The Problem With Food Raw Materials
Actinide
Friends, Dutch, countrymen, lend me your ears!
I am a rather young citizen (only level 23). I have only just been introduced to the economic module of eRepublik (including WAM). However, I have made a realization about food that I think should be made known to the general public.
All of the following are “other things considered equal”. This means:
You’re using a Q1 food factory and (where grain farms are used) 3 grain farms.
Market prices as described below remain constant.
There are no production bonuses (although this would only change any of these points if the eNL owned three or more regions with food production bonuses).
1 At current prices, selling raw materials on the market is a foolish idea indeed.
To sell food raw materials competitively on the open market right now, one must set their price at .02 guilders. To make 35 food raw materials costs 1.06 guilders in work taxes. 1.06/35 ~= .03. Do the math. You have 33% losses from producing raw materials and selling them on the market.
2 One can make a profit from food produced using raw materials created with WAM.
Let’s say you have three grain farms and a Q1 food factory. You’d produce 105 food raw materials. You’d use 100 of those to make food and have 5 left. This entire process costs you 4.24 guilders in work taxes. On the open market, Q1 food is going for .05 guilders. So, using food raw materials values from the previous point, one can draw the conclusion that they would make (5 guilders from food + .1 guilder from raw materials - 4.24 in work taxes = ) .86 guilders per day. A profit is made.
3 Raw materials are cheaper to buy than make.
This is self-evident: .02 is less than .03; therefore, raw materials are cheaper to buy than make.
4 One can make a larger profit off of food if they buy their raw materials.
Let’s do the math: 100 raw materials costs 2 guilders. 5 guilders from food - 2 guilders from Raw Materials - 1.06 work tax = 1.94 guilders. You more than double your profits! All from buying your raw materials instead of making them.
~Actinide~
13-9-3-18-15-5-3-15-14-15-13-9-3-19
Commentaires
[removed]
And no crystal boll needed to predict it will be for years to come.
A few remarks:
1: for new players investing much in the economy is not recommended. Save it until there is a 45% discount on training grounds, then upgrade those (starting with the first one), That is way more profitable than whatever companies you can buy with the same amount of gold. Additionally, you build up strength faster. See also my article: www.erepublik.com/en/article/2502371.
2: for division 1 players working more than for your employer is not recommended. It gives you 2 XP and no strength for each time you work. In other words: it gets you closer to "promotion" to D2, where the opponents are stronger.
3: higher quality raw materials companies are profitable at the current market prices. Although also only for very small amounts of money. Definitely keep the above 2 points in mind before buying those.
4: I mainly buy Q3 food at the moment. 13 cent per 6 energy = 2.17 cent per energy. Comparing Q1 food prices: 5 cent per 2 energy = 2.5 cent per energy. So for most of the health I restore Q1 food is just too expensive. I need a small amount of Q1 food to solve the "remainder problem". I.e. if I can restore 100 energy by eating, and want to do that with Q3 I get to 6*16=96 energy restored. With 2 Q1 you do get to 100. eRepublik automatically picks the highest Q food for as far as it will restore your energy, and then proceed with the lower quality food and use that for as far as it will restore your energy. So if I have only Q3 and Q1 food, my Q1 food only gets used to solve these remainder issue. For the food I buy, I'll probably spend about 2.2 cents per energy.
5: like Fhaemita says: the economic module is not that good at the moment. Basically the admins may decide to one day change everything around without prior warning. (They've done this a couple of times already). Whether the changes are good or bad, noone can tell... In any case, future changes in the economy module might change this story.
I just re-posted my article, seeing there is currently a 45% discount on training ground upgrades:
http://www.erepublik.com/en/article/winstgevendheid-van-trainen-profitability-of-training1-2512436/1/20
I cannot stress how important this is, both economically (super soldiers are a great reliable source of income), and for your military capabilities.
Moral of the story: Don't use low tier raw companies. You get them with missions, but you should dissolve them as soon as the game allows you to. With the current gold price, you can actually produce more if you use the currency you get from that and convert it to gold to eventually buy fisheries. And I'm not even mentioning the benefits of the reduction in working actions.
Purchasing and using companies shouldn't be your first concern when you start the game though. Training grounds are far more lucrative and helpful while companies only bring you unwanted experience and a long waiting period for the return of investment.