Department of Education: Pricing Products
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by Department of Citizen Affairs
Today I noticed some troubling figures in the Marketplace when I went to collect some figures for a personal study I am doing.
There are Q2 products that are not selling for the prices that they should be selling for. Although our previous article did a good job in generalizing a manual to help business owners I think business owners need to learn how to price out their products to at least stay afloat, if not make a slightly larger profit.
How should I price my item? (Construction/Manufacturing Company Owners)
Well as a Q1 company, it is hard to decide how you want to price your items. The general idea is to assume all of your employees work every day. Get a rough estimate of what they each produce and how much Raw Materials (henceforth referred to as RM) they use each day to make whatever you produce. Then figure out how many they produce per diem and calculate the cost yourself so that you make a profit (obviously do not gauge the consumer but you can't just break even every day).
As a Q2 company owner you are going to need more materials and are going to probably be paying your employees more. This should work out roughly, to double what a Q1 company is charging. Obviously, if you can sell for a little less than do so, but you should do your best to keep your prices roughly twice the Q1 companies.
Q3 company owners are going to need thrice the amount of materials as Q1 company owners and will need high skilled employees who they will be paying higher salaries. In your case, selling products for slightly more than three times a Q1 is acceptable.
Well I hope that you can see the trend I'm following.
How should I price my items? (Raw Materials Owners)
For all Q owners, this is both harder and easier to price out so I'm going to break this down into separate categories.
Owners in High Productivity Regions
You guys are the smartest of all. You had the foresight to start your company or buy a pre-existing company in a High Productivity region. This boosts your productivity multiplier and allows you to make more money. So between how good your employees are and the high productivity multiplier you should be well off. The difficulty is in trying to figure out a good price to make profit on while offering competitive prices. This you'll have to do by analyzing the marketplace and smartly paying your employees.
You owners in High Productivity Regions are lucky, you don't have to deal with low import taxes.
Owners in Medium Productivity Regions
You aren't as smart as the guys in High Productivity Regions but don't worry, what you will probably be facing foreign competition as well as limited domestic competition. You guys have it harder and therefore will have to work harder. I commend all of you for trying, and if so, succeeding.
The trick for you guys is to read articles that explain the benefits of upgrading quality. I remember reading a series published by denversbest02 (Congressman from Colorado) about how if you are in a Medium Region, and you upgrade your Quality level, not only will you make a greater deal of profit but it will negate the multiplier that the region applies.
Pricing Products in General
The same scale applies here as it did in the first section,
Q1 is dependent upon costs (in your case only the pay of the employees)
Q2 should be double Q1
Q3 should be triple Q1
etc.
What sparked this article...
If you look at our markets, our Q1 products/RM are all decently reasonably priced. The problem starts with Q2 company owners, sadly enough. There are clearly uneducated players who are selling their products for nearly the same price as the lowest Q1. If these players are making a profit, I dare them to post how so in comments on this article.
Congress is doing everything it can to stabilize our Monetary Market, but part of that is dependent upon the company owners who post ridiculous prices on the Marketplace.
This guide should not just be for the company owners, but for the consumer. This should give you a good sense of what is reasonably priced, what is a "steal", and what is price gauging.
Please vote, comment and subscribe as well as send this to everyone you know!
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Comments
Voted....
An excellent article. Thanks for the refresher...
Great article. I would also recommend setting up a spreadsheet to getter a better view of your company's productivity.
Voted
The key to MOVING a product is different than SELLING it 'normally'. To move your product NOW, you take the lowest priced product from each quality level, divide the selling price by the quality level, then price your product level*unit_price minus 1 cent.
So, you're in grain, Q2 grain. Lowest Q1 is $0.74, lowest Q2 is $1.40, and lowest Q3 is $1.89. Where do you price? Many people think 1 cent below lowest Q2, at $1.39, but the Q3 grain is still cheaper than this. Q3 at $1.89 is $0.63 a unit, which means you have to price you Q2 grain at $1.26 less .01, thus, $1.25.
This game drives the market down if you play it regularly, so stockpile and sell in batches when it is most profitable. Don't live 'hand to mouth'.
i wish we had such an educating campain!
I figured out mow much to pay....how much to sell. It's kinda easy,but it's going to be my secret.
It was up just a moment ago. For those who read it.
WHY DO QL1 PRODUCTS SELL FOR MORE THEN 1/2 OF QL2 Products?
Business owners do not realize that a QL1 Manufacturing/Construction Company can use ANY QL product.
In fact, when you see a raw material list all you really see is how much QL1 raw material they have. If you , as QL 1 company, buy 100 ql4 wood, you will see an increase of 400 wood in your raw materials list. Its that simple.
Check out my company- BEST GRAIN PRICES on the market.
BEAT THAT! By posting this article you may have created a HUGE competition.
Heh - they just got sold for $1.19
Well I'm only where I am on Q2 Iron cause I need to move my merch. Otherwise I'd have it around 2.2/2.6 where it should be
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Attention New Zealanders of the New World. The time for our own state is now!
Join us as we attempt to lobby the eRepublik admins for an eNew Zealand. If you are a Kiwi, Maori or Pacifica please enrol on the citizen register by adding this org to your friend list using the "add as friend" function.
Former ministers of foreign governments, high ranking military personel and large company directors, please contact via PM.
Negotiations have been finalised with the Australian government for a support pact. It is strongly advised that New Zealanders abroad move to Victoria, Australia until the new state is granted.
Travel assistance is available by application via PM.
If you know of other New Zealanders in the New World, please advise them of this development. If you own a newspaper, please publish a copy of this article.
Your donations of moving tickets, gold and currency will be greatly appreciated and would be used for moving tickets and promoting this organisation. The surplus from which will be donated to our first treasury.
voted - great article