Chef Archive
Thread: Undercutting Prices
Cyene wrote:
Just understand that I am as adamant as you all are that my prices are justified; I'm not trying to grief you, just steal your business (muhaha). Additionally, while many of you may feel I'm undercutting, I feel just as strongly that you are gouging.
Go ahead... steal, or try to anyway.
It's a game. I couldn't care less. 
I don't feel like I'm price gouging. I think I'm pretty much in-line with how much it costs for me to run factories, harvesters, and purchase top-quality resources from other players who mine for a living. I have hunters who harvest the best meats and hides for me and I pay them well. If I charged 2-3cr per resource for my products, I would be losing a lot of money, not gaining.
Again, I feel like my prices are fair, and I'm not even making much of a profit. If you don't like these prices and want to undercut me, be my guest. Just keep in mind that this isn't like being an architect or tailor, where your items don't decay and you don't get repeat business often. There's more than enough room for a dozen chefs in one city.
I notice repeat customers alot more often now im getting people coming daily for crates of sunburns be cause now they are not afriad to use them while they exp(because of the cost) they can use them freely with out fear making more sells for chefs no only myself but anyone else selling sunburns.
On the bazaar I charge 800 for a stack, as I have to travel about to place them. If people buy from my vendor, they pay a little less, if they order from me in crates, it's ~5cr per resource.
I buy 90% of my resources as I have a medium house, a factory (I have 3 but one down at a time, the others are for AUKs & WUKs for my slicing), and a Forward HQ - this leaves me with 1 slot for a harvester which is generally on reactive gas, as thats the highest priced resource generally.
I do price spice differently though. I charge 500 a shot for Muon Gold & Neutron Pixie.
If I wasnt so established, with people knowing me, I would probably increase my food & drink prices a bit, as when I set them I was running 7 harvesters, so my overheads were lower.
That said, I still make enough cash for my needs.
OMG I AM GOING TO SCREAM!!!
1-Realize WE are the chefs, THEY are not, and most customerscan make much more money than we can.
2-Chef is a very very tedious lengthy process to master. Other professions can master much faster, and rake in much more per sale without any guilt in pricing.
3-***MOST IMPORTANT*** our prices should be based PER use. Why? because they get BENEFITS from EACH use. Sure discounting large stacks/crates is very acceptable HOWEVER. When you dip so low as 150, 200, 300 (screams) per use, you are screwing ALL chefs and future chefs, since anyone seeing that price per use learns to expect ALL TS to be worth no more than that. People do not understand our profession. Give samples as I do for those wavering about buying. But do NOT ruin the future value of the profession, by making the public think our food and time, and equipment use is not worth much.
4-People in this game pay 10k in a heartbeat for clothes. Something that just gives them a certain look. Food has a definitive purpose, visible benefits, and enhancements, that allow them to RAKE in huge amts of money quickly on kill missions. DO NOT...DO NOT feel guilty for charging per use. I sell TS for 125k a crate of 225 uses (555 ea) to go lower than 500 is foolish. Customers that fight will tell you those maxed on fighting stats do great with the minimal +1500's TS stats, so save your xp pts for quantity and duration.
5-Lastly, it is totally irrelevant in sales how much our cost to make something in , as far as end product sales price goes. Calvin Klein ( clothes maker of RL) does not say "Oh Gee, I got that denim at an awesome price, so I think I will only charge the same $2 it cost me for these packs of 10 jeans. Heck thats 400% profit! Yes 10 Jeans for $20..." Our food stacks are the same way. Discounts in bulk are fine, but price cutting just because you made 200% profit or 400% profit is silly. If itcosts me 300c in res to make a stack of TS you are darn right I will make at least 4200c (1400% )profit on a stack of 9 sold at 500c ea. Why the heck should any of us feel guilty?? The consumer gets a great per use price, we make good profit for our time spent and equipment maintenance.
***PLEASE, base your price on the USEFULNESS of the end product, not a set amount of profit and the rest free, and not on feeling guilty about making so much more on a sale than it cost you. They are getting the stat buff many many times over, we get paid ONCE. Next time you feel bad about profit % ask some armorsmiths how much profit they make on suits. My hubby played one and they had suits marked up by thousands. He made 1 mill creds in his first week. I make great profit, and have yet to make a million after being a chef since week 1. DO NOT FEEL bad. We have a purpose. It is undervalued right now, and undercutting does not fix that.
In response to YodaBabe:
1. Yes, I am the chef and I will set my prices.
2. I don't care how much other professions make. If I wanted to roll in millions of credits from the get go I would of powergamed up the weaponsmithing tree ASAP.
3. How can I screw up the market with my priceswhen A. They are consumables and people will always need more. B. I cannot supply an entire server. C. I am still making money of the deal.
4. People will pay 10K for clothes because they are indestructable. They will never decay. I would pay 100K for a good suit of clothes becauseI know they won't disapear in a week. A shot of food on the other hand will be gone, done, and useless after a few minutes. People don't want to pay out the nose for something that will last that short of time.
5. Comparing ingame profit margins to a company in real life is assinane. You can do stuff with all that extra profit in real life. You can invest it in a hell of a lot of things to make you business more money or more efficient. You can hire more personal and do all kinds of stuff with extra money. In SWG there is bigger harvesters and the collecting of resources to invest it. That's it. I don't need to get max profit in order to get those things. Plus, it's just a game.
And lastly, you say you charge 125K for a crate of Tatooine Sunburns and have yet to make a million credits? Funny. I charge 22.5K for the same thing and reached the million mark this week.Clearlyselling volume andnot tothe rich is the way to go.
"When you dip so low as 150, 200, 300 (screams) per use, you are screwing ALL chefs and future chefs"
Whereas I feelyou are screwing all your customers.
Please, continue charge that much if you can...that's the difference between you and I, you want to try to pressure other Chefs towards your skewed pricing model while I could really care less.
"I charge 22.5K for the same thing and reached the million mark this week.Clearlyselling volume andnot tothe rich is the way to go."
WTG Hoggle, won't be long for me and business is just getting better.
I personally am selling for a tad lower per crate, but I have a couple of resellers who are making a killing because my prices allow their markup to be very competitive.
Cyene
I sell tat sunburns for 1500 ... so a crate for roughly 40k.
Someone on Chilastra must be selling higher, because they thought that 40k was an awesome deal.
People who charge only based on what it costs them to get the resources are missing the less obvious costs of doing business. Consider this:
--It takes very high quality reactive gas to get the large stack sizes that people want. This is not always available. On Starsider, we just went well over a month with nothing over 550 OQ. Another 900+ just appeared, but a few days before that I saw some of the older high quality gas get posted on the bazaar for 15 credits per unit, and was snatched up within minutes.
--Some of our items require meat and hides of the best quality. Many of us don't have the combat skills to obtain these ourselves, and few (if any) can get the kind of quantity we need solo. So we buy from others, and this puts us in competition with all the medics and armorsmiths out there for a limited supply. Good meat and hide sells for WAY over 5 credits per resource on my server.
--You're not factoring your overhead beyond maintenance and power for your installations. You paid a lot of cash for those heavy harvesters and that factory, and invested hundreds of thousands of resources in your training. (Plus probably a lot of cash too, if chefs are as scarce on your server as they are on mine.) And what about factory time? By the time you've cranked out all those Starshines and the final load of Sunburns for a full factory run, several days have gone by. If you had used that lot for a heavy harvester instead, you could have pulled up tens of thousands of resources and sold them for a sizable sum. In economics terms, this is known as "opportunity cost." It's a well established real-world business principle, but I have yet to see anyone make it a factor in their in-game pricing scheme.
--You need some headroom in your profit margin to allow for the unexpected. Your vendor eats a customer's special order, and you have to re-make it. Radioactive power disappears completely from the galaxy for a couple of days, and you have to buy it on the bazaar to keep your harvesters going. The only decent quality of a resource you need is found on a planet it costs 2500 credits round trip to get to. People start complaining that the Sunburn you sold them isn't working, and you have to replace their bugged stacks. All of the above has happened to me just in the last two weeks. People who are scraping by just above their cost are not going to be able to deal with situations like this.
That being said, I don't worry too much about price undercutters for any of the items I sell in my shop. People who sell at the cheapest price in the galaxy invariably find themselves unable to keep up with the demand. My vendor is always stocked, and money isn't so hard to get for combat classes that they'll travel halfway across the planet to someone else's vendor to get a bargain price, knowing that it's likely to be empty. I do a slow and steady business, which enables me to provide good service and keep consistently stocked.
And like Ilori, I try not to price myself so low that (a) I'd take away a less experienced chef's chance of making a sale, or (b) that I couldn't at least break even if I had to buy all my resources, or if the quality of everything I needed suddenly turned to crap.
Some good points Olathe..I feel like opinions on this issue could very widely from server to server.
I personally am sitting on some 35k of 985 quality reactive, and the quality on Chilastra has been very good the past month or so (the 985 i had a med and a small harv on an 84% spot for a full week).
Many of the points you bring up I do factor in already, though I totally agree with the meat/hides scenario. It is just impossible to find meat and hides in quantity sufficient for a factory run. Luckily,some items that require harvested organics have a counterpart recipe that may no be quite as good, but is much more easily mass produced.
As far as factory cost, mine persoanlly were either paid for by missions early on, or were part of a resource exchange to get a good price (I think I traded 15k ore for my med flora harv).
As I mentioned in a previous post, I'm very interested in see how people price whom run their own harvester versus those who purchase resources. And, more specifically, if it is possible for a someone who only purchases resources to be competitive with someone who does not.
The good news for all of us is the present demand is sufficient enough to keep the small number of Chefs extraordnarily busy.
Cyene
First, let me apologize for my post ALL being in large text, didn't realize it was still on after the first line.
Anyhow, I don't want every chef to use my pricing, BUT every chef should see the value in their foods, and there is nothing wrong with charging what its worth.
As far as the million issue, I am speaking from the stand point of having to train another skill to master, as well as a few high music/dacne things for some fun in this game. THAT is why I do not have a million credits, and many other chefs do not as well. I also maintain 3 shops, and have quite a bit of maintenance and resource costs per day. So since week one yes i have made a million, maybe even 2. But in the bank steadily NOT a million. I have steady sales and restock daily, so clearly my prices as are most chefs valid. I am just emphasizing, that when Joe Player sees TS on the bazaar for 60 ea, or hears someone shout it for 200-300 ea in cases. All they hear is that must be what its worth. And their opinion of every other chef becomes skewed if they see 500ea ( trust me I got into it with a player that swore if this other chef could afford to sell TS crates for 200c ea, then the rest of us were ripping him off) Yet this same player, who admittedly has over 2mill creds from missions on Endor and wherever else, has a HUGE house fully decorated, and brags about how bada-- he is when using TS and can kill mobs there in just a few hits....That is why I feel we need to have some sort of agreeable pricing. There will alway be "sales" and "competitive pricing" but yes, what the game public sees ( the 12k TS crates) DOES influnce what they begin to feel our service is worth.
"That is why I feel we need to have some sort of agreeable pricing. There will alway be "sales" and "competitive pricing" but yes, what the game public sees ( the 12k TS crates) DOES influnce what they begin to feel our service is worth."
See, that's where the disconnect is. Many of us are perfectly profitable and happy selling 12-15k per crate, and I honestly feel thats close to what they are worth (with the caveat that I am selling to a reseller, not retail per se hehe.
Not that I haven't tried to sell them at 25k per...I just personally didn't have much luck.
There must be a wide gulf in perceived overhead costs from one Chef to the next.
Just as long as everyone understands that low prices do not always mean that particular Chef is undercutting to grief other players.
Cyene
I think part of the reason why some like to price low is that getting the materials for 99% of the chef itemsis way too easy to do.I know I do.
There are no subtypes of ricelike there is the different kinds of steel. There's one drink I think that requires specific types inert gas, but I have no idea if it's even worth bothering venturing through the galaxy looking for the stuff for just one item. But with steel there is quadranium, ploonium (I think that's the name) and a ton others. Each being specifically used in something and they aren't always available on a planet orevenin the entire galaxy.
There are also no planet specific materials required like a medic needs for various healing packs. Sure there is Corellian Ale and Brandy needing Corellian stuff, and some Tatooine required materials, but their effects can easily be replaced by something that can use materials found on any planet 100% of the time. But as a chef, I can use just anyfungus from any planets for 99% of the items.
A Tatooine Sunburn needs cereal, minerals, and reactive gas. The first two are very broad and cover a bunch of different types of materals. Cereal and minerals can *ALWAYS be found on any planet. Step out side your house and chances are you on or close to a high % spot for it. And reactive gascan pretty much be found on any planet at any time.
If Suburns needed a specific type of reactive gas, or reactive gas fromaspecific planet you can be sure my price would go up.