No profit

[Guest]

I am regularly producing leather jackets (300 every two days someotimes more) and selling them via contract to a company for 350 caps a unit. To produce leather jackets I need cattle and cotton, I have the money to buy them but then my money staysaround 220 000 caps all the time, I need some help to make more profit.
P.S. I might lose my deal with the company I sell to if I make the unit price higher.
Please reply soon

[Guest]

Well if your not making anything, try to make your price as high as possible, try to reduce your costs, maybe try selling the leather jackets yourself?

If none of that works then i would consider reseting and choooosing a new buisness area

jsut check after your next batch of leather jackets the unit price in the warehouse, if its above or very close to 350caps then its pointless

[Guest]

I would recomend that you build just a single textile store.

Then you can sell like 100 a day at for 700.

That will help you get on the way, then you can start to think about building your company.

This is for realm 1.

[Guest]

jsut check after your next batch of leather jackets the unit price in the warehouse, if its above or very close to 350caps then its pointless

PLEASE, do NOT do this! Have some business sense and calculate the TRUE product costs:

For Realm 2 this is:

Market price for Textiles Q0 is 100c
Market price for Leather Q0 is 110c
Market Price for Power is 0.06c
Production cost for Leather Jackets is around 30c

You need 1 Textile, 1 Leather and 600 power for 1 jacket, so your total product cost is:

100c + 110c + (600*0.06) = 100c + 110c + 36c + 30c = 276c

Since you are producing leather and textiles yourself (I assume since you say you buy cattle and cotton), this means that you have the option of selling the individual items separately.

Assuming you are manager level, and have 3 textile factories 20m2 in red, in 24 hours, you can produce:

Either 391 * 3 Leather = 1173 Leather for 0.5*80c (Market price) + 700*0.06 (Market power price) + 1.50c (prod. cost) = 40+42+1.50 = 83.5c each

Or 391 * 3 Textiles = 1173 Textiles for 3*15c(Market cotton price) + 350*0.06 (Market power price) + 3.50c (prod. cost) = 45+21+3.50 = 69.5c each

Or 112 * 3 Leather jackets = 336 Jackets for the aforementioned 276c each

However, you can only produce one of the 3 (same cycle if you produce one product each in each of the 3 factories, so I simplify here.

Let's assume you produce 24 hours of raw material1, then 24 hours of raw material 2 and then 48 hours of leather jackets (lower production volume).

So after 96 hours, you will have around 750 leather jackets (3 factories!)for a production cost of 276c. You sell them for 350c, so you make a profit of 74c per piece. That's a total of 74c*250 = 18,500c. That's a profit per production hour of 192.7c

Now if you had produced ONLY Textiles the whole 96 hours, you would have produced 391*3factories*4prodcycles = 4,692 Textiles. Production costs are (as explained above) 69.5c. Market price for Textiles is 100c, so you could contract it out for even 85c. That would make a profit per piece of 15.5c. Total profit for 4,692 Textiles would be 72,741c. That's 757.7c per production hour.

As you can see, by simply selling the intermediate product that you produce anyway, you would make almost 4 times as much profit as with the leather jackets.

THAT is why i URGE everyone, not to look at this freaking misleading warehouse price!!!

Hope this helped.

Soc

[Guest]

THAT is why i URGE everyone, not to look at this freaking misleading warehouse price!!!

I have been trying to convince only ONE person for a few months but no argument seems to convince that person that producing everything yourself in no way makes you more profitable I think i would have more success in teaching cows q0 the fundaments of quantum mechanics

[Guest]

The warehouse cost is the true cost. People are right to be concerned about assessing whether alternative business plans are more profitable. But there is a difference between (1) not making as much profit as you could and (2) losing ever more money with each unit you sell. #1 is something most people will do to some extent, given the large universe of alternatives. #2 is unsustainable and will put you out of business if you continue to do it.

[Guest]

I have been trying to convince only ONE person for a few months but no argument seems to convince that person that producing everything yourself in no way makes you more profitable

If I ever rewrite my guides I'm going to start with a very simple, but very crucial, emphasis of this point. I mean I do mention it like 40 or 50 times, but only along the way rather than as a foundation.

To produce leather jackets I need cattle and cotton, I have the money to buy them but then my money staysaround 220 000 caps all the time, I need some help to make more profit.

Generally a good sign that you're busy, but not very profitable. However, I want to mention the secondary possibility - that you're building up inventory. It seems unlikely for a smaller company, but keeping too many goods in your warehouse would make your cash lower than it should be.

Socronoss did some excellent explanation there. I'm going to come from a different angle:

Cotton costs you at least 15 each. You need 3.
Cattle cost you at least 90 each. You need .5.
Power is congregating aroung .06. You need 350 + 600 + 700 = 1650.
And then your production costs are 1.50 + 3.50 + 30 = 35.

Totals
Cotton: 3 x 15 = 45
Cattle: 90 x .5 = 45
Power: 1650 * .06 = 99
Production cost = 35
------------------------
Spent to make the jacket: 224

Now the good news is, you're selling for 350 each, making about 125 profit each.

The bad news is, you're only selling about 300 every two days.

So your daily profit =
125 * 300 / 2 = 18,750 a day.

All your textile factories' efforts are making you 18,750 a day.

That, my friend, is not a lot. It's so little that it probably does seem like you're not moving up at all. An aggressive company can hit two million within two weeks, three conservatively. At your rate, it will take at least 2 months.

Here are some things I would do:

1) Sell stuff in your warehouse that you don't need. Make sure you have enough cotton and cattle to continue, but don't overstock. Also make sure you're selling all the jackets ( but I assume you are ).

What I'm talking about specifically here is your starting amounts of steel, stone, and wood. Keep some aside for your own building needs, but not a lot - 5 buildings worth is plenty for now. (That's 500 stones, 250 steel, and 50 wood.) Sell the rest.

2) Keep a little money on hand to keep things running, but invest the rest in buildings. You may want to keep 50-100k on hand to make sure you can purchase your supplies. But the rest - make another building as soon as you can.

3)Figure out which parts are more profitable than others. This is where what Socronoss was saying really pays off. Right now you make three things: textiles, leather, and jackets. Consider the prices of textiles and leather. If they're cheap, maybe you should buy them instead of making them. If they're expensive (and I think they are) maybe you should be selling your supplies instead of using them.

What this means for you is that you should maybe start making extra textiles and / or extra leather, and selling that extra. It may be so profitable that it's not worth turning into jackets.

(If that's not clear to you yet, consider this: Suppose you run a bakery and sell cookies. One morning someone rings your doorbell and says "I need your flour, I'll pay you $1,000,000 for all the flour you have." Would you say "no I need that to bake cookies" or would you say "deal! Forget the cookies, I'm retired!"

Sometimes an offer is so good that it's not worth going the extra step. It's not always as obvious as that example, but even a little profit will help you grow.

[Guest]

I have a power plant.

[Guest]

I don't have any idea what buildings to build, could you help me a little?

[Guest]

The buildings to build depends on the company you really want to make. I play in realm1, so i have to use those examples...

1.) With leather jackets, research is a huge part of it. Everytime you get 4 research points (i think), that will raise your overall quality of leather jackets by 1, and will raise your profit per jacket by 70-80, depending on what the quality standards are now (70-80 in realm1).
A.) This also goes for most products, especially wardrobes and leather jackets, because neither of them make a profit without some research.
2.) Another thing you should do with extra money is obviously expand your production line. Maybe you might want to specialize in one field, just textiles or just leather, at least until you can get a high enough leather jacket quality. Or maybe you want to be one of the crazy people who makes all of their own stuff, which sometimes isn't all that crazy. Then you would have to make...
at least 1 factory for leather jackets
at least 1 factory for textiles
at least 1 plantation for cotton
at least 1 factory for leather
at least 1 cattle-breeding for cattle
at least 1 plantation for corn
and power plants for the whole line. Personally, i would just stick to the textiles and cotton line, but thats just my opinion. At least until you get at least q8 research of leather jackets.

Remember, there are some really good guides on this forum written by various people (mostly knolls), that show all the principles of making a high profit. Personally in realm1, i just make oil. I buy power, i make oil, simple, but effective. I make nearly 20% of my fixed assests per day. I have buildings expanding, and a few very large RCs (7000-8000m2), and i produce about 1 million oil.

Let me just say, I'm going to make a suggestion to almost every new realm1 company. My guess is that soon the power market is gonna go through the roof, and your gonna be selling power for .2 on the market. This is obviously a guess, but there is FAR more demand for power than supply right now, and it's been forcing it up for awhile. It's up to .14 now, and it was .1 or .11 just 2 weeks ago. The maximum price per power you can get is .26, but still dang good deal. Consider this....

If you are a Businessman, and have 60 20m2 power plants that you load everyday... (i'm going to say in green for this example)
Each powerplant makes 197,410 power per day...
197,410 x .14 (current price) = 27,637, not bad.
197,410 x .20 (my guess at where i could stop) = 39,482, really good

27637 x 60 (number of power plants) = 1,658,220
39,482 x 60 (number of power plants) = 2,368,920

Both of those numbers are good, and it could go higher than that. Now lets just say (for the fun of it) that you were to stick with power. You make yourself a VIP member, and built up to 100 buildings. No need for research, you just make power. Lets jump months in the future, and say you are now a billionare with 100x 2000m2 power plants in red..

Each power plant makes 10,800,000 power per day (sweet momma)

thats 1,512,000 profit per power plant at .14
2,160,000 profit per plant at .2

Profit for all plants-
.14 - 151,200,000
.20 - 216,000,000

Let me just say, i wouldn't complain about those profits. I also pray to the living God this doesn't happen, because let me just say, i'm gonna feel it nice and hard, being an oil producer. Right now i have personally been able to hold all of my .10 contracts, but idk how long that will last. Anyway, just my opinion

(PS, sorry, had to say that somewhere)