The Q1 Food Crisis
Nosyt
I’m sure many of you have realized that the price of Q1 food has been on a rapid spiral downwards. Sure this is great for the people of eCanada, but the GM’s who are just as important have undoubtedly suffered. As a Q1 food company owner, I’ve done the math and the results don’t look good.
Right now, Q1 food is at an all-time low of 0.66 CAD. With taxes this is a profit of 0.61 CAD. The lowest Price for Grain is 0.34 for Q1 or 0.65 for Q2 (divide the price in two and you get a price of 0.325 CAD which is slightly cheaper than Q1) If you were to buy Q2 grain then each product would yield a 0.28 profit. Employees with skill level 4 (I will be using skill level 4 as a reference because it’s what I know best; I’m at that level and I have extremely high health 😛
) often have a productivity level of 15-20. Even if they were to produce the max of 20 (which is extremely rare) the Q1 food they would produce would yield a profit of 5.60 CAD. (0.28 profit/product multiplied by 20) This means that if you pay a skill 4 any more than 5.60 CAD you are LOSING MONEY.
So if the industry desires to survive we can either increase our prices or slash salaries. I’m not sure what other manufacturing industries can afford to pay their skill 4 workers, but I’m sure it’s more than 5.60, making that nearly impossible to do. (Unless the other Q1 manufacturing sectors are taxed to hell 😛
) So what’s it gonna be people?
Comments
Omg, I' sorry. After rereading my article I realized that my last statement is a form of propaganda known as false alternative. I told you what the options were and I explained that my way was the only way. For that I apologize, and I would like to point out that there are probabaly other options, I just don't know of any 😛.
I was just happy to be able to buy Q3 food for half the price I was buying it at a week ago. It was over 6 CAD, I bought some the other day for a little over 3 CAD.
Which just proves my point that food has seen a massive shift in price and something has to change. Be it taxes, wages or prices, or perhaps some other alternative I don't know of. (Hah, I shall not fall victim to propaganda again mwahaha)
An alternative is that some food co. go out of business and prices rise. The ones that will continue will be the ones that take the loss until the profits come back. You could increase productivity by firing anyone under 80 wellness and only hiring workers with 80 wellness, also you could fill the working ranks with mostly dead and produce less until prices recover....lots of alternatives
Grain has the same problem right now. The wages cost more than what you can sell the grain for. I have no staff right now. Not sure how other companies are surviving.
As a business owner, you set the price for your goods. If you choose to set the price below the profit amount, then you will no doubt lose money. Competition in business is wonderful and good for eCanadians as it allows them to buy goods at "competitive" prices, meaning the cost of goods is low enough that businesses do not over-profit, due to their competition being willing to undercut them to make the sale.
As in a previous article of the past, I feel that as long as eGoods are sold basically on a "lowest price sells first" basis, one cannot truly imagine that businesses will do well always in their respective industries.
If it's unsustainable, it won't last. As Clancy said, some companies will go out of business or stop producing, since it's unprofitable to do so.
In the meantime, food consumers benefit from lower prices, and wages should drop for all of manufacturing, which benefits owners of non-food manufacturing. Given time, food will become profitable again and other industries less so.
Yeah, it sucks. I've been selling gifts at a loss of profit for god how knows long. The competition is ridiculous, and there is no way in eRepublik to make your products more appealing other than price.
Markets crowded, some companies will fold, not really a crisis just the market doing its thang.
So this happens often lol, well guess it's a part of life then 😛
I believe the solution to this problem is for companies to obtain licensure and market their products worldwide. The only way this will happen is by lowering taxes, especially landbased import taxes, to make the base price of materials as low as possible. Once this is done, Companies can slim down their prices even lower and make products cheaper while still bringing in more profit than ever. At that point, eCanadian products will be able to compete outside of eCanada, and bring in even more money and diversify your income streams.
One of the largest pillars of the Canadin Libertarian Party is tax reductions, especially import taxes to Land products. If you want to know more, please contact me or head to the party forum 😉
With all due respect to the Minister of Finance and the other posters, the exchange rate of Gold to CAD is one of the highest in the world. Compared with a Gold to USD rate of 0.02, the rate of 0.033 doesn't help Canadian companies on the global market.
Rowlock, you will note the very low import taxes on grain, iron, (15 and 5% respectively). Lumber, Diamond and Oil have higher imports as a sort of stupidity tax, our domestic market is supersaturated 99% of the time and we have some of the lowest prices in the world (using eReptools). All our raw materials, save iron but that is due to historically low demand and no high production region, are more than competitive with our international counterparts even in sectors with higher import taxes.
It would sure be great if the prices were kept like this (as long as you're not the GM). 😛
Guess I'll buy 10 Q1's and donate it to some citizen 🙂
Hope that could relieve a portion of Canada's troubles 😛
Fill your company with skill level 1, 2 and 3 workers. Get a couple of 0 skill zombies to boost productivity and hunker-down. It'll mean you make less (we make about 0.75 CAD a day comfortably under present conditions, and can even ride grain down farther if need be) but a minimal profit is way better than losing 5 bucks a day with high skill guys with only middling wellness. Not only do you have a strong base of workers growing for you, but you have less wages going out each day and you ultimately are building up new eCanadians. That's why we here at Strongside Industries try to take a hands on approach with the boomers. Get'em while they are young
I've never complained about the stupid pricing in the Q1 weapons market, but I will add that a number of people are selling well below their cost just to free up some cash.
Any company that's not at peak efficiency (healthy workers, full employment, low input costs) will fall quickly, however somehow these companies linger and manage to drive down the prices for the rest of the market.
What has to happen is natural selection - the better firms will survive and just have to wait it out - you can't keep selling food at 0.61 CAD when it costs you 1.00 CAD to make - you will run out.
Well I wouldn't mind having the prices increased... If it helps the businesses and most of all the economic growth of eCan paying extra isn't a big deal. I suggest raising the price of food to an even dollar to start with and the price of q1 grain from .35 CAD to maybe .55 CAD