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Topic created : 29.01.2010, 09:45
Jythier
Five years with Virtonomics
Ten years with Virtonomics
 
Given unlimited qualifications, it looks like I would want to build store after store after store.  A store is easy to make profitable, and does not require any true initial investment in order to succeed.  The investment is an every-week rent payment instead of a one-time building payment.
 
Factories and livestock raising, however, are limited by capital outlay.  I cannot build as many as I would like to.  But this begs the question - what rate of return is good for a factory or livestock raising?  Obviously in order for a store to be profitable, it needs to pay back the expenses it generates - staff, rent, and product purchase.  With a large-ticket building, one should be paying back the cost of it over time as if it's rent - how quickly should we be making that back?
 
I ask because if I build one, I need to know how to price my product - if I'm not paying my building, I'm pricing too low.  If I can make back the amount I would invest in a cow shed faster than a factory, I should go that way first, until my efficiency limits me, just like I should build stores until my efficiency limits me to get the highest rate of return.
 
The real problem comes in for me when I'm looking at semi-products. If no-one is selling them, then I don't know what a good price is.  I also don't know if everyone on the market is under-priced, or if I should be trying to undercut them and take their business.  As there is no Independent supplier there, and no consumer market to gauge on, pricing can be more fluid.
 
What do you think, community?   

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29.01.2010, 11:26
Winner of the Contest for Managers in the nomination Raw Material Base Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Winner of the Contest for Managers in the nomination Trade Turnover Winner of the Contest for Managers in the nomination The Standard of Virtonomics Three years with Virtonomics
Four years with Virtonomics Golden Finnish Lion Golden Finnish Lion MBA diploma
m:
Company 2.0
 
For someone playing less than a week your observations are very insightful.
 
Retail is indeed easy to make money with, and is the best for big $$$. I find the majority of costs with retail (especially larger stores) is in product purchase. Rent is a pittance compared to supply purchase and salary payments.
 
Animal farms and factories have lower $ figures but usually have a higher % return. Depending on product and pricing day by day returns (daily revenues - daily expenses) of 500-1000% are achievable. I have one factory operating at 3000%+. Revenue is a little under 4 million but initial build cost was ~1.2 million. 
 

29.01.2010, 12:06
ccm_tsang
Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Three years with Virtonomics
Four years with Virtonomics
 
Fractal
For someone playing less than a week your observations are very insightful.

yes, very impressive observations, Jythier !
 
Fractal
I have one factory operating at 3000%+. Revenue is a little under 4 million but initial build cost was ~1.2 million.

very impressive as well, Fractal.  did you count tech study/purchase for the factory?
 
Jythier, at a certain point, you may well find that you cannot find enough supplies for your many stores, so you build your own factories to supply them.  when you start production, you may then find problems with semi products, and start to produce those as well --- til you end up buying a mine or 6 for the raw materials.
 
with the factories, unless you have lots of $ from your stores and can afford to buy technologies, you may wish to start a lab or 2 to research.  then, it takes less capital, but more time.
 
as for pricing, calculating unit cost + building + equipment replacement + technology are all very useful, but there is also the supply and demand.  if you include all your initial costs and expect to recoup too soon, chances are there may not be too many buyers for your products.  for a while, income from your stores and farms will need to called into service. 
 

29.01.2010, 13:51
Jythier
Five years with Virtonomics
Ten years with Virtonomics
 
Thanks for the kind words.  I play a lot of board games.  When you play board games, you need to know the rules before you start playing because they're enforced by humans - I think a lot of computer gamers don't have that mindset, they just jump in and go, and so they build too many stores and end up having to close down because they did not see that it's not capital that limits it.  That's why all the newbie posts seem to say "You have too many stores, close some down."  I'm off to a slow start but was looking to get into the 'components' business in order to band with other players.  I wouldn't be able to use them myself, so I would need to price them low enough to sell, and wondered if based on that current market, would I be making enough profit to justify putting out the up-front cost.
 
I've decided against it for the time being.
 
On the Lien server I did buy cows before food, which stinks.  But it's a recoverable error.  I'm moving into meat and milk production because the only foodstuffs on the market are grapes and sugar, leaving me with very low profitability stores. 
 

29.01.2010, 15:17
Mike1
Eleven years with Virtonomics
Four years with Virtonomics
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m:
Mico Inc
 
Hi Jythier
because you want to grow your qualifications, it is good to maintain subdivisions in all sectors e.g. farming, production etc.
 
For lien, having farms should be especially rewarding because the realm is young and you can make huge profits when selling it in your stores, thus quickly recover your investment. 
 

29.01.2010, 17:56
Winner of the Contest for Managers in the nomination Raw Material Base Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Winner of the Contest for Managers in the nomination Trade Turnover Winner of the Contest for Managers in the nomination The Standard of Virtonomics Three years with Virtonomics
Four years with Virtonomics Golden Finnish Lion Golden Finnish Lion MBA diploma
m:
Company 2.0
 
Animal farms are good because you can get two food items from two of them (cowshed and poultry). This gives you an extra product to sell in stores than if you built a factory. It is also very easy to sell the goods on the open market. 
 

30.01.2010, 09:16
balseraphim
Four years with Virtonomics
 
Hmmm... I've never been one for thinking about anything in much detail, but my reasoning is as follows:
 
In your realm, check the suppliers page via a store or warehouse. If their are plenty of suppliers for that product with units available, the price they are selling it at is your effective top market price. In this case you should retail the product because there are too many wholesalers.
If there are no or few available units for the product, then the supplier has the main advantage. In this case you should wholesale the product because there are too many retailers. You can experiment with the prices (you will have the flexibility to do so with such imbalance) to find the most profit.
 
That is a general way to go about it. Obviously there are problems in taking such a broad view but you should be able to see them with any luck. 
 

31.01.2010, 03:25
Jythier
Five years with Virtonomics
Ten years with Virtonomics
 
Is there an easier/better way to see the market, for those of us without warehouses?  I'm interested in semi-goods markets so that I can interact with other players.  But obviously I can't buy them for my stores, so is there any way to see how much is being bought?  I know how to see how much is being supplied. 
 

31.01.2010, 07:45
Winner of the Contest for Managers in the nomination Raw Material Base Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Winner of the Contest for Managers in the nomination Trade Turnover Winner of the Contest for Managers in the nomination The Standard of Virtonomics Three years with Virtonomics
Four years with Virtonomics Golden Finnish Lion Golden Finnish Lion MBA diploma
m:
Company 2.0
 
Using a warehouse is the best method to check market prices and availability for goods you do not need at present.
 
I'm not sure it would help much anyway. Semi-products are unlike all other products.
Retail goods have demand from the start of the game and most raw materials have demand as soon as players start playing. Semi-products on the other hand don't really have a demand until there is a supply. 
 

31.01.2010, 10:03
ccm_tsang
Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Three years with Virtonomics
Four years with Virtonomics
 
need good quality dye...   was producing my own and found the cost and quality to be not as good as the open market (and snowman melted), was able to get Q 7+.  now, good quality is no longer available.  in fact, there is only Q1 dye available in the open market.  perhaps the other players are also gradually recovering from snowman.  
 
word of caution, Jythier, using dye as example:  when i was producing my own dye, factory produced a lot more than i needed, so i tried to sell excess in the open market.  demand was not there unless i sold for LESS than cost of production - so i'd need to just keep the excess and put the factory on holidays every so often.
 
some semi products are like that.  you really will need to do some careful research if you can't afford to lose the revenue from production.
 
with end products, you can sell to other players as well as your own stores, so you can interact with those.  perhaps leave the semi products til you grow so more.. 
 

1.02.2010, 00:09
Jythier
Five years with Virtonomics
Ten years with Virtonomics
 
Is there any problem with using a smaller dye factory, with less machinery and employees in order to match your demand?  I know it's not perfectly efficient, but if there's no demand... then there's no demand.  
 
What doesn't make sense is that the dye market included some people selling for lower than cost of production.  That's really the only way you should have been needing to sell below cost to get demand, is if there is someone in the market who is making dye and selling it for too cheap.
 
Or else there is a player who is only buying dye when it is lower priced than his own factory makes?  But that doesn't make sense either, because as far as I know, even when you holiday your factories you are still paying some costs.  So if the dye market works that way, either further down the production chain is an unfeasable good (production cost is higher than average price) or there is someone trying to wholesale dyes and probably failing horribly because he can't sell it at a higher price either.
 
Raw materials are funny (I looked it up and it turns out components/Electronic components are considered raw materials) in that the prices are set entirely between the players, which determines which enterprise is more profitable.  I think it probably ends up with players making their own raw materials in order to eliminate that need to find a price point.  I wonder at the effectiveness of me entering a market that is probably filled with additional electronic components left over after servicing their own factories, at prices that are low, quality that is higher, etc.  Probably a bad move.  I will probably restart my Mary career after my component factory goes belly-up.  But who knows?  Maybe someone is just waiting for the right electronic component supplier to pop up.
 
As for Lien, stock raising seems too profitable to pass up at this point.  I will eventually move into other products but for now I'm all foodstuffs. 
 

1.02.2010, 02:11
eVVe
Six years with Virtonomics
 
Seems like you have done allot of market research, Jythier Well
 
Unlike allot of new players.........
 
Well Keep up Well
 
Btw, Drop me a visit at the chat room Well 
 

1.02.2010, 06:39
Jythier
Five years with Virtonomics
Ten years with Virtonomics
 
I figure, if I'm going to play a game about business, I better do some market research, even if it's just to examine what products are available, and what information is available.  There is absolutely no fun in coming online every day and looking at what you've done, saying 'Hey, that's what I've done' and then signing off.  One should be looking for a new opportunity every day, even if the capital or qualification level is currently holding you back from it.  I recently learned about the independent suppliers.  It seems there's pretty much one for every resource, which will allow me to produce goods from resources into finished goods as long as the production chain allows.  Excellent, because I'm not spending money on game points. 
 

1.02.2010, 10:30
ccm_tsang
Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination Consumer Goods Three years with Virtonomics
Four years with Virtonomics
 
re the dye factory - yes, if i had known demand was low, would have purchased less equipment and staff and slowly increase both as my own demand increased.  i didn't know better.  hopefully you do now, Jythier.  now my choice is to remove the equipment and fire staff and keep the factory open all the time, or produce excess and put the factory on holidays every so often (yes, holidays has cost still)
 
as tech for the factory improves, per unit cost of production drops and quality increases.  other players may also be able to get cheaper supplies with better quality.  for my factory, i either need to buy tech or study it before the products become competitive in the open market, and there may still not be enough demand for any excess products.  to get stable supplies of half reasonable quality for other factories, i still need to keep this factory even though it may then have to run at either a small profit or even at a loss.
 
bottom line, semi products are a bit tricky til you grow some more.  
 
one more thing to share: there have been a few times when i saw a need for supplies for some products (which i also needed).  but by the time i build the factory and get supplies in, other players have the same observation, and suddenly there is an over supply...  best bet there is to make sure you will be able to use your products even if there are not enough customers. 
 

1.02.2010, 14:11
Jythier
Five years with Virtonomics
Ten years with Virtonomics
 
Another question I've come up with - I now have 5 stores, 2 livestock growers, and a research lab under a single office.  This seems to be a problem because the number of subdivisions appears to require more workers.  This may mean it's more efficient to close down stores and make my remaining stores larger in order to still sell my full stocks of eggs, meat, and milk.  Is this an accurate assumption or will bigger stores require more office staff as well?
 
Also, when is the best time to start advertising and what kind of effect does it have on office efficiency and on sales? 
 

1.02.2010, 15:22
VLLord
Eleven years with Virtonomics For contribution to the development of Virtonomics Golden amphora of Heraklion Golden bed-clothing Standard underwear
m:
Golden Empire
 
Jythier
Another question I've come up with - I now have 5 stores, 2 livestock growers, and a research lab under a single office.  This seems to be a problem because the number of subdivisions appears to require more workers.  This may mean it's more efficient to close down stores and make my remaining stores larger in order to still sell my full stocks of eggs, meat, and milk.  
Better to put stores and factories(farms) in separate regions. Sell all stocks of your stores, close them and open in new region.
 
Store 500m is that you need for your top manager. To increase it to 1000m is better when you've 4..5 in commerce.
 
Jythier
will bigger stores require more office staff as well?
Of course.
 

Jythier
Also, when is the best time to start advertising and what kind of effect does it have on office efficiency and on sales?
To start better with radio advertising. Start advertising when you'll be able to pay about 100k a day for it.
If  your goods have brand about 2, then volume of sold goods will increase about 1.5 times. The same effect has store reputation. Advertising need more workers in offices. 
 

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