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A discussion on the price for profit

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PostPosted: Mon Sep 17, 2007 18:03    Post subject: A discussion on the price for profit Reply with quote

Assuming a rate for raw materials:

Titanium - 28
Energium - 20
Optium - 12
Plasma - 60

We shall calculate the minimum price needed to turn a profit.

The cost of an item should include the cost of the raw materials, plus the cost of maintaining the factories needed in its production, plus the cost of the intergalactic sales tax. To demonstrate this, i will work through the costs of making an L6.

The techical datasheet shows that the supplies needed for an L6 are 2 m1, 4 o1, 1 o2, 1 e5, 1 e6, 10 p1, 6 p2, 2 p3, 1 p4, and 180 credits.

To make an m1 we need 3 titanium, 1 energium, 2 optium, and 1 plasma, at a total cost of 188 credits. To this price we need to add the payment for maintaining the factories. This is a level 1 supply item, so it only requires 1 unit of factory production. 1 unit costs 100 credits (or 77 credits for a pro with research centre). The total cost for the m1 is therefore is 288 credits (265 with research centre).

The cost of a p2 is 352 for the raw materials plus factory upkeep. The p6 is a level 6 item, so factory maintenance costs 600 credits (462 with research centre).

Following this method for the other supply units costs, give them a price of:
m1 - 288 (265 with r.c.)
o1 - 144 (121 with r.c.)
o2 - 288 (242 with r.c.)
e5 - 1588 (1473 with r.c.)
e6 - 2280 (2142 with r.c.)
p1 - 276 (253 with r.c.)
p2 - 552 (506 with r.c.)
p3 - 940 (871 with r.c.)
p4 - 1536 (1444 with r.c.)

So, returning to our L6, recall that the supplies needed are 2 m1, 4 o1, 1 o2, 1 e5, 1 e6, 10 p1, 6 p2, 2 p3, 1 p4, and 180 credits. Using the prices calculated, this gives us a total cost for L6 supplies of (2*288) + 1588 + 2280 + (10*276) + (6*552) + (2*940) + 1536 + 180 = 14,976 credits (for a non-pro).

This is the cost of making all the supplies needed for an L6. To this price we need to add the cost of factories to actually make the laser itself. An L6 is a level six item, and will therefore cost 600 credits in factory upkeep (or 462 with r.c). So, the total we must recieve to sell our L6 at a profit, is 14976 + 600 = 15576 credits (or 14261 for a pro using a research centre with her factories).

To this final price we must add a little to pass on the galactic sales tax to the customer. Sales tax is currently at 5%. Therefore we must increase all our final prices by approximately 5.25% so we dont end up making a loss due to tax. The final price of our L6 (including galactic tax) would therefore be 15576*1.0525 = 16,394 credits (or 15009 credits for pro with research centre). It is clear that a good profit can be made on L6, as people usually buy these items for more than 16394 credits.

Following the same principle for an S6, the price to sell at would be anything above 72,905 credits (69,140 for r.c.). An H4 would need 31,196 credits to make a profit. These items are more difficult to make for profit.

The prices for your own raw materials, mined from your own planets will probably be less than those market prices, so you can make cheaper goods, but remember, anything less than these amounts, and you would make more money simply by selling the raw materials directly!!

Of course, all of this assumes that there is demand. Sometimes you may not be able to sell your raw materials.... (or the components for that matter, dont try making L1s for profit!)

Finally, as others have pointed out, sometimes it is better to operate your factories at a loss rather than let them sit idle, getting back just *some* of the upkeep money is better than losing the value of *all* of it. While this is true, in the long term you would be better lowering the level of your factories, and keeping them running all the time at break-even or profit. It makes no sense to operate at a loss for a long period.
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