We Have Been Thinking About It All Wrong! Store Sales Prices

Guest · Post by **Guest** » 06.10.2010, 00:29

So, many years ago, many articles were published on these very forums about how to calculate how much store a money can make. In general, it was determined that the maximum amount you could see from a store in 1 day would be to set full racks at 24 hours. However, this price was below the average sale price, so prices would fall, and people would lose money over time.

I would like to propose a new theroy. Economic wise, the maximum amount a store can make is not based on the highest number you can see when you sell. It is based on the highest PROFIT (Sale Price - REGULAR MARKET PRICE) per hour (/hours).

This is the equation i used to make these calculations.

{[(Sale Price) - (Regular Market/Invoice Price)] * Sales Number} / Hours of sale.

This gives us profit per hour. The actual amount of money you can make above and beyond what you could simply sell it for by invoice.

I tested q39 gas. On r1, i can sell q39 gas for 89 (50+q). This is the value of the product (if i can sell it for that easily, why would i sell it for less profit in the store?).

So, then i set the prices to sell a full store of gas in x hours (24, 48, 72, 96, 120, 144, 168).

Hours -- Sale Prices -- Contract Price (Value)
24 -- 90 -- 89
48 -- 111 -- 89
72 -- 128 -- 89
96 -- 140 -- 89
120 -- 150 -- 89
144 -- 159 -- 89
168 -- 168 -- 89

According to the oldest theroy, the idea is that you would sell much more gas at 24 hour cycles, therefore make more money. The problem is, in the age of kapilands we do business in, there are set prices for just about everything. The fact is, i can go on the forums, send out a contract, and the person will sign it soon. Because of this, we have got to set the value.

In this case, the highest profit per hour is 72 hour cycles. However, i would encourage you to do your own calculations.

In the past, all gas produces have basically done 24 or 48 hour cycles. Due to this new information, i would encourage them to reconsider and switch to at least a 72 hour cycle.

Just something to think about.

APCE

Guest · Post by **Guest** » 06.10.2010, 06:13

Isn't this what this topic is all about?

I have used Knolls method since shortly after I started playing. I never set my prices to 24h.

Guest · Post by **Guest** » 06.10.2010, 07:57

Ive never heard of it being smart to set them at 24h in fact if we all were to set prices at that we would suck up the production levels that are currently available and cause inflation whilst decreasing the avg price as well as increasing the supply-to-demand ratio altogether bad for everyone!

I would direct you to my profit spreadsheet so you can work out the best price for Your gas!
H

Guest · Post by **Guest** » 06.10.2010, 22:15

24 hour cycles was the prevailing way to sell gas for years at the beginning of english kapilands. I forget how, but knolls method actually lead people to that idea. I believe it was due to the low value to the player. Way back when, the value of gas was incredibly low.

For instance, if i changed the spreadsheet, and valued gas at 50 each instead of 89, the 24 hour sale time would be the most profitable by far. It has to do with how players define value. I remember when gas was 15+q. I sold ~q35 gas for 120 when the world was buying it for 35+q. The reason people paid those low prices was that they would sell for a profit of 20 or so in 24 hour cycles, sometimes 36 hour cycles.

Anyway, anyone that is reasonable would have figured this out already, but i figured i'd put it out here for those that aren't

.

APCE

Guest · Post by **Guest** » 07.10.2010, 12:51

This was one of the recentish topics about gas prices and some people were quite adament that 24hr rack sales was the right way to go.

Guest · Post by **Guest** » 08.10.2010, 10:59

And I'll throw my two cents in. (as if you not heard it before)

Whilst I agree that more profit can be made for selling over a longer period, where is the advantage to a producer seller ?

All he does is fill up his warehouse with gas he will never sell. Now... if he could sell at the longer time and sell the surplus on contract or at the market and get a better return than he could selling all instore then yes I agree, but I don't think that would be the case.

Guest · Post by **Guest** » 08.10.2010, 11:30

exactly thats the case. the optimal price usually isnt the price that exactly sells your production, but higher/lower (depending of store/production facilities ratio). and you are supposed to sell/buy some of the goods to stay in the optimum

Guest · Post by **Guest** » 08.10.2010, 13:10

Not selling gas, I wouldn't know the figures but it would be interesting to see a producer seller of gas post some figures.
For example
production capacity
sales capacity
and store selling price and time

I think your production would have to heavily outweigh your selling capacity to make it more profitable to sell the excess in other ways.

I may be completely wrong. but when I started selling jewelry (admitedly different volumes) I found it was more profitable to sell my production in 24 hours than to sell at average price and try to sell the surplus other ways.

Guest · Post by **Guest** » 08.10.2010, 23:39

What! You sell jewels in 24h!
I have my own production/sales in golden items and I take 1.2k hours to sell 3/4 of a store. I would take 1.6k but it just goes to 'no sales' Thats 80k of items for a full store through. My prices are at clearance prices whilst im draining off my stocks, 13k an item.

I figure there are two main ways to look at retail pricing
One is keeping the time the same across Q, so when I get a higher Q item I set it at a price that makes the time the same across the Q change

Secondly is just setting the same price and allowing the extra volume make the profit. This would only work if you have a sizable markup compared to the extra value of Q

The third and possible most popular is just adding a extra bump to each Q regardless of how it effects the time. I wouldn't suggest this unless you want to be lazy or know your market backwards as the majors do.

I use them both for different times or how when I dont have enough time to work out the best prices for each Q

My 2c
H

Guest · Post by **Guest** » 09.10.2010, 08:58

No I don't sell in 24 hours...Well I do but not a full rack. like you I'm selling off surplus and set my stores to sell 1,000 in 24 hours, they sell for between 24,000 and 27,000 each depending on stats.
I was talking about when I started out with jewelery. I've never sold a full rack in 24 hours but I have sold my full days production in 24 hours and even then that was only using prob about 20% of sales rack.

Guest · Post by **Guest** » 09.10.2010, 09:13

Nice, you must some serious Q!
I was just amazed you could even look at selling of that much so easily, let alone at 24k+
My own Q27 are at 13k for optimal profit, its above the max price so im happy with it. Perhaps the cost of gold in r1 is pushing up your sales prices unduly.
Kudos dude!
H

Guest · Post by **Guest** » 09.10.2010, 11:19

Only Q32 on the surplus.
I am down to the last 14 mil gold in my warehouse (all Q0 ) which has been purchased over time.
I wanted to max my jewel factories before I start producing gold myself (still making stones at the mo). My factories are almost there and the fact I have a 23 day production cycle means when I start producing I'm going to have to wait 23 days to get my first gold.
I set my price for the surplus so that the surplus would be all gone just as my mines start delivering. This is why I'm selling at the price I am. When the surplus has gone and I'm producing goods from my own gold obviously the price will drop.
Yes I could make more profit by selling cheaper and getting my own gold into production. But I've got to the stage where for me ease of management is more important than extra profit provided it's not costing me too much.

Guest · Post by **Guest** » 14.11.2010, 19:12

Ive made my own sheet for selling my wardrobes and figured out that the most profit per houre was made selling in 70 houres cycles. However i usually tend to sell my wardrobes between 55 and 65 houres.
However to raise the price ive notice that it is best to refill your stores as much as possible when the update comes in. Your full stores have a bigger effect on the avg. price. You can reset your stores after the update and they earn you more money again.

Guest · Post by **Guest** » 15.11.2010, 15:50

actually i think only the items sold have effect on stats price. so having a full store that sells 10 items has exactly the same impact as having a half full store that sells 10 items.

Guest · Post by **Guest** » 18.11.2010, 05:13

True that, the impact your stores have on the avg price is only when you 'visit' your stores. That means that if you dont visit your stores over a very long period their effect on the market can be very large. If you do plan on not checking for a while then I suggest dumping when you have a few days left of sales then restocking once your impact has passed. If your a small fish in the big ponds (gas, robes ect) then dont worry about it.

H