Electic
Alpha
- Joined
- Jan 13, 2006
- Posts
- 536
- Location
- The Netherlands
- Society
- SUF
- Avatar Name
- Electic Dutchy Power
Below you will find my thoughts on establishing a successful shop. Although I never owned a shop I came up with this little paper when the sale of the malls was announced. I was thinking of what was needed to become a successful shop owner. To give all this a base, I talked to some current shop owners in Entropia Universe (EU) and of course used my knowledge gained at marketing classes.
You probably ask yourself why I don’t own a shop or ain’t buying one now. Well I answer is simple: I don’t have the money for it.
To structure my thoughts I used the basis of marketing, namely the 4 P’s and a bonus. The 4 P’s in marketing are Product, Price, Placement and Promotion, as a bonus I included Supplies.
Product
Well this is up to you, I aint going to tell you what to sell, this is entirely up to you. But to get you started there is one important point to be aware of, chose a product which has profit potential!
In the end the purpose of a shop is to make profit. To make profit you need to sell items for a price which covers all the expense and have a little mark up to compensate your effort (profit). Below I list the expenses which you can run into:
• crafting costs
• losses made while crafting items
• shop rent
• promotion costs
• pay back a loan which enabled you to buy a shop
When you have found a product that can be sold for a price (read the next paragraph carefully) which covers all above costs then read on and the first steps are made.
Price
Price is the most important tool within EU to build customer relations. Because everything within EU involves real money everybody is always looking for the good deals. At this point the Auction House (AH) is still the main tool to buy and sell items. Although the AH contains large amount of items, finding a good deal is rather though. Sellers (me and you included) want to sell there products at as high as possible prices. This is the reason that most products have an opening bid around market price and a buyout (b/o) which is usually higher then market price. The result of this is A) you have to wait till the auction end and hope you don’t end up in a bidding war or B) you are paying way too much to just get instant availability of you item.
A shop on the other hand is the new sales cannel within EU and works just like a real life store. You buy an item and get it instantly. So the big advantage of a store in contrast with the AH is the instant availability of the desired item. This is the point where Price comes in, when the price is right you will sell your items. The question is what is the right price, well this fairly simple, the right price is market price or less. When someone is looking for an item he is willing to pay market price, but only rarely wants to pay more. This is one of the biggest mistakes of many shop owners, the are to greedy or have to set high prices to pay for expenses. Most products in shops and AH are priced to high, which makes them hard to sell.
Placement
Where do you want your shop to be placed, located? At this point the transportation of your avatar (not including space travel) can be done in two (free) ways. 1) use your legs or 2) use the Teleport. Because I find walking irritating especially when heavy, I like shops close to a TP. Personally I tend to shop more often in shopping locations close to a TP like TI City and Genisis then for example Oxford city. TI and Genisis have an even bigger advantage over Oxford, the shops are easy to locate. Oxford citie’s shopping area on the other hand is a labyrinth.
In the new malls the TP is on the top floor, which makes the level 3 shops at the TP end of the floor the most desirable. In the near future televators can be installed by the mallowners, this makes level not an issue anymore. Still the shops closes to the televator are the best ones, everyone walks passed them.
Promotion
The next important thing is promotion; of course everybody needs to know where the shop is located, what is sold and maybe what the prices are. Promotion in EU is not very easy, because it’s hard to reach a big group of people. Below are what I think the most important communication channels:
• In game advertising system
• Banners on Entropia Forum (this most popular community website and forum)
• Entropia Directory (very good informative EU website)
• Siggy under every message you post in the forums
• Maybe advertising in chat at the busiest non shop trading spots (Port Atlantis and Twin Peaks)
• Get a sign out side the shop, so customers will recognise it.
Supplies
Although this paragraph doesn’t belong to the 4 P’s it is a very important one, please read on.
At this point in game there are a lot of competitors on the market, it is almost impossible to have a monopoly position or find a nisse. The reason for this is the limit amount of crafted items in game. The introduction of (L) items made things a bit better because there will always be a demand for these items.
To bind you customers to you, you have to make sure you always have a good supply of items in your shop. When for instance you are selling Breer P3a’s and you followed all above steps people will find there way to your shop. But when the visit the shop for the second time and there are no Breer’s to be found, the will go to another shop and probably won’t come back.
Thank you for your attention, feel free to comment and have fun in the Universe.
May the HoF be with you.
Electic “Dutchy” Power
You probably ask yourself why I don’t own a shop or ain’t buying one now. Well I answer is simple: I don’t have the money for it.
To structure my thoughts I used the basis of marketing, namely the 4 P’s and a bonus. The 4 P’s in marketing are Product, Price, Placement and Promotion, as a bonus I included Supplies.
Product
Well this is up to you, I aint going to tell you what to sell, this is entirely up to you. But to get you started there is one important point to be aware of, chose a product which has profit potential!
In the end the purpose of a shop is to make profit. To make profit you need to sell items for a price which covers all the expense and have a little mark up to compensate your effort (profit). Below I list the expenses which you can run into:
• crafting costs
• losses made while crafting items
• shop rent
• promotion costs
• pay back a loan which enabled you to buy a shop
When you have found a product that can be sold for a price (read the next paragraph carefully) which covers all above costs then read on and the first steps are made.
Price
Price is the most important tool within EU to build customer relations. Because everything within EU involves real money everybody is always looking for the good deals. At this point the Auction House (AH) is still the main tool to buy and sell items. Although the AH contains large amount of items, finding a good deal is rather though. Sellers (me and you included) want to sell there products at as high as possible prices. This is the reason that most products have an opening bid around market price and a buyout (b/o) which is usually higher then market price. The result of this is A) you have to wait till the auction end and hope you don’t end up in a bidding war or B) you are paying way too much to just get instant availability of you item.
A shop on the other hand is the new sales cannel within EU and works just like a real life store. You buy an item and get it instantly. So the big advantage of a store in contrast with the AH is the instant availability of the desired item. This is the point where Price comes in, when the price is right you will sell your items. The question is what is the right price, well this fairly simple, the right price is market price or less. When someone is looking for an item he is willing to pay market price, but only rarely wants to pay more. This is one of the biggest mistakes of many shop owners, the are to greedy or have to set high prices to pay for expenses. Most products in shops and AH are priced to high, which makes them hard to sell.
Placement
Where do you want your shop to be placed, located? At this point the transportation of your avatar (not including space travel) can be done in two (free) ways. 1) use your legs or 2) use the Teleport. Because I find walking irritating especially when heavy, I like shops close to a TP. Personally I tend to shop more often in shopping locations close to a TP like TI City and Genisis then for example Oxford city. TI and Genisis have an even bigger advantage over Oxford, the shops are easy to locate. Oxford citie’s shopping area on the other hand is a labyrinth.
In the new malls the TP is on the top floor, which makes the level 3 shops at the TP end of the floor the most desirable. In the near future televators can be installed by the mallowners, this makes level not an issue anymore. Still the shops closes to the televator are the best ones, everyone walks passed them.
Promotion
The next important thing is promotion; of course everybody needs to know where the shop is located, what is sold and maybe what the prices are. Promotion in EU is not very easy, because it’s hard to reach a big group of people. Below are what I think the most important communication channels:
• In game advertising system
• Banners on Entropia Forum (this most popular community website and forum)
• Entropia Directory (very good informative EU website)
• Siggy under every message you post in the forums
• Maybe advertising in chat at the busiest non shop trading spots (Port Atlantis and Twin Peaks)
• Get a sign out side the shop, so customers will recognise it.
Supplies
Although this paragraph doesn’t belong to the 4 P’s it is a very important one, please read on.
At this point in game there are a lot of competitors on the market, it is almost impossible to have a monopoly position or find a nisse. The reason for this is the limit amount of crafted items in game. The introduction of (L) items made things a bit better because there will always be a demand for these items.
To bind you customers to you, you have to make sure you always have a good supply of items in your shop. When for instance you are selling Breer P3a’s and you followed all above steps people will find there way to your shop. But when the visit the shop for the second time and there are no Breer’s to be found, the will go to another shop and probably won’t come back.
Thank you for your attention, feel free to comment and have fun in the Universe.
May the HoF be with you.
Electic “Dutchy” Power
sorry , is this allowed?
