If you’ve been following along with SamSyn’s most excellent updates, we’re getting close to testing the “Real Money for Developers” project.
In short, what this project does is take the “Virtual Currency” out of Digital Goods sales in There. Note I said “digital Goods”, since that’s what developer sales are – sales of things you created which just happen to be in digital form – as opposed to “virtual goods”.
For things that you sell this way there are no more issues about T$ exchange rates, T$ buybacks, etc. You (the developer) put your things up for sale for Real Money, people pay Real Money, and you get Real Money for them.
I’m not quite sure this has ever been done before in a Social Virtual World before (if so, I’d love to hear about it).
For There, this is both very exciting, and very scary.
It’s exciting because:
- Developers can now get real money for their work. Hard cash. In your pocket (well, ok, your PayPal account).
- Developers now own even more of the transaction between them and their customer. In fact, in PayPal parlance, There is now a “Secondary Receiver” since we just get a portion of the sale.
- Developers have more incentive to bring themselves customers in There (because they’re being paid in Real Money, perhaps using other channels like their Facebook and Twitter feeds.
And, frankly, it’s exciting because it sweeps aside the whole “T$ BuyBack”/”3rd Party Resellers” issue. If you, as a developer, want to make real US $ for your goods, then you’re free to offer them that way.
(On top of all the other issues with “T$ BuyBack”/”3rd party resellers” we’ve discussed before, there’s the issue that since There was previously wildly unprofitable, every T$ was, in essence, subsidized by it’s investors, and, when you sold that T$ on the 3rd party market, a small part of that was subsidized also. Ugh).
It’s scary because:
- Depending on how many people opt to buy and sell this way, it could cause a significant drop in There’s revenue (because people aren’t purchasing Therebucks to purchase the items). Of course, we will still get a cut of the sale, but it’s not the same as us getting the whole Therebuck purchase revenue.
- This is a whole new level of responsibility for Developers, and people purchasing items from them. Since There’s not in the middle any more, Developers will have to take more responsibility for disputes, and keeping their customers happy. Fortunately, it will never be a matter of “I want to return this because it didn’t fit”, “I want to return this because I’m allergic to the fabric”, or “I just bought this to wear to the Oscars, and even though Lindsay spilled cocktail sauce all over it at an after-party, I want to return it”, but there could be issues which are new and unexpected. That being said, I’m sure they will step up to the plate, and have fun with it.
Let me go ahead and try to answer some questions ahead of time:
Q. Why are you making us (the Developer and Buyer) use PayPal?
A. That’s easy. Because PayPal is the only payment provider that provides a reduced transaction rate for digital goods (micropayments). You can read about it here (click on the “Pricing” tab).
Q. Why are you making us (the Developer) pay the PayPal Fees?
A. The biggest reason (apart from the usual litany of us being “Evil”, “Money Grubbing”, “Capitalist Pigs”, “Greedy”, and “Not caring about anyone”) is that it cost us (There) significant money to develop this feature, and the end result will we will make less off each sale than we did before. Bearing all that in mind, it doesn’t seem unfair that we’re asking the developer to foot the PayPal fees. I’m sure 99% of the people paying those fees will disagree, and maybe that will change some day if the program is wildly successful.
Q. When will you allow be to sell T$ to third party resellers?
A. For all the reasons we’ve discussed before, we’re sorry, but you can’t do that. It’s against the Terms of Service, and can result in you never having to worry about T$ again.
Q. What fees will you charge?
A. Our fees don’t change. The only difference (to There) is that we get the money when the sale is made, rather than “in advance” when the buyer purchases the Therebucks to eventually buy the item. Weird, huh?
Q. Will Developers have to pay income tax on money they earn?
A. We don’t know, and, even if we did, we wouldn’t tell you. It’s up to you to work with your financial or tax consultant to figure that out.
Q. Will you send developers a 1099?
A. No. The developer is the Primary recipient in this transaction, it’s up to them to tend their own finances. After all they’e a merchant now :-).
Q. Shouldn’t There pay my income taxes for me on any Developer sales I happen to make?
A. Ummm. No.
Those are all the questions I can think of.
I really, really, really hope people will focus on how to make this work best for Developers and Customers, and how we can drive more sales to Developers so they’ll make more stuff, and in turn make more money, so they’ll make more stuff…
In many ways, this feature is 110% for them, and although it’s been a long time coming, we’re really happy to offer it and see it go to work.
So let’s put it to work!