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Hey guys.

A friend shot me a question regarding the details of running raw materials companies. Rather than shoot him a one liner, I decided to post this excerpt from my half finished company guide (found my external hard drive, dont have time to finish the guide), and then shoot him a one liner containing the link to this article 😃

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Raw Materials
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General
Raw materials (RM's) are the foundation for an economy. Without a certain type of raw material being created within the economy, the entire nation is at the mercy of the international markets to bring that resource in to allow for the creation of finished goods (buildings and manufactured goods).

Quality
Quality is the main thing to consider when going into RM companies. The higher quality your RM company is, the more efficient it is - and thus the more profitable you can be. Heres a quick model describing why.

A skill 5 worker, assuming the company in question has 10 workers and is placed in a high resource region will create the following number of units:

At a Q1 company: 22.50 units of Q1
At a Q2 company: 20.25 units of Q2
At a Q3 company: 18.00 units of Q3
At a Q4 company: 15.75 units of Q4
At a Q5 company: 13.50 units of Q5

Look at those numbers. Theyre decreasing! oh noes!

Now, keep in mind that each "quality" of the RM in question counts as 1 unit (ie: Q5 wood = 5 Q1 wood). Suddenly, the higher quality companies look a lot more efficient (rea😛 profitable).

At a Q1 company: 22.50 units
At a Q2 company: 40.50 units, an increase of 80% over Q1 at a cost of 20g to upgrade
At a Q3 company: 54.00 units, an increase of 33% over Q2 at a cost of 50 gold to upgrade
At a Q4 company: 63.00 units, an increase of 17% over Q3 at a cost of 100 gold to upgrade
At a Q5 company: 67.50 units, an increase of 07% over Q4 at a cost of 200 gold to upgrade

Assuming you can keep labor prices the same at all quality levels (a fair assumption), there is significant profit to be made by increasing your quality level past Q1, but that benefit decreases (and the cost increases) as you reach higher quality levels. As a general rule of thumb you should at least have a RM company at Q2, although generally its considered average to do Q3. Above that, most business owners decide to spend their money elsewhere. To punctuate this point, consider that the cost to upgrade to Q4 (100 gold) is greater than the cost to purchase and upgrade a new company to Q3 (90 gold). As long as two Q3 companies are more profitable than 1 Q4 company, you will probably be best stopping at Q3. This all very much depends on market conditions, and will factor very much into your estimated startup cost.

Do not, under any circumstances, attempt to operate a Q1 raw materials company.


Choosing which RM

Now which RM to go into? Well, for starters you already know you have to pick a high resource region. For anyone interested in running a company in america, that cuts you down to (at the time of writing) wood, grain, and oil. How to pick between the three?

Consider current prices. It doesnt cost you a dime more to create (or buy) a RM company of one type over another, not does it cost any more to produce different RMs. So if, for example, wood is selling for more per unit (the only metric that matters) than grain, then at the moment wood is more profitable than grain, yay!

"But everyone needs food every day, people only buy houses every once in a while, so I should go into grain"

Thats fine logic, unfortunately everyone else as thought of it as well, so its pretty much null.

I cannot stress enough the importance of making math-based decisions instead of "logic" like the above example. However, there is once case where you should go into a little bit of logical speculation. Consider the potential future, and the current events, surrounding the manufactured/finished good that your raw material creates. If there is concern that the market for a good will die down due to natural, or unnatural reasons (changes to the game), you probably should reconsider creating the raw material for that good. For example, a few months back when citizenship was released there was a lot of fear the moving ticket industry would suffer, as people no longer needed to move as much for PTO/ATO efforts. That would not have been the time to become an oil producer. Keeping track of current events is an important part of being a successful business owner.

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This is just an unfinished excerpt of an unfinished guide, so sorry if it seems a little bit disoriented/meh. I figured I might as well publish it since I probably wont bother finishing the full guide.

If you have any questions, suggestions, updates, or counter arguments, please leave them in the form of a comment in this article (that way others can attempt to join in the discussion as well).

-Choc

EDITS: Doing some small edits to try and make it less terrible. Apparently ereptools and erepublik.ws are both not available? That kinda sucks.


As always, I suggest all players who do not know how to effectively fight and use a hospital check out This guide to hospital use, fighting, and wellness.

It is also imperative that all players read and follow orders as described in the the Department of Defense Newspaper as often as possible.