Myspacepros seller survey review
A few weeks ago I conducted a seller review survey at the webmaster forum myspacepros.com asking sellers about their main grievances on myspacepros. There were a total of 47 votes. Here are the results:
| None. Everything is fine |    |
4 | 8.70% |
| Prices keep falling |    |
12 | 26.09% |
| Not enough buyers |    |
16 | 34.78% |
| People keep stealing stuff |    |
2 | 4.35% |
| Too many scammers/ripped off |    |
4 | 8.70% |
| Lack of originality |    |
8 | 17.39% |
Over 60% of people complained about ‘prices falling too much’ and ‘not enough buyers’ while the other choices got significantly fewer votes.
The polarized results of this survey don’t surprise me in the least. The results are reflective of the economics of supply and demand, as well as the increasingly difficulty of monetizing the internet which I go into more detail in my article Making Money Online Generally Sucks.
In terms of economics as supply increases there has to be sufficient demand for the supply or prices will fall. Therefore, when you have too little demand or too much supply prices will fall. This is inextricably tired into the results of the survey. We can conclude that on myspacepros there are too many sellers, but not enough buyers to compensate for the glut. In order to reduce inventory, prices have to fall to make the offers more compelling to buyers. In a fiercely competitive marketplace with perfect competition marginal costs equal marginal revenue. What this means is at best competing sellers can expect to break even.
But it gets worse. To create graphics to sell on the myspacepros marketplace requires time which is an opportunity cost. Other opportunity costs include negotiating with buyers, processing payments, and sleuthing competitors. But there is also an upfront cost of five dollars per marketplace listing as well as upfront costs for graphics software.
In summary, sellers are finding it increasingly difficult to recoup their opportunity and upfront costs in the marketplace due to excessive supply and insufficient demand, as the survey results indicate.
One Response to “Myspacepros seller survey review”
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Comment from Jack Rack
Time December 22, 2007 at 5:52 am
Good economic analysis. But you forgot to mention the solution. The solution is to create a cartel. If the sellers over there made a cartel ala De Beers, the cash would come rolling in.