Increased Marketplace Fees

Image Source: marketplace.secondlife.com

At the beginning of every month, I print out a report from my small Marketplace store.  I have small items for sale – rugs, particles I’ve made for a routine, etc.  Most of the items I have run between $5L-$15L.  I’m not looking to make a living, just make back a few $L here and there to help defray some of the costs of SL.

A few months ago, LL announced that they would be raising the fees charged by Marketplace.  The commission they charge was raised from 5% to 10%.  At the time, there was some outcry by creators, because of course this will affect their bottom lines  – which for some is already pretty marginal.

I just shrugged my shoulders, because what can you do?  If I want to sell on the Marketplace, I have to abide by their rules.  If I don’t like them, I don’t have to use the Marketplace.  I could sell in-world only, or just not sell at all.  Since my MP income is just extra for me (and pretty small), I decided to just wait and see.

Honestly, I’d forgotten all about it until I logged in to download my sales reports.  I noticed as I was working that my $5L items had a $1L commission – which is unusual, because for the last however many years, if I sold a $5L item, I got the whole $5L.  The commission was rounded down, I think, so I only had commission taken out if the item was $10L or more.

This month, however (well, December), pretty much every item I sold had commission taken out.  Which, again, I understand – their MP, their rules.  However, it made a pretty significant difference in my own income, which I hadn’t expected.

For most of 2019, my store averaged $850L in sales income.  The commission fees for most months averaged $50L.  For December, my sales income was only $642L, which is a low month.  Lower than usual, but not alarmingly so.  However, when I looked at the commissions, there was a significant difference.  The commission fees I paid in December were $103L.  On the surface, that tracks.  If I normally pay around $50L in fees, $100L in fees with the doubling of the commission fee accounts for that.

The kicker is that I actually made less in sales than I usually do – so if I had made my average $850L in sales income, my commission fees would have been even more than the $100L.  Which means that while LL may have only doubled the commission fee from 5% to 10%, in effect they will likely collect more than that.

I still plan to sell on MP, and I don’t plan to change my current prices.  However, I will be keeping a closer eye on the fees in the coming months.  I don’t pay for any extra advertising on MP, so my only fees are the commissions.

As I said, I don’t plan to make changes, but for large stores and/or people who make their living from SL, this seemingly small change may have a ripple effect as people discover exactly what impact it has on their income.  Some creators have already stated that they will raise MP prices, close their MP store, or leave SL altogether.  2020 may be interesting. 😛

3 thoughts on “Increased Marketplace Fees

  1. I have noticed that a few stores have raised their prices on MP by the whole 10%. Previously they had absorbed the 5% as the prices were the same both inworld and on MP but now they are adding it and the prices are very strange. I found that very interesting and a bit offputting frankly. My store only sells my extra gacha things but it is a sizable chunk taken off now. For one linden in 5 that’s a 20% commission! But what can one do? Their rules as you say.

    1. I went back looking and near as I can tell, the 5% was rounded down, resulting in the $0 commission on $5L items. But now that it’s 10%, that’s $0.5L which rounds up to the $1L fee. So yes, while it was technically only a 5% increase, it actually adds up to more because of how it’s implemented.

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