Kapi as it stands - A critical view

[Guest]

Interesting discussion, because i am in wood business Anybody made accurate calculations about wood and wardrobes ROI (with current market prices)?
For me, whole discussion sounds like agitating to produce more wood witch means - lower wood prices I know, furniture is profitable, but before entering in it, company must be prepared own production buildings, a lot of cash, researches, etc. And if you are not ready, its really better to make some wood

Atm it's till rising, yesterday I sold for 65c on the market, 3 days ago that was 62c and week ago 56-58. Of course small differences in prices are relative, but wood is deffinatly a good (and easy) bussiness.

Grtz

[Guest]

wood is deffinatly a good (and easy) bussiness.

Of course, but unfortunnetly after big expansion ROI drops very much comparing to Plantation without expansion. And then its really good question: is it still more profitable to expand Plantations or its better migrate to furniture I have some calculations about wood until then its profitable to expand, but still do not know anything about wardrobes ROI. And for me its difficult to compare them yet

[Guest]

Here's some ROI's if it helps you. I do ROI a little different then most - I include the cost of the materials to operate as well as production costs for 24 hours as part of the building cost: it is effectively capital tied up, so it should be treated as an investment.

Assumptions:
all at manager
all goods sold to self or on contract
power .09 water .10
iron 10 coal 10 chems 16+Q

100m2 Green Plantation making Q9 wood sold at 52 +.6Q: 57.40

7.79%

100m2 Green Factory making Q8 steel sold at 133 + Q: 141

3.34%

100m2 Green Joinery making Q10 wardobes sold at 1550+50Q: 2050

3.26%

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Here's a few more, just for reference points

100m2 Yellow Mine making stones sold at 13.5

6.82%

100m2 Green Power Plant making power sold at .09

4.84%

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Still think joineries are a good deal? Want to buy some joineries and maybe some L24 wardrobe research?

- Capi

[Guest]

me too i am also a wood producer, more than 150K wood daily and still expanding. i have 3 joinery idel. i sell the wood. joinery only work for my own store. so, in about 3 days joinery work only 1 day.

[Guest]

But you cannot make the hourly profit that you can on other products.

Don't want to sound too much like a noob, but,,, if you expand your furniture stores, you will be able to sell the same amount of products per hour and get more for those units sold. Use the extra caps you make from the expanded stores to expand your research centers and then your other buildings until you end up expanding your stores again.

I think store expansion is the key to selling low quality anything. If you can get advertisements in stores that are 200 sqm, you can sell any quality at a relative profit.

[Guest]

i have to agree with Smell as well. Although i am putting off building another joinery right now i continue to expand my existing Furniture store. i want to see how large it must be to sell all my wardrobes at the optimum price so i dont have to dump some to other players at much lower prices. That will also tell me how large it must be when i do add another joinery. Constantly modifying my business plan is one of the most enjoyable aspects of Kapilands to me. Constant motion is a good thing

[Guest]

Constant motion is a good thing

I won't take that out of context.

[Guest]

rofl. oops. then again, it could mean so many things.

[Guest]

Capitalist said:
Here's some ROI's if it helps you. I do ROI a little different then most - I include the cost of the materials to operate as well as production costs for 24 hours as part of the building cost: it is effectively capital tied up, so it should be treated as an investment.

What exactly are you calculating? Are you dividing the returns gained from selling the goods over the cost of obtaining the building (ROA)? If so, then you should note that there isnt depreciation in this game. And there isnt the cost of finding buyers/sellers of buildings. Your return will be the gain on goods sold over Original cost of building - current selling price. (There is no opportunity interest returns in this game, so the most effective way is to use the payback theory)
If you arent calculating returns/ building
then original ROI actually = Price of g/s sold - cost of production / cost of production.

[Guest]

Ah. Someone who can ask questions

ROI = return on investment

It can be measured as a number of time units (days here) or as a percentage.

The pain is measuring the investment:

One part is the cost of the building (time, materials, money)

Another is the materials used in a time unit: most of my production is in 24 hour cycles. From that perspective, 24 hours of production costs, material and monetary, are effectively part of the "investment".

A building without materials is a cart without a horse.

Trying to see the horse and cart as seperate investments is... silly.

[Guest]

Capitalis
Making wardrobes in own joineries to sell them to CMB for such low price is really low ROI. But how about own furniture shops + own joineries? Or maybe, only own furniture shops and buying wardrobes from others? 3 ways and all are different in profit with different ROI

[Guest]

Your return will be the gain on goods sold over Original cost of building - current selling price. (There is no opportunity interest returns in this game, so the most effective way is to use the payback theory)

I disagree with that approach, because even if there isn't an interest rate, you still have the opportunity cost of the buildings you didn't create. Since the money is tied up, I would include it in the investment and calculate the return off that, which helps me better decide if money is wisely used on something else (building something cheaper, buying research, speculating on market purchases, etc).

However, there is a good premise to what you're saying that is definitely worth thinking on.

[Guest]

TakeON

Getting an ROI for retail is kinda odd - really, it has to be done on a daily basis based on AV and Q.

If we assume that the AV of wardrobes is 1550+50Q, my 300m2 full ad furniture stores spread across all three countries, use results from my Q10 wardrobes, and look at the last few days, retail ROI is around 3.333%.

Getting that ROI is a mess and time consuming process.

For one, you have to see profit as the difference between selling the goods to CMB and selling them in your store. At any given price, the number sold and profit per unit changes.

Determining what price is the best takes putting a lot of numbers in as price, and making a chart. There are many points on the chart with very close profits. I tend to err on the side of that "plateau" that uses the fewest wardrobes.

For right now, I sell 300 (1/2 a rack) in 24 hours for an average around 3050. Q10 CMB price - 2050. That means, I make a profit of 300k from selling my wardrobes.

On the other hand, each 300m2 furniture store costs around 9M to build and put ads into, given that you look at the build time and the cost of the wardrobes you could have sold much faster to CMB.

300,000 / 9,000,000 = 3.3333333%

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Terarus

On the other topic - the best example for looking at ROI this is in cars - the cost of the materials is many times the cost of the building.

Try looking at cars with and without this.

- Capi

[Guest]

why does it always happen when I should be asleep?

This happens all the time to me. I like to write and I suffer from writers block from time to time. My best work (in my opinion) comes at either the start of a new day, like 3:30am when the birds are just starting to stir and the night sky is giving way to the pastel gray of the coming day. Another good time to write for me is,,, just before bed.

I think that everyone would have a late night every now and then, thinking about things that have been on their minds of late but have never been able to work them out. When you think about something when you're tired it can be hard to remember what your thoughts were when you wake up. I write things down (or type them actually) so I can remember what my weary mind was doing. Being sleepy can give you some really great ideas but if you don't remember them in the morning what good is that?

When we get sleepy things can seem a little more simple. Things can seem very complex sometimes but if you take time to think and remember your thoughts when you're not sleepy, you may find that the complexities are merely an illusion.

When you are close to journeys end (thinking about a situation) why would your mind let you go to sleep? Sometimes you can go to sleep and pick up the pieces in the morning but other times you just have to get the job done, come to a conclusion and fall asleep happily.

This is obviously something you have been thinking a lot about lately. Or you spent too much time sleeping in the afternoon.

I sold my plantations and the wood price went up the next week, or was wood always dear? Everything changes and if I remember correctly, I started Smellin Inc about 5 times. I should have restarted a sixth time but I decided to just keep going and change my company structure as time went by. This probably slowed my start down heaps but the mistakes I made, I made for a purpose.... To learn what I was doing...

I made and sold wardrobes through my own stores, sold them to CMB (oh and by the ways, thanks CMB) and I also sold my joineries and furniture stores back to the system. That gave me enough experience in the field to know that I didn't want to make wardrobes

why does it always happen when I should be asleep?

Because your mind never goes to sleep, only the body sleeps. I love ranting sometimes.

[Guest]

Getting an ROI for retail is kinda odd - really, it has to be done on a daily basis based on AV and Q.

Knolls write a good post about this here :
http://www.forum.kapilands.com/viewtopic.php?t=4219

With this information on hand we will know what is the perfect price for selling your item in your store.
What I want to tell to all of you is that in that post there is a spreadsheet and there is one of the column that tells you the value of the item to you.
Knolls have told us why that in this column you should never use the price of the item in your warehouse. If you bought the item, you should use the price of the item that you paid.
I want to add this. The price that you should put in this column is the amount of money that you can get when you sell the item in marketplace deducted by 10% market taxes or the price that you can get if you sell the item by contract or the money that you can get when you sell the materials you need to produce the item, which one of these three that is higher. This way you won't miss the opportunity of getting more bucks for your item or the material needed to produce that item. You also won't sell your item for too low of price in your retail store
So selling wardrobe for 1700 is in my opinion really not good for your own profit

The poster of this topic, Capitalis also write some good posts about why you must calculate the money you spend in building your retail stores. Here they are : http://www.forum.kapilands.com/viewtopic.php?t=4127

With all of these informations, I understand why elder choose not to produce wardrobe in his joineries and left them idle. I also understand why Capitalis want to sell his joineries and wardrobe research and why TheSmell even already sold his joineries and furniture stores.

Too many of wardrobe producers sell wardrobe for too low of price and don't understand how to get the best profits for their own sake