Architect Archive
Thread: People who are jacking up our economy...
Kragbax wrote:
People don't seem to take into account the time it takes to a. get theresources. And b. Make the **edit** product. "I am harvesting them for .52 a resource". Well I'd love to know how you can mine enough low grade, metals, etc. to build a bunch of large harvesters, unless you are doing just one or two a week. If you've got a house or shop eating at your lots then it seems unlikely you can personally mine enough to keep up with any quantity of demand on heavy/large equipment/houses and keep prices based on .52 a resource. Perhaps you have many accounts anduse the additional lots, or switch lots with main characters on other servers. Because 6 heavys on a typical low gradevein might give you enough to build a couple large deeds per week. And you'd still have to get a hold of metals, reactive, aluminums, inerts, etc. Market Value is what it is, and 2.5-4 a resource is current Market Value per resource. Why? Buying the Harvesters, paying maintenance, redeeding, power. Do you not also take into account the hours spent running around between harvesters collecting the resources? The hours doing factory runs? The product itself?
I wish they sold DVD's based on the .10 cents per diskit cost to produce them. Based on your example I could load up my collection at $1 a DVD and the companies would still be cleaning house, right? I wonder whynone of the companies do that? Hmmmm... Could it be, supply and demand?
The major flaw here is that the .10 cent per disc argument is incomplete. They also have production costs for the movie, licensing costs, royalty payments, distribution costs, and enough other hidden costs that it wouldn't be .10 per disc, but closer to $10 per disc.
The argument is that Architects have basically 3 things that hold them in place: Resource Cost, Lot usage, and Failures. Costs for houses, vendors and anything like that are incidental, since they are not truly required to do the job. Any amount of networking can get access to a Small House where you can stick a vendor.
And if you have 2 heavies on a decent vein, and you can only build 2 larges in a week, you're doing something wrong. Or you need to revisit your definition of decent (I say 45% or higher, or it's a waste of time). I haven't done the math recently, but it just doesn't feel right.
Yes, resources can be sold for more, but then again, you can sell your deeds to someone else and they can resell them for a jacked up price, still for a profit.
The simple fact is that any architect "undercutting" isn't jacking up the economy, they are following it. They sell a good at a price point the common player is willing to pay. Under an economic definition, the entites that are trying to maintain an artificailly inflated price are the ones "jacking" it up. Take that as you will, but that's what it is. Don't argue economy when you're not practicing it.
The simple fact is that people want to be able to sell a good now for more than they can. Yes, the resources could potentially be sold for more, but there is such competition for those resources that it's not likely that the overall market cost of resources is that high. When you factor in the cost of resources that an Architect pulls, around that .5c mark, that the cost of resources going into production is probably around 1-1.5c per resource, at best.
If an architect is working strictly off purchased resoruces, they won't get very far. There are just not enough people selling the goods to be able to support such a structure.
Let's take the real world example of Wal-Mart vs. Small Businesses. Do you think that the cost of a good through distribution is that great between your average Mom and Pop store and Wal-Mart? Not really, probably less than 10%. The difference comes in effeciency and bulk purchase power. Wal-Mart sells a good at $15, while Mom and Pop are selling at $25. The good costs Wal-Mart $9 and M&P $10. M&P accuses Wal-Mart of Undercutting, but in truth, both are still making a handsome profit.
What it happenning is meeting consumer market demands. I sell Large harvesters for 115k each, and still make a profit. I sell Medium Mineral harvesters for 10k each, and still make a profit. I sell factories for 20k each, and still make a profit. Just because I don't use an imaginary inflated number doesn't mean that I'm "jacking" your economy, it means that I'm following it. I have orders in that I can't pull fast enough. Even purchasing a portion of my resources, I still make a profit.
I don't mind anyone arguing, I just want them to argue correctly. Don't accuse me of jacking your economy, accuse me of not collouding with you to keep prices high.
Either way, I still sell a ton, and make a very nice profit.
Most excellent statement.
dWhisper wrote:
I don't mind anyone arguing, I just want them to argue correctly. Don't accuse me of jacking your economy, accuse me of not collouding with you to keep prices high.
"Yes, resources can be sold for more" -- "The simple fact is that any architect "undercutting" isn't jacking up the economy, they are following it"
how can you be following the economy when you admit you can get more for just the resource than your end product ?
"I sell factories for 20k each, and still make a profit."
are you really? resources needed to build a factory = 13430 20,000 / 13430 = 1.43 cr per now this is with NO crit fails. if you were to just stick the raw material on the bazzar and sell it at 2 cr per unit which would fly off the bazzar in a few hours you would be making more for just your raw materials. i would say with crit fails you are cutting it very close to just breaking even.
Now by you charging a crazy price like that anyone who ever seen or even heard about your price quot will demad the same from the next guy. peoplethat follow your business planare the direct cause of our failing market. not the other way around.
"Let's take the real world example of Wal-Mart vs. Small Businesses. Do you think that the cost of a good through distribution is that great between your average Mom and Pop store and Wal-Mart? Not really, probably less than 10%. The difference comes in effeciency and bulk purchase power. Wal-Mart sells a good at $15, while Mom and Pop are selling at $25. The good costs Wal-Mart $9 and M&P $10. M&P accuses Wal-Mart of Undercutting, but in truth, both are still making a handsome profit. "
yes lets do, unfortunatly you are not following this example. as you can see you are priceing your Crafted final product lower than what you could sell the raw material by its self. that isnt a sound business plan and even wal-mart woudnt follow what you are doing.
"Just because I don't use an imaginary inflated number doesn't mean that I'm "jacking" your economy, it means that I'm following it. "
what imaginary inflated number are you talking about ? the bazaar is about the closest thing we have to have a "supply and demand" market. if you price your stuff on the bazaar too high it wont sellsooner or later you will have to lower your price till it starts selling. if there is a high demand for the resource you are selling you can price it higher, if there isnt you have to sell it for cheaper. so the market value of your resource can be calculated by just following the bazaar prices. this isnt any inflated number it is supply and demand concept at work. So if you are selling your final crafted item Below what you could sell the resource alone on the bazaar your not "following the market". you are ruining it.
I have never sold a widget for less than it is actually worth, I have however sold a widget for less than other people sell the widget for.
Zelight wrote:
"Yes, resources can be sold for more" -- "The simple fact is that any architect "undercutting" isn't jacking up the economy, they are following it"
how can you be following the economy when you admit you can get more for just the resource than your end product ?
Because it's about selling the end product. I could sell the resouces and that'd be it, but I'm also an architect, so I'm here to make structures. The end-point price is based on a 3c per unit cost, where a price assesment should be based on a resource cost to the manufacturer. Car manufacturers could save a lot if they owned their own refineries, and could make more selling the finished metal good. But how it ends up is as a different product.
"I sell factories for 20k each, and still make a profit."
are you really? resources needed to build a factory = 13430 20,000 / 13430 = 1.43 cr per now this is with NO crit fails. if you were to just stick the raw material on the bazzar and sell it at 2 cr per unit which would fly off the bazzar in a few hours you would be making more for just your raw materials. i would say with crit fails you are cutting it very close to just breaking even.
I could, but like I said before, I deal in finished goods. Maybe the resource prices are just to high, and need to fall to be in line with the given cost of the finished goods. Inflating the price of the finished good to compensate for overpriced resources would mean that overall demand would go down. I never started to sell my goods based on some imaginary
Now by you charging a crazy price like that anyone who ever seen or even heard about your price quot will demad the same from the next guy. peoplethat follow your business planare the direct cause of our failing market. not the other way around.
"Let's take the real world example of Wal-Mart vs. Small Businesses. Do you think that the cost of a good through distribution is that great between your average Mom and Pop store and Wal-Mart? Not really, probably less than 10%. The difference comes in effeciency and bulk purchase power. Wal-Mart sells a good at $15, while Mom and Pop are selling at $25. The good costs Wal-Mart $9 and M&P $10. M&P accuses Wal-Mart of Undercutting, but in truth, both are still making a handsome profit. "
yes lets do, unfortunatly you are not following this example. as you can see you are priceing your Crafted final product lower than what you could sell the raw material by its self. that isnt a sound business plan and even wal-mart woudnt follow what you are doing.
"Just because I don't use an imaginary inflated number doesn't mean that I'm "jacking" your economy, it means that I'm following it. "
what imaginary inflated number are you talking about ? the bazaar is about the closest thing we have to have a "supply and demand" market. if you price your stuff on the bazaar too high it wont sellsooner or later you will have to lower your price till it starts selling. if there is a high demand for the resource you are selling you can price it higher, if there isnt you have to sell it for cheaper. so the market value of your resource can be calculated by just following the bazaar prices. this isnt any inflated number it is supply and demand concept at work. So if you are selling your final crafted item Below what you could sell the resource alone on the bazaar your not "following the market". you are ruining it.
The imaginary inflated number that all Resources are worth 3-5c. That's based on what you can sell it for, I suppose, but I still feel that resource value is the number that has to change. Structures are worth what people will pay for. You can stop making them, and sell the resources, but other people will still make them. In that sense, I suppose, we both win
That Rath is an entirely different subject. My wine example was about vertical monopoly case and how it does not apply if others have exactly the same access. If we are done with that one and agree that vertical monopoly indeed does not apply we can move on to market value.
You folks choose to sell ( mostly to each other ) a unit at 3 cr that has an actual cost of less than 1 cr. Just because you choose to sell it to each other for that doesn’t make it actual cost higher, its cost is still less than a cr. If Shell oil sells a turckload of gasoline to Standard oil at $5 a gallon that does not automatically force everyone else to use $5 as the market value. That is what goes on here, we have mostly architects with harvesters selling units to other architects that make houses, resource units for 3 cr per and all of a sudden it becomes a holy price that no one should violate?
What you and Shila and others want is for me to join your little OPEC style business club, you want me to collude with you to keep prices high with you and I wont do it. The value of a resource is NOT 3cr, it may be to you, but it isn’t to me. The cost of a unit is less than 1, the value to me is about 1.5, and I profit greatly at 2.8. On my server resources sit on the market for days at 3per and don’t sell.
And at my price I become known as a low cost dealer, when the market falls I hope to continue to have a larger share of the few customers that will be left. If something comes in to change the game as it stands then I re-think my business strategy.
I don’t expect that change to come quickly but I have been wrong before, I was wrong once in 1977 when I married my first wife. Fortunatly the one I have now is all I could ask for.
p.s. I dont solo at all, I have partners and we are thinking of expanding with more partners. You cant be in sales not interacting with people.
I started a post about this about a month ago entitled "A note about our economy". I have nothing but disrespect for anyone that sells crafted items below the going bazaar rate for that resource. I also know from talking to a few of these "undercutters" that they use multiple accounts, friends lots, cross server lot swapping etc....not to mention the resource exploit that was posted on this forum. Just because you have a million units of each resource doesn't mean you should undercut the market value of an item. I hope they introduce natural disasters and a earthquake or tornado wipes out everything these people own....One good solution, that I'm sure these undercutters are going to cringe at, is to remove the option to give administrative rights for harvesters to anyone except the actual owner. This would only bea mildly annoying to multiple account owners that like to make all their harvester runs with one character. The game also needs more "reasonable" money sinks to increase the value of a credit. Bottom line...if resources are selling for 3cr/unit on the bazaar, your product should be worth AT LEAST3 credits per unit no matter what your harvestingcosts actually are.....and that's still rediculously low. Allow for crit failures on wall modules or the entire item and the price could easily reach 6cr/unit. A house should be an item that requires a player to work for it....the same for any other nice crafted item. I could buy numerous small houses a day from these business knowledge inept people just running delivery missions. Flame my post all you want, you're idiots and you are destroying the ecocomy. Everyone is starting to go into the resource selling business because of you (at least on my server) and that is only making things worse. Competitive pricing is part of business and that is great but, keep your prices above the going rate forthe resources it takes tocraftyour items.Just an added note...I know that some resource dealers who sell in bulk (over 10K units at a time) can price their resources at 1.8-2.5cr/unit which is great for crafters who need to buy extra resources but, this should just increase your profit margin if you keep your prices above the general resource market value (bazaar). Use some common sense folks and help improve our economy. Enough said.......
That's the BEST Idea I've seen. That just might be the one thing which could bring some validity back to the economy. That single item would get rid of cross server lot trading. I would even go so far as to extend the idea to houses, and factories.
For example, with houses and factories, The owner would be the only ones with the rights to add maintenance/power. Yea I know a lot of people would scream bloody murder at this but YES it does need to be done. There are a lot of people out there using this "loophole" to have more than everyone else and it's to the point I'm even considering it myself just so I can keep pace. Most of the people I know doing it are good guys and it's not really cheating so it is a valid tactic but it shouldn't be. It allows 1 person to have 10 times the capacity for housing, storage, and harvesting that a casual player will have. It's just bad design and needs to be fixed.
Until recently I've only used my own 10 lots for stuff. I moved in with a friend so I wouldn't have to have a house, and he put down a structure factory for a couple days to let me use it. It's the only way I can even begin to compete.
Granted it would cause prices to rise for resources but it would actually benefit the economy in the long run by evening the playing field for all players. There is an imbalance in the force and it's called LOTS.
That is funny, I have nothing but disrespaet for companies that price fix, like OPEC.
To each his own I suppose.
That is right, if you cant win an argument you go into personal attacks,
I agree I also think I won.
Dayln,
I"I have never sold a widget for less than it is actually worth, I have however sold a widget for less than other people sell the widget for."
This is clearly not the case.
I agree that you may not have sold anything for less than its cost to you... but the fact that you are selling things for less than you could (as established by all the other architects who sell higher) means that you are selling for below the items worth.
The "Worth" of an item is the value the consumer places on it. The consumer shows repeatedly every day that they value the items much higher than you claim to sell for (evidenced by the fact that so may architects sell at a higher price).
There is nothing fundamentaly wrong with selling low....it's a common practiceused to grab market share (which is what I believeyou are claiming to be doing), its a shame for you that it can't work in this game. You have limited capacity (lots).. and produce a product that never goes away (something which doesnt happen in the real world). You can't have significant impact in the market in the short term (other than pissing some of your fellow architects), and in the long term you will have the same market as any other architect, ZERO.
You have stated that your customers love you. Do they?I can see two other possibilities... they love your PRICES, and don't give a darn about you...oryou are a mediocre salesman who can only sell if the price is very low. I know that im not a good salesman, so I sell to somone that is. He shows me respect by paying a fair price, and in exchange i show respect by going out of my way to get him what he wants when he needs it. We each may no secret of what we expect out of the business relationship, and I think we both make good money from it. Whats more... his end customers get great service. I've seen other architects (towards the bottom end of the price spectrum) that offer great prices, but generally make their customers wait for ages to get the product (if it EVER gets delivered). Room for both business models in this game.. something which I'm sure we can both be happy about.
At the end of the day, all these arguments about pricing are pointless... There is no mechanism in place to correct what would be major business flaws in the real world. Therefor, anyone can sell at any price they like (all the way down to zero Dayln.. will you still compete then?). We each just have to decide if the game mechanic is one we can live with. If not then we can thank SOE for making it so easy to change skill sets.
Positronic.
Master Architect. Not cheap... but I can barely keep up with orders 
Come on Rheet!
You forgot OPEC!
Seriously Dayln if you want to sell for .2 cr/unit its all good in my book. If you can keep up with demand and drive everyone else out of business it is your choice. I still question if you are even an architect and not here just to get under everyone's skin but for the sake of argument lets say you are. It wouldnt effect me anyway as I really dont care about the profits I make though I am sure to charge more than 2cr/unit for a house or harvester b/c I value my time and all the other little things that cant be measured by an online calculator. I might not agree that your tactics are for the good of the server or your brethren but it is obvious you care little for either as long as you keep your customers happy. And who can fault you. Others will still get business. You might weed out some of the people but others dont have any costs at all so they could theoretically give it away and still be ahead of the game. The simple message is everyone can play the game how he or she fits.
But what you are forgetting is that eventually there will be no need for you or me or anyone else in this profession. Eventually everyone will have8 large harvesters and a house or a factory or whatever they need. Then it wont matter what anyone is charging.
Hopefully the devs will understand that there needs to be something done to help us all...even people like you Day 
In my book this argument is moot until some major changes are made to our profession. If not decay then something that doesnt last forever. I can definately see a time where more than one architect per planet will be too many. But then again this game may not be around long enough to get there either.
And guys/gals this isnt happening only to our profession. You've seen this happen to Droid Engineers and Tailors and others. Im sure we have all seen master level tailor items selling on the bazaar. I know as a novice tailor it bugs me as well to see that. But again it is all b/c there is nothing to keep us in the market. Once you've sold an item in these professions you have probably lost that customer forever unless they need another one or upgrade...and there is only so much of that one can do.