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 Post subject: 96.1% markup?
PostPosted: Fri Oct 31, 2008 12:45 am 

Joined: Oct 30, 2008
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I experimented with selling accessories in Bellerive. I have a 100 sq ft retail store on standard ground. It is an apparel superstore (apparel superstores have sales efficiency 92.6%). Training is 100%, store rep is 0 (I just started). I decided to buy Q0 accessories from the NPC merchant, and sell them to my customers.

I calculated the speed at which I earn gross profits based on (retail-wholesale)/(time per sale). I found that whether it was Belts, Handbags, or Backpacks, I always make money the fastest if I sell at a 96.1% markup over the NPC price. That is, I charge 1.961 times what the NPC charged me.

It seems that the time per sale is constant at a given price and store size. Trying to sell twice as much takes twice as long. It also seems that my gross profit per day is a little over 11,000 Bucks on each item for all three items. The handbags are 2.43 times as expensive as the backpacks, but the backpacks sell 2.43 times as fast.

I didn't incorporate employee commission into these calculations because I'm new and don't know how commission works.


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PostPosted: Fri Oct 31, 2008 1:11 am 

Joined: Oct 17, 2008
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Location: Ottawa Ontario, Canada
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a 24 hour production run of Q0 seem to be a profit margin of 10K from NPC price on all the produces i have seen/herd.


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PostPosted: Fri Oct 31, 2008 1:51 am 

Joined: Jun 27, 2008
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Nice calculation! I've been doubling it as a rule of thumb, but I like your number very much.

Commission is only on City Center land I believe, which I don't use much personally. But I think it's a way to sell faster, yet get a little taken out per sale. So it would be part of a land calculation more than selling price (though it might affect that).

A thought for you, if you feel like answering it Tifforo1: Do you think that 96.1% might change with other factors? (Quality, brand, etc) And I think it might be worth selling for less if you want to steal market share from someone for some reason.

Also a warning for the long-run: NPC prices will change when the current supply sells out. So that ratio may change.

Quote:
a 24 hour production run of Q0 seem to be a profit margin of 10K from NPC price on all the produces i have seen/herd.
As I understand it, it matters what product you use and what store you have. An expensive store should make more per product, to get the same ROI. I've been using a Snack Bar which is cheap, and making about B7000 per slot. But it works out.

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 Post subject:
PostPosted: Fri Oct 31, 2008 2:37 am 

Joined: Oct 30, 2008
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Just as an afterthought, I would note that at those prices I can sell about 96% of the maximum quantity that the price advisor says you can sell in a day. Like, he says you can sell 15-43 backpacks or belts per day in a 100 sq foot store, and I can sell 40-41 in a day at those prices.

Also, with a 96.1% markup over the Q0 cost from the NPC, your retail prices are 64.1% as much as the highest recommended retail of the advisor.

As for other factors, I don't know whether having a higher retail efficiency, training level, reputation etc. would raise the ideal prices, or just reduce the time per sale by a constant factor. I don't have enough experience to know that yet, but I'll try to do some experimenting to see.


Last edited by Tifforo1 on Fri Oct 31, 2008 3:01 am, edited 1 time in total.

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 Post subject:
PostPosted: Fri Oct 31, 2008 2:58 am 

Joined: Oct 30, 2008
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Shoot, I forgot the 5% market fee for purchases from the NPC when I was doing these... I'll see if that adjusts the markup.

Well, for now, maybe just charge 96.1% above what it costs with the market fee?

I'll have to redo the math. I'll post later.


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 Post subject:
PostPosted: Fri Oct 31, 2008 10:26 am 

Joined: Jun 26, 2008
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Location: Sydney, Nova Scotia (Canada)
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Yeah, not all products make 10k per slot. I make 18k with NPC bought fridges, fixtures, washing machines, silverware, and blankets.

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 Post subject:
PostPosted: Fri Oct 31, 2008 12:49 pm 

Joined: Oct 30, 2008
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I meant that all products within one category tend to make the same amount per slot if you're getting them from the NPC. Remember that everything I discussed was an accessory.

Oh, and I found that at a megastore, the ideal price IS slightly lower


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 Post subject:
PostPosted: Fri Oct 31, 2008 2:26 pm 

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Using an accessory shop with similar conditions (100 sq ft, 100% training, standard ground), I found that the ideal price for q0 backpacks at an accessory shop in Bellerive (if you are buying them from the NPC) is 2.054755 times the NPC price, or 1.95691 times the price it costs you to buy from the NPC after you factor in the 5% market fee.
Maybe I should have called this thread "95.7% markup?"

Using that price, I can make 470.52 profit per slot per hour, which is around 11290 per day. I buy inventory for each slot for a day that costs around 11,800 (including market fee), and sell that inventory for 23,100 revenue.

So, my advice to retailers is to charge 96% more than what you paid wholesale, including the market fees that you paid. At, least, that seems to be the best choice if you are retailing the NPC's products.

Again, I don't know what effect things like store reputation have.


Last edited by Tifforo1 on Sun Nov 02, 2008 12:42 am, edited 1 time in total.

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 Post subject:
PostPosted: Fri Oct 31, 2008 4:14 pm 

Joined: Jun 26, 2008
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Tifforo1 wrote:
Using an accessory shop with similar conditions (100 sq ft, 100% training, standard ground), I found that the ideal price for q0 backpacks at an accessory shop in Bellerive (if you are buying them from the NPC) is 2.054755 times the NPC price, or 1.95691 times the price it costs you to buy from the NPC after you factor in the 5% market fee.

Using that price, I can make 470.52 profit per slot per hour, which is around 11290 per day. I buy inventory for each slot for a day that costs around 11,800 (including market fee), and sell that inventory for 23,100 revenue.

So, my advice to retailers is to charge 96% more than what you paid wholesale, including the market fees that you paid. At, least, that seems to be the best choice if you are retailing the NPC's products.

Again, I don't know what effect things like store reputation have.


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 Post subject:
PostPosted: Sat Nov 01, 2008 7:07 am 

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I ran some numbers for a drugstore. Once again, default parameters (standard land, 100% training, no rep, etc.), and I was buying from the NPC in Bellerive.

I found that the ideal price was still 96% above what you paid wholesale (what you paid includes the 5% market fee you paid when you bought it), but that the profit per day was less, only about 9650 per day.

So it would seem that the 96% markup is ideal for all product lines under these conditions, you will just make less if it isn't the most profitable industry to be retailing in. It also means that the amount I need to spend wholesale on products each day is lower for the drugstore than the accessory shop (which is a bad thing for the drugstore since I make a $96 profit for every $100 of wholesale price goods I retail).


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 Post subject:
PostPosted: Sat Nov 01, 2008 11:28 am 

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In Bellerville there is a weaker economy, which would account -5% selling price (see stats page).

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 Post subject:
PostPosted: Sat Nov 01, 2008 9:40 pm 

Joined: Oct 17, 2008
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i recently built a automotive retail store to see for myself how much they sell for and so i can judge on fair prices for Q's.

aparently i was quoted wrong on the 10K profit for cars a buyer was making (maybe he was selling 2 cars in 24 hours instead of 1) but doing 1 car per 24H i can sell it at 40K for Q0 and for the same time period 41K on Q1.

at market price of 25K thats 15K profits, 15.5K at Q1 as i only increased Q1 prices by 500 to make Q1 have a higher profit margin and worth getting.

This by the way being a Automotive retail store located in Suburban Stripmall property


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 Post subject:
PostPosted: Wed Nov 10, 2010 5:26 pm 

Joined: Nov 6, 2009
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Is this ratio of 96% markup still valid with player sold products, or should the markup be based on NPC prices still?


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