Architect Archive
Thread: prices lately
Dvnce wrote:
...actually I feel true value of these items are 2.5 times higher than this.. but with the current market and no one selling for true Value..
I think that what you're looking at is the ROI (return on investment). What you are doing is looking at the profit you'd get if you bought the harvesters and thats the ROI. That is a valid thing to do if someone is deciding if it is worth it to pay a certain amount for a harvester versus use that money for something else. People would be stupid to pay 10M for a BER10 harvester because they'd never recoup their investment. But as a seller the ROI calculation only matters if the buyer is doing it as well or you can convince them of it.
But the buyer doesn't need to do any of that thinking to decide if they want to pay 75k to one guy or 120k to another guy. And even if you convince them that they'll make x% return on the 120k price they'll still want to spend 75k cause they'll save 45k, nomatter what an ROI calculation tells them.
And the guy charging 75k is just figuring he'll sell more if he is cheaper. Which is true.
Yes if we all doubled prices then we'd all make that much more profit. However, if one guy cuts his prices enough then he'll capture more of the market and get a larger share of those profits. The hard part is figuring out the right price to maximize profits.
Of course since we're playing with imaginary money it kind of throws a monkey wrench into all the logic cause people will throw away imaginary money without a care cause its just play money. And furthermore some folks don't have a clue on economic concepts and just charge whatever figure sounds good or 5k less than the other guy or what customers seem happy to pay.
Pawlin wrote:
Dvnce wrote:
...actually I feel true value of these items are 2.5 times higher than this.. but with the current market and no one selling for true Value..
I think that what you're looking at is the ROI (return on investment). What you are doing is looking at the profit you'd get if you bought the harvesters and thats the ROI. That is a valid thing to do if someone is deciding if it is worth it to pay a certain amount for a harvester versus use that money for something else. People would be stupid to pay 10M for a BER10 harvester because they'd never recoup their investment. But as a seller the ROI calculation only matters if the buyer is doing it as well or you can convince them of it.
But the buyer doesn't need to do any of that thinking to decide if they want to pay 75k to one guy or 120k to another guy. And even if you convince them that they'll make x% return on the 120k price they'll still want to spend 75k cause they'll save 45k, nomatter what an ROI calculation tells them.
And the guy charging 75k is just figuring he'll sell more if he is cheaper. Which is true.
Yes if we all doubled prices then we'd all make that much more profit. However, if one guy cuts his prices enough then he'll capture more of the market and get a larger share of those profits. The hard part is figuring out the right price to maximize profits.
Of course since we're playing with imaginary money it kind of throws a monkey wrench into all the logic cause people will throw away imaginary money without a care cause its just play money. And furthermore some folks don't have a clue on economic concepts and just charge whatever figure sounds good or 5k less than the other guy or what customers seem happy to pay.
I have seen people sell heavies BER13 for 90k, actually a friend of mine did, but he lost creds on it. I asked him why and he sais as long as he does it like a hobby, it's ok. Well, he ruins the market, and puts architects out of business, that is my opinion.
My two cents
Dvnce wrote:
Yes you are correct.. I am talking about ROI.. But my point is still valid.. a prospects potential POI is still valid.. and Dropping prices making it easier for more people to buy harvesters only drills holes in a sinking boat..
Pawlin wrote:
Dvnce wrote:
Yes you are correct.. I am talking about ROI.. But my point is still valid.. a prospects potential POI is still valid.. and Dropping prices making it easier for more people to buy harvesters only drills holes in a sinking boat..
It is the buyer that makes an ROI calculation not the seller. Sellers can try and show it to help convince the buyer but I don't think our buyers need too much convincing of value at the prices we charge. If you want to convince a customer that they should pay more then you loose that argument if another architect is charging less unless shopping with you provides another benefit.
Buyers also consider how long they want to spend searching for a stocked vendor,how long they want to spend hunting for a cheap rice, how much money they have in their pocket at the moment, if they know and like the architect in question, if they heard their buddies girlfriends cousin bought a deed for xx credits or if they already know of another architect selling for less. I think these factors dictate the buying choises of most of our customers.
so are you saying the fact that a buyers ROI is less than 120 minutes of use should not be considered in pricing?
and I agree it is hard to do this when there are people dropping their pants on pricing..
Dvnce wrote:
...so are you saying the fact that a buyers ROI is less than 120 minutes of use should not be considered in pricing?
and I agree it is hard to do this when there are people dropping their pants on pricing..
I don't know where you get 120 minutes from.
I think that saying people are "dropping their pants" isapretty crude insult to anyone with low prices. Don't you?
I'm saying that buyers are the ones that figure their ROI. ROI is a calculation that a buyer makes. Not the seller. I don't think we need to convince customers that harvesters have value. The've already decided they do. ROI calculations won't convince buyers that they should spend 180k for a harvester that someone else is selling for 90k unless there are other factors involved like availabiliity or customer service.
If someone wants to sell for more then thats their perogative. If someone wants to sell for less then they are free to do so.
I don't think the trick here is convincing customers that a harvester is worth XX credits. The trick would be convincing the other architects to change their pricing if you feel a need to. You think another architect can convince you to change your prices?
Pawlin wrote:
Dvnce wrote:
...so are you saying the fact that a buyers ROI is less than 120 minutes of use should not be considered in pricing?
and I agree it is hard to do this when there are people dropping their pants on pricing..
I don't know where you get 120 minutes from.
I think that saying people are "dropping their pants" isapretty crude insult to anyone with low prices. Don't you?
I'm saying that buyers are the ones that figure their ROI. ROI is a calculation that a buyer makes. Not the seller. I don't think we need to convince customers that harvesters have value. The've already decided they do. ROI calculations won't convince buyers that they should spend 180k for a harvester that someone else is selling for 90k unless there are other factors involved like availabiliity or customer service.
If someone wants to sell for more then thats their perogative. If someone wants to sell for less then they are free to do so.
I don't think the trick here is convincing customers that a harvester is worth XX credits. The trick would be convincing the other architects to change their pricing if you feel a need to. You think another architect can convince you to change your prices?
I am saying there is one inherent fact... Our Products do not decay... so in order for us ( without any changes to our products) to sustain our market.. there needs to be a balance between sales of our product and the need for our product.. with need in this scenerio being from either new players or a existing player needing to replace their harvester because of neglect of their existing supply... Lowering prices does not help to reach this balance.. it only speeds up the saturation and thus hurts our profession even more...
I got 120 minutes from my example above.. investment of roughly 35k and that being roughly the time frame for my Breakeven on my investment.. granted I happened upon the best of a specific resource needed by weaponcrafters to ever hit that server..so throw that out.. the math has been done on grind qual on a 70% vein.. and using market price of 2 cpu on that grind resource.. still within 3 days that harvester is paid for.. minute after that that person is making profit.. ( and this is using 175k for price of this harvester).. there is room for us to slow down the rate at which our products are sold and make the same amount of money all the while helping to prolong our market..
as I have said before Ultimatly I can care less about what you price your product as.. I have had 6 different architects set up in my mall.. 4 of the 6 had prices as much as 30% less than mine.. and I and one other of this 6 still are in the business.. Now.. At my prices I am only asking the buyer to use 3 days out of all the rest of their days of playing to pay for what they buy from me.. I am far from gauging them.. especially within the next week they will make more profit from the harvester that I made for them than I did from selling that same harvester to them..
As far as the "dropping their pants" term to identify some others prices do infact note that I have not said how low of a price qualifies as "dropping their pants"... I have said in this and another thread I am taking this extreme stance to get people to think.. with prices getting lower who is being helped here? the person that now only has to use their harvester for a day and a half to pay for it? our profession that now has someone buying 2 harvesters instead of having enough money to buy 1.. ? Does this not speed up our rate of saturation? Does not the increase of Saturation Hurt our profession?
Do I expect people to change their veiws and price exactly how I do? nope.. ( like I said I do not care) ( plus I have said that I am priced well below actual true value of our products as well thus dropping my own pants... 
) .. What I hope to accomplish by this extreme veiw is that people at least see that when it comes to products that do not decay.. It is not as simple as just taking a CPU pricing scheme.. that other things should go into the equation.. ( such as the fact that it takes on average less than 3 days to pay for our products) .. That those that think they need to cut their prices to compete and keep up with sales are infact only speeding up the time it takes for our market to hit the ceiling.... Again .. this Has nothing to do with what exactly your price is.. it has to do with the fact that very few of us (if any ) are selling our products for what they are worth..,...
Dvnce wrote:
...Do I expect people to change their veiws and price exactly how I do? nope.. ( like I said I do not care) ( plus I have said that I am priced well below actual true value of our products as well thus dropping my own pants...
**edit**ing piece of **edit** forums ate my last response... /flail.
If you want to look at worth, then feel free. I think its meaningless until we get to the point that demand is so high our prices can be raised to the point that they hit the point where ROI pushes the max of what buyers will pay. e.g. if someone has a BER25 fusion that they are looking to auction, then I'd personally look at the ROI of buying it and the seller might do so if setting their price. But if everyone is selling BER25's and they are in ample supply then we should look more at what the market prices are.
But as long as there is amply supply and competition at work then 'worth' isn't relevant.
Could we charge more and would it be worth it to customers? Yes. Ifwe charged more would it work? Maybe. Probably not if someone else has ample supply at a lot cheaper price or if an opportunistic person could makea profit and charge less than me.
You say: "That those that think they need to cut their prices to compete and keep up with sales are infact only speeding up the time it takes for our market to hit the ceiling...."
Well answer me some questions:.... When will the market hit the ceiling? Or has it already? Are we in sustaining now or have we yet to hit saturation?Will SOE's recent marketing efforts with the 14 day trial and lower purchase price for SWG case an increase in players? Will our business pick up more in the summer with a large group of potential players out of school? Will our business pick up more after the JTL launch? Why do some players keep buying deeds from me? How many harvesters are sold per day in Kettemoor? Is that number going up or down? How many architects are there on Kettemoor? Is that number going up or down? What is the average selling price on Kettemoor? If I raised my price would the increased profit per unit offset the decrease in unit sales or if I lowered my price would the increase in unit sales offset the decrase in profit per item?
Fact is we don't know the answers to that stuff. You don't know. I don't know. All we can do is speculate. You can theorize that lowering prices will hurt us in the long run. It is just as valid for me to work on the assumption that if I lower my own prices then I'll grab more market share both today and tomorrow and personally do better in the long run.
Pawlin wrote:
You say: "That those that think they need to cut their prices to compete and keep up with sales are infact only speeding up the time it takes for our market to hit the ceiling...."
Well answer me some questions:.... When will the market hit the ceiling? Or has it already?Are we in sustaining now or have we yet to hit saturation?
I dont think we have hit the ceiling.. and I actually think that we can prevent the ceiling from being hit.. if we get a little smart in how we handle our business.. like i said above the idea is to find a balance between the amount of product we sell.. and the amount of new need that enters the game..
Will SOE's recent marketing efforts with the 14 day trial and lower purchase price for SWG case an increase in players? Will our business pick up more in the summer with a large group of potential players out of school? Will our business pick up more after the JTL launch?
I would imagine that is what SOE is banking on....
Why do some players keep buying deeds from me? How many harvesters are sold per day in Kettemoor? Is that number going up or down? How many architects are there on Kettemoor? Is that number going up or down? What is the average selling price on Kettemoor?
Dunno...
If I raised my price would the increased profit per unit offset the decrease in unit sales or if I lowered my price would the increase in unit sales offset the decrase in profit per item?
Yes you would.. You may not sell as many.. but you will definatly make around the same profit.. if you averaged the two together..... ( why can I say this..?) well becuase.. the market needs more resources than can be Hand Sampled.. plain and simple... our products control the market.. if no one sold a harvester the market would eventually slow down to a crawl.. we sell too many and the market gets flooded with finished goods.. this isnt like we are selling a luxury item.. we are selling a needed item.. ( just like our factories.. ) Would there be an adjustmant period if there was a change.?? YES.. but it would all balance out....
Fact is we don't know the answers to that stuff. You don't know. I don't know. All we can do is speculate. You can theorize that lowering prices will hurt us in the long run. It is just as valid for me to work on the assumption that if I lower my own prices then I'll grab more market share both today and tomorrow and personally do better in the long run.
I dont know what you do in real life.. but this what I said above is not just speculation.. it is all part of tested business principals.. though we are playing with monopoly money here.. there is still some underlying truths that will still carry over..
Dvnce wrote:
Pawlin wrote:
You say: "That those that think they need to cut their prices to compete and keep up with sales are infact only speeding up the time it takes for our market to hit the ceiling...."
Well answer me some questions:.... When will the market hit the ceiling? Or has it already?Are we in sustaining now or have we yet to hit saturation?
I dont think we have hit the ceiling.. and I actually think that we can prevent the ceiling from being hit.. if we get a little smart in how we handle our business.. like i said above the idea is to find a balance between the amount of product we sell.. and the amount of new need that enters the game..
Well that is clearly an opinion.
Prove to me that we haven't already hit the ceiling. Prove to me that I have to ever worry about hitting this alleged ceiling. People have been saying for 9 months that "the end is nigh" for architects. Why should I believe it will ever happen?
Or... How do I know that the slow down in sales about a month ago wasn't the ceiling being hit on my server and that my server isn't right now already in sustaining mode with all the real growth behind us?
Will SOE's recent marketing efforts with the 14 day trial and lower purchase price for SWG case an increase in players? Will our business pick up more in the summer with a large group of potential players out of school? Will our business pick up more after the JTL launch?
I would imagine that is what SOE is banking on....
Ok so we've got renewed business coming. No need to prepare for the end of the world.
Why do some players keep buying deeds from me? How many harvesters are sold per day in Kettemoor? Is that number going up or down? How many architects are there on Kettemoor? Is that number going up or down? What is the average selling price on Kettemoor?
Dunno...
But these are the key questions about supply and demand. Thats very relative stuff. I should know what supply and demand is on my server before I go thinking about how global changes in pricing will effect the long term and how I should change my prices because of it.
If demand is through the roof and supply is constrained then don't you think thats a totally different situation than if supply is abundant and demand is low?
If you don't know the big picture data than you can't apply big picture solutions.
If I raised my price would the increased profit per unit offset the decrease in unit sales or if I lowered my price would the increase in unit sales offset the decrase in profit per item?
Yes you would.. You may not sell as many.. but you will definatly make around the same profit.. if you averaged the two together..... ( why can I say this..?) well becuase.. the market needs more resources than can be Hand Sampled.. plain and simple... our products control the market.. if no one sold a harvester the market would eventually slow down to a crawl.. we sell too many and the market gets flooded with finished goods.. this isnt like we are selling a luxury item.. we are selling a needed item.. ( just like our factories.. ) Would there be an adjustmant period if there was a change.?? YES.. but it would all balance out....
Architects don't act in unison. We compete with one another.If we acted in unison then we could control the market. But that won't happen.
I act as an individual. I can individually raise my prices a certain amount and still retain some sales but raising prices will loose some customers and decrease units sold. But if I raise my prices too much then I'll not make as much profit. There is a 'sweet spot' in the pricing curve where profit is maximized. Look at the extremes: If I tried to sell harvesters for 15M each then I'd sell none. If I sold them for 50 credits profit each sell as many as I could make but I'dvirtually no profits. Who are you to say that my pricing on my server isn't already at the sweet spot? As you said above you "Dunno" the picture on my server regarding supply and demand.
If architects did act in unison then we could set prices and production controls and play OPEC.WE won't.
Fact is we don't know the answers to that stuff. You don't know. I don't know. All we can do is speculate. You can theorize that lowering prices will hurt us in the long run. It is just as valid for me to work on the assumption that if I lower my own prices then I'll grab more market share both today and tomorrow and personally do better in the long run.
I dont know what you do in real life..
Irrelevant.
but this what I said above is not just speculation.. it is all part of tested business principals.. though we are playing with monopoly money here.. there is still some underlying truths that will still carry over..
Those "tested business principals" are generally based on systems where money has value and items are consumed or decay in some way. If you change the underlying assumptions in a system then you change how the system works.