The Fledgling Economy or How I Learned to Stop Worrying And Love The Spreadsheets
Hi, Everyone! I have a LOT of important information to share, particularly for the admins!
=Introduction!=
I've been spending the last week since launch doing a lot of research and experimenting and footwork to find out the ins and outs of the economy system in the game. Market orders and offers, Refineries, Autofactories and everything in between that has to do with crafting stuff. Ultimately, I want to get a working supply economy in place that will allow people to refine raw materials at a fair price and a fair profit for refinery owners and then sell said materials to factories for a fair profit for themselves. Then, to allow the factory owners to buy the refined materials and use them to create finished goods and sell THOSE for a fair profit. These are my findings so far.
=Refineries!=
The public refineries on Omni, while well-intentioned I'm sure, have created a massive headache for our early efforts. These refineries are charging extremely high fees for their services in comparison to most people's total bank accounts at the moment, an example being Iriil which is refined for around 100 marks per ton. This amount of a fee results in ballooning the cost to perform every action in the supply chain going forward. One ton of Iriil, if refined for the cost of 100 marks, must be sold to a factory owner at a minimum of 110 marks for any kind of profit by the miner, lest the miner lose money. The factory owner must then carry that cost onto the consumer by raising their price of their finished goods accordingly.
For example, if this Iriil were used to supply one production cycle of HDS Astrium, it would require 120 Iriil (and 16 Astrium) to produce 4 tons of HDS Astrium. This translates to a cost of at least 12,000 marks, valuing the HDS Astrium at 3,000 marks a piece. That one piece of HDS Astrium would then be used along with 32 Elessium to create an EM Battery at a cost of at least 3,000 marks. The problem, is that EM Batteries currently cost 150 marks to buy from the star forges. And herein lies our dilemma.
However, I discovered a solution. A refinery costs 5 marks per ton for the owner to operate it. If they set their fee at 10 marks per ton, it provides the owner with 5 marks of profit per ton, and as refining is a high-volume operation, this translates into a tidy cash-flow over time. The miner can then take their refined material to factories that will buy it at 20 marks per ton, giving the miner a profit of 10 marks per ton, more than the refinery owner, on account of being exposed to the inherent risk of space lane piracy. This also establishes a baseline cost of 20 marks per ton of material when calculating costs for the rest of the supply tree.
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It is late and I am quite tired, so I will be continuing this tomorrow, as we still have Autofactories and the Market System to go over. Good night everybody!
=Introduction!=
I've been spending the last week since launch doing a lot of research and experimenting and footwork to find out the ins and outs of the economy system in the game. Market orders and offers, Refineries, Autofactories and everything in between that has to do with crafting stuff. Ultimately, I want to get a working supply economy in place that will allow people to refine raw materials at a fair price and a fair profit for refinery owners and then sell said materials to factories for a fair profit for themselves. Then, to allow the factory owners to buy the refined materials and use them to create finished goods and sell THOSE for a fair profit. These are my findings so far.
=Refineries!=
The public refineries on Omni, while well-intentioned I'm sure, have created a massive headache for our early efforts. These refineries are charging extremely high fees for their services in comparison to most people's total bank accounts at the moment, an example being Iriil which is refined for around 100 marks per ton. This amount of a fee results in ballooning the cost to perform every action in the supply chain going forward. One ton of Iriil, if refined for the cost of 100 marks, must be sold to a factory owner at a minimum of 110 marks for any kind of profit by the miner, lest the miner lose money. The factory owner must then carry that cost onto the consumer by raising their price of their finished goods accordingly.
For example, if this Iriil were used to supply one production cycle of HDS Astrium, it would require 120 Iriil (and 16 Astrium) to produce 4 tons of HDS Astrium. This translates to a cost of at least 12,000 marks, valuing the HDS Astrium at 3,000 marks a piece. That one piece of HDS Astrium would then be used along with 32 Elessium to create an EM Battery at a cost of at least 3,000 marks. The problem, is that EM Batteries currently cost 150 marks to buy from the star forges. And herein lies our dilemma.
However, I discovered a solution. A refinery costs 5 marks per ton for the owner to operate it. If they set their fee at 10 marks per ton, it provides the owner with 5 marks of profit per ton, and as refining is a high-volume operation, this translates into a tidy cash-flow over time. The miner can then take their refined material to factories that will buy it at 20 marks per ton, giving the miner a profit of 10 marks per ton, more than the refinery owner, on account of being exposed to the inherent risk of space lane piracy. This also establishes a baseline cost of 20 marks per ton of material when calculating costs for the rest of the supply tree.
-------------------
It is late and I am quite tired, so I will be continuing this tomorrow, as we still have Autofactories and the Market System to go over. Good night everybody!
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Comments
Okay, this is where the numbers are really going to start flying around, so bear with me here. So, continuing from before, we now have our full set of refineries that only charge a 20 mark processing fee, what next? Well, next we need some Autofactories. And this is a beast all its own.
You see, while a Refinery is mostly a 'set-it-and-forget-it' type of thing, Autofactories require more attention than a needy cat. The process for running an Autofactory is as follows.
- Step 1: Buy Autofactory (obviously)
- Step 2: Put up Market Orders to purchase refined materials that will be used to create the items your factory makes. They are stored in cargo storage on the station your factory is located on. Better make sure you have marks in your Cargo account to cover storage fees.
- Step 3: Manually run Production Cycles to produce intermediate materials/finished goods. Manufacturing is NOT a passive process.
- Step 4: Find a buyer for your quality items using a Market Offer -or- Ship your items to another station with active Market Orders for the product you're producing.
These steps all need to be kept up with, otherwise the money-making process stops DEAD in its tracks. Not only that, but there are complications and caveats.
Placing Market Orders - A hurdle to running an Autofactory is the fact that placing a Market Order for the necessary materials requires that you already have the funds on hand to pay for the order you're placing. These funds are taken and put into escrow (held aside by the system) until someone accepts either a portion or the full amount of items you want to buy. The escrow is paid out to the trader when they FULFILL the order by delivering the items to the station your factory is located at. So, say you want to buy 500 tons of iriil. Thanks to our reasonably priced refineries, we can buy those 500 tons at 20 marks per ton. But you will still need 10,000 marks on hand to buy that much. Takes money to make money.
Running Production Cycles - THIS is the big problem. And to get a better idea of it, I need to bring you into my magical world of Spreadsheets. Dare you enter?
As I wrote earlier, it is my goal to allow opportunity for profit to be made at each stage of production on the supply chain. The refinery owner gets a little, the miner gets a little, the courier gets a little, and the factory owner gets a little as well. Take the humble Repair Kit for example. It requires 1 Paristeel, 1 Transteel, 1 R-Glass and 1 Nanoplastic to manufacture. Or at least, that's what AUTOFACTORY WHATMAKES REPAIRKIT would tell you...
Only problem is that this isn't quite true. Look closer at the 'Min. batch size' there. 15 units. Now, you might be mistaken for thinking that that means that one production cycle means you get 15 units of repair kits out of the batch, right? Seems reasonable, even if the production cycle costs 3850 marks to fund. 3850 divided by 15, comes out to around 256 marks per kit. Quite a bit more than the 30 marks that they're being sold for in ship forges right now, but not breaking the bank too badly. Well, unfortunately, AUTOFACTORY TYPE REPAIR tells us a different story.
Yeah. Turns out that the Minimum Batch Size isn't what you get for the recipe. It's how much that recipe needs to be multiplied in order for you to run a production cycle. This means that it not only costs 3850 marks to produce ONE repair kit, but it costs 57,750 marks to run one production cycle of 15 repair kits. And that is IF the materials are ALL bought for 20 marks per ton! If you have to pay more, say, to cover the cost of refinery fees from Omni, the cost increases by orders of magnitude. And the ship forges are selling an item valued at 4,000 marks for only 30 marks.
= Summary =
In closing, my findings are that the numbers really, REALLY need to be retooled. I know how busy the admins are right now, holidays not even withstanding, but once things settle down, I would love the opportunity to be able to talk one-on-one with someone from the team and go into more detail about what I've figured out so far, and handle over all of my work to help with balancing this jenga tower of capitalism. Call me any time! We'll do lunch!
- XOXO, Millette
I have finished compiling a full list of the all the Autofactory-crafted items and how much each of them cost to run a production cycle (buying raw/refined materials at 20 marks per ton and not including maintenance fees) and how much they will need to be sold for (per unit) on the open market in order for the Factory Owner to turn a profit.
Yeah. 6700 marks for a missile. 7100 marks for a probe. 11,000 marks for an astromech. Numbers need fixing. Here's hoping we can get it done soon.
Editted a few times to correct errors. Apologies, it's late and I'm tired.
I also don't know what the solution to that problem is. Because if the prices become fixed, what then do players base their choice of refinery off? Naturally, you're going to use a refinery that belongs to someone in your own faction, because you know your marks are going to your section of the game. But what about when there are multiple refineries owned by different people in the same faction?
Of course, this assumes that people actually check job queues, or remember to move them.
@Razzy makes a very good point about wait times in regards to my concerns about what miners would factor into their choice of refinery! I had forgotten altogether that there's a queue. Hopefully as more people level up their captaincy and give mining a go, this will become relevant.