Economy Guide [001] Working as Manager vs. Employees
Marcelaxy
Hi, I'm Marcel and welcome to the Economy in eRepublik.
In this series of articles I'd like to share some insights in the world of business in eRepublik. I will mostly focus on eUS citizens and producing in eUS regions
In this firt part I compare Working as Manager vs. Employee Work and explain when and for whom each one is viable.
Employees
To make it short and simple: Employee Work is not profitable.
Unless you are using Tycoon Packs.
The Price of HRM for example is 69cc, wages are somewhere at 350cc. In the best regions you'll have a productivity of 193% meaning with a Q5 HRM Company you produce 1.93 x 2.5 HRM = 4.825 HRM.
4.825 x 69cc = 332.925cc
So you'll lose 17.075cc per employee working in a Q5 HRM Company.
When you use a Tycoon Pack however: 2.13 x 2.5 x 69cc = 367.425cc
So a profit of 17.425cc per employee working in a Q5 HRM Company with an active Tycoon Pack. This is similar for Q1-5 House Companies and Q1 Air weapons.
Tycoon Packs themselves are a cost factor, too.
They cost 150k each (price of the last one I bought, might be higher now).
Each one contains 20 Gold, 150 Works, you can buy 50 gold a day for 8 days and a productivity bonus of 20% for 8 days.
"But Marcel. It says 7 days, not 8 days"
This is right, but like every other pack's perk, the timer doesn't count the daychanges, it counts the time since the purshase.
So when you buy it late enough in the day, you can easily use the gold per day and productivity bonus for 8 days.
With this in mind, let's calculate how many employees you'll need to profitably use a Tycoon Pack. To simplfy it, let's assume an Employee Work Costs 350cc, Gold 450cc and the profitability per Employee Work is 20cc.
With this, for the 8 days, you'll need to use
(150000 - 20 x 450 - 350 x 150) / 20 / 8 = 553.125 ≈ 554
employee Works per day so the Tycoon Packs pay themselves.
(under the assumption that you are not Working as Manager)
The 50 gold-per-day-limit is a nice bonus for those who are constantly limited by the 10-gold-per-day limit. Gold from the exchange market is way cheaper than the cheapest gold from packs (>1000cc per Gold).
You'll however need a diverse pool of companies to make sure you don't get hit too much by changes in the market (also means you should have way more work places than 554). Additionally Holdings in different countries to keep the employee number high, large storage capacities and lots of CC for wages.
The minimum starting investment is ~ 5000 Gold + 1.000.000cc just to pay the Tycoon Packs reliably. With more than that, you can start thinking about making profit of Employee work.
Work as Manager
Work as Manager is the cheaper way for new players or everyone wanting to earn some extra bucks.
To keep things simple, I always assume 193% productivity (max resources + max pollution) and 2% = 5.8cc work taxes since that's the most reliable prognosis for the future in eUSA. Also 0.8cc for the food you consume. So a total cost of
6.4cc for each Work as Manager. (FRM and higher Q Food might have higher than 193% productivity due being rarer)
How profitable is each company?
FRM
You can ignore Q1 and Q2. Per CC, they have almost the same productivity as Q4 but with work taxes, and health playing a bigger role. To keep it nice and short, I give you the profitabilities and amortization time of Q3-Q5 Companies. With and without Tycoon Pack, assuming 22/30 days with active Tycoon Pack, a Gold Price of 450cc and 5.1cc per FRM, 193% regional productivity, 2% work tax (5.4cc) + 0.8cc for food. In this article I am defining the "amortization" as the time needed to re-earn 100% of the initial cost for a company.
Q3: 5.904cc (762 Days) / 6.839cc (658 Days)
Q4: 10.825cc (785 Days) / 12.134cc (700 Days)
Q5: 18.208cc (865 Days) / 20.078cc (784 Days)
WRM
Same story as with FRM, for WRM I assume a price of 7.7cc each.
Q3: 12.177cc (369 Days) / 13.588cc (331 Days)
Q4: 19.607cc (433 Days) / 21.588cc (393 Days)
Q5: 30.753cc (512 Days) / 33.576cc (469 Days)
And remember: These daily profits and amortization times are for 2% Work Tax, not for the current 3%. The profit of FRM is pathetic. There's no point in investing into its production right now. If you want to build up a self-supply, I recommend Q5 FRM Companies. You can use your available health more effectively and the amortizadtion time is barely longer than the lower Qs.
As FRM Regions I can recommend Nebraska and Washington D.C. in eUSA or Sichuan in eChina.
If you want to produce WRM, you are a bit more flexible. You can chose wether you prefer more money for your health or quicker growth due to faster amortization. It depends on how much daily health you have left and wether you are making use of the military module. To be better prepared for the future and changes in the economy, I would rather recommend you to go for Q4 at least.
As WRM region I can highly recommend Kentucky in eUSA.
Food
The productivity of Food Companies increases proportionaly to its Q.
The exception is Q7. Q7 Food is de facto "Q10 Food" while it has the FRM requirement of "Q20 Food".
A great advantage of Factories is that you can either upgrade them or sell them on the Market instead of having to sell them back to Plato for a joke price.
Assuming FRM prices of 5.1cc and Food prices of 0.17 for Q1, 0.33 for Q2 and 0.49 for Q3, 193% productivity, the Profits and the amortization times are the following (also I assume 72 Gold for buying a Q3 company off the market, there's plenty):
Q1: 16.242cc (277 Days) / 17.963cc (250 Days)
Q2: 36.973cc (365 Days) / 40.260cc (335 Days)
Q3: 57.705cc (561 Days) / 62.577cc (517 Days)
Upgrading from Q1 to Q2: +20.731cc (434 Days) / +22.297cc (403 Days)
Upgrading from Q2 to Q3: +20.732cc (1085 Days) / +22.297cc (1009 Days)
Upgrading from Q1 to Q2 during 30% off: 303 / 282 Days amortization time
Upgrading from Q2 to Q3 during 30% off: 759 / 706 Days amortization time
I could do this for Q4+ but this would require too much math and text. The only thing you have to know is: Only upgrade to Q3 or higher on Days with a Company Upgrade Discount and only when you don't want to increase your use of health for WaM.
The only times Q4+ Food Companies are profitable are during spikes in food prices due to drastically increased health recovery. Then you can even profitably use Employee Work with them. But more on this in another Topic.
If you want Q1, Q2, Q3 (or higher) Food companies depends on wether you want to make quick money and grow fast or if you don't want or can't afford more health for WaM anymore.
The best Food production places are Nebraska & D.C. in eUSA and alternatively Suichuan in China.
All amortization times don't include the storages neccessary to operate your companies smoothly. Fresh citizens will have to buy them while older ones may got enough for free from the Weekly Challenge etc.
Edit: Q7 is never an option. Because it requires twice as much FRM per Health you produce. Only during events with high Food prices and normal FRM prices, they are viable. However usually the FRM price will also explode within a few days making them useless again.
Weapons
You can forget Q1-Q6, the weapons are usually worth less (or barely more) than the WRM you need to produce them.
Q7 weapons are an interesting topic. These companies can be profitably WaM'd and operated with employee works. Depending on the Q7 and WRM price (and if you use a Tycoon Pack), the daily profit can be anything between 300 and 2000cc.
Because of this high variation (and because I'm writing this in the minutes after publishing the article), I can't give you exact daily profitability and amortization times.
I can only tell you so much: Per Gold you are better of building a Q7 Weapons company on days with a discount than upgrading Q2 Food to Q3 and not quite as good as producing WaM.
Even without Tycoon Packs, using employees for Q7 weapons can also be profitable at times. Q7 Weapon Companies are definitely the go-to if you don't want to spend too much health and rather want to fight or simply because you already use most of your daily health for producing. They are even more "profitable" when you primarly use them as a self-supply since you get your weapons VAT-free.
I recommend you building your Q7 weapons company in Kentucky. Building in a country with less stable tax and resources - or in one of our 50 regions without high weapons pollution - is always a big risk since relocating those companies is extremely expensive.
Future Topics
- Events: How to make a Profit
- Holdings & Residence
- Employees & Tycoon Pack (more indepth)
- Storage Wars
- Houses, Packs & Weekly Challenge
- (more?)
Comments
To make it short and simple: Employee Work is not profitable.
Unless you are using Tycoon Packs.
lol
Using RL muni to make virtual "profit" ftw!
you should join special olympics in South Korea... 😃
I am not paying a single buck for this game. Anymore... I buy all my packs from people who do.
doesnt really mater who payed RL muni for the pack.. just the idea is bad.. plus destroys the game even more.. 😛
Yeah, it's pretty messed up. On the other hand, it's good for the employees who can afford more for their daily work...
PS: admins introduced more decimal places for product prices some time ago so you could try make some more "profit" not putting prices of your products 1 CC lower than the rest.. Try a cent or two first.. or even equal price as the lowest actual price... so you can also save some virtual "muni".. 😛
Note: Some values like the WRM/FRM prices aren't up to date anymore since I wrote most of this a few days ago. I personally think it's a shame how cheap especially FRM is on non-crazy-health recovery days...
It’s investment in over production because of how badly people got burned during the 10 year anniversary.
iirc, it was always this way that FRM was way too cheap compared to Food and a Q2 Food Company was always much more profitable than a Q5 FRM one despite being more expensive and with other downsides.
Food is being overproduced though, it's 15-20% cheaper than before the 10th anniversary. People invested massively in discounted upgrades and new Q1s back then.
Thanks for the guide. It was helpful.
Very helpful thank you for writing this!
would you like a job in government?
Depends. If I think it's a useful one and doesn't require too much time...
Maybe do some short econ writing for WHPR?
I don't know what WHPR is...
Good Summary Marcel!
have to add, relocating factories using game mechanics is naive since it pays off after ~1000years/every% of tax difference between countries
the way to relocate your factories is to swap with someone who wants to relocate in the other direction 🙂
well, im talking about q7 (wep) factories since those experience manager work 🙂
I actually bought a highly discounted Q7 Weapon Company in Nebraska and I calculated that moving to Kentucky paid off in a 100ish days. The distance and the gold price back then was much lower though.
Great stuff. I haven't forgotten about our discussion, we need more of this.
Excellent
Your productivity and region recommendations are less than ideal.
You also get amortization wrong.
Productivity can be higher than 200, you focus on regions with high resources that have high pollution. The smart way is to find regions with little or no resources and 0 or close to 0 pollution. So you lose the equivalent of a tycoon pack out of the gate, vs the best possible location. An example, Chimor in Peru, for weapons, 2% bonus and almost 0 pollution.
Amortization is really half the cost of the farm, a lot less for comps upgraded during promos. A 35 gold farm can be dissolved and you get 17.5 gold back. Cash flow is a different matter.
Ofc there is also pps, with a handful of work as manager , it does not matter but , build some more and it has a very substantial cost as you get fewer rewards. Military rank is another downside, XP is a gain.
The problem with those regions is that you can only place a few companies per type there and if someone else also places their companies there, it's a total desaster. If you want to grow big, you then need a lot of Holdings, they cost CC, as well as travelling from Holding to Holding.
Simply going to one zerged region per Industry with max. resources is the safest, cheapest and more commonly used option. That's why I'm using that for my calculations.
At high numbers of companies, there comes also the cost for Power Packs, Blitzkrieg Pack and in my case even Maverick Packs, but the XP gain is awesome. Easily 3000 XP per day and in my case every Level-Up from Level 500-600 is worth 13 Gold.
I will discuss all this more precisely in another article though.
Define big? Hundreds of WRM farms barely make a dent in pollution and if bigger, you can spread to different locations, the cost of tickets is not high.
There is a slightly higher risk as there is the possibility for pollution to go up and farms need to be moved but that hasn't been the case in the years up to this moment - yeah i know, i've just ruined it lol.
Most commonly used doesn't mean it's the best, folks rush without thinking, they did that from day one.. If people knew what they are doing, they wouldn't need this kind of article isn't it.
[removed]
ust to clarify a small bit, pps is very important when you compare different fams qualities, I don't build anything bellow 35G farms because of that.
"Amortization is really half the cost of the farm"
For Q1 Food companies, the amortization then would've been reached after just 10% of the price because you can easily sell them for 9 Gold (except you placed them in a lonely region you described).
For Q2-7 Food, Q7 weapons and Q2-5 Houses, the amortization time would be less than zero, because you can occasionally upgrade them for cheaper than you can sell them.
I mean the time until you get 100% of your investment back. What's the point when working every day until you delete/sell your company and made no profit? -> I assume a user who would never even consider to delete his companies.
Would be easier to simply accept your mistake instead of getting creative and making funny claims.
You can't realistically sell Q2 to Q7 at market prices.
And you don't get to redefine the term amortization. The residual value of the asset is at least half the cost (17.5 gold for a 35 gold farm). If you have two apples on a table and you move one to another table, you still got two apples.
As previously mentioned, cash flow is another metric and you seem to be mixing the two.
The most consumer friendly example is how a car depreciates, some 10% once you leave the dealership, some 20% of the initial value after a year and after 5 years it loses maybe 50%. Here the residual value of the asset never drops bellow 50%.
"In this article I am defining the "amortization" as the time needed to re-earn 100% of the initial cost for the company."
Looks like I can in fact, for a specific context, redefine the word amortization. Just like in mathematics, where you can and most of the time have to define letters, symbols, abbreviations etc. to mean whatever you want, e.g. when writing a test.
I am not elaborating this more, so it doesn't become "too philosophic."
To clarify this, in the German langauge we are using the term "Amortisierung" (amortization) a little bit different than in the English language.
Ger: "die Kosten, die mit der Anschaffung von etwas verbunden sind, wieder einbringen."
Eng: "to recoup the costs that are connected to the purchase of something"
I guess the language barrier this caused the whole confusion.
It's not different in any language, you are just choosing to ignore the metric that is relevant, because you don't understand it and because you can't admit to be wrong.
The value of the company or farm is there,,2 clocks away and it's dissolved. An accountant friend of mine that plays erep, likes to call his comps and harms his bank. That's where he stores his gold while generating some daily revenue.
You are right when using your definition and I am right when using my definition.
And it is different across languages. Definitions of words and grammar rules can even shift in the same language locally and over time. The "Duden" (the German equivalent to Oxfort Dictionary) uses basically the same definition. The one I quoted was from Google.
"metric that is relevant"
With that statement you are expressing a bias. There is no objectively relevant metric. Nothing is ever "objectively relevant".
I would never downgrade or delete any of my companies, that's why this is the "metric that is relevant" for me.
It's like having two apples on the table. You take one, lock it into a safe and throw the key away. The apple is there, but you can't have it.
@realjjj since factories in erepublik have unlimited economic life and can ever be sold for 1/2 the price i see why youd think you only need 1/2 the time to get your investment back
however, i believe the point of having companies is not being stuck forever on 0 profit, but actually making it. and to do so, you need your factories there after they paid off 🙂
if you do however use the dissolve option to invest in something other than building new factories, than it makes sense for me to look at the problem as if you only need half the price of the company back
The word you're looking for is "breakeven" which happens when you reach 100% ROI. Amortization refers more to loan repayment in fixed terms where there is both principal and interest calculated.
Tycoon Packs 150,000 cc. It would be nice to have it explained why someone might be motivated to sell packs for CC.
You did a very good job of illustrating the damage done to the average player by use or misuse of the tycoon pack, and frankly it is a reason for the masses to leave the game, which they did. Thank you for your efforts.
V
How is that even possible to have 500 employees? It's a complete country on erep.
Employees
1080/4125
Work presence
84%
(The "work presence" should go up a % or two until Daychange)
I can easily use 1400 works per day, because on non-Tycoon-Pack days, I simply stop all employee work. I need Holdings in 15 different countries to make it possible though.
So you alone employ more than half of the American population. This suggests most players are employed by the same few people. I never thought about that.
massive workforce there xD
500 work tickets can easily come from 150-250 employees. Each citizen can readily work 5-6 times a day. Everyone should be working at least twice a day, because that makes profit for employee and employer.
o7
Nice article, keep it up.
excellent resource
Thanks Marcel
Thanks for the feedback Marcel. If you don't mind I would like to share it on discord eIndonesia
EXCELLENT. Thank you, I can't wait for the next articles, cheers o/
great breakdown
looking forward to the Holdings & Residence topic in the future 🙂
V
Excellent work right there! V+E+S!
Very nice! Looking forward for the next edition 🙂
Thank you Marcel o/