[ePH Econ] Stop Worrying and Learn to Love Owning a Business

Day 1,205, 08:48 • Published in Philippines USA • by PigInZen
AKA Why Have Employees? Part II

My last article covered the benefits of a capital investment of ~88.6 gold to buy 4 grain companies and 2 food companies. The biggest benefit is the ability to produce enough grain & food to provide yourself with 300 health daily to be used for 6 work shifts and 24 food fights plus have a little left over to sell on the market. I didn't get into the economic benefits, just the game play benefits. Today's article will cover the current return on investment if you were to sell all of your product and the ability to insulate yourself against price declines on the grain and food markets.

First, however, let's cover some economic differences between the eUSA and ePH as of 6:00 Server Time for Day 1,205:


Current Exchange Rates




Current Market Offers Table



Iron remains overpriced in the ePH. I have adjusted my sales prices for Q5 food and Q5 weapons for my offers on the market in the ePH and now those prices are in line with their eUSA counterparts. Q1 food has a premium of about 20% in the ePH. To help force the price down I've dropped a few hundred Q1 food at the comparable price to the that in the eUSA but I don't know how long that will last.

I will be expanding this section to cover the all food and weapon quality levels as well as to identify where citizens should be focusing their buying power in both the eUSA and ePH - things like comparing food Q levels by health/cost and renewing my "biggest bang for your buck/power for your peso" section.

On to today's feature article: why you should get your grubby hands on ~90 gold anyway you can and build yourself a permanent foundation in eRepublik.




Capital Investment in 4 Grain, 2 Food Companies: Why You Should Do It

Two days ago I discussed some of the benefits of company ownership and the work as owner feature. Today I am going to show how you can never be unprofitable with this scheme and how as your economic skill increases you will become MORE profitable.

That's right, folks, you heard me correctly, investing 90 gold NOW will provide you with an economic and functional base that increases in effectiveness as you gain experience and economic skill. BUT WAIT! That's not all! What if I told you that you could continue to make money selling grain or iron with my scheme even if the price of raw materials fell all the way to 0.01? Impossible you say? Not with this ginsu knife of a plan. Read on for the juicy details.

Let's consider the current cost of Q1 foo😛 .71 PHP. Working for yourself will cost you 10 health or 3.55 PHP. I currently produce 306 grain/iron per shift: 422 base production * 1.45 / 2 = 305.95. If ePH were to obtain a grain region and get Mindanao back from Indo occupation this would rise to 359: 422 base * 1.7 /2 = 358.7. Let's see what my production cost is per raw material unit:

Currently
3.55/306 = 0.0116

With grain/iron regions
3.55/359 = 0.00989

This is great! At the current expected price of Q1 food I can ALMOST make money even if raw materials prices fell to 0.01. If we obtained a grain and an iron region I could definitely make money under the current conditions.




The Follow-on Effects of Low RM Prices

What I haven't discussed yet is the impact of low RM prices on food and weapons prices. This is where the scheme really has impact for it is in the business owner's interest to drive that price down. Yes, that's correct, because the lower the cost of food the lower your production costs are when working as an owner. Let's use my Q1 food company as an example.

My production in my food and weapons companies is 633 points. It takes 6 grain and 6 points to produce each Q1 food from which equates to 105.5 Q1 food per shift. If grain prices were 0.05 per unit each day's work would cost me 31.65. If we take out the 5 Q1 food needed for my work (10 health, remember?) and divide my total cost of grain by the food produced we get my break even price point So... 31.65 / 100.5 = 0.3149. I could sell grain at 0.05 and food at 0.3149 and STILL break even. THIS IS AWESOME.

What if the price of grain went all the way down to 0.01? My total cost for 105.5 Q1 food would be 6.33. Divide 6.33 by 100.5 and we get a lowest-possible price of 0.063.

Yes, that's right. I can still make a profit at a Q1 food price of 0.07 and grain at 0.01 per. In fact, it makes no difference to me whatsoever where the price points are since I am only using money as a mechanism for getting the food out of my company and into my mouth. Sure, I get more money the higher the price is which I can then turn and exchange for gold for strength training and tanking but the bottom line is that I am now insulated from economic crashes and deflation. They no longer affect me.

All for about 90 gold. Run, don't walk, to get in on this.



Preview of My Next Article

Tomorrow I will be publishing my price analysis and market tracking like I used to do from my old Zen Industries newspaper. This will be published every morning during the week and irregularly if at all on weekends. Every few days I will have a feature article in which I will discuss more in-depth economic matters like I have done today. It's the best of all worlds - those interested in just the market analysis will get their content almost daily while those interested in the serious economic geek/game mechanic analysis will get their fix once or twice a week.

As of now I plan to publish another feature article on Friday, March 11 or eRep Day 1,207. In this feature I will discuss some of the following, depending upon how damn long it gets:

1. My personal plans to support company ownership among ePH citizenship through personal philanthropy (i.e., I'm giving you mofos gold)

2. The effect that working as owner will have on the jobs market and wages in particular.

3. What the government can and should do to encourage company ownership and ensure zero unemployment.

Stay dirty, piglets.




Maka-Diyos, Maka-Tao, Makakalikasan at Makabansa

For the Love of God, People, Nature and Country!

The ePH can have the most efficiently run economy but only if we work on building it together. I have a big-picture goal and hope that these series of articles will help explain my reasoning. For those wondering, no, I haven't reached my conclusion yet but it should be getting more and more clear as each article is released. Like I said last time, the goal for the ePhilippines can never to match the total damage of a large country like the eUSA but rather to exceed her in per capita damage. Small but mighty...