Business And Economy Archive
Thread: So tell me...why are prices so high on things?
For instance, the type of player truly dedicated enough to be making the server's best composite armor is not likely to be one to base his prices on his costs, i.e. the maintenance and power of a few harvesters. He's much more likely to base his prices on what people will pay--he's doing something few other people are capable of, and is liable to feel his product is worth paying a premium for. Players who are in it more for the fun of providing a service they know everyone can afford work well in certain markets or professions, but they tend not to make it or last long in the most demanding styles of crafting.
Not without raising their prices, anyway--and all these demands of keeping up with and organizing and paying for the best possible resources tends to push people away from low prices in a hurry. Architects and tailors and us smugglers will end up charging a very low rate based on a cpu cost because it's relatively easy to produce our best stuff, so a modest profit still seems pretty good for the lower amount of work we're putting in, driving down prices across the profession. However, even as a shipwright (a moderately demanding crafting profession, but probably not on par with AS/WS) who harvests most of his resources, I have no desire or motivation to lower my prices: for one thing, I try to service the elite market that can pay what I charge, and for another, what I have to do to run a successful business often feels like work.
What I feel comfortable with charging does depend a lot on what people are willing to pay, but I decided to base my prices on labor and value rather than the cost to produce them because what I try to do is both hard and costly, and I think that should be reflected in my rates.
Case in point: I charge very little for my weapons (I only have a few on my vendor that aren't enhanced and are over 10k credits, such as power hammers). I sell maybe a weapon a day on average; some days I sell three or four, but most days I sell none. It evens out to about one a day.
I was practically broke (less than 100k in the bank) and ended up having to fork over one of my anti decay kits to keep from going bankrupt.
I know there are weaponsmiths out there that charge a bundle more than me, and their weapons are just about the same -- I'm 11 point. They're 12 point. Theirs have.. I dunno, 50 more condition points. They get all the business, while I get little to none.
I really think that people get the idea that paying more for a weapon means it's special, I don't know how they think it's special, but they really do seem to. Charging less for weapons almost put me out of business.
Message Edited by OsirixJedi on 03-12-2005 01:24 AM
MeciniaLua wrote:
Well to the crafter that is charging 10 cpu, that's actually pretty good and fairly reasonable.
Charging 50k to 100k a piece for composite of the kind described by the person from Chilistra I believe is outrageous. ( Same quality on Radiant you can buy the whole suit for less than 200k if ya know who to buy from.....my last suits were 175k and 183k respectively...and I don't even wear them much now...I use my Stormtrooper armor......I save the comp for my trips to Dathomir.....)
Recently on Radiant I started a second toon, Bienurdau. I had been somewhat upset at the prices charged by several tailors on the server. So I decided I was going to be a tailor. Now first off i don't grind like most people do, that's just an unnecessary waste of resources and credits. I buy my resources from the bazaar right now from 3 to 5 cpu. I make my little items and put em up for sale for 10 cpu. I chose 10 cpu because it was sufficient to meet my needs and was a good bit cheaper than many items I saw on the bazaar. I've not made it to tailor yet, but that's okay, in time I will.
For example a Travel Pack at 10 cpu sells for 700 credits...if you are paying more than that, someone is really just jipping you. Someone that was collecting their own resources could probably sell it for even less perhaps even 5 cpu and still make a profit.
By grinding a profession in only 2 to 3 days you are really outpacing yourself. If you spend a million on resources for your grind of a crafting profession then you start that profession a million in the hole. That's one reason we see such insane prices. Some of those folks are trying to recover what they spent grinding as quickly as they can, some, not all.
Another major problem is the price of harvested resources. Most hunters take missions out on the animals that drop the harvest they want. This makes it much easier to get it. Running missions with Enoorea, I generally can cover travel expense, veghash, and probably some towards maint on weapon and armor from just the mission money. Then I go and sell my harvested resources to someone. This is where the economy has gotten way out of whack. 100 cpu for herb meat or wooly hide sounds like a dream to a hunter. You can generally gather 10k a buff session on a good run of harvested stuff. That's a million. off one buff session the hunter makes. A buff ran them around 15k ( that's the cost of the buffhouses on radiant), a full suit of comp armor that is decently good runs around 175k to 185k, a decent carbine I can get for under 50k ( not a krayt one but a decent one ), crate of ahrissa would run me 125k ( and in this time I wouldn't use but half of it ), crate of brandy 125k or thereabouts ( wouldn't even use a stack of this....). I've sold the meat and wooly for 100 cpu before, why cause it was easy money. But looking at my expenses compared to what I made you can see that the price is really outrageous. How does this affect the overall economy. Simple, if you got a doc or armorer offering 100 cpu for that avian meat, herb meat, or wooly hide, then all the main hunters are going to be hunting that and not the insect meat, carny meat, or other items that are needed. Thus chefs and others have to raise what they are willing to pay for their resources so that they can get someone to hunt. I recently offered 40 cpu to a lot of different folks to hunt me some insect meat with Mecinia, not one person would do it or so far I haven't had any. Keep in mind for vercupti at 40 cpu that raises the cost to make the vercupti 800 credits as each stack takes 20 units.
This affects the costs of many goods. Tailor, Armorers, Chefs, BioEngineers, Medics, Doctors all use harvested resources in their products. As you drive up the costs to obtain those resources you drive up the cost of the final product.
So basically as I said before it breaks down to greed.
Thus if you really want to know why prices are so high, look at the costs of resources ( both those mined and those harvested ) and look at how many folks are wasting resources just to grind a profession quickly. In my honest opinion these two things are the greatest contributors to the runaway market we have seen on many of the servers.
I want a 100 inch Widescreen Plasma TV with surround and a deluxe super comfy recliner, but I only need a 10 inch 4:3 mono TV and a cushion to watch my favourite shows.
If people wake up and realise that its a MAKE DO system and you reep what you sow, they wouldn't whine so much. A player based economy means putting in the hours = reward, not "Hey I bought the game, gimme everything I want, for cheap, so I can be a L33t h4rdc0r3 Playa!"
Cross-Fingers that the CURB resets most of the mentality of current players...
Ara-Dan
Umm, how do you people think collectibles get prices so high in real life... people WANT THEM and are willing to pay for that sentiment. SWG is the same capitalist consumerism as real life, hence why supply and demand and price fixing can work.
Thinking about it, we do need a conglomerate of powerful player to be honest and not price fix across the board, but all that is needed to topple that is a new collection of players to undercut prices and openly publices that fact.
Thinking maybe SWG needs a watchdog against price fixing if nothing else...
Ara-Dan
MeciniaLua wrote:
The point is if you feel prices are overflated on your server its the players fault because of greed. And the number one cause of that prices is the cost of harvested resources and resources mined.
This isn't really correct. Greed has very little to do with it. The customers set the price, not the 'greedy' crafters.
Consider this example from my server. PSGs are a hot commodity, something that most armoursmiths have a lot of trouble keeping in stock - the stun and lightsaber resist means that they get bought out very fast. The long-term, established armoursmiths sold them for about 25k each. Before you go up in arms and start calculating what that is in cpu, hear me out. A newer armoursmith, freshly 12 pt, wanted to start making PSGs, but didn't know what to price them at, because he'd never managed to see them on people's vendors (bought out too fast, at 25k per, no less). So he tried to calculate them for himself. He worked it out, and charged 6k per - that came to 10-20cpu, I dunno, something like that. He spent the required 3-5 days (that's how long it takes, guys - there's a lot of crafting involved) to do his first run, got the first run complete after a lot of work, and advertised it on the forums for 6k per PSG.
His 3-5 days of work was bought out in less than two hours.
Now, if you believe the quote below, you'd think that this guy would be ecstatic - he's selling to more people, selling faster than ever before. Getting more money, right?
iota-frost wrote:
it would work better if u make things cheaper...more people would be willing to buy off of u instead of having a laughable price...and in the end u'll get more money...no not basic economics...just basic intelligence
But that wasn't the case. He realised something had to be wrong - the total reward wasn't really worth it for the work invested. And of course it isn't - that's a lot of crafting time, which he could have spent getting 500k an hour in space, or killing Nightsisters to loot hundreds of k worth of creds and items that he might sell for millions. Instead, the full PSG run made about 1.5 million gross - that's not profit, but total. He could have made that in an evening in space, or less.
What's more important, though, is that he realised - this isn't right, if people are buying me out this fast, they must be prepared to pay more. 6k is obviously too cheap. Is it greed to charge what people are prepared to pay? Some people obviously say yes. I hope those people, when they loot a +25 attach that people are offering 30 million for, say to themselves, 'no, that's greedy, it only cost me an hour of time, 10k worth of buffs, about 25k of armour condition, and a few k of weapon condition to loot this. It wouldn't be right to sell it for 30 million when it cost me less than 100k to get. I'll put it on the vendor for 500k, that's a 5cpu profit, that's fair'. But of course nobody would do that. Would they now? Surely everyone can see that it's not 'basic intelligence' to try to sell things for less than what people are prepared to pay for them.
On one last note, for those people who think that those crafters who are 'overcharging' for items could make more money by selling more at lower prices - it's not true. Believe me, as a high volume crafter, I have tried. It's not true. If I lower my prices, I am bought out too fast. I cannot physically craft that quickly. I cannot stock that many items that fast.Sure, I might be able to if I played for 18 hoursa day and did nothing else but craft, but if I were playing that long and that intensively, I could make more money doing other things than crafting. And people have real life to deal with too - your creds don't pay your mortgage. As a crafter, I raise my prices to the point that I am bought out slowly enough that I can restock in time. That's it - it's really that simple. If I lower them, I ambought out too fast. That doesn't encourage me to lower prices, not a bit. All it shows me is that people are prepared to pay a certain level of price. I am already crafting as fast as possible - why charge less and make less money?
RelicOMO wrote:
MeciniaLua wrote:
The point is if you feel prices are overflated on your server its the players fault because of greed. And the number one cause of that prices is the cost of harvested resources and resources mined.
This isn't really correct. Greed has very little to do with it. The customers set the price, not the 'greedy' crafters.
I never said it was greed of the crafters you assumed that. Crafters pay others for resources, at least most do because it is hard to craft and get all your own resources ( you can do it early on as I did, but as you get more and more customers it is hard to work that way ). My comment was not directed at crafters but at everyone in general. The original poster wanted to know why things costed so much.
And it was pointed out that the major issue by not just myself but another poster or two as well was the cost of resources. If BE tissues and resources weren't so expensive I could sell my chef foods much cheaper.
In my example I provided a real game example of how much I could make in 1 buff session selling meat at 100 cpu. I admitted I did it cause it was easy money, that is greed. I even broke it down to show what I spent, I still have over 600k in money...though I'm still doing missions right now..not hunting. I basically have it to where i earn a little more than I spend everytime I log on. If I spend 15k in buffs and then perhaps another 1k in travel I make sure to make twice as much back.
OsirixJedi wrote:
It's always seemed to me that the "expensive" crafters seem to get a lot of business.
Case in point: I charge very little for my weapons (I only have a few on my vendor that aren't enhanced and are over 10k credits, such as power hammers). I sell maybe a weapon a day on average; some days I sell three or four, but most days I sell none. It evens out to about one a day.
I was practically broke (less than 100k in the bank) and ended up having to fork over one of my anti decay kits to keep from going bankrupt.
I know there are weaponsmiths out there that charge a bundle more than me, and their weapons are just about the same -- I'm 11 point. They're 12 point. Theirs have.. I dunno, 50 more condition points. They get all the business, while I get little to none.
I really think that people get the idea that paying more for a weapon means it's special, I don't know how they think it's special, but they really do seem to. Charging less for weapons almost put me out of business.
Message Edited by OsirixJedi on 03-12-2005 01:24 AM
i've thought about this some too...i only made 12 point a few weeks ago. i used to be just about the cheapest on the server, now i'm at the lower end of the pricing range but not the cheapest.
i decided that being the cheapest, which i started to do thinking i would be sort of a weaponsmith for the masses, makes people think you see your own stuff as lower quality. i think the average customer scans the vendor list before looking at details and if all the prices are really low they think if they look at details, they will find its all bad stuff.
as a consequence my own sales were pretty low for awhile, even though i actually have great resources and made pretty comparable stuff compared to the high end ws's on ahazi at the time.
to get repeat business, you have to not only provide a good product but also give the perception that thats all you do is make great stuff. i think the perception is that only bad crafters go for cheap, so pricing higher actually gets you more business.