing out ways in which I could improve my product. I basically pay them to tell me what needs to be improved in my product, then I improve it along those lines. I also reach out to other businesspeople in SL. If I can't do a job, and it needs to be done, I look to hire someone with a reputation for quality results to do the work for me. I pay them to do it, too, and the price I pay them is based on a combination of what I can afford, what I think is a fair price for the work, what they think is a fair price for the work, and how much a similar service would cost elsewhere.
4) If you screw up, admit it, find out how to fix the problem and fix it. Don't let your pride get in the way of doing the right thing. A lot of people actually give a great deal of respect to a person who is mature enough to admit their mistakes and learn from them.
5) Make sure you have a few people who are both customers and friends. Typically, do this by giving free samples of your work to your friends in the early stages of development (they're the ideal beta testers as hopefully they share your interests, and your product is based on your interests). Once you do have a few customers who are also friends, try to encourage them to give you honest feedback on your product. A friend who says your product is great when it really sucks does you no favours. A friend who tells you it sucks because it does really suck when you think it is great does you a big favour. A friend who tells you it is great because it really is great, even when you think it sucks, is the most valuable of all as these are the people that really help you through even the hard times of running a business.
Unexpected costs
A tip for those considering starting a small business in SL : you face many unexpected costs.
For example :
1) The cost of the time you spend making your product and doing business-related activities. (reduce this by working on something you enjoy, and don't forget the community you're selling to!)
2) The cost of the land you buy/rent for your vendors or business-related activities. (reduce this by getting free placement in malls where possible, and seeking out value for L$ in terms of exposure to good potential customers versus cost of the advertising)
3) The cost of selling L$ on the Lindex or other currency exchange sites, to recoup any USD investment (currently 3.5% of value sold, IIRC).
4) The cost of getting LL/PayPal/etc to let you withdraw the USD value of Lindens you sell (up to $15USD per withdrawal if you use LindeX).
5) The cost of changing that USD back into your local currency (can be up to 5% in places, depending on your bank).
6) The time cost of how long it takes you to get L$ back that you've put into SL - and if you can afford to have your RL money tied up in SL.
The top 5 ways to make sure you make L$
1) Pick wisely from your skills, talents, knowledge, friends and business contacts - use all together to make a product that fills a consumer need/want.
2) Make it *popular* - general use items sell much better than niche items, unless you're SURE a niche is big enough to support your product *AND* that most people in the nice will and can buy it.
3) Market your product the right way. NEVER SPAM ANYONE. Instead, put your product info in your profile and ask permission to advertise it in places/groups/IMs about related topics. Target your audience and market towards them in a way they find USEFUL, not annoying.
4) Budget. Remember to translate your L$ profits/losses back into USD so you can see how much you're making *at most* - before fees as above are deducted.
5) If in doubt, get more feedback from other people. Try to get feedback from multiple TYPES of people too - coders on your scripts, artists on your art, builders on your builds/textures, marketing people on your advertising, etc etc etc.
6) Protect your product. Never give someone else enough information about the whole of your product/business that they could copy it and replicate your product themselves. Similarly, each industry is prone to a certain amount of illegal copying/piracy, which hurts creators in that industry. Consider how vulnurable your products are to copying, and if possible take steps to limit the risk of your products being pirated. You can give out free samples for advertising, and you can choose not to have copy-protection because many consumers are against it. Those are OK choices, but you should still be aware of the vulnurability of your product and *consider* what you can do to reduce the risk of piracy.
7) Don't expect to EVER make a lot of USD playing SL. SL is not geared for that. It's geared so you can make a bit of L$ doing something you enjoy. It's not geared to make mega-bucks unless you're prepared to invest mega-bucks. For example : say the rate of return on your investment was 10%. You'd need to invest 1000 USD to make 100 USD. If you have 1000 USD at your fingertips, then there is really no need for you to take on risky investments in SL, because you're probably well off already in Real Life If on the other hand you'd struggle to find even 100 USD, then you probably can't afford to take risk with that money - you can't afford to risk it all on a "get rich quick" scheme because you risk losing everything, and you can't afford to lose everything. So... as a general rule, only invest in SL what you can afford to lose - and make sure you're doing it for your own enjoyment and education. Remember to balance what you have, what you can make, and what you risk/lose by making it. Remember that making a lot of USD in SL is hard (otherwise everyone would be doing it) and it takes serious thought/skill to do. If this fact bothers you, then remember that even playing SL itself is a luxury item (only 1% of the world's population own a computer). Again, it is usually best to make money with a RL job, and to spend some of it in SL. If you want to be a creator in SL, and get paid for your work, then remember : DON'T DO IT FOR THE MONEY. Do it because you love it (you'll do a better job *and* enjoy it more *and* get paid more that way).... and don't expect to make money. Plan for the worst and hope for the best.
Remember your friends and the community. They're INVALUABLE sources of feedback, people to beta-tester your product, and so on.
9) If it all goes down the pan, and you've tried hard at making something that makes L$ but it just doesn't work...... then release free, all-permissions copies of it to everyone who you think might be interested, so at the very least it helps them anyway and a future product might be made from it (and... it'll help build your reputation!).
10) Remember, the best ways to make L$ depend on hard work, and investment of time, skill and L$. Making L$ isn't easy - if it was, everyone would do it! It is, however, possible if you keep trying to do it the smart way - eventually, if you learn from your experience - you will hit upon an idea. If you don't... then that doesn't matter, because you've been sensible and remembered point #4 (Budget) - so you've kept your losses to a safe minimum that you can afford.
Quotes from other SL users
Quote:
Originally Posted by Barbarra Blair
When you've been in SL awhile, you will suddenly think, "I wish I had <insert wish here>."
Build that thing and sell it.
Quote:
Originally Posted by stove Lu
It is possible to make money in sl, but its like living in a poor country where the exchange rate to the dollar is terrible.
I've only just started playing this game, and the most I can make in a day is about l$1000 aprox 3usd.
Id rather do a days work irl and get paid £150.
I think if you really put your heart into it you probally could make about $100 a week from it, but its going to take time and alot of hard work.
But how you should view the game as a place to have fun, or a profitable hobby. Dont think your going to make your millions here, because thats very unlikely.
__________________
Helpful links : Get L$ | Reduce Lag
My current focus : Improve SL Security
Improving SL : my wishlist | writing your own
Last edited by Angel Fluffy : 11-26-2006 at 07:02 AM. Reason: adding alternatives to the LindeX