Important about Gas Prices!

[Guest]

Hello,

Word of introduction - I'm a big gas seller. I sell tons of gas daily and therefore I'm interested in average gas prices.

Why? Because the higher the average gas price is, the faster gas is selling in gas stations.What leads to higher profits. So naturally we should all tend to raise average gas price.

I've recently saw that average gas prices are dropping and gas business is getting less and less profitable.
It's because someone is selling huge quantities of gas at low prices and therefore ruining the average prices what leads to smaller profits for all of us gas sellers.

It has been long time ago proven that to keep average gas prices going up, all stores must be filled in 36-48hrs cycle. It means that once you completely fill your gas stations, you should adjust price so that all your racks would be sold in 36-48hrs. This way you'll contribute to raising average gas selling price and therefore you'll earn more money in a long term.

Example:
DAY 1 - If for example avg. price for gas is 50 caps and I sell 10k gas for 50 caps and it will be sold in 12hrs. So in day 1 I'd earn 1mil caps. But selling gas in 12hrs cycle would damage avg. price. So
DAY2 - cause I was selling in 12hrs cycle, avg. gas price dropped and now it's 40cap. I'll again sell in 12hrs cycle - 10k for 40 caps a piece. So that day I'll earn only 800k.

And each next day, avg. price would drop and I'd earn less and less!
That's why we should sell in 36-48hrs cycle to make sure it goes up.

Well - you'll probably say - "I'm just a small seller and it wont hurt the economy if I sell and lower prices". Well that's not quite true - I know that huge seller have a great influence on avg price but small sellers matter as well - for every big seller there're few small ones and if we'd were to compare they're selling figures we'd see that they have almost the same influence.

While working together we could make average selling price climb up and thanks to this we'll all earn much more money in the future!

Of course you can go even higher - 36-48hrs is a bottom limit - the higher you go the better for the future!

I am for example selling my gas on 72hrs cycle to contribute to raising gas prices!

Let's ALL use this method! No matter if you're big or small - toghether we can make a difference

Thanks for understanding and I hope I've convinced you to use this method

All the best
~gassy

[Guest]

Agree and not only for gas, for any product in stores.
I'm selling gas on 48hrs cycle, wardrobes on 72hrs cycle, Leather jackets on 480hrs cycle.

[Guest]

Don't deal with gas at all but there's a lot of companies on R1 seem to push the price of wardrobes right down recently, alot don't work out any figures and i know of at least a couple that sell or where selling at the wholesale price and couldn't understand why that is a problem, selling full stores in 24/36hrs and getting nowhere fast, when they realised they could still make good profit at higher prices and have wardrobes left to sell later/wholesale/build up a stockholding hopefully they stopped though some days the stats don't show that, thse were companies that had bought max furniture stores off the market and jumped straight in to selling.

Jackets need a good long sales time to maximise profits which is good as they take a while to produce good amounts, i normally fill every store once every three weeks or so and sell just over the maximum PPM, not the fastest way to earn caps but might as well get the most out of them, plus it give me time to convert a lot more cotton/cattle over to materials i can use straight away for jackets, i was slightly confused retailing jackets at first though all the info i saw about retailing on the forum mentioned 24/48hr sales times which have no bearing at all on jackets i slowly worked out.

[Guest]

Whilst I agree in principle, you have to think about the smaller company that produces and sells instore his own product. A company that is still expanding needs their profits now not some time in the future.

Why would they have Millions of caps worth of stock sat in their warehouse when that could be converted into cash to speed up expansion ?

It's the larger companies that are hurt most through reducing avg prices not the smaller ones.

[Guest]

There's no need for the smaller to rise they're prices, they don't effect the price much.
One of the top retailers can change the price faster then 1k small retailers

[Guest]

Actually you're wrong because average price is calculated based on quantity of gas sold at certain price. Let's say one big retailer have 20 maxed gas stations. In maxed g.station you can have max. 1,6milion gas. Let's say this player sells using 72hrs cycle - so in 24hrs he sells 1,6*20*0,33. So he sells 10,5milion gas.

Small retailer has let's say 50 gas stations 1000m each - so he can have 50k gas in each station. We suppose he sells on 24hrs cycle - 0,05*50= 2,5. So he sells 2,5milion gas a day! It's only 4 times less then big retailer!


Now we should take into consideration that there are much more small retailers then big ones! And well - as an example I've taken 50 gas stations 1000 m each and we all know there're many small retailer who have sum of gas stations much bigger then 50k sqm! So basicly small retailer has 10 times less sqm of gas stations but have only 4 times smaller influence on the price!


So the conclusion is that you need 2-3 small retailers to ruin an effort of huge retailer! And belive me - there're not many retailers who have 20 maxed gas stations and there are dozens of retailers who have many stations each with few thousands sqm! Still not convinced?

[Guest]

I sell gas on a 72 hour cycle as well... although 48 hrs seems better in the short term.

If anyone's interested I actually calculated that with the mechanics for price vs. selling speed the way to maximize profit per unit time in the short term is to sell at around 1.5x your true or opportunity cost (actually around 1.47x but it doesn't make a big difference and this applies to all products by the way). So there's never any reason to sell Gas on anything shorter than a 48 hour cycle.

I doubt enough people will see this to make a real difference though, sadly.

[Guest]

I gave a reason why it's NOT always best to sell at optimum price.

[Guest]

I'm really dissapointed because both of my Gas Stations are in expansion so now when the prices are booming I can't make any cash out of them.

[Guest]

@SJMSA: Great to know you're onbaord Well - I'm trying to convince ppl to use this method. It's worth a try even if only few ppl will actually see this and change their selling habits. I've also sent the same message to all ppl I know are selling huge quantities of gas - if you know anybody who's in gas business - please spread the word. Maybe together we can make a difference (and higher profits )

@podge: Well that's the trick in business - you have to be able to balance the production amounts and your selling capabilities. Smaller companies shouldn't keep any stock at all - it's too expensive for them And selling on 48-72hrs cycle isn't giving them much less profit

@Euanid: gas market is not booming now - it's still circulating around 60+1*Q (avr.price - avg.quality*1).

[Guest]

There's the problem.
If you sell less than you produce in a 24 hour period then you are stockpiling.

The other alternative is to sell on a 48 hour cycle and sell at market or on contract your suplus production. However I doubt that you could sell the surplus for as much as you could in your store.

[Guest]

Yes that's true but if you sell on 48hrs cycle then you can focus your expansion on gas stations and dont have to expand your production capabilities as fast as you'd need to if you were to sell on 24hrs cycle

I'm not saying that switching from 24hrs to 48hrs or 72hrs cycle is easy and fast for small companies - it isn't. But it's a step that should be taken - the sooner the better.

[Guest]

I hear what you're saying but different companies need different strategies.

My business is jewelery. I started with 46 mines, 3 jewel factories, and 5 jewelers. While it was still profitable to produce my own pieces I sold my 24 hour production in 24 hours.
When the price of power and water made my own production unprofitable because of lack of Quality I switched to making stones.
This meant as my factories and stores were not being used they could go into max expansion.
Another month will see my factories and stores fully expanded and a new strategy will be needed.

I know the big retailers don't like to see the avg price drop but do they consider the smaller player when they sell amounts that bring supply upto demand meaning the smaller player can't sell at all.

Just my thoughts and in no way having a go

[Guest]

You're right - but I'm not suggesting gas companies any strategies cause everyone needs to figure out the best tactic for themselves.

The point of this topic was to show ppl how avg. price works and how to plan ahead to try to maximize the earnings in the future. Using 48-72hrs cycle is just an element of company development strategy and it's up to everyone to use advice from this thread to their own advantage.

What I wrote earlier is valid only for gas market - I remember reading once a thread on TiB forums about different "cycles" for each product. Each industry has different "best" cycles to make a decent profit and make avg. price go up

[Guest]

I would say that the gas market is booming because you can make it for less than 5 caps and you can sell it for over 40 caps.