Architect Archive

Thread: How to stop the undercut....

Deoka
Sun Aug 31, 2003 6:09 pm
#27

Acanis the reason 3cr a resource is given as a minimum price is because you can sell the resources for that mucheasily on any server. Making an item, risking failure, putting up with factory bugs, factory crate bugs, and the time it takes to craft an item and then selling for less than 3cr a resource is viewed as stupid because you are supposedly adding value to those raw resources. To add value to material and then sell it for less than you could get for the raw material is a flawed business model in any economic system.




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Deoka - Master Creature Handler, Novice Pistoleer
Acanis
Sun Aug 31, 2003 7:34 pm
#28

I understand and personally would agree with you Deoka.


However, what a player does with his time, character, or property is of little consequence to any other player in the game.No single player can dominate and control pricing. Given the tone of the complaint, I don't see your explanation as the primary cause that motivates people to come to this board and complain about pricing. Add to that, in many cases you can visit the Galaxy boards where the complainers come from and find posts where they themselves have promised the "lowest price".


Given what can be discovered on the other MB's, I think what I previouslysaid is reasonable. The most vocal arguments for a 3cr min seem to come from those wanting to buy all their resources on the bazaar. Even if they sell for6-7 cpr they won't make the profit of someone who mines their own resources. For them tocome here and discuss "making a profit" in such a manner is silly. When someone puts out a message saying people should do one thing while they do another; that's not about profit, that's about creating confusion.


I know not everyone who comes here is doing that, but I also know there are some that do. Once you put something in writing it's pretty easy to do the search. Once you make MA it doesn't excuse your past, and how you got there either.


I'll admit I'm low on the food chain 3-0-2-2. My cost to produce a resource is close to 1.5 - 2cpr, final products would be slightly more. I'm comfortable where I am, doing a pretty brisk trade in furniture while I enjoy playing and earning the rest of the levels. The pace and rewards have been comfortable. I price most eveything at 5cpr, some much higher and a few times lower. I haven't given it much thought but if I were near a new level and in a position to be trained.... I might sell for 2-2.5 and feel no shame at all. One, the market is the real determining factor, what I want or need is secondary to what the market is willing to bear. Secondly, xp has a monetary value as well.


/rant off


If you read this far, most of what I wrote prolly doesn't even apply to you, /ignore would be a better option.


Those that it does apply to likely /ignored a long time ago which is why they still think they can come here and create a double standard.

Dayln
Mon Sep 01, 2003 4:27 am
#29

Ropock before posting about people you need to learn how to read, or improve your comprehension skills.



I said that my base resource cost is about .5 per unit.



I said I figure overhead into my final product cost.



I said my profit margin is over 400% while still charging substantially less than some ( not all, I have seen some cheaper than I am ) other architects. That profit margin includes overhead. I charge less than 3cr per unit of resource for a finished product currently.



All of that is true, it is also true that I don’t use my characters name on the boards as I want to be free here to argue and talk bout things that effect the game without it hurting my characters business in-game. I don’t particularity care if you think I am a troll or not. I am here to discus the subject with people that CAN read and CAN comprehend that disagree with me.



I may disagree, but I respect them.

mangadrive
Mon Sep 01, 2003 4:30 am
#30

Ive tried it both ways. Mining yourself and Buying bulk. I've eaten 500k ore in 5 days. Yes thats 1.5 million credits at your magical number of 3 cpu. Thats just ore. Not counting steel. Not counting all the 5 different things you need for generators in mass. The order for 5 fusions had to have 25 (26 because you have to have +1 for your schematic) alone. Thats a lot of different things you need in bulk quantity. Good luck running to the bazzar and finding everything you need for that. If you wanted to mine those kind of numbers by yourself I wouldnt have to explain how much time/matienence/power/lots you would spend to get that. There will be a time where you will want to buy your resources. If you got friends that will help you thats cool, but its gunna cost more than 2cpu over time. It takes you a few minutes to assemble those small homes and mineral miners now, but wait till you spend the greater part of a day assembling a large order and realizing youll just have to spend another part of tommorow to finish it. You will change your prices in a heartbeat. Its very respectful to offer low services to people out of the kindness of your heart. If thats your goal, then thats great. We are only warning you that it will catch upwith you at some point. If you dont have a cushion in your bank ,by the time you 'grind' your MA title will also be your retirement party. Its inevitable. Your friends will realize that you are like the friend that says he's going to stay a couple weeks to get on his feet, but ends up eating you out of house and home and you have to kick them out because they wont pay rent. You have to make a profit. If you dont you loose money all the time in some form or another. Thats just words of advice and not criticism.



And to answer your question. Hell yes I sell at 5cpu and greater on most everything. Thats the service I provide. Provided services are paid for. Thats middle school. Not even high school economics.




Opeth Mort'dege - Kuari
RabidDawg
Mon Sep 01, 2003 4:32 am
#31

Drueric and Deoka, thank you for saving me the extra typing. And Acanis, I read a lot of the posts here on pricing, mostly because the whole player driven economy thing facinates me. I frankly don't see what you're saying about architects wanting to buy their resources off the bazaar. Bazaar prices are a barometer most of us use to set our prices. If most people think resources are worth 3-8 cpu, then we need to use that as a baseline to figure our pricing schedule.


Any seasoned architect knows you can't make moneybuying all your resources off the bazaar.. What Deoka said it the truth. If you can sell your resources for more on the bazaar, there is no point to going through the build process. Now come the 'I didn't become an architect to make money' arguements again. Sure, you didn't, but I'll tell you what, as a 6 cpu architect, I cover my overhead with plenty to spare.




Natalya, Blackened Forge Master Architect / Master Droid Engineer
Flurry, Naboo, Keren (1200/3800)
Torakusu
Mon Sep 01, 2003 4:46 am
#32

Frankly, I would be bored out of my mind if architecture is the only thing I do in this game. I imagine everyone else here have other professions as well. What I do is to simply have my architect title up and my character searchable. I don't have a vendor. I just get my occasional tells while I go about my other businesses. I don't get a lot of orders, but the ones I do get I take good care off. I don't stock deeds but rather I craft them as they're needed. I tell my customers that and I am clear about my price and delivery time. I also have friends that I build for and I give them really good price for the buildings (still profitable). They are even willing to wait for me to be able to build what they want. I don't think of it as my primary source of income, but it's nice supplemental income. It is important to stand your ground when it comes to price negotiation. I had someone who tried to intimidate me a few weeks ago. He wanted a small house. When I told him that it's going to be 10k, he said that his first small house was 5k and the same architect sold him a medium for 10k (or something absurd like that). At that point I decided that even if I get this sale, he's going to be a pain. So I told him straight that the guy he bought from gave him a really good deal and he should buy from him again. He stopped messaging me right after that. So I imagine he went to search for other architects to intimidate. More hunting time for me. But my point is, we all started with nothing. Everything we gain here is pure profit. The question is, do we want this to be a stressful existence, or a pleasant one?


Torakusu

BedroxX
Mon Sep 01, 2003 5:03 am
#33

The reason Dayln doesnt post his ingame name here is the same reason that I dont.


Some of the people crying for price caps give a good impression of ingame griefers - people who get frustrated cos things dont go their way and turn to ruin it for others.


Acanis
Mon Sep 01, 2003 6:33 am
#34

Putting it another way.....many of the same people lecturing others on how to make a profit have said at one time or another that they would "combine" for free if another playerprovided the resources. Throws their "make a profit" lecture right out the window. Statements like that show their true color, those players are willing to take the xp and sell at the same price as cost, with no profit.


I don't find fault with providing the "free" combine..... but I do find fault for players that do that and then come here to lecture others about how to make a profit.


I can find all the ore and metal I could possibly use on the bazaar. If I'm careful I can get it for 3cpr and never spend anytime mining. The only real problem I faceusing that method, is how to convince those mining their own resource that they should be charging more for their final product.


As to why a player might sell for 2.5 cpr is so easy I don't see how so many people could keep asking the same silly question. How long does it take someone running around town barking out a price of 2.5cpr for a finished house or harvester, compared to selling resources 1k at a time on the bazaar? One way is quick and gives you xp, the other way consumes a great deal of time. ( Assuming the cost is < 2.5 cpr ). The person who does this has not done anything more harmful or stupid, than the person that does "free" combines, or buys and sells at 3 cpr.


As I've said before I'm content and happy at 5cpr. What I find repulsive is the double standard that is commonly expressed in posts concerning pricing.

dWhisper
Mon Sep 01, 2003 7:46 am
#35

My main problem with terming someone as an under-cut is that all of the price definitions are based on a more-or-less imaginary standard. If you purchase your Ore, then yes, it can get a little pricier to manufacture items. However, if you mine your own ore, then on average, the cost is around .75c per resource on a 50% spot, if not much lower. Basing your price on a sales-inflated rate is incorrect math for the bottom line.


I know people hate a real-world example, but that's where we find the best examples. Look at a cost-comparison from computer manufacturers. On average, it'll cost them $275 to put a $400 SRP video card into a system. They could sell that card for $400, or they can use it at a reduced cost. The upgrade from that card in a system with a $100 video card is only $250, so it stands to reason that they're "Losing" $50 on that card.


Yes, you can sell your resources for 3c per resource if you'd like, and probably make a great deal of change. But prices aren't set according to what you'd like them to be at. That's not a good economic model in the slightest. The fact that others are undercutting a price does not mean that they're taking a loss, it means that they may not be making as much profit. But they're also meeting market demand for the goods they provide. I've been selling Medium Mineral Harvesters, by far my best seller, for 15,000c. It's quite a bit lower than others, but I still turn a very healthy profit from it.


The only way to beat someone "undercutting" your prices is to adjust your pricing model to compete with them. You can purchase it from them if you like, but in the end, they're still going to succeed in what they're trying to do: sell deeds. Since you've just purchased thier stocks from them, even if you plan to resell, you've helped them accomplish what they were trying to do.






Back yet again, for another round of SWG... um... fun. Yeah, that's it. (It's not just a diversion while I wait in the queues for WoW BG's)


Alysann Arimere - Imperius Doval... Two sides, one coin

RabidDawg
Mon Sep 01, 2003 7:01 pm
#36

Sorry dWhisper and Acanis. You're still not seeing the difference between cost and value. With your argument, a CD would cost us around 50 cents...25 cents for the materials and 25 cents of pure profit for the recording company.


The cost to pull up resources is really not that high. At most, it's around 0.75c per unit. That's assumes pretty horrible locations for both the power you use to supply your harvesters and the harvesters themselves. This doesn't include anything having to do with redeeding harvesters, your time to find an optimal location, travel expenses, regularly feeding and other headaches such as a pack of Kimogilas using your harvesters as a scratching post. The accumulation of these figures is the total cost of extracting your resources.


You still have to add in costs for your time AND expertise to make schematics, juggle factories, feed factories, redeed factories, assembly, paying for your continuing education as an artisan and of course, critical failures. Sum all of these up and that is your cost of doing business.


You may attach very little worth to all of these 'fees', but they do exist...I hope you can at least agree with me on that.


Enough on costs...on to actual worth.


The simple fact that the very same resources you use to make up your product sell for 3-6 cpu on the bazaar and regular vendors sets the actual worth of the product. This is not imaginary (besides the fact that it exists only in the form of a cartoon), it is a picture of the true economy and a baseline to be used by all artisans when pricing your resources...not your final goods.


If you don't put any value on any of your work after the resources are pulled up, then 3 cpu would be a very fair price. I, for one value my time, and the worth of a product that will last forever is also higher than zero.


This will all be moot though soon enough when everyone has at least a medium house and some combination of 8 heavy harvesters and factories, all bought at rock bottom prices. The price of structures will plummet and all the drifters will move on to other professions. Of course the cost of weapons and armor will contiue to rise.




Natalya, Blackened Forge Master Architect / Master Droid Engineer
Flurry, Naboo, Keren (1200/3800)
Acanis
Mon Sep 01, 2003 8:09 pm
#37

If I fail as you claim to grasp your point of view, how do you explain the fact that I'm very consistent in pricing my finished goods at 5 cpr or better? My bank account and raw inventories are growing at a very comfortable rate.


Besides being able to make a profit, I also get a pretty good read when someone degenerates to name calling, character asassination, or derogatory references to anothers intelligence.Those messages are typically self-serving.


When I read here that people are willing, or condone buying and selling at 3cpr, and then attack the character of an individual who claims he can produce resources less than 1cpr and sell at a profit of < 3cpr my interest changes immensely.


The position of this post and others like it is quite clear.


Buying and selling at 3cpr is an acceptable practice with no regard to profit,value, crit failures or whatever.


Nothing could be more clear. Along comes someone who boasts that he can make a profit selling under 3cpr, and people start raising issues of profit, value, crits etc.If what he is doing is repulsive then the player buying and selling at 3cpr is at least as equally repulsive if not more.


If you have a sense of integrity and your beliefs are as stated you will find it impossible to sign-on to any form of a 3cpr agreement. Given your statements it violates your principles.

Ropock
Mon Sep 01, 2003 9:34 pm
#38

Well, since you wanted to accuse me of not being able to read, I said to myself Ok, maybe i misread his numbers.... Let me go back and check.


Dayin wrote:






understand how you feel, but I can decide what profit margins will work for my business, thank you. 2cr per resrouce price would be a400% profit margin, very profitable.






You also wrote:






I guess the bottom line for me is what one unit of resoruce costs, the base value is a 1/2 cr to me.






So, where does the overhead come in at a 400% profit margin? I seem to be missing it....


I will admit I've questioned your methods and numbers... I and others have tried to show you different ways of looking at it to try to get you to see our point of view. If I went to far in the last post that drove you to accusing me of being illiterate, so be it, my fault. But how can you argue with what you said yourself?


By all means keep driving prices down, you may continue to have a big business for a while while making your small profits, I just think you aren't undercutting anyone else but yourself and your own valued efforts.




Ropock Epock
Master Architect
Moenia, Naboo - Kettemoor

Interior design screenshots at www.81x.com/gridlokk/SWGdesigns
Acanis
Tue Sep 02, 2003 12:15 am
#39

Thanks dWHisper you bring some logical thinking to the forum.


If a standard was adopted I think it far more appropriate to have it slightly below the going prices on the bazaar. I don't see that position changing for myself. imho 2.5 - 2.9 is reasonable. That's just my opinion and others may think it should be lower. In any case it should be "lower" than the going price of resource on the bazaar. XP and a larger share of the market have a monetary value that needs to be factored into the equation.


Neither do I find myself opposed to players having a "leader" item.... an item they sell at a loss in hopes of getting greater business. There are a few items in this game that people are constantly buying. It's impossible to keep some of them in stock unless you inflate the price 10cpr. I wouldn't try it without a factory but some items definately would be ideal for store "leaders".


Given that I accept using "leaders" it's within the same realm that I would accept an Interior Designer taking a hit on selling a house in order to attract the buyer to purchase furniture for the home from him/her. To me, packaged deals are just good business sense. That guy running around town selling houses for 5k might be doing another 25k in furniture sales; you never know.


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