Business And Economy Archive
Thread: The economics of a crafter
Page 1 of 4
Ledao
Mon Aug 09, 2004 10:19 am
#1
Phaelyn wrote:.
- Creates new roles for architects and BE's. While giving YOU an unfair advantage vs other professions that need resources. What next, a machine that draws Aluminum from Endor down to Dantooine, so that you don't have to move a harvester?
Message Edited by BleuDestiny on 01-21-2005 09:29 AM
Ooooh, that sounds like fun. 
But it's going to be a Doc schematic, right?
tehehe...
mistereous1
Fri Jan 21, 2005 8:34 am
#2
A month in the life of an Armorsmith
There is a lot of fingerpointing out there that the crafter is price gouging. Hopefully this will give a little insight into how this works.
To make it easy here are some relatively close numbers
New smith sets up a vendor and stocks 40 suits his first month. Manages to sell 5 suits every week selling at 250k per suit with a raw materials cost of 50k per suit. His overhead costs include factories/harvesters/vendor cost/etc. and average 50k per week, except for the week he runs the armor we'll estimate that at 150k. A new hide comes out and he hires a scout for 75 cpu who delivers 10k units in the second week. A new resource comes out needed for stocking so he hires a miner for 4 cpu that delivers 300k units in week three. And he buys a +2 tape for one million credits in the last week of the month.
All numbers in thousands of credits
Week 1Week 2 Week 3Week 4 Total
Gross Sales1,250 1,2501,250 1,2505,000
Material Cost2,0002,000
Overhead 150 50 5050 300
Gross Margin(900)1,2001,200 1,200 2,700
Expenses
Scouting 750750
Miner 1,2001,200
Exp Tape 1,0001,000
Net Income (900) 450 0 200 (250)
In the first week opening up you're at an operating loss, a modest profit the next week, break even the third, modest profit thelast week, but you're at a loss for the month. Looking ahead to the next month you just need to replinish 20 suits so your material cost is cut in half, so in a month's time you've made 750k.
This is not a whoa is me, I'm a crafter post, this is an attempt to educate those that have not experienced crafting and operating your business of the reality that's there. The rich people in the game are either fighters that have run out of things to spend credits on, crafters that have grown their business to large proportions and have paid off their 12 point suits, looters that don't have anything to spend money on, or resource merchants since they have such low costs. The common crafter is not rich, most of them support their crafting by fighting or looting.
Message Edited by mistereous1 on 01-21-2005 11:09 AM
BleuDestiny
Fri Jan 21, 2005 10:25 am
#3
Also, crafting faces two other problems, one of which is passed on to the customer:
Storage:
Storage is obscenely limited in the game, we have to fight storage constraints on a daily basis. So much of our daily existance is dedicated to fighting storage problems, making us do things outside the scope of a single avatar's ability to store things. If you want to enjoy other elements of the game, like gather loot kit items, or space loot to better your ship, forget it. There is no way to manage a crafter's role with other elements of the game that involve loot of any kind, other than things that don't fall within reason for a single avatar, such as lot swapping for example. This is seriously broken. A significant, consistent, and ongoing daily grief is put upon the crafter to manage around storage issues.
Solution: The simple solution without increase server burden or playing with a lot of server database issues is to increase stack size of existing items, so that 100k stacks of resources cap at 500k. I don't know if increasing the digits in a stack to 7, fora million in a stack, creates new difficulties, then perhaps 800k even. Increasing item caps in a crate would also significantly remedy this problem.
Meats and Hides:
As a Doc crafter, I'm held hostage to an economic monopoly of the hunters. If I want meat to craft buffs with, as many professions need meat and hides, I have to pay outrageous prices to hunters to obtain the meat, upwards of 200cpu or more. This is nuts. When is a monopoly good for an economy? Like my fellow crafters who also rely on meats and hides, I have to pass those costs on to the customers. People complain of the high price of buffs, comp armor, etc., well look no further than yourselves or your fellow hunter who charges obscene prices for the meats and hides. They're collecting $1 million from me for every 5,000 units of meat, which for the average spawn is about one buff session of hunting. Nice return eh?
Solution: Create a ranch player city structure as an alternative to reliance on hunters, as an alternative, not to replace hunters, that also helps the architect and the BE earn a living. The architect crafts, experiments, and sells the structure, including quality aspects that lead to greater output of meat and hide, the BE is required to sample the DNA of the spawn to feed into the structure, and the crafter has a ready source of meat as a secondary channel to balance out the monopoly of the hunters. Like a harvester, when the meat or hide spawn dies, so does the output of the ranch.
Benefits of a new Ranch structure:
- Hunters must compete for meat and hide business, prices fall
- Hunters and crafters don't have to stop and hunt for two weeks during a spawn on some planets that are really mind-numbing and unenjoyable!!! Pharples rather than Banthas. Choose what and when its worth hunting vs. ranching, or both.
- Prices come down for all related items down the chain from having cheaper sources of meats and hides; price of buffs, of getting buffed, of food, of armor...
- Raises enjoyment for everyone regarding meat and hide acquisition
- Lowers the uber $$$ earnings for hunters, improves the overall economy overall, and brings down the prices of loot and auction items cause there's not so many billionaire hunters out there jacking up the auctions
- Creates new roles for architects and BE's.
Message Edited by BleuDestiny on 01-21-2005 09:29 AM
mistereous1
Fri Jan 21, 2005 10:50 am
#4
Interesting thought, I'd almost like to see it explored as it's own thread. But I'm not sure how it would work, because if you think about it, what makes a resource valuable is that it's unique. Completely and totally unique. It hits and it's never coming back EVER. So miner, stop what you're doing, we've got 7 days to pull this together. Scout, forget that, we've got ten days max to go get this stuff. By that very nature, we've got to have it all right now tomorrow is too late. It's that urgency that drives the prices to where they are.
MadeEvil
Fri Jan 21, 2005 10:51 am
#5
The problem is everyone has so much money that they can afford to pay those sorts of prices.
I think if we take money out of the economey people will no longer beable to afford 50 cpu
So the hunters will drop their prices becuase no one is buying then item prices drop because people get materials cheaper then the hunters don't need to charge 50 or 75 cpu to make enuff money to but the items..
Same goes with Minerals and chemicals and such if people stop buying at 8 cpu the price will go down it only costs about 1 cpu to mine a resource on a decent spot
I think if we take money out of the economey people will no longer beable to afford 50 cpu
So the hunters will drop their prices becuase no one is buying then item prices drop because people get materials cheaper then the hunters don't need to charge 50 or 75 cpu to make enuff money to but the items..
Same goes with Minerals and chemicals and such if people stop buying at 8 cpu the price will go down it only costs about 1 cpu to mine a resource on a decent spot
Pawlin
Fri Jan 21, 2005 10:55 am
#6
I believe it does take 1-2 months before a new master crafter is really starting to turnany profit. And thats after they spent however much time and money to get to master in the first place. And if the economy is down or they have some difficulty selling their wares then they may never have any success. Its not easy for newcrafters in an established market.
Phaelyn
Fri Jan 21, 2005 10:58 am
#7
BleuDestiny wrote:
Meats and Hides:
As a Doc crafter, I'm held hostage to an economic monopoly of the hunters. If I want meat to craft buffs with, as many professions need meat and hides, I have to pay outrageous prices to hunters to obtain the meat, upwards of 200cpu or more. This is nuts. When is a monopoly good for an economy? Like my fellow crafters who also rely on meats and hides, I have to pass those costs on to the customers. People complain of the high price of buffs, comp armor, etc., well look no further than yourselves or your fellow hunter who charges obscene prices for the meats and hides. They're collecting $1 million from me for every 5,000 units of meat, which for the average spawn is about one buff session of hunting. Nice return eh?
Perhaps on your server it is different - However as an observer of the forums, etc - You can't blame the sellers -You blame the BUYERS. Much as I know you'd like to deny it, it's your competitiveness that has caused this problem. how, you may ask? Doc A posts on Forums he is buying a good spawn at 50cpu. People start selling to him at 50cpu, and ignore their normal contractee, or guild doc they have been supplying. So far, not bad, right? but, Doc B, seeing that he is losing the meat, ups it to 60cpu so HE can get the meat. Add in Doc C who bumps it to 75cpu - The hunter did not dictate these prices.. The Docs themselves did. If you don't get the same spawn your competitor gets, you lose business, so their ecision to up the ante makes you do the same. I suggest instead of playing the Outbid game with each other - Get together and develop an agreement - Set a CAP on all future purchases. Establish amongst yourselves what the meat is TRULY worth at each level, and instead of out bidding each other, offer the same price across the board. In turn, hunters who used to wait for the highest bidder will develop a relationship with a particular Doctor, and begin to harvest for them exclusively. THIS leads to a perfect symbiotic relationship, and settles the economy.
Solution: Create a ranch player city structure as an alternative to reliance on hunters, as an alternative, not to replace hunters, that also helps the architect and the BE earn a living. The architect crafts, experiments, and sells the structure, including quality aspects that lead to greater output of meat and hide, the BE is required to sample the DNA of the spawn to feed into the structure, and the crafter has a ready source of meat as a secondary channel to balance out the monopoly of the hunters. Like a harvester, when the meat or hide spawn dies, so does the output of the ranch.
Benefits of a new Ranch structure:
- Hunters must compete for meat and hide business, prices fall Hunters don't set these prices, YOU do. Don't compete against your fellow docs, cooperate and settle the system yourself.
- Hunters and crafters don't have to stop and hunt for two weeks during a spawn on some planets that are really mind-numbing and unenjoyable!!! Pharples rather than Banthas. Choose what and when its worth hunting vs. ranching, or both.They chose the hunt as part of their character - If it's that bad, they won't do it.
- Prices come down for all related items down the chain from having cheaper sources of meats and hides; price of buffs, of getting buffed, of food, of armor...Prices come down when you make the pricing structure for purchases. Again, it's all of you competing that made this an issue.
- Raises enjoyment for everyone regarding meat and hide acquisition No, it takes away an aspect of the game.. Interdependance on each other, and the purpose for gathering in the first place.
- Lowers the uber $$$ earnings for hunters, improves the overall economy overall, and brings down the prices of loot and auction items cause there's not so many billionaire hunters out there jacking up the auctions Again, all of YOU have caused the prices you pay to skyrocket. If you were paying 10cpu for meat, and a hunter came to you and said "Pay 100cpu or I won't sell" You wouldn'tpay it, and look for the next hunter who WOULD sell at 10cpu.Instead, you all started bidding wars that is burying YOUR profits and your profession.
- Creates new roles for architects and BE's. While giving YOU an unfair advantage vs other professions that need resources. What next, a machine that draws Aluminum from Endor down to Dantooine, so that you don't have to move a harvester?
Message Edited by BleuDestiny on 01-21-2005 09:29 AM
mistereous1
Fri Jan 21, 2005 11:01 am
#8
MadeEvil wrote:
The problem is everyone has so much money that they can afford to pay those sorts of prices.
I think if we take money out of the economey people will no longer beable to afford 50 cpu
So the hunters will drop their prices becuase no one is buying then item prices drop because people get materials cheaper then the hunters don't need to charge 50 or 75 cpu to make enuff money to but the items..
Same goes with Minerals and chemicals and such if people stop buying at 8 cpu the price will go down it only costs about 1 cpu to mine a resource on a decent spot
I'm curious what do you think this entire thing will do other than change the proportions??? AT BEST what we're looking at is mission terminal pays out 1/3, so crafter charges 1/3, so resource/scout charges 1/3. You haven't changed the economy, you've changed the scale...that's the best case scenario. If I'm missing something please enlighten me.
Now let's look at the next step. Resource merchant is now selling for 1.2 cpu with a cost of .8cpu. At that margin you'll have less people willing to harvest resources, so you'll have a resource shortage...resources are finite. Each one is unique, there is only one best on the server and it spawns ONCE, so if you're mining less of it, wouldn't it stand to reason that the price on it is going to reach higher proportions??? Man this can be bad, you still end up paying 8 to 10 cpu if not more, only you're pulling in credits at 1/3 the rate it was so that 8 to 10 is really like 24 to 30 in today's economy...does anyone not see a problem with that???
mistereous1
Fri Jan 21, 2005 11:04 am
#9
Pawlin wrote:
I believe it does take 1-2 months before a new master crafter is really starting to turnany profit. And thats after they spent however much time and money to get to master in the first place. And if the economy is down or they have some difficulty selling their wares then they may never have any success. Its not easy for newcrafters in an established market.
You're right...in reality, I put 5 suits a week up as an example, but it takes several months before a smith is selling at that rate. Luck plays a role in that, but for the most part that's it.
Ledao
Fri Jan 21, 2005 11:14 am
#10
BleuDestiny wrote:
Meats and Hides:
As a Doc crafter, I'm held hostage to an economic monopoly of the hunters. If I want meat to craft buffs with, as many professions need meat and hides, I have to pay outrageous prices to hunters to obtain the meat, upwards of 200cpu or more. This is nuts. When is a monopoly good for an economy? Like my fellow crafters who also rely on meats and hides, I have to pass those costs on to the customers. People complain of the high price of buffs, comp armor, etc., well look no further than yourselves or your fellow hunter who charges obscene prices for the meats and hides. They're collecting $1 million from me for every 5,000 units of meat, which for the average spawn is about one buff session of hunting. Nice return eh?
Two points regarding this:
1. Why is 200 cpu "outrageous"? At 200 cpu, the avian meat cost on a health pack is 5600 credits. Given that the pack can be sold for 15-25k, there's quite a bit of room to turn a profit... In fact, buffpacks have by far the highest profit margin in the Doc product line. Further, I really doubt that the increased meat costs over the past year-plus have actually been passed on to the consumer -- they've been compensated for by cheaper and more readily available extractable resources, as well as increased competition, and prices on the whole have gone down (even as quality has risen).
2. The price of avian meat is dictated entirely by the demand -- what Docs will pay for it. The only impact the scouts and rangers have on the price is in their willingness or lack thereof to spend time hunting. Demand isn't determined arbitrarily though: the higher the price, the more people will be out there harvesting, and the greater the general supply of that meat will be, so the price threshold is determined by the quality of the spawn and the scarcity of meat at the time. Of course, how many people will be harvesting avian meat in a given week also has to do with what Chef, BE, and Armorsmith creature resources are available that week, and what they're all paying.
Ledao
Fri Jan 21, 2005 11:19 am
#11
Phaelyn wrote:.
- Creates new roles for architects and BE's. While giving YOU an unfair advantage vs other professions that need resources. What next, a machine that draws Aluminum from Endor down to Dantooine, so that you don't have to move a harvester?
Message Edited by BleuDestiny on 01-21-2005 09:29 AM
Ooooh, that sounds like fun.
But it's going to be a Doc schematic, right?
tehehe...
MadeEvil
Fri Jan 21, 2005 12:00 pm
#12
mistereous1 wrote:
MadeEvil wrote:
The problem is everyone has so much money that they can afford to pay those sorts of prices.
I think if we take money out of the economey people will no longer beable to afford 50 cpu
So the hunters will drop their prices becuase no one is buying then item prices drop because people get materials cheaper then the hunters don't need to charge 50 or 75 cpu to make enuff money to but the items..
Same goes with Minerals and chemicals and such if people stop buying at 8 cpu the price will go down it only costs about 1 cpu to mine a resource on a decent spot
I'm curious what do you think this entire thing will do other than change the proportions??? AT BEST what we're looking at is mission terminal pays out 1/3, so crafter charges 1/3, so resource/scout charges 1/3. You haven't changed the economy, you've changed the scale...that's the best case scenario. If I'm missing something please enlighten me.
Now let's look at the next step. Resource merchant is now selling for 1.2 cpu with a cost of .8cpu. At that margin you'll have less people willing to harvest resources, so you'll have a resource shortage...resources are finite. Each one is unique, there is only one best on the server and it spawns ONCE, so if you're mining less of it, wouldn't it stand to reason that the price on it is going to reach higher proportions??? Man this can be bad, you still end up paying 8 to 10 cpu if not more, only you're pulling in credits at 1/3 the rate it was so that 8 to 10 is really like 24 to 30 in today's economy...does anyone not see a problem with that???
My problem with the ecomonics is that people are turning over huge profit margins
Just seems wierd to me when someone mines something at 1 cpu and sells it for 30 cpu thats a 3000% profit..
Does that seem off to you?
mistereous1
Fri Jan 21, 2005 12:10 pm
#13
Not if it fits within the scheme of everything else now your numbers are excessive let's try something more realistic.
more like 1 cpu and 4 cpu. That's the average cost of most mining contracts I've seen. But once the good is gone that price doubles, because we have gone from an unlimited readily available supply to a limited if you don't have it you're not going to get it supply. The shift ending increases the value of it...it will still stay in the doubled contract price for months as the supply is still plentiful. But what about resources that either
A) Aren't as plentiful because the supply has been used up.
B) weren't as heavily harvested because there was another resource spawning at the same time.
To put it in real world terms, it's oil. While the production runs freely, prices are low and everyone is happy. When the supply starts to lessen gas prices go up now imagine things stop...what would happen to the prices of existing oil? How much would a gallon of gas cost??? These resources are no different in the exception that eventually another similar resource will spawn, may not be as good, but it should be adequate which is why things don't get totally out of proportion 1,000 cpu or 10,000 cpu
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