March 14, 2008

Too cheap?

My lovely sister Chey is about to relocate her island, and is extensively using a tool called Rez-Faux by creator Lex Neva. I decided to cold-call Lex and offer her translation services. To my huge surprise - and Lex' as well - she was already considering to get some texts translated, and she was even considering to specifically use my services for this. "Good timing", as she mentioned - indeed.

However, what made her not contact me so far was the fact that my service offerings were too cheap! Cheap prices, so her line of thought, equal cheap quality. And since she has a serious business, she wants and needs quality of course.

On the other hand, I often have clients who gasp in disbelief if I give them a quote, who think that 900 L$ for a 300 word notecard is outrageously expensive.

The problem is of course the different perception. People like Lex, who get a substantial amount of US$ or EUR from their SL work, tend to think in RL categories. Lex knows what services cost in RL, and she thinks in RL categories. The job I got from her would have been something along the lines of 40 EUR / 50 US$ in RL. To see the same work offered in SL for 1500 L$ made her suspicious regarding the quality.

On the other hand you have SL residents, who are struggling with their first business attempts. Who probably camped for weeks or poledanced or DJed their virtual bums off, in order to afford a stall in the cheapest mall. Translation costs of 1500 L$ seems unbelievably expensive to them - something they might - MIGHT - afford in the distant future when their business generates a little revenue.

So why are we so cheap? Or why are we so expensive? We are so cheap because my company - Babel Translations - is a purely SL company. Of course the amount of work in a translation is the same as for a RL translation. But neither myself nor my translators expect to get rich by this - in RL terms. Almost all of them are RL translators too - they know excatly what their work is worth. But by immersing completely into the SL economy, 1500 L$ is not "peanuts" anymore. This translation job in RL - with its 50 US$ revenue - allows them to have a nice dinner in town. They need 4-5 of those jobs per day, to pay their bills. But in the SL economy, 1500 L$ is not peanuts. It pays the rent for two weeks. It buys a new dress AND new hair. In fact 1500 L$ get your farther than 50 US$ do.

And why are we perceived expensive by others? SL has a tendency to skew perceived pricing. Last Call is giving out high quality clothing in their "eternal sale" for 100 L$. In many resident's perception, this lowers the price for quality. What they forget is that LC sells probably thousands of outfits each day, generating hundreds of US$ each day. What Babel Translation offers is an individual service. It is real work involved, and we can only ever sell one copy of each. So asking 3-4 L$ per word is a fair price, and for those thinking in two economies, it's a real bargain.

Looking forward to get some comments on this :-)

3 comments:

Anonymous said...

There is no answer. But, you could ask Lex if Rez-Faux code is worth more than 600L$ or so (as I remember that was the price but I may be wrong). Is that thing, that is used in building business worth more than that money? It is used for large buildings which are expensive. Dos it mean it is not a good product? Sure not.

Gina Glimmer said...

Yes, people tend to think in the same way about pricing in SL as they do in RL. Some of us think that the quality gets better when they pay a higher price, which I think is a misperception.

I'm building this statement on long and thorough research (read: shopping) I've done over the past year and I've seen products of surprisingly good quality for a very fair price as well as expensive items of disappointing quality.

One the reasons may be that the cost of creating merchandise is 0, not taking the time of making it into account of course. So this leaves the price much more open as it does in RL...

Anonymous said...

Regarding Dandelion's question, I think my answer would be along the lines of Peter's last paragraph. Of course the Rez-Faux code is worth more than $600L... it's taken me many hours of development to produce it. I make it up in volume, though, and it doesn't cost me more time to make another sale. My time expenditure doesn't scale up linearly with sales, but Babel's does.

I'm glad my conversation with Peter sparked such an interesting debate.

--Lex Neva