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[Presidency] Let's All Work Together to Improve our Economy

Day 1,852, 02:03 by Al Kazar

The eSA economy, and the economy of eRepublik in general, is totally screwed up. Salaries and market prices for raw materials, weapons and food are a joke.

Manager production (or self-production) results in goods being sold for next to nothing because players think it costs them nothing to produce, but this bad financial practice is one of the main reasons for the broken economy.

The other main reasons are not supporting your own local economy no matter the short-term cost and bypassing the marketplace to donate goods or supplies directly to citizens.

There is no financial incentive to sell goods on the marketplace and tax collection to generate income for the country (to benefit all citizens) has become so pathetic that countries could become bankrupt.

Larger countries possibly get by with the taxes raised due to their larger population, but smaller countries like eSA struggle especially if citizens buy and sell on foreign markets for the short-sighted benefit of lower prices.

Pricing goods at economically sound levels has the added benefit of increasing the salaries that can be paid to workers, allowing them to afford to buy more (even at higher prices).

This could have a snowball affect of improving the overall economy and improving the finances of the country and every citizen of the country.

I would like to appeal to all citizens of eSA to support our local economy by buying and selling locally and by not drastically underpricing your goods.

So what if our prices are higher than places like eBrazil - eSouth Africans should be supporting their own country by buying locally, thereby supporting their fellow eSouth Africans and, at the end of the day, themselves as well.

Following is a breakdown of actual costs that should be used as the basis for determining the cost of producing goods in eSA (even if you are self-producing).

Raw Materials (both Weapons and Food):
(figures are based on a production bonus of 40%, a salary of 20 ZAR, and using the highest quality farm etc.)

Each worker (and manager) will produce 350 RM at a cost factor of 20 ZAR, giving a production cost of 0.06 ZAR each

Suggested selling price for both WRM and FRM - 0.04 to 0.10 with a recommended price of 0.07 ZAR

Weapons:
(figures based on a WRM price of 0.07 ZAR, a production bonus of 40%, and a salary of 20 ZAR)

Q1:
Each worker (and manager) will produce 14 weapons using 140 WRM (with a cost factor of 9.80 + 20 salary), giving a production cost of 2.13 ZAR each

Suggested selling price (incl 10% VAT) - 2.50 to 3.00 with a recommended price of 2.75 ZAR

Q2:
Each worker (and manager) will produce 14 weapons using 280 WRM (with a cost factor of 19.60 + 20 salary), giving a production cost of 2.83 ZAR each

Suggested selling price (incl 10% VAT) - 3.30 to 4.00 with a recommended price of 3.65 ZAR

Q3:
Each worker (and manager) will produce 14 weapons using 420 WRM (with a cost factor of 29.40 + 20 salary), giving a production cost of 3.53 ZAR each

Suggested selling price (incl 10% VAT) - 4.20 to 5.00 with a recommended price of 4.60 ZAR

Q4:
Each worker (and manager) will produce 14 weapons using 560 WRM (with a cost factor of 39.20 + 20 salary), giving a production cost of 4.23 ZAR each

Suggested selling price (incl 10% VAT) - 5.00 to 6.00 with a recommended price of 5.50 ZAR

Q5:
Each worker (and manager) will produce 14 weapons using 700 WRM (with a cost factor of 49.00 + 20 salary), giving a production cost of 4.93 ZAR each

Suggested selling price (incl 10% VAT) - 5.80 to 7.00 with a recommended price of 6.40 ZAR

Q6:
Each worker (and manager) will produce 14 weapons using 840 WRM (with a cost factor of 58.80 + 20 salary), giving a production cost of 5.63 ZAR each

Suggested selling price (incl 10% VAT) - 6.60 to 8.00 with a recommended price of 7.30 ZAR

Q7:
Each worker (and manager) will produce 14 weapons using 2800 WRM (with a cost factor of 196.00 + 20 salary), giving a production cost of 15.43 ZAR each

Suggested selling price (incl 10% VAT) - 18.00 to 22.00 with a recommended price of 20.00 ZAR

Food: (10% more production so costs 10% less)
(figures based on a FRM price of 0.07 ZAR, a production bonus of 40%, and a salary of 20 ZAR)

Q1:
Each worker (and manager) will produce 140 food using 140 WRM (with a cost factor of 9.80 + 20 salary), giving a production cost of 0.21 ZAR each

Suggested selling price (incl 10% VAT) - 0.25 to 0.30 with a recommended price of 0.28 ZAR

Q2:
Each worker (and manager) will produce 140 food using 280 WRM (with a cost factor of 19.60 + 20 salary), giving a production cost of 0.28 ZAR each

Suggested selling price (incl 10% VAT) - 0.33 to 0.40 with a recommended price of 0.37 ZAR

Q3:
Each worker (and manager) will produce 140 food using 420 WRM (with a cost factor of 29.40 + 20 salary), giving a production cost of 0.35 ZAR each

Suggested selling price (incl 10% VAT) - 0.42 to 0.50 with a recommended price of 0.46 ZAR

Q4:
Each worker (and manager) will produce 140 food using 560 WRM (with a cost factor of 39.20 + 20 salary), giving a production cost of 0.42 ZAR each

Suggested selling price (incl 10% VAT) - 0.50 to 0.60 with a recommended price of 0.55 ZAR

Q5:
Each worker (and manager) will produce 140 food using 700 WRM (with a cost factor of 49.00 + 20 salary), giving a production cost of 0.49 ZAR each

Suggested selling price (incl 10% VAT) - 0.58 to 0.70 with a recommended price of 0.64 ZAR

Q6:
Each worker (and manager) will produce 140 food using 840 WRM (with a cost factor of 58.80 + 20 salary), giving a production cost of 0.56 ZAR each

Suggested selling price (incl 10% VAT) - 0.66 to 0.80 with a recommended price of 0.73 ZAR

Q7:
Each worker (and manager) will produce 140 food using 2800 WRM (with a cost factor of 196.00 + 20 salary), giving a production cost of 1.54 ZAR each

Suggested selling price (incl 10% VAT) - 1.80 to 2.20 with a recommended price of 2.00 ZAR

I appeal to all eSA citizens to be Proudly eSouth African (and economically patriotic) by basing the prices of goods on the eSA marketplace on figures like these (especially if you self-produce), by buying locally and supporting your fellow countrymen that are Proudly eSouth African, and by doing your bit to help fix and rebuild our economy.

 

Comments

The Valeyard
The Valeyard Day 1,852, 02:57

Bad idea is bad.
I already explained on the forum why this will never work.

Al Kazar
Al Kazar Day 1,852, 03:15

And your explanation has been rebutted - it can probably work if everyone pulls together and does their bit as a patriotic and proud eSouth African

Madalin Mastertrap
Madalin Mastertrap Day 1,852, 03:44

I would sell my products in eSouth Africa but I don't have 20 gold now for the license. Anyway I aprove this message.

Rexdeus
Rexdeus Day 1,852, 03:56

I support the message.

I only buy Made In eSA!!

Al Kazar
Al Kazar Day 1,852, 04:19

Madelin, why do you need a license to sell in eSA? You are a citizen of eSA.

Kumabibihako
Kumabibihako Day 1,852, 05:35

Sounds good, but if everybody employ people in their factories, there will not bee enough eSouth African to fullfill all positions (simple math behind, we all start with a Q1 food factory and are told by the erepublik mission to buy a Q1 weapon factory : 2 employees needed per player minimum).

I suggest that you redo your pricing considering that only Q6/Q7 should hire.

Plus people should be educated to include the cost of opportunity to their calculation.

Kumabibihako
Kumabibihako Day 1,852, 05:36

I have been sending this message to people under pricing their Q1 weapons :

Hi,

I noticed that you are selling Weapons Q1 very cheap.

Since you need 10 raw materials to creat 1 unit of Weapon Q1, if you were selling the raw materials directly on the market at 0.01 ZAR less than the market price, you would make 10 x 0.06 ZAR = 0.6 ZAR.

Kumabibihako
Kumabibihako Day 1,852, 05:37

f you want to make more money by producing and selling Weapons Q1, you need to sell them at a price including the following costs :
- Cost of opportunity of the raw materials not sold directly : 0.6 ZAR
- Energy consumed in the process (10 for 14 units) roughly : 0.02 ZAR
- A small additional profit : 0.01 ZAR
Total = 0.6 + 0.02 + 0.01 = 0.63 ZAR
Your selling price should include 10% taxes : 0.63 x 1.1 = 0.69 ZAR

Kumabibihako
Kumabibihako Day 1,852, 05:38

Coincidence, all the offers disapeared.

But i guess it is because of a bot

Gambit LeBeau
Gambit LeBeau Day 1,852, 05:41

Proudly eSA!
I like this idea, good work Al.

I support eSA business, do you?

Rico Suave
Rico Suave Day 1,852, 07:28

Right. I've changed my market offers to the recommended price but I'm pretty sure I won't sell anything.

Al Kazar
Al Kazar Day 1,852, 07:28

Gambit - Great to have you on board and Proudly eSouth African!

Al Kazar
Al Kazar Day 1,852, 07:29

Thanks Rico! Another proud eSouth African. If everybody comes on board you should sell as much as you would have or hopefully even more.

Miyagiyoda
Miyagiyoda Day 1,852, 09:48

Your assumptions are wrong. Q1-5 (and arguably Q6) should not be employing people at all. WRM cost is closer to 0.05-0.06 than 0.07. This regime effectively out-prices the local market to encourage bad business.

Rico Suave
Rico Suave Day 1,852, 12:01

Btw, Al: Are these recommended prices set or will you update as things progress?

Al Kazar
Al Kazar Day 1,852, 14:02

Miyagi - you can't say that the lower Q's should not employ people - why not? I have Q3 companies and employ people - younger and poorer players have a right to take part in the economy too. How else do they make the money to get to Q7 level?

WRM cost to produce is closer to 0.05 - 0.06 but that's not what cost to buy from the market should be. You need to use the price it would cost to buy from the market as not everyone can produce enough on their own.

Al Kazar
Al Kazar Day 1,852, 14:08

Rico - these are recommended prices based on a producer employing workers at 20 ZAR, and buying RM at 0.07 ZAR each, i.e. based on the maximum cost for someone to produce the goods, then adding a reasonable profit plus 10% VAT.

Those that do not employ workers or buy RM's should use the same figures so as not to discriminate against those that do, and thereby level the playing field for everyone (otherwise the economy cannot work).

Al Kazar
Al Kazar Day 1,852, 14:11

There is a suggested minimum and maximum price to allow for competition and demand, and then a recommended median price.

It is not necessary to have a huge gap in competitor prices e.g. 2,75 then 1.95 - having a price a couple of cents lower then your competitors still gives you the lowest price if that is what you are aiming for.

Locutus
Locutus Day 1,853, 23:03

I´m currently not an eSA citizen but I sell all my goods on the eSA market. I´ll adjust my prices according to your recomendations. Let me know if there´s anything I can do to help.

Wacky368
Wacky368 Day 1,853, 23:44

Ai ai sir!

Voted

Al Kazar
Al Kazar Day 1,853, 23:45

Thanks Locutus. You may not be an in-game SA citizen but you are an honorary eSA citizen and Proudly eSouth African

Locutus
Locutus Day 1,853, 02:51

Thanks Al!

Enriche2Ribeiro
Enriche2Ribeiro Day 1,853, 06:46

Sounds okay will change pricing.

K1dz3r0
K1dz3r0 Day 1,853, 11:18

Agree! your idea is similar to my own, but much more refined and comprehensive.

 
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