Should you make that? WAM edition
Wilhem Klink
Running companies in eRepublik isn't always as straight-forward as it seems. There's a couple of items to keep an eye on and help to figure out whether you should make that (or not).
First disclaimers:
1. I'm writing this as it applies to eCanada. It might have some application to other countries, but I make no claim it does;
2. I've selected prices as "market" because I need to have a reference point. Small changes in "market" may move the needle, but are unlikely to make a big difference.
This article will address Work as Manager (WaM) items (Food & Weapons). I'm hoping to do another for Employee-Only industries (Houses & Air) later.
In WaM industries, the producer has two main costs: Work Tax (1% of the average wage paid to the country the factory is in), and the cost of the raw materials (RM). A producer may buy the RM from the market or may also produce them.
Food
Production of food RM is pointless as one can buy from the market for 0.01cc. One canot produce FRM for less Just go buy it on the market.
Assumptions:
*"High bonus" = 200% bonuses representing a high bonus region
*"Low Bonus" = 100% bonuses representing a region with no bonuses
This has a great impact, A food factory produces 100 units of food at 100% bonuses and 200 units of food at 200%. More than anything this will determine your profitability.
*Work tax is Canada's tax as of this writing 35.64 CAD per WaM. For food production, its the only expense one needs to cover
High Bonus production first
This grid format is one I'll use throughout the article. It shows each quality along the top. Take for example Q1:
We start with the work tax and then add the RM cost to get total costs. We then divide that by the number produced to get a production Cost per Unit. We compare that to the standard "Market Value" to find a profit or loss (marked as (-2.50), for example). The last two lines note how much in CAD a factory costs to create and how long it takes to recoup that cost by selling (or by not having to buy it from the market)
One will note the "total cost" barely moves as the rock-bottom FRM price has little effect.
Food of any level is a money maker, even if just a bit. Q7 makes quite a bit, but it also costs quite a bit to get that factory. Assuming you buy it straight off the market, its 2,094 days to breakeven (that's 5 years & nine months). Grabbing it off the Company Market for 1107 gold (the lowest it can go) cuts that to 1,887 days.
Low Bonus production's next
Q1 food is a money-loser and all other gives just enough profit to get by. The 0.01 FRM really helps.
WEAPONS
Weapon production is a bit trickier. Making your own Weapon Raw Material (WRM) has an impact on profitability, unlike its food cousin. But lets start with buying WRM at market value, which will include VAT as paid by the seller. We skipped this with food as the small amount is irrelevant.
Again, a high bonus goes first
Weapons Q1 to Q3 cost more to produce than the market value. Profit can be had from Q4 - Q7. Days to Breakeven, however is measured in years. Doesn't look good for low bonus producers, does it?
Low bonus extends losses to Q4 and stretches Breakeven even longer. You CAN make money at Q5-Q7, but getting the cash back to pay off the gold investment may take longer than the game servers can run.
Weapon Raw Materials
Unlike Food RM, Weapon Raw Materials remain a play in the market.
Same grid :
Don't produce Weapon Raws with Iron or an Oil Well. Its a waste of cash. Saltpeter mine, bought with cash rather than gold, actually doesn't have that poor of a breakeven time.
How about those working in a low-bonus region? Glad you asked
Looks to not be worth producing at all in low bonus regions unless you've shelled out the 35 gold for a Plantation. Even then, your breakeven rolls around in late summer 2036. You'll still be playing then, right?
Lastly, best case scenario is you produce in a high bonus region both weapons and the needed raw materials. What happens to using your own WRM?
As an added wrinkle, a producer may have some left-over WRM that they can sell, so I've added that as a line item. It takes Q1 weapons from a money-losing venture to making 5CAD per day. But why take 5 units of WRM at a profit of 51.36CAD and turn it into a Q1 and 5CAD profit?
Regardless, on the high end using your own produced WRM really improves the production cost of a Q7 driving it down from 36.63CAD to 16.09. There's a huge gold outlay to get there (since one will need eight Plantations), but net is there.
Employees
Let's say you've decided to expand into employees, leveraging your infrastructure investment to make more. We're going to assume you're not cheating and are hiring off the market at 4,000CAD per day. I'm going to focus on Q7 weapons as evidence exists that Q4-Q6 have a small active market (meaning your items may sit for sale for weeks) and Q1-Q3 just don't have the net available to support a worker.
Well, it looks like Q7 can't support a worker either, doesn't matter which industry its in. Breakeven comes around a wage of 1,100CAD if you're buying on the market, or 1,500CAD if using your own WRM. In Food, breakeven comes at 680CAD wage.
So the take-away from all this
- High bonus food region is profitable for any Q-level
- Q4-Q7 weapons can be made cheaper than the market price in a high-bonus region even when buying WRM
- low bonus regions work for the higher end Q5-Q7
- decent profits in Weapon raw materials with a Rubber Plantation in a high bonus region
- don't bother with WRM in low-bonus regions (or any food RM anywhere)
- employees are not for WaM industries.
Last thing to keep in mind, if you are producing to sell, is the volume in the market. As a test, we listed some items for sale at the lowest prices on the market. Food Q1-Q4 all sold within a day. Q5 sold in two days, Q6 & Q7 never sold in the 4 days we ran the test.
With weapons, sales were sluggish everywhere, although Q1 seemed to move a bit quicker. But then there's no profit to be made there.
Comments
I'm glad you wrote that disclaimer at the end. Ultimately, even if the math says there is profit to be made, if you can't sell your items, or use them yourself, it is a money loser and your days to break even will greatly increase due to lack of selling ability.
I'd be interested to see the change in profitability per company type with an added tycoon pack bonus, and then how many factories one may need to make the tycoon pack break even for itself with the difference in profit compared to the cc cost of a tycoon pack.
It's also important to note the effect pollution can have on the production calculations. A region with max bonus can hit 218% production, but typically it also has lots of production happening in the region causing pollution to increase. Especially in the weapons, air weapons and housing industry, pollution can max out causing the maximum bonus in a region to become 193%.
There were so many permutations possible with production (country bonus, region bonus, pollution) I decid3e to just broad-brush a low bonus & a high bonus. A few point here or there won't change anything dramatically.
Market volume was very interesting. Going in, my assumption on Food was Q1, Q5, and Q7 were going to be the volume leaders, but that did not pan out that way. While Q1 sold out in a matter of minutes, seeing Q5-Q7 just sit there day after day was surprising.
Even with weapons, I assumed Q7 would be the mover, but there wasn't much in the way of sales. I'd love to see actual sales details over time, but if I'm producing for market profits, I'm going Q1-Q3 food. That's where the profit & volume is. Either way it aint much.
Good article - I enjoyed reading. Nice to see there are still a few people prepared to put effort into producing informative articles.
Personally when I do B/E calculations I make 2 assumptions that lower the B/E point greatly :
1 ) Company is upgraded/bought during Black Friday - 30% gold discount.
2 ) Deduct the gold value if the company were to be dissolved - 50% gold refund on normal price.
I use this since technically the company is still a valuable asset. Therefore if I were to dissolve it on the day that I hit "my personal" lower B/E point then I would recover my initial investment and any revenue after that day is technically already a profit. Example: for a Q7 company I would need to generate enough profit for 244 gold instead of 1220 to B/E. So it basically cuts all B/E points by a fifth.
You might also get lucky like Kippers and flip it in the market for 1170 gold instead of the 610 dissolve refund 🙂
But Marcel currently has 30+ sitting there 😒
Agreed, the gold discounts and refunds on dissolving are valid considerations for the B/E.
I got one Q7 sold for 1170g before Marcel flooded the market for months. I think he only had 5 or so offers up at the time.
I forgot how many days it took me, but I think it was within 30-60 days. Too lazy to check on Discord, though. Marcel might have 30+ sitting there, but we don't know when exactly he posted those up. He does have 100+ Q7's, I believe.
🙂
Just wondering, since you can get 25 Food and Weapon RM/day from the daily challenge, this obviously would impact a newer player with Q1 or Q2 factories the most, since some of that initial production is subsidized.
I have 2 Q2 weapons factories right now, and still end up with a surplus of 17 weapons materials per day, which is good enough to run 6 or 7 factories at Q2. Since I don't have to spend 17.4 CAD on the materials, aren't I technically looking at a profit around 14 or 15 CAD at this point?
Correct but you are better offer selling those 25 WRM directly in the market rather than using them to make lower Q weapons. Technically only starting at Q5 weapons it would be worth to use as raw material rather than sell directly but I don't know if there is a real market demand for Q5 weapons. Better just wait to use for Q7 weapons to be sure.
Much appreciated, thanks. 🙂
~hyuu~
The real truth is ROI is about the same as the half life of U-235.
Is there any logic in simply trying to produce enough weapons, food, or both to be self-sufficient? Not with profit in mind, but as a way to have enough supplies to fight and eat while avoiding making purchases in the Market.
Yes, as long as one can do it cheaper than buying it off the market. Makes no sense to produce Q1 food at 0.36cc when one can buy it for 0.33cc. The work tax always means you are paying someone, either the government or a producer.
But there isn't a magical formula, right?
No. You'll need to know work tax, and how much the raws cost to determine your costs. Years ago I saved this Google Sheet
https://docs.google.com/spreadsheets/d/1Z6DFj5YY3eYW54MazLFK8mzPajvux3cDE8Aze4VfN14/edit#gid=0
that helped a bit. It's outdated (no work tax), but I could update something similar
Thank you for your wizardry.