Architect Archive
Thread: Some of you architects dont understand the profit margin very well, or your too greedy.
Im on thevirgin Tempest server, where lots of people like to play Artisan.
I just created this character a week ago, thinking I'd get a few architect skills so i can build my own medium harvesters so i can grind towards armorsmith.............. Well, I then took a peek at the Bazaar and saw average price for personal harvesters at 1,500 credits. So I sold at 1,400. Then someone undercut me at 1,300. So I sold at 1,200. THen someone undercut me at 1,200. Then I sold at 1,000. Then someone undercut me at 900. Then I sold at 850. Then someone undercut me at 800. Now for last few days I've sold at 799. ANd i've only seen a few personal harvesters on sale for 700 or less. But No point in undercutting those guys cause theyre on another planet.
I've sold about 300 personal harvesters of all types in thelast week, and probably made about 100k in credits in profits. During that period of time, I saw an increase in the amount of people using personal harvesters about 20 fold..... NO KIDDING you, 20 fold. And the amount of resources on the Bazaar have tremendously increased in quantity. Also, the cost of resources people sell are also going DOWN on bazaar considerably. Big bonus to any and all artisan professions. More resources, lower prices. Supply and Demand.
Today I made my first medium mineral harvester I intended to use for myself, but someone bought it off me for 10,000 credits. NOW SOME OF YOU MAY SAY THAT I SELL TOO CHEAP! But I disagree. Considering the fact that theguy that bought that medium harvester off me will also be flooding the bazaar with cheaper prices, I think I made out fine myself cause I will probably be buying resources from him at 3-2 credits per unit.
N O T 5-10 credits per unit.
Hmm...so you sold something that takes 3607 resources for 10k. And you think that the person buying it will be selling you resources for 3cr each. 3607 x 3 = 10821. Sounds to me like you lost money on the deal...and even more money if you failed any of the components while you were building it.
I'm curious as to how you think you're helping yourself. Your last statement seemed to indicate that the person would sell their resources lower. Why? Cuz their cost is lower? How does THAT affect it? Is it increasing his supply? His # of lots are finite, the ore spots are finite, so how does you're price increase the supply of ore out there? given the calculations Ive made, I would have to say one medium harvester is pretty infinitesimal in the grand scheme of things. His price will be determined by the supply he has vs the demand he sees. If he doesn't see much demand, then yes his cost will decrease but your pricing has little to do with that. Now if the cost of a harvester was so high as to make his business unprofitable given the demand for his commodity, then you've just knocked a person out of that business. That sort of thing is why I have not made any chem extractors for the general public. They are simply unprofitable items due to their high resource cost vs marketable price. Now you're underlying point is that competition is good. Well, yes it is good for the consumer. However, in a game its bad. Games are not like reality in that certain commodities are required. In fact EVERY item is a luxury. My point in saying this is if an architect(or insert whatever profession you want) fails to get the return on their time that they want, they will spend their recreation time on something else(be it another profession or another game.) And then in effect the cost of the items will go right back up and will hurt the buyers until more players see the profit potential and enter back in.
See my point here? In your example, the person who bought the harvester from you has no incentive to sell cheaper. In fact the price sold in either case will be the same. In the higher cost case, there may be a lesser chance that the person will sell in the first place, but that chance is low(it has to be unless harvesters start selling in the 100k+ range, well actual value to be ~128k or so.)
If you're counting on gratitude, don't. Economics don't work on gratitude. While its nice, and everyone I know is normally pretty loose, Ive not yet said I will not take less than X cost(on my first offer.) nor has anyone Ive bought from. However if you make this an assumption, you're just asking to get burned, and cutting your own profits the way you are, you will be much more sensative to it. Would really suck to crit the last generator turbine and then have to walk 1-2k to the harvester, or spend anywhere from 5-15 creds per unit buying on the spot market. However if you build that in your cost, then you can do it, not worry and not have a problem. The only assumption I make in calculating my cost of an item is that I will automatically crit fail the final assembly. Now if I do that, it would be extremely painful, but I would think if you crit failed a medium or large harvester that you're bringing out on bargin basement pricing, you'll be hurting by several orders of magnitude more than I will.
Canth
This continues to blow my mind. Why architects continue to sell deeds at a price so low they'd actually get more for selling the raw materials. This is one of the major problem with the profession. Originally people complained about the fact that prices were too high, it has to be compared to the base cost of resources, everything in this game starts on that number, mind you that's only one of the numbers that should be worked in but base is always cost per resource. Why would you sell something for so cheap? In all honesty it doesn't make any sense. I guarantee you that as(if) you continue up the artisan tree you will have customers, but someone chargine 50% more than you will also have the same amount(I'm not saying everyone, but some people). Why not take the 3607 resources you used in the mineral harvestor and sell them on the bazaar, that way you'd be making at least 15k. Which is the minimum of what these things to go for. Even then though, you're still getting ripped off on resource cost.
That's all, I just wanted to get that out, why people feel the need to work, use skills, get crit fails, and still get paid less then if they did nothing...I don't even know what else to say...
Yikes...it looks like groundhog's day all over again. I suppose it happens on every server though. Prices drop drastically in the beginning so baby architects can make sales so they can feed their harvesters so they can get more resources to make more harvesters to make more resources so they can make more buildings to sell cheap so they can afford to feed their harvesters....you get my point. This is a good way to fuel your own personal expansion, but when you start to get some failures on big items it'll feel like someone hityou square in the gut.
In a perfect world there would be no failures and you could happily charge low low prices (and 3 cpu is very low) and never feel the pinch of scrambling for more resources because the large house you just promised someone yesterday has gone up in smoke.
Critical failures are not the only thing you have forgotten about. There are the fixed costs involved with harvesting. While somewhat predictable now, resources will shift and you will have to move. That means a certain amount of lost time, lost energy and perhaps lost money too if you had put in too much prior to the shift. There's also no way of effecting any change on maintenance and energy rates (except by getting efficiency 4), but that's a long ways off and is not market driven.
There's absolutely no reason you should be selling yourself short, and that's what probably 99% of all architects do. A weaponsmith sells a weapon for 100 cpu and no one bats an eye, but an architect tries to get away with the utmost in greed by asking 5 cpu for a building. How dare they.
I'd be interested to see how long your pricing schedule lasts. If you are lucky and never fail anything larger than a wall, you'll probably keep it the same, but if you are like the rest of us, you'll either quit or raise your prices. Either way, I wish you good luck.
Let's not forget it was like this on every server. All the munchkins training to be L33T bounty hunters slap up 10 harvesters to sell steel at 6 credits per unit. Sure, you'll sell alot of harvesters in the beginning...then you're realise they don't decay and you can't afford to make anything because you're paying 20,000 a day in Harvester Maintenence plus 100,000 to pick everything up and move it once a week.
So basically if that guy you sold the medium harvester to for half it's worth decides to sell his resources for 6 credits per unit like everyone else then you lose 8,000 credits for every one sold. It won't take long to go through that supposed 300k profit you made selling 150,000 personal harvesters.
DireBountyHunter wrote:This continues to blow my mind. Why architects continue to sell deeds at a price so low they'd actually get more for selling the raw materials. This is one of the major problem with the profession. Originally people complained about the fact that prices were too high, it has to be compared to the base cost of resources, everything in this game starts on that number, mind you that's only one of the numbers that should be worked in but base is always cost per resource.
What always blows *my* mind are the people who seem so close to atually understanding this situation, like Direbountyhunter here, but then veer off and miss it completely.
Look, you said it yourself. "base is always cost per resource." Now read that again, even though you wrote it. *COST* per resource. *COST COST COST*. "Cost" does not equal potential profit *IF* you were to go sell the resources on the bazaar. "Cost" is how much, in credits and time invested, it took you to obtain the resources, whether you bought them or harvested them yourself.
Running your harvesters on good density spots, and using fusion power, you can obtain your own resources at a *COST* of below one credit per resource. I know this, because I do it all the time and I keep track of these things.
If I sell products at 2 cr. per resource, guess what? I'm making a "profit" for my time invested. Maybe not as much of a profit as if I'd just sold them on the bazaar, but a profit nonetheless, and I dont' find being a miner and resource supplier to be very fun.
Obviously a noob architect, just wait until you critical fail on a house, med or large harvester and all that work/resources disappears in a flash. Sure early in the game it is fine, just wait until you get to the advanced items that require 25k+ resources and get a critical failure, re-calculate your profit margin then.
Wait until you are paying the maint that most architects have to pay. 100K? That is nothing. I drop 100K in a single day moving my extractors and set them up for a few days. That does not include travel, possibly to other planets, or any other costs.
What you also failed to realize is that while you were slashing prices the other people who sold for 1500 still sold their extractors. So all you did was leave a lot of money on the table. In fact the guy that was selling for 1500 probably bought your extractory for 750 and resold it for a 750 profit.
If you are smart you will learn soon enough that being the lowest price in town for architect stuff is only gonna hurt you. When you burn out or cannot make your orders there will be plenty of us more seasoned architects that can step in and sell at a reasonable rate and offer better service.
So if my time is free, my resources are coming in at less than .4 (Even if you include re-deeding costs)
So hell, if I wanted very little money for my time, I could sell at 1 credit/resource & still crack a profit of 100% over my investment. Now I have absolutely no reason to though. When I can't sell for at least 4 cred/res, I'm not going to make stuff anymore. I'll simply use my cash reserves (significant cash reserves) to mine 2 million resources, & pull my heavies/fusion up. If resources still sell at 3+, I may keep selling resources.
Selling at 2 cred/resource, I could fail every other deed, and still show a profit. So when you say these people are going to go broke, no, that's not true at all. They are doing a ton of work for no return, but if they're having fun, hey, more power to them. Some goof selling at 2 doesn't stop me from selling at 6.5. The goof can't deliver 5+ heavies a day, I can.
Like the other professions, Weaponsmith COULD sell at 15 cred/resource, and still show a profit on paper. However, it would be a SORRY ASSED profit for all their work. Ditto with Armorsmith selling at 20 cred/res.
Now, observe the last two weeks' posts. Has anyone else's business dried up? I haven't gotten any orders in the past week. If this keeps up I'm leaving the profession.
Notice, please, that these are the same people who were flooding the market with dirt cheap items a month ago and announcing to the world that they don't care.
The housing market is gone. Everyone has a house now. So the people who were undercutting selling small houses for 5,000, medium houses for 40,000, and large houses for 80,000, are now busily flooding the harvester market as well. Eventually that will dry up and they'll move on to furniture, and then that will dry up and these parasites will (finally) LEAVE the profession.