From Grid Boutique to Chain Store Mogul – expanding your retail operations in Secondlife.

In a virtual world where inventory is unlimited after creation, it’s all about volume. Even low profit can become substantial profit when you multiply it by ten profitable locations.

Once you have a profitable main location it is time to consider the pursuit of low-cost, low-prim satellite shops to help move your top-selling products, acquire new customers, increase brand awareness, and subsequently increase sales.

 

Finding the Right Space

Rental spaces on the grid are very similar to your average shopping mall but there are some very notable differences.  To begin with, most retail space in Second Life is a secondary attraction (and subsidizer) of a social attraction.  Unlike the shopping mall, the bulk of foot traffic arrives with an intention other than shopping.

While this may appear to set retailers at a disadvantage from the start, there are some important considerations to keep in mind:

– Most SIMs cater to a distinct niche market audience, while often smaller they are generally a targeted and more qualified prospect

-Start-up costs are relatively low and you can easily rent low-prim spaces for as little as $200 Lindens per week

– You can rent without a long-term commitment on many SIMs

With all that in mind, developing a sound space strategy can be relatively risk-free provided you do some basic research and don’t overlook the obvious:

– Choose a SIM where your products best fit the needs of the audience

– Visit the SIM daily for a week and observe visitors (see if they stop or browse in shopping areas)

– Inspect the “About Land” option in the viewer and record the Traffic on each visit you make to the prospective SIM – NOTE: traffic is the total minutes visitors spent on the SIM in the last 24hours – not unique visitors

– Ask the Landlord how long the other renters have been tenants

– Contact other renters and ask if they are satisfied with the SIM’s sales performance (especially those some distance from the landing point)

 

Expand with a Plan

Once you have found a number of potential rental spaces you can begin your expansion.  The key to success will rely on expanding in a manner that limits your risk and meets cash flow demands while offering a greater potential for a return on your investment.

– Open your first store with a capital investment but expand only with profit

– Expand slowly, steadily and deliberately knowing some spaces will fail to break even

– Analyze sales and calculate profitability monthly (as sales will vary week to week)

– Keep a store that is only breaking even because it is a zero-cost marketing tool

– Close unprofitable stores quickly and move to your next potential

– Avoid renting from friends or as a favor if you would have difficulty leaving

– SIMs have loyal, repeat visitors so expect introductory sales to rise, plateau and begin to fall – be prepared to change inventory or move on when space becomes unprofitable

– Be sure satellite locations offer landmarks to your main store and promote your marketplace storefront.   A landmark tracker and server can simplify this process and provide additional information to help determine the value of your rental spaces.

As with any endeavor, simply don’t bite of more than you can chew. Managing dozens of rent payments and keeping sales analytics up to date takes time.  By all means have an emergency plan should you ever get stuck offline for an extended period, as you would not want to return to find yourself ejected from a number of your top selling locations.

Done properly, expansion is one of the best ways to increase profitability on the grid.  While a walk before you run plan works best, the best first step is exploration, so put down your building tools and roam around the grid today.