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List of forums -> Questions and answers. Help. -> Pricing vs Independent supplier

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Topic created : 1.02.2021, 00:34
Betterby
The tender collider, VII-XV places World Cuisines, IV-Vi places World Cuisines, IV-Vi places Shagreen, VII-XV places Shagreen, VII-XV places The winner of the Industry Competition in the "Virtostandard of fuel" nomination Winner of the Leaders Contest in the nomination Week of perfect Service Winner of the Contest for Managers in the nomination Nation's Health
The winner of the Industry Competition 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 The Standard of Virtonomics One year with Virtonomics
 
Hi, I'm new to Virtonomics and have been looking at ways I can make the most of my starting position.
 
Firstly, I've been looking at guides tutorials, and found the Newbies Guide. It has some suggestions on setting pricing in comparison to the Independent supplier.

https://virtonomics.com/mary/forum/forum_new/13/topic/101622/view
 
Set up your price next way:
Your price = Local suppliers' price * (Your quality / Local suppliers' quality)^0.5
 
This formula is for cities with middle welth level.
 
For cities with high welth level:
Your price = 1.5 * Local suppliers' price * (Your quality / Local suppliers' quality)^0.5
 
 
For cities with low welth level:
Your price = (1/1.5) * Local suppliers' price * (Your quality / Local suppliers' quality)^0.5

I've found a number of markets where the Independent supplier would be my only competitor. Does anyone have any views on whether this guide holds true in general, and specifically without other player competition? The resulting opportunities seem interesting if it does. Or has anyone tried other strategies?
 
Also the formula uses different constants depending on the wealth of cities. Should this actually be a a range, or are there actually 3 bands? If there are bands, can anyone suggest where the borders between them lie?
 
Also, has anyone tried other pricing strategies in these situations?
 
Another, secondary question too. I've bought a small supply of game points to reward the work that goes into the game. I'm generally not a fan of the in-app purchase model, so I'm unlikely to be buying many more. I took the starter package, which means I have a selection of quality 5 raw materials, agricultural products and fish. Looking around, it seems like I don't have the technology or the cash to make the most of any of them. There doesn't seem to be much liquidity in these, but it seems like some might be useful in future (I'm still working out the huge variety of production chains so I'm not 100% sure which yet). Would anyone be willing to suggest good ways of turning these assets into cash to grow the business? I see that asset backed bonds are something that will open up in the future, but it could be a way off.
 
Thanks in advance for any help you're willing to give!
 

 
   

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1.02.2021, 11:10
JustNash
Twelve years with Virtonomics Jubilee Ten Shagreen, VII-XV places Shagreen, VII-XV places Macedonian common amphora Common amphora of Heraklion The winner in the nomination Your Way to success of the Industry Competition Winner of the Contest for Managers in the nomination "Knowledge is power!"
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Основатель г.Хасселт Jewelry Loupe Founder of Carcassonne Twelve years with Virtonomics Belgium soccer ball Traskor Swedish standard Viking helmet
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For contribution to the development of Virtonomics The tender collider, VII-XV places The tender collider, VII-XV places The tender collider, VII-XV places The tender collider, IV-VI places The tender collider, IV-VI places World Cuisines, VII-XV places World Cuisines, VII-XV places
World Cuisines, IV-Vi places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places
Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, IV-VI, places
Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, II-III places Shagreen, II-III places Shagreen, II-III places Shagreen, II-III places
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Three years with Virtonomics
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Premium Brands
m:
Premium Brands
 
Welcome to the game!
 
Great questions! I'd say the formulae give you some sort of a grasp on where your pricing should be. It's not as simple as just that formula though. Much like it isn't that simple in the real world :-)
 
Some other variables that come into play: competition, "uniqueness" (are you selling something you only made for your own stores or are you selling the exact same product 3 others shops in your street are selling?), service level, popularity, district (fashionable/trendy <-> outskirts), branding of the product, possible franchised variants, number of product categories in the shop...
 

Here's what I generally do: set up shop in the trendy neighborhood. Aim for 10% market share with above average quality items.
 
Game points are precious. Their value might range between $300Bn and $1Tn at the moment, depending on who you're asking. You can indeed buy game points to support the game's administration. If you don't want to buy exclusive stuff with them, you can also use them to further your qualifications and their growth.
 

Enjoy! 
 

1.02.2021, 14:57
ChrisTekk
Egypt retail leader Belgium Retail Leader Italy retail leader Shock-worker of Virtonomics Kindergarten's Leader Power Plants Leader Double corporate chevron Science: master
Agriculture: bachelor The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, II-III places The tender collider, II-III places
World Cuisines, VII-XV places World Cuisines, IV-Vi places World Cuisines, IV-Vi places World Cuisines, IV-Vi places World Cuisines, II-III places World Cuisines, II-III places Shagreen, VII-XV places Shagreen, VII-XV places
Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, IV-VI, places
Shagreen, IV-VI, places Shagreen, II-III places Shagreen, II-III places Shagreen, the winner Platinum sponsor of the Contest for Tycoons Sponsor of the Contest for Tycoons Greece retail leader Brunei retail leader
Venesuella best retail Tenderman Winner of the Leaders Contest in the nomination Week of perfect Service Freezer Washer Restaurateur Mayor Mayor
Mayor Mayor Mayor Mayor Mayor Mayor Mayor Medicaster
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Kuwait retail leader France retail leader World's retail leader Leader in technologies
m:
EcoTech SE
 
I'd recommend to look into real world e.g. Finland, an learn from well working stores there.
 
1. Example: check out Sausages, or Tomato paste in Helsinki.
https://virtonomics.com/mary/main/globalreport/marketing/by_trade_at_cities ...
 
2. Look through the "Top Sellers" listed. Click at a store to check the store setup (size, visitors, popul., serv.level) and some price/quality/revenue indicators.
 
What works for them - should work for you Well - as long as your Top Manager qualification supports the store setup.
Not sure what Commerce qualification you need , maybe 10 to support enough Sellers in the store ? 
 

2.02.2021, 02:50
Betterby
The tender collider, VII-XV places World Cuisines, IV-Vi places World Cuisines, IV-Vi places Shagreen, VII-XV places Shagreen, VII-XV places The winner of the Industry Competition in the "Virtostandard of fuel" nomination Winner of the Leaders Contest in the nomination Week of perfect Service Winner of the Contest for Managers in the nomination Nation's Health
The winner of the Industry Competition 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 The Standard of Virtonomics One year with Virtonomics
 
Thanks for taking the time to answer. You've both given me some food for thought, and even more questions to investigate!
 
I price myself based on the marketing reports in my initial clothes store in Sweden, and am tweaking that over time. I'm making some profit, but margins are low in some cases, and there are a few products I can't see how to sell at a profit at all. Then again there are some products I can make good markups on.
 
The formula probably isn't too far out of line with what I end up going for there, but I wondered about those markets where the Independent supplier is the only comparison, as the formula suggests you could make pretty good money there despite them being lower wealth cities.
 
Looking at those top stores in Helsinki was slightly surprising to me. Their profile doesn't seem too different to my store.
- They are twice the size, so not unachievable for me. Is it worth expanding if my customers think my trade hall is spacious already?
- They have similar popularity - this surprises me. I've been doing outdoor advertising since starting, but I'd expect the top stores to be significantly more popular than I could achieve in that time. Does this mean further advertising isn't going to help?
- My service level is Very High, they have very high/elite. I've managed to get elite service in a laundry and fitness centre, I'm not sure what more I need to do to get it in my store. Better quality staff maybe? Or a unique offering?
-Number of visitors, they probably have 2-3 times as many as I do - I assume over 1000 means 1000-2000 similar to the quantity sold.
- They are city centre like me.
 
All in all, with similar stores they are selling hundreds/thousands of times the volume I am. Then again I'm constrained by the amount of cash I have available. I'm selling out of a lot of goods each day, so maybe it's just a case of continuing to increase stocks when this happens (or increasing margins where they are low) to get there.
 
@ChrisTekk, you suggested Trendy neighbourhoods. That is something I've considered. It looks from what I've read like a trade-off between getting higher unit prices against less volume.  Maybe that's where I should be looking given limited cash to play with.
 
I guess the other thing is qualifications - the owners of those stores have 10-20 times what I do. I assume these will have an impact on the amount they are able to sell? 
 

2.02.2021, 19:07

Last time edited : 2.02.2021, 19:15
Geniticer
Seven years with Virtonomics Winner of the Contest for Managers in the nomination The Standard of Virtonomics
Single corporate chevron Six years with Virtonomics
Seven years with Virtonomics Top Technologist Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination The Standard of Virtonomics
l:
Geniticer Incorporated
n:
G Invest
m:
Geniticer International
 
Hi newcomer!
 
Welcome to virtonomics.
 
The first 10 qualification levels(on skills)
You use to learn, trial &amp; error, expand, your bussiness.
 
Rule of thumb, do not use more than you can afford when investing in terms of capital or if your opening a new, try not spend so much more than you profit from current stores. Its fine if it goes red 1-3 updates if you know they would go green after setup and you got enough capital to take the hit.
 
Early levels you will need to check more regularly on your subdivisions, like adding more workers or increasing worker qualifi levels, adding more stores and setup these etc.
 
About retailing. Retailing is the most important sector in the game according to faq’s. For you i would recommend you to establish stores at 500sq/m and then idk like 25w or 40 at 4,6 qualif levels each store. I have put this info somewhere in the guide threads. Then you just add more stores at same size, same setup, but increasing amount of workers while keeping it at 100% effiency. Then level up commerce as much you can. At lv 6 commerce you can try doing 1k sq/m stores. And remember to advertise enough that the required amount does not exceed 80-90% of employed workers(lower for wealthy neighboorhood) and when you hit this try hold required workers steady there. If it exceed this req workers count you will experience a hit in service level and subdiv efficency numbers that will affect commerce qualification growth. Keep that in mind.
 
Pricing, depends on salary, wealth levels and independent suppliers price/quality atm. Service level could actually allow you to sell some goods higher than independent supplier/Npc stores ex sugar. Independent supplier got q1 for 13.33, with elite you can sell for around 18,5-20 ea. Elite is like really good way above average of competitors i would i say is it easy to get where there is almost no other competition outside of NPC. 
 

2.02.2021, 21:38
Betterby
The tender collider, VII-XV places World Cuisines, IV-Vi places World Cuisines, IV-Vi places Shagreen, VII-XV places Shagreen, VII-XV places The winner of the Industry Competition in the "Virtostandard of fuel" nomination Winner of the Leaders Contest in the nomination Week of perfect Service Winner of the Contest for Managers in the nomination Nation's Health
The winner of the Industry Competition 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 The Standard of Virtonomics One year with Virtonomics
 
Thanks!
 
The cash is starting to flow now. I think I initially tied too much up by overcomplicating my supply chain with a warehouse. That basically meant I had to have twice as much cash available to keep the stock coming in as I needed to have enough to pay my warehouse as well as the supplier each turn. (Seems a slightly odd game mechanic, you'd think you might give your own business some credit!).
 
My strategy is pretty much as you say, 500sq m stores. I'm opening more up where there is little competition, and focusing on the products which will allow me a margin, rather than try to cover all the bases.
 
I'm not quite sure what you mean with this part though.
 
And remember to advertise enough that the required amount does not exceed 80-90% of employed workers(lower for wealthy neighboorhood) and when you hit this try hold required workers steady there. If it exceed this req workers count you will experience a hit in service level and subdiv efficency numbers that will affect commerce qualification growth.

My actual number of workers is way higher than the required number in order to keep service level at Very High. For example my initial store requires 10 in theory, but I have 50 to keep the service level high enough, and now I'm having to increase wages &amp; train staff to keep it there. Is that what your warning is about? Are you saying I should I stop advertising at some point to prevent this continuing to a point where it's impossible to keep up? Or that advertising will help somehow?
 
I think I'm getting there on pricing, hopefully, thanks to some useful previous comments. 
 

3.02.2021, 13:05

Last time edited : 3.02.2021, 14:50
Geniticer
Seven years with Virtonomics Winner of the Contest for Managers in the nomination The Standard of Virtonomics
Single corporate chevron Six years with Virtonomics
Seven years with Virtonomics Top Technologist Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination The Standard of Virtonomics
l:
Geniticer Incorporated
n:
G Invest
m:
Geniticer International
 
Well to answer your question more straightforward.
 
Yes you can say i mean stop(reduce budget) the advertisement in a way that your popularity stays around same levels which also will make sure your required amount of workers stays the same.
 
If you go into advertisement page in your stores you see how many contracts you need to keep current popularity levels. So once you hit an certain level
 
ex you got 100w employed and once required workers reach around 75-90 its a good time reduce advertisement budget to match contracts to keep current popularity levels for stores located in normal areas.
For wealthy neighboorhoods(Trendy in area selection) i think like 20-30 required amount is good enough to keep service level high. You need to test this out. 
 

3.02.2021, 16:52

Last time edited : 3.02.2021, 16:54
ChrisTekk
Egypt retail leader Belgium Retail Leader Italy retail leader Shock-worker of Virtonomics Kindergarten's Leader Power Plants Leader Double corporate chevron Science: master
Agriculture: bachelor The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, II-III places The tender collider, II-III places
World Cuisines, VII-XV places World Cuisines, IV-Vi places World Cuisines, IV-Vi places World Cuisines, IV-Vi places World Cuisines, II-III places World Cuisines, II-III places Shagreen, VII-XV places Shagreen, VII-XV places
Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, IV-VI, places
Shagreen, IV-VI, places Shagreen, II-III places Shagreen, II-III places Shagreen, the winner Platinum sponsor of the Contest for Tycoons Sponsor of the Contest for Tycoons Greece retail leader Brunei retail leader
Venesuella best retail Tenderman Winner of the Leaders Contest in the nomination Week of perfect Service Freezer Washer Restaurateur Mayor Mayor
Mayor Mayor Mayor Mayor Mayor Mayor Mayor Medicaster
Top Technologist Retail Elite Fitness Tycoon Five years with Virtonomics Lithuania retail leader Latvia retail leader Winner of the Leaders Contest in the nomination The Standard of Virtonomics 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 The Standard of Virtonomics Finland retail leader Governor Spain retail leader United Arab Emirates retail leader Saudi Arabia retail leader Mali retail leader
Kuwait retail leader France retail leader World's retail leader Leader in technologies
m:
EcoTech SE
 
To be precise:
 
overcomplicating my supply chain with a warehouse. That basically meant I had to have twice as much cash available to keep the stock coming in ...
Correct, stocks do bind money. This is plain business mechanics: "Working Capital".
Your problem is: Liquidity.
 
... as I needed to have enough to pay my warehouse as well as the supplier each turn. (Seems a slightly odd game mechanic, you'd think you might give your own business some credit!).

It's not about credit, but the value stored in your goods. When your phyiscal goods move, also their value moves with them: transfer of money. Try moving your goods out of Sweden, and you will note what it means by the Customs bill. Nothing odd about it.
 
The only odd error of the game: they insist to call "profit" what actually is a "(net) cash flow". 
 

5.02.2021, 20:18

Last time edited : 5.02.2021, 20:18
Betterby
The tender collider, VII-XV places World Cuisines, IV-Vi places World Cuisines, IV-Vi places Shagreen, VII-XV places Shagreen, VII-XV places The winner of the Industry Competition in the "Virtostandard of fuel" nomination Winner of the Leaders Contest in the nomination Week of perfect Service Winner of the Contest for Managers in the nomination Nation's Health
The winner of the Industry Competition 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 The Standard of Virtonomics One year with Virtonomics
 
I agree, there's definitely a confusion of cashflow and profits, it's often not clear which is meant.
 
I can see what you're saying on the working capital, but I think this is slightly different.
 
The working capital is increased by 1 day, which is fine. It takes 1 day to get the goods from the supplier into my warehouse, 1 day to get the goods into my store, and 1 day to sell them and get the cash from customers. So 3 days instead of 2 if there was no warehouse involved. And I need to pay for and hold twice the stock. No problem there.
 
However in addition to that I need to have additional cash on hand for my store to pay my warehouse otherwise I will be "bankrupt". That's the bit which seemed odd to me. It's not a big deal though, the game works how it works, it's not reality. 
 

7.02.2021, 19:24
ChrisTekk
Egypt retail leader Belgium Retail Leader Italy retail leader Shock-worker of Virtonomics Kindergarten's Leader Power Plants Leader Double corporate chevron Science: master
Agriculture: bachelor The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, IV-VI places The tender collider, II-III places The tender collider, II-III places
World Cuisines, VII-XV places World Cuisines, IV-Vi places World Cuisines, IV-Vi places World Cuisines, IV-Vi places World Cuisines, II-III places World Cuisines, II-III places Shagreen, VII-XV places Shagreen, VII-XV places
Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, VII-XV places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, IV-VI, places Shagreen, IV-VI, places
Shagreen, IV-VI, places Shagreen, II-III places Shagreen, II-III places Shagreen, the winner Platinum sponsor of the Contest for Tycoons Sponsor of the Contest for Tycoons Greece retail leader Brunei retail leader
Venesuella best retail Tenderman Winner of the Leaders Contest in the nomination Week of perfect Service Freezer Washer Restaurateur Mayor Mayor
Mayor Mayor Mayor Mayor Mayor Mayor Mayor Medicaster
Top Technologist Retail Elite Fitness Tycoon Five years with Virtonomics Lithuania retail leader Latvia retail leader Winner of the Leaders Contest in the nomination The Standard of Virtonomics 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 The Standard of Virtonomics Finland retail leader Governor Spain retail leader United Arab Emirates retail leader Saudi Arabia retail leader Mali retail leader
Kuwait retail leader France retail leader World's retail leader Leader in technologies
m:
EcoTech SE
 
True, each single subdivision is treated as separate legal entity, with its own P&amp;L and tax bill.
I see what you mean now.  Your goods stuck at your warehouse - that's definitely a problem. 
 

7.02.2021, 23:30

Last time edited : 7.02.2021, 23:33
Geniticer
Seven years with Virtonomics Winner of the Contest for Managers in the nomination The Standard of Virtonomics
Single corporate chevron Six years with Virtonomics
Seven years with Virtonomics Top Technologist Winner of the Contest for Managers in the nomination "Knowledge is power!" Winner of the Contest for Managers in the nomination The Standard of Virtonomics
l:
Geniticer Incorporated
n:
G Invest
m:
Geniticer International
 
Warehouses is good to store produced goods of material and finnished goods from production/mining. But when your just gonna supply stores i would prefer just going for ordering straght from stores. Like if you are producing t-shirts, you make 1 Warehouse which only stores those T-Shirts, you can have one as Reserve then one for Public B2B Sales and then 3rd (optional) Private WH for T-Shirts. But if your gonna do the same with stores its gonna take more time to manage it all.
 
So, Warehouses Are great to use for when branching out to other service sector skills as Restaurant, Auto Repairs, Medicine, education. If you prefer to have separate WH for each region, or set them up in one region for every entity for auto repairs ex. Its up to you. You buy materials to this WH then Sell it to your Service Sector Subdivs and use this WH to make sure they get the goods they need.
 
Otherwise i highly recommend to use it to store materials or finnished goods made from Factories, Animal Farms or Agriculture, Mining(if your doing it). 
 

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