Business And Economy Archive
Thread: The economics of a crafter
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EdOWar
Mon Feb 07, 2005 1:38 am
#40
Rere wrote:
EdOWar wrote:
Something to keep in mind about buff packs, each buff pack only takes 20-30 Avian meat. Most of the rest of the resources are obtained from harvestors for only about 0.5 cpu (or less). For six buff packs (one for each stat), that's less than 200 Avian meat.
Slim Vargo, Corbantis
Not true. A buff pack actuallyrequires other 7 resources. One of then is herb meat (which you need 192 units per set) and that cost a Doc anywhere from 50 to 100 cpu. And of the others, 4 are VERY specific resources, meaning that they aren't always spawning and that in the history of each server, there was probably only 1-3 high quality spawns that can really make high quality subcomponents. (And trust me, if you're spending 200 cpu on avian you wouldn't use it to make sub par packs). So in the end, you either have this stuff because you stockpiled it during months or you can be sure you will end up paying a heck lot more than 0.5 cpu for it.
But on a more general note, I agree with you. It is definitely a profitable business otherwise no Doc would be willing to pay 200-400 cpu for a certain spawn of avian on-shift. (Just probably not as profitable as you 1st assumed)
Ah, okay. Thanks for the correction on the herb meat (so add another10K to 19K forgood herb meat). Still, most of the other resources are collected by harvestors, and working with a guild or using lot trades it wouldn't be hard to stockpile millions when a good resource does spawn. Even a lone doc can stockpile enough to last until the next good spawn comes along.
Slim Vargo, Corbantis
Crimsonsplat
Wed Feb 09, 2005 2:24 pm
#41
Suggestions that docs, or anyone else, collude to pay less, are hopelessly naive, if not evident of a "blame the victim" mentality.
Price collusion does not work unless all parties unanimously abide, because the moment one gets an advantage by breaking the agreement, all other parties have a strong incintive to also do so, e.g. lost sales. In a venue where there is a highinflux of new competitors, it is also necessary to continuously recruit the new businesses to the cartel, or else the group will find itself at a disadvantage vs. them. Absent any mechanism of enforcement, it is inevitable that someone will attempt to gainan advantage by refusing to join or remain in, such a cartel.
Furthermore, should such a cartel succeed in raising profits to high enough levels, newmerchant/manufacturers will be attracted to the market. Again, absent any barriers to their entry (legal or otherwise)these businesses will inevitably represent a threat to the established cartel.
For a real-life example of this, study the Iran-Iraq war of the 1980's. Iran needed more money to field their army, but the Saudis backed Iraq (because they feared Iran more at the time). Iran started breaking their quotas to earn more cash. The Saudis opened their exports up to a very high level (~ 9,000,000 bpd), driving world oil prices very low. Iran couldn't sell enough to make up for the loss in revenue,but the Saudishad the reserves & cash to keep it up for over a year. Iran finally caved and agreed to follow OPEC quotas, and S.A. dropped their exports back to normal (~<8,000,000 bpd). Later, Venezuala tried the same thing and simiilarly got spanked.
On the crafter's "sales side," few players are rich enough, and none can produce enough,to play Saudi Arabia to an entire galaxy of crafters. When they run out of their crafted resource, people will pay a competitor's higher prices. So they can't undercut long enough to forceany but the weakest competitors out of business--in short, the entry level crafter.
On the crafter's "buy side,"there is a time pressure on spawned quality resources. Both buyer and seller know it's going away soon. Therefore the pressure is on the buyer to raise the incentive to his supplier to gather large quantities now, and the supplier knows if he doesn't get a bid that's "worth it" he's going to go do something else "worth his time."
Because in the end, that's what you're bidding for-- not the resource, but the player's leisure time. Too many crafters unconciously understand that on the buy side, but fail to set their prices accordingly on the sales side.
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