Tailor Archive

Egads!

I was just running through some of the recent posts, and saw one where aplayer had folks complaining that she was underpricing. And then she said she was selling most of her shirts, pants, etc for under 100cr.

YIKES!

I think it's fair to say that the business aspect of the game is modeled after the real world. So, that's the model I used for pricing, and it works. (In the game, my prices tend to run on the higher side, but not leading the pack, as it were. And I do a good amount of sales.) So, I thought I should give the 'formula' I use. I ran across a player last night who has a tailor on another server, and he uses a straight formula of (# of resources used) x 10cr to get his prices. For those who want to take a simple formula, this works... though I would suggest a multiply of x 12cr to be a little more accurate.

For those interested in being as realistic as possible, here's the equation I use:

(Cost of Resources) x (Service Multiplier) / .6 = Suggested Retail Price.

This equation gives me 2 very important numbers... wholesale and retail values. Wholesale is the CoR multiplied by the SM. This is the price at which I sell in bulk to Merchants. This is NOT the price I give to Joe Blow when he comes up and asks for a pair of pants. It's the price I give when they're buying a full crate of pants. The SRP is the price I suggest that a merchant sell it for, and I agree not to sell it individually for less than. This allows anyone playing a true merchant the opportunity to make money.

Cost of Resources can be simple... what did you pay for your resources. Insert that number here. Of course, most of us are harvesting some or all of our resources, so this gets a bit tricky. The rule of thumb that I use (based off Valcyn bazaar sales of resources) is 3cr/unit for organics, fuels,chems and flora resources; 5cr/unit for most minerals; 7-9cr/unit for low yield resources such as water or LGOs; and 12-15cr/unit for specialty resources required in crafting. For example, if I had a shirt that required 16 fiberplast and 4 metal, that would give (16x3) 48cr and (4x5) 20cr, for a total CoR of 68cr.

Service Multiplier is a personal evaluation of your skill. In the real world, this normally runs between 3 and 5, though some folks do go infinitely higher. Set this number where you feel comfortable. If you're good at customer service, go for 5. If you aren't, go for 3. Under no circumstances should you go lower than 3. Ever. So if we apply a SM of 3 to the shirt in the previous example, we end up with a Wholesale Price of 204cr. This is what you would sell the shirt for if you were selling to a merchant player.

Now comes that little "/ .6" you saw in the equation. In the real world, we have 3 steps in the process... manufacturer, distributor and merchant. I don't think anyone will actually want to play a distributor, so I'm folding his price cost back into the manufacturer end of this equation. Basically, merchants purchased their wares for 60% of what they're selling them for. That's why sales of greater than 25% are so rare in day-to-day life. Even if they want to move something, merchants still want to get their cost and overhead back out of it. Normally, the merchant makes 40% at regular price... so this "/ .6" allows that. Following our previous example, we get a SRP of (204cr / .6) 340cr. And this is the price you should use for individual sales because you should never undersell your merchant!

The market concepts of supply and demand exist, and that is where your SM comes into play. Raise or lower your SM, not the end price. If your SM must drop below 3 in order to "price competitively", guess what? Stop making that item... it's a losing proposition! Go on to making something else, instead. If you can't, then just grind for a while until you get some new item that you can afford to make, or change professions.

Sincerely,

Kakita Jammo

Proprietor, JOS (Valcyn)

Only one tiny problem... At those ratios, a crate of reinforced fibreplast panels (My staple item) costs (using an SM of 3 to minimise this number) 18750 credits. My rate is 2700 credits (And has been for some time). Why? Becuase harvesting materials costs less that 5 creds a unit. Under fair circumstances it is worth .7 creds a unit if you harvest it yourself on a pretty wasteful spot. It all boils down to a vertical monopoly.

Based on the .7 creds a unit cost to the miner (Now working on a standard market layout assuming that manufacturers buy it at wholesale) we apply your formula (.7*3)=2.1 credits a unit. Now we apply that to the RFP Crate (25 Count) (2.1*30*25*3)=4725 a crate. With the current going market price @ 3000, this shows that it is ineconomical to sell RFPs using the formula and expect to turn a profit if you don't establish a vertical monopoly. And for anything other than crated goods (because the facotry requires little-no attention) the additional time spent maintaining harvesters could get seriously annoying...

But otherwise it's a great pricing scheme. Better than the one I made, (Retail=Material Cost*1.1, stack the 1.1 markup on the cost of components) only because the exact specifics are more appropriately accounted for and the price makes more sense. So dispite the complaints... Ya, I think at least for non-Synth Cloth/RFP sales its a great plan.

I like his general idea as well. It cant really aply directly to factory crates because they dont require any personal input to justify the 3-5x multiplyer.

And I agree with him, wholesale prices of resources should be based on what they are sold for by miners, not by what you can harvest them for. If you have the time and resources and to harvest all your own resources, great. But you shouldnt expect every tailor to base prices at .7 per resources just because thats your cost.

On the same note, its note very fair to base your prices on those .7 costs either. If you can afford to sell clothes slightly cheaper because you harvest your own resources, thats fine. But selling at 1/3 or less the price of everyone else is wrong.

(Sorry if this turned into an anti-dumping post... didnt mean to).

I like your post, one of the most thoughtful on this all too controversial subject. Two factors though that are difficult to ignore:

1) demand for an item.Some items arein suchdemand, that you're pretty much compelled to bump way up the price irregardless of material costs or anything else. In a way people that buy them I think are greatful for higher pricing on these items too cause if you buy something you like, the last thing you want is to see every newbie on the server wearing the same thing that you just worked your butt off to buy.

2) The "bazar" factor. If in the formula something comes out to be "worth" 4k-5k or so, you really gotta ask yourself if it is worth charging that price and putting them only in your vendor, or biting the bullet and putting them on the bazar at 3k where you'll probably sell many many times more of them.

demand for an item should certainly be taken into consideration. i think bumpinghot sellingitems up is fine.. afair ratio for that would be nice. just like when something is not such a hot seller i end up marking them down to get them off my vendor.

aimee isakk

expert tailor, theed, naboo on gorath

This is one of the better pricing systems/suggestions I have personally seen on these boards. Well done. I am using your formula to see how my prices would stack up. I'll be interested to see the results I get.

Thanks for sharing.

I charge what I think i can get away with and still sell items at. The truth is I make a lot more than I will sell so I figure i might as well get some return for them other than the xp. I am not giving the stuff away but I think i have a fair pricing system and if items are not selling in a few days i normally drop them down to half price.

Something is awry with your math there.

Using the original formulas:

(25 chem * 3 cr per unit) = 75

+(5 metal * 5 cr per unit) = 100

* 25 in the crate = 2500

* SM of 3 = 7500

You seem to be multiplying your CoR times 3 to start with before ever beginning your calculations. Using your number of .7 cr per resource we have:

(30 resources * .7 per unit) = 21

* 25 in the crate = 525

* SM of 3 = 1575

Correct me if I'm wrong.

Shianna Aislin

Chic by Shianna

On Scylla, between Keren and Theed at -267, 2331

swgcraft.com had a link to a nice price list generator, forgot what it was offhand, tho.

the defaults worked pretty well -- basically10c/resource, 12-20c for specific hide/metal/gems, and then multiplying tier 4 items by 1.5, master by 2.5 or something like that.