Architect Archive
Thread: Architectual Item Pricing
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Stownhart
Tue Jan 25, 2005 7:11 am
#1
I have been playing this game for 7 to 8 months now. And I have never understood the extreme over-pricing that goes on. However I think I have it figured out now. See I am 38 years old and have had plenty of real life experience to learn the value of a dollar. Appearantly the vast majority of SWG players are children, and have not had a chance to learn such. So now coming from a very experienced capenter in real life, here is a more down to earth pricing plan. BTW, you can always find my wares sold at these prices...I am BlackStarr on the Corbantis server, my shop is in the Western Dune Sea of Tatooine titled StarrMart.
First let's tackle resource pricing. When I had an offer posted on my vendor for Fiberplast, I literly laid my head down on my desk laughing. Some one had offered 500 units of Fiberplast for 15,000 credits. That is roughly 27CPU. I sent the seller an email right after declining the offer. I asked him what types of drugs he was doing. Recently I set 14 Fusion Reactors on a 94% location. They were harvesting roughly 280,000 units a day. Maintainance was costly me roughly a total of 16,700 credits. So I was getting 16 units per credit of cost. In real life business, doubling your investment in product price is concidered quite lucrative. So a reasonable price for this reactive energy would be 8UPC (note NOT 8CPU). Now of course that was a 94% area of concentration. So let's average it and say half everything to accomidate a 50% concentration average and a reasonable price would still only be 4UPC. Why in the world would I pay the prices I have seen all the way up to a rediculous 50CPU when it cost so little to harvest it myself? There is another factor of course, and that is the high demand/rare resources that some crafting classes need. For example a Doctor/Medic requires specificall Dolovit Iron to make Advanced Solid Delivery Shells. And from what I have noticed Dolovite doesn't spawn very often. However even quadrupling the above noted pricing would only result in an even 1CPU.
Now on to crafted products. It seems that most crafters determine their pricing by how much resources it requires to make an item. Well this is why I tackled resource pricing first. Resources are cheap and easy to come by. So this should have very little influence on product pricing. Rather the skill level needed to make the item should be the predominent influence. In my line of work you pay an employee according to their skill and experience. A lead carpenter should make much more than a laborer even though they may both utilize the same amount of lumber in a day. However there are exceptions where the resource count needed should influence price. It's just shouldn't be the main factor invloved. For instance, all vehicles are able to be made at one particular skill level: Master Artisan. However Speederbike require more to make than X34's, and Swoops more than Speederbikes. So They should range in price accordingly. And of course item quality should play a roll also. Stimpacks made with the advanced components should cost more than ones made with standard components.
As an example of REALISTIC pricing here is a short pricing list of my most common wares;
Small Houses (all) - 5,000
Medium House (all) - 25,000
Large House (all) - 50,000
Personal Harvesters (BER4) - 2,000
Medium Harvester (BER10) - 10,000
Heavy Harvesters (BER13) - 25,000
Factories (all) - 20,000
X-34 - 5,000
Speederbike - 10,000
Swoop - 15,000
Loot Decoration (blue & orange rug, gong, glass top table, ect.) - 100,000
Guild Hall - 100,000
City Hall - 75,000
Various other city structures - 10,000 to 50,000
Furniture - 100 to 5,000
Well I hope this pricing info brings a few people back into reality.
Zhundult
Tue Jan 25, 2005 8:49 am
#2
Don't forget to factor in that you can't get BER 14 for any other than fusions now, and the other harvesters all require power as well, so the costs will go up. Also, make sure you let WS, AS, and all other crafting professions know so they will stop charging the 20+ CPU they get, while we are lucky to get 3 at times.
Ty-Kaz
Tue Jan 25, 2005 8:51 am
#3
You certainly have a point, but you're forgetting a key element. This is not reality, this is a game -- and, more importantly the ecomony is set by players. 1cpu pricing sounds great...now let's factor in elements that effect most people. The majority of crafting professions use massive quantities of materials (particularly architect and shipwright). Each player is given a mere 10 lots to play with. For an average person, once they drop a shop, a workshop, a factory or two, etc, etc, there are only a few lots left. That is, from my experience, not enough to place enough harvestors to keep up with demand. That leaves the crafter in question in a position where they must purchase from resource resellers. The usual price across the galaxy is 2cpu. So me, with my architect, goes out and purchases the million units of ore I need a week. This costs me 2million credits. Am I insane enough to take a loss by charging 1cpu for my crafted goods? Of course not. On any given week, I sell between 50-100 heavy harvestors. Grind-quality resources aside, I also need a hefty amount of high quality steel and ore. If I'm fortunate enough to rent/borrow enough lots to harvest a few million units of these resources when they're in-spawn, great, but more often than not, I'm forced to purchase them...and resellers charge between 3-5cpu at best for anything of such quality.
So long as resellers are charging such high prices, you won't be seeing the cost/retail price on crafted goods go down. If you're able to harvest all your own resources, that's great...but you are in a small category. I charge 3cpu for virtually all of my architect goods (with some minor exceptions). I, as a busy architect, could adopt your philosophy, but it would result in a series of empty vendors as I cannot harvest enough resources alone. It's a Catch-22 situation. So long as crafters are willing to pay 2cpu or more for resources, where's the incentive for resellers to drop their prices? On the other hand, if I, as a business person, don't buy the resources I need, the empty vendors will cause customers to go elsewhere. Add to that the law of supply and demand. Players are paying hundreds of thousands, or millions, of credits on relatively easy-to-get loot. This is not realistic based on your own definition of the term. A combatant can hop into a solo group, get buffed up, grab some Beladonna's missions and loot the VICTORY, No Division, and Transdosian posters in under an hour. Even under cutting the market, they've made roughly 2-3mill. Where's the grip on reality there?
To me, this game isn't about credits. I charge what I believe is fair for my goods, based on how much it cost me to get the resources. I get frustrated when I see players charging 2k for a simple lamp, or 50k for a basic loveseat, sure... I'm not one to charge such rates, and given the amount I sell, I believe people know what is fair and what isn't. The only advantage undercharging in a market gives is to the bevvy of resellers. If I stocked heavy harvestors at 25k each (being less than 1cpu), I'd be sold out in a day...even if I stocked 1000. Then, in under an hour, I'd see spammers in Coronet reselling my wares at double or triple my prices.
In the end, you're more than welcome to charge any price you wish for your goods -- either really cheap, average, or really expensive. If you're comfortable pricing your goods in the way you mentioned, all the more power to you. That being said, you won't see too many people following such practices.
Pawlin
Tue Jan 25, 2005 11:21 am
#4
First of all, stating that you are 38 years old and everyone else is a child is not a good way to start a winning argument.
If you look at mining resources and just consider the % profit markup from costs then it does look like dropping some harvesters is printing money. Its pretty easy to get 2-3 cpu off of a cost of 0.5-1 cpu. Thats a real good % return. However, if you instead look at the profit / time invested then its a different picture particularly when compared to a lucrative crafting or elite combat profession. Say the average miner drops 8 x ber13 harvesters on a 70% metal spot they plan to resell immediately for 4 cpu. Thats income of about 335k and costs of about 40k. So you're looking at a profit of 290k / day or about 2M per week. Thats good money for little effort. But how much did people use to make running solo missions? How many crates of BE brandy would a chef have to sell to get that profit? How long would a Doc have to buff at the Cnet starport to get 2M? The point is that if there are other ways to make good money and quite a few ways to make more money in the same amount of time. Now we could do both some mining and whatever other profession you want and many people do so. But we've got limited time so if your other profession starts to net more money then you have less incentive to spend your time on the mining.
This is the economic concept of 'opportunity cost'. "In general, economists define the "opportunity cost" of any good or service as the value of all the other goods or services that we must give up in order to produce it." Its a fancy way of saying that there are better ways to make money. For an example in SWG terms consider what I could do with good steel as a master artisan and master architect . I could take my nice steel and make swoops or I could use it in my harvesters. THe price of swoops is real low cause the market got flooded with them so I can only get 2-3 cpu off swoops, but I still sell harvesters for a decent price and can get 4-5 cpu. So the 'opportunity cost' of using good steel to make swoops for 2-3 cpu is the money I don't get by not making harvesters for 4-5 cpu.
With mining the 'opportunity cost' is spending your time and effort doing something more useful with your time which has a better profit / hour return.
p.s. you should post this in the new Business and Economy forum. I'd like to see that.
Stownhart
Tue Jan 25, 2005 12:46 pm
#5
Well unfortunately most of the responses thus far have come from persons insistant on basing prices off of amounts of resources needed to produce. Maybe I didn't make myself totally clear the first time. My whole idea is that basing product cost off of resource usage is nothing more than ripping of the customer. If resource usage were the main influence to say car manufacturing, then wouldn't a Saturn cost the same as a Corvete? No and the reason being is that when buying that Corvette you are paying for the higher technilogical skill involved in it's design and creation. Or to expound upon my previous example, what if a laborer carries 100 pieces of lumber on a job site one day and a carpenter nails together 100. Should the laborer make an identicle paycheck?
A few other points in response to responses;
I never insulted children in my first post. I only pointed out the fact that they have not had the life experience to learn the value of money.
The game may not be reality, but the players within it certainly are.
No PLAYER is limited to 10 lots. There are many way to cercumvent this limit. I personally run over 100 harvesters
Resellers selling at higher prices has no baring on the rise/fall/stagnation of the going prices. The only influence to that is how well informed the customers are...hence my posting of this thread.
As far as the "need" to buy resources in order to be a business person, I personally have neverpurchased resources as an artisan, my vendors are never empty, my bank acount never goes below the million mark, and I even go so far as to donate approximately 1 million a week to new players (players not characters) in credits, resources and products.
If resellers increase due to my low prices, why should I care? I am making the same if not more from their purchases also.
As far as following my practices, Come to the Corbantis server and notice the lower costs, at least on architectual goods. I have gone out of my way to keep the customers informed. And why would they buy from a higher priced vendor if they know about mine? So this left other architects with no choice but to lower their prices too if they wish to sell at all...and they have. I have seen it in the past few months.
Refering to economists in regards to the economy is not a good way to start a winning argument.
"Oppotunity Cost" has nothing to do with the sale price differnce between swoops and harvesters. There are far more Master Artisans than architects of any level. It all goes back to the basic supply and demand rule. With all vehicles being made by artisans the supply is overloaded and forces the price down. On the other hand with the limit of Architects, the demand for decent harvesters is high, and so price is higher. This actually supports my ideal of pricing according to skill level needed to produce rather than recource usage...thank you...
One last comment. Is it possible to get a response on this thread from SOMEONE that is not trying to have "Delusions of Grandure". A reply that invloves more of the topic rather than an attempt to seem so highly educated (akalacking common sense) would be a great breath of fresh air!
Pawlin
Tue Jan 25, 2005 12:59 pm
#6
I'm not really sure what you are trying to say.
What is your point? Can you put it into a single sentence for me?
bigwilly1979
Tue Jan 25, 2005 2:13 pm
#7
I think this reasoning is fundamentally flawed. Of course, resource usage is the main influence. As a crafter, resource cost is my cost to craft the item and to sell it below what I pay for it is stupid, to put it simply. I think the car example is a bad one because the difference in the two is quality. If I have a failed experimentation and end up with a BER 11, I cannot charge as much for that as I would for a BER 13. Rather, if I went out and bought a bike instead of a Corvette or Saturn, I would be paying less due to the resources involved. There are several different elements to price, andquality is just one of them. Yes, SWG has a very inflated pricing structure. If anything, I think houses and harvesters should cost more, but due to the cost difference between harvesting your own resources and buying them, I think the undercutting done by those who harvest their own resources coupled with the low prices people charge has caused to the market to expect a lower price. I think that houses should cost as much or more as a suit of armor that decays. The whole thing is out of whack, but it's too late to fix it now.
Stownhart wrote:
Well unfortunately most of the responses thus far have come from persons insistant on basing prices off of amounts of resources needed to produce. Maybe I didn't make myself totally clear the first time. My whole idea is that basing product cost off of resource usage is nothing more than ripping of the customer. If resource usage were the main influence to say car manufacturing, then wouldn't a Saturn cost the same as a Corvete? No and the reason being is that when buying that Corvette you are paying for the higher technilogical skill involved in it's design and creation. Or to expound upon my previous example, what if a laborer carries 100 pieces of lumber on a job site one day and a carpenter nails together 100. Should the laborer make an identicle paycheck?
Jutewr
Tue Jan 25, 2005 4:11 pm
#8
Stownhart wrote:
Believe it or not, how much money you make is not the sole purpose for working. I know this may seem an alien concept these days, but there is still a little thing called "Pride in your work".
I do take very much pride in the work that I do, but I don't have the time to spend endlessly restocking my vendors. I have a thriving tailoring and furniture business. I stock two of each clothing and furniture item on my vendors. I only have time to play for usually 2-3 hours a day, and I like to do things besides stock my vendor. My prices are high, and they are set that way on purpose. This helps prevent (but doesn't completely block) me selling out my stock every day. I have more money than I will ever use, but I don't have the time to restock all of the items I would sell if I sold them cheaply. I happen to use a cpu pricing system, but only for simplicity's sake. My furniture prices range from 1k for torches and candles to 12k for some master level furniture. I enjoy running my shop and take great pride in my work.
Pawlin
Tue Jan 25, 2005 4:17 pm
#9
Stownhart wrote:
No cross server anything. This is a community game. I work deals with other players for there building lots that they would never use anyway. Mostly with all combat class characters. My stadard deal is that I give them 8 harvester to set and they set me with admin status. I keep up all maintainance on all 8 harvesters, I collect from four of them, they from the other four. They get free resources which they can sell, and I get more building lots available to me. See I deal more with the people playing the game than the game mechanics. This is because while this is a game which is not reality, the people playing the game ARE reality.
Ok, the above method is a pretty good way of doing it actually. Thats a good deal for both you and the lot owners. Usually when people have 100 lots it is through cross server trades.
And yes, fairness to the customer is my main point here.
But what is a 'fair' price? THe supply and demand factors in a free market are what determines what is 'fair'. Is it 'fair' that gold costs 426.60 an ounce in the real world?
Most people can take one of our heavy harvesters and recoup their investment easily within a week. THat seems 'fair' to me.
I think your basis for resource prices being unfair was that the profit margin was "too high" compared to real world. But in the real world there are plenty of things with very high profit margins that are considered 'fair' by the milions of people buying the product every day. e.g. movie theatre popcorn, a cup of coffee at Starbucks, a bag of ice at Safeway, etc. Profit margin alone isn't what determines if a price is fair or not.Consider, what is a 'fair' price for 1 acre of land. THen consider 1 acre in Hong Kong versus one acre in rural South Dakota. Demand as much as supply determines what is fair and what is not.
Believe it or not, how much money you make is not the sole purpose for working. I know this may seem an alien concept these days, but there is still a little thing called "Pride in your work".
I'm suremost of us have pride in our work. Both in the game and outside of it. But we all have different goals in what we do and want to accomplish. I'm playing the game because I find it fun. I do run my business in order to generate good profits since the amount of money I make is one measure I use to determine how successful my business is. Its a challenge for me to make more money which I find fun. Many people playing the game play that way.
But profits is just one factor for me. I do also try to keep a well stocked shop, I try to meet my customers needs (within reason) and I try to provide good customer service.
If you want to give away money and sell things for cheap then thats fine. If that makes the game fun for you then cool. But don't expect other people to use your business model or think that its the only way things should work cause you "know the value of a dollar" and the rest of us are supposedly children who don't know any better.
Anthemion
Tue Jan 25, 2005 7:32 pm
#11
Walmart is an example used in many economic arguments.
Anyhow, I think that the pricing of goods based on CPU of materials is a bit arbitrary. Yes it is important, but the most important thing is your in game time to grind out the items. I respect the value of skill in RL but skills in the game are easy to obtain an things made buy a "less skilled" toon have little value in the game. There are many "Master Crafters" in the game and we are all competing for customers and want a return on our investment. Our investment is time.
But pricing by resources is more convenient. All monetary systems are arbitrary.
Anyhow, I think that the pricing of goods based on CPU of materials is a bit arbitrary. Yes it is important, but the most important thing is your in game time to grind out the items. I respect the value of skill in RL but skills in the game are easy to obtain an things made buy a "less skilled" toon have little value in the game. There are many "Master Crafters" in the game and we are all competing for customers and want a return on our investment. Our investment is time.
But pricing by resources is more convenient. All monetary systems are arbitrary.
Message Edited by Anthemion on 01-25-2005 09:42 PM
Mad-Hatter
Tue Jan 25, 2005 7:42 pm
#12
Sorry, I missed this part, while this seems like a good idea, once again, not everyone wants put put trust into other people's accounts, it's just human nature. Seems like you got a good thing going, but even still like I said, someone could easily have better marketing skills then you and buyout your stock and resell it for more, so why lose out on the money? And you also have to factor in that alarge portion of people who play this game act like an idiot or "uber d00d", which makes people like me lose trust in people even less. Plus, everyone I know can't spare the lots to set something like this up.
Stownhart wrote:
No cross server anything. This is a community game. I work deals with other players for there building lots that they would never use anyway. Mostly with all combat class characters. My stadard deal is that I give them 8 harvester to set and they set me with admin status. I keep up all maintainance on all 8 harvesters, I collect from four of them, they from the other four. They get free resources which they can sell, and I get more building lots available to me. See I deal more with the people playing the game than the game mechanics. This is because while this is a game which is not reality, the people playing the game ARE reality.
And yes, fairness to the customer is my main point here.
Believe it or not, how much money you make is not the sole purpose for working. I know this may seem an alien concept these days, but there is still a little thing called "Pride in your work".
Anthemion
Tue Jan 25, 2005 7:47 pm
#13
If you don't trust that uber dude simply use secure trade or let them buy it off the vendor. People you have a working relationship with in the game you can work out more trusting deals. Professional relationships can develop and bring yor costs down.
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