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PostPosted: Mon Feb 04, 2013 12:20 pm 

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The leadership of IMU has transitioned during the month of January, and we now have two new founders at the head of IMU and a new position of spokesperson for the trade group has also been created recently. IMU King and Top Notch (IMU) are now co-founders in charge of the trade group. I had been originally asked to serve as one of the two co-founders after our prior leaders moved on to join the Revolution Group, but I declined that invitation as I have made a change in strategy and direction in the game to become a pure retailer. I did not feel that it would be appropriate for a company that was totally retailing focused to be a leader of IMU. However, I was then asked by the two new founders to act in the role of spokesperson for the trade group, with my first assignment to publish this new release on the EcoSim Journal section of the forums.

The transition to new leadership has occurred without any problems, although we have lost some of our members to the Revolution trade group (including both prior co-founders in charge of IMU), and several more of our members have moved over to the newly merged Elite VIP Chambers trade group. Although we are still a large trade group in the game in terms of total members and total assets within our group, we are not the largest trade group in terms of either criteria, and we do not believe we will be able to "control" prices or force dominance on other players or trade groups by "dictating" IMU office prices as being the only possible pricing standard.

Rather than trying to compete for alternative pricing models, or having prices shift to a one-on-one negotiated basis, which is generally more favorable to stronger and larger retailers than to producers on average, we are in the process now of actively working with other retailers and producers, and other trade groups, to consider whether any changes are needed to IMU published prices in order to develop a consensus pricing model that many players and trade groups in the game can accept. In particular, discussions with Elite VIP Chambers trade group leaders have been quite active in an effort to try to reach some agreement and consensus on pricing that both of our trade groups can support and accept moving forward. Retailers should not dominate or dictate prices, but manufacturers also can not and should not dictate prices either. Official price changes will be developed in a consensus model. Revolution members have not been involved much in the pricing discussions so far, but there is not a lot of selling now going on by IMU members to Revolution trade group members, so it is not clear that there is a need to work closely with their trade group as most of their buying and selling is happening within their trade group, and thus, does not affect our members or our customers.

Some retailers have complained that our prices are too high for all products. Some producers have said that our prices are too low for all products. And, there are a few cases where some retailers feel that our prices are too low and need to be increased (Vaculus is our strongest supporter in the forums on that point). In general, the leadership of IMU views prices as generally being reasonable in level now with no urgency for major changes up or down in prices at about the QA60 level for most products, but there is some pressure to make some changes in the slope and rate of increase of prices in ways that might result in more complicated pricing formulas in the future. However, out goal is to avoid complication unless it is necessary, and to keep pricing simple to the extent we can reasonably do so. Unfortunately, the reality for retailers is our current pricing approach is probably too simple to accurately match retailer economics and some changes will be needed that will result in a need to use pricing spreadsheets to public prices in the future rather than just a simple price listing like we used in the past, but we will try to make any such official IMU spreadsheet for pricing as simple and easy to use as possible for all players.

New pricing is being worked on right now, and pricing changes are expected to be introduced sometime within the next month, possibly sooner. As we have more information to share, I will add it to this post, and when new prices are formally published, they will be posted on the SELL forum. In the mean time, IMU prices will stay the same as they have been for the past three months until new prices are announced.


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PostPosted: Sat Apr 13, 2013 3:27 pm 

Joined: Nov 6, 2009
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Emerald City
Simunomics Supporter
Any update on this? I would like to see how IMU reacts, and if it reacts at all, to the increase in costs for tickets and higher prices for building materials, and buildings, and general inflation in the game.


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PostPosted: Sat Apr 13, 2013 6:41 pm 

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I believe IMU should not rush to make pricing decisions. It would be best to wait until game developers make whatever changes they are planning to remove excess cash and earnings, and to see what happens with tickets and other prices after that happens.


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PostPosted: Sat Apr 13, 2013 10:24 pm 
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User avatarAindala Holdings
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Professor wrote:
I believe IMU should not rush to make pricing decisions. It would be best to wait until game developers make whatever changes they are planning to remove excess cash and earnings, and to see what happens with tickets and other prices after that happens.

I believe I don't hear from IMU in a while now... Basically since Lorrine et al. left.

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PostPosted: Sun Apr 14, 2013 11:25 am 

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Aindala wrote:
I believe I don't hear from IMU in a while now... Basically since Lorrine et al. left.

I have been talking recently with one of their leaders and I know that they are thinking about their next move.


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PostPosted: Sun Apr 14, 2013 1:55 pm 

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I have been talking with both of the current IMU leaders, off and on, for a couple of months.

The bad news is not much is happening so far. The good news is they are being careful not to make big mistakes like IMU made last September when they did a radical pricing change that was upsetting to many, many people in the game.

I personally have some problems with current IMU prices, but overall, I think the price system they are using is not bad. It could be improved, but I would rather have stability than to have big variations and uncertainty about prices, and radical change is as likely to be worse or wrong or bad or rejected as it is to be better than what we have now.

One principle which might be considered to be valid now could be "if it is not broken, don't fix it". The current system is not really broken, or at least, only a little bit broken in a few minor areas.


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PostPosted: Sun Apr 14, 2013 2:16 pm 

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User avatarVaculus
The current pricing system seems fine to me, I see no part being broken.


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PostPosted: Sun Apr 14, 2013 3:23 pm 

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Vaculus wrote:
The current pricing system seems fine to me, I see no part being broken.


What is broken? Farm products and raw materials are too low in pricing.

My price for both of these has been higher since October 2012, and I have sold a reasonable amount of both at higher than IMU prices. Building materials prices don't make much sense in current IMU prices, and QA0 products in general make virtually no money for producers with current prices, which don't make much sense for very low QA products (tools, pipes, steel, bricks, wood, clay, etc.). Also, what is broken, sort of, is the profit for retailer is actually lower for very high QA products than it is for products with moderately high QA. I'm not saying selling price is lower, but the pace at which prices increase is higher than the incremental additional revenues you get from selling higher QA products once you have reached a level of QA that is over 100. I have four companies that are selling me products with higher than 100 QA, and basically, the only way to really make profits that are attractive for these extremely high QA products is to merge them with products that come from other suppliers that have QA of 40 to 50. Long term, since QA is increasing from all suppliers over time, in general, the issue of whether higher QA products are worth the extra cost of higher QA is an issue that needs to be addressed someday. This is not a problem for most suppliers, because in the product quality range of QA40 to QA60, the bonus for higher QA is lower than the value to retailers. At about QA60 level, you beat average QA for most products, and the value of QA starts to become less critical, and the IMU premium starts to become less valuable in incremental value than the cost from the producer for the extra QA.

The solution, in my opinion, is to increase the value of low QA products and reduce the QA bonus, so that QA60 products have about the same prices as they do now. In addition, between QA50 and QA60, or QA50 and QA70, there should be an extra bonus on the value of quality, because retailers get a higher price and bonus when you hit about that level for most products (beating average QA).

I have thought that a good system was to have a dynamic pricing model that tracks average QA over time for each product, and changes over time, but feedback from IMU leaders has suggested that doing that would be too complex and would not be well received by their members, and would not be something the leaders would want to maintain and update frequently. Although a simple model will have problems, it does have the benefit of being easy to understand and stable for people to use and plan around.


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PostPosted: Mon Apr 15, 2013 11:55 pm 

Joined: Dec 12, 2008
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User avatarVaculus
Professor wrote:
Building materials prices don't make much sense in current IMU prices

Those belong in a different category. Their price is totally determined by demand and supply (while for other products most people will try to make them by themselves as soon as the price reaches a point). But IMU prices are the under limit anyway.

Professor wrote:
QA0 products in general make virtually no money for producers with current prices

I totally agree with that, but weren't a number of retailers that asked for IMU to lower prices on low quality products, so that producers get a stronger incentive to make higher quality products? Weren't you one of those reailers?

Professor wrote:
Also, what is broken, sort of, is the profit for retailer is actually lower for very high QA products than it is for products with moderately high QA. I'm not saying selling price is lower, but the pace at which prices increase is higher than the incremental additional revenues you get from selling higher QA products once you have reached a level of QA that is over 100.

This is really a matter of scale. Every value in this game gives less extra output with every extra input. Higher quality products bring less profit to producers as well, because their production cost also increases (higher maintainance cost for higher level research, higher price for higher quality inputs). If you expect retailers to get higher quality products for lower prices, that would just be unfair.

Professor wrote:
I have four companies that are selling me products with higher than 100 QA, and basically, the only way to really make profits that are attractive for these extremely high QA products is to merge them with products that come from other suppliers that have QA of 40 to 50.

So higher quality products are not that bad after all. Now think of a pricing model that gives less value to higher quality products. People could just buy them cheaper and merge them with lower quality products. In the end they would get the desired quality range for a lower price. That's one reason we need to keep a linear pricing model.

Professor wrote:
This is not a problem for most suppliers, because in the product quality range of QA40 to QA60, the bonus for higher QA is lower than the value to retailers. At about QA60 level, you beat average QA for most products, and the value of QA starts to become less critical, and the IMU premium starts to become less valuable in incremental value than the cost from the producer for the extra QA.

Now if I get this right, are you saying that higher quality products are not worth it because they are already much higher than the average quality of the market? Is the retailing bonus included in IMU prices in first place?


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PostPosted: Tue Apr 16, 2013 8:00 pm 

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I can see that my point was not understood. What I am saying is prices SHOULD be linear, but the rate of increase for higher QA products is too high after some level of quality has been reached.

Right now, the rate of increase of price is slightly higher than the rate of increase of store prices that a retailer receives. I'm not saying that higher QA products should EVER be worth less than lower QA, but I am saying that the rate of increase in QA for products over QA70 is too high. At the same time, because of the retailer bonus, the value of products between QA40 and QA70 is probably too low in terms of the value of incremental bonus increase.

And, sometimes, products with low QA are preferred, but the IMU prices are very unattractive for low QA goods.

Instead of a purely linear price model, where the value of QA increase is the same at every price point, perhaps QA60 products should be worth the same as they are now, but the incremental bonus above QA60 should be lower than it is now, and the discount should be lower than it is now for lower QA.

You are absolutely correct that a year ago, I had asked IMU to increase the bonus paid for higher QA products, because the bonus then being paid was too low. IMU leaders made several increases after that, and my point is that I think they went too far in the end and the bonus for higher QA ended up being too high, and maybe QA0 prices ended up being too low. Having said that, I'm not suggesting a dramatic shift, but about 10% lower incremental QA bonus would be better in more accurately tracking retailer selling profits with manufacturer prices. Keep QA60 prices the same as they are now, but reduce the QA bonus for products over QA60 by about 5% to 10% lower than the incremental QA bonus level we have now, and increase the QA0 prices to be something that players can actually make some profits from producing in some size of factory. Right now, I don't see how anyone could make money in any factory of any size with current IMU prices for QA0 products.


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PostPosted: Tue Apr 16, 2013 9:03 pm 

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User avatarVaculus
Professor wrote:
Right now, the rate of increase of price is slightly higher than the rate of increase of store prices that a retailer receives. I'm not saying that higher QA products should EVER be worth less than lower QA, but I am saying that the rate of increase in QA for products over QA70 is too high. At the same time, because of the retailer bonus, the value of products between QA40 and QA70 is probably too low in terms of the value of incremental bonus increase.

I still think that it's a matter of scale. You think that profit for higher quality products is decreasing faster for retailers and slower for producers? I don't think so. By the way, I still pay higher prices than IMU to my suppliers. I buy silverware q80-85 for IMU+q10 and q70 ceramics for 30xQA from them.


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PostPosted: Tue Apr 16, 2013 9:22 pm 

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User avatarReal Value
 
Vaculus wrote:
Professor wrote:
Right now, the rate of increase of price is slightly higher than the rate of increase of store prices that a retailer receives. I'm not saying that higher QA products should EVER be worth less than lower QA, but I am saying that the rate of increase in QA for products over QA70 is too high. At the same time, because of the retailer bonus, the value of products between QA40 and QA70 is probably too low in terms of the value of incremental bonus increase.

I still think that it's a matter of scale. You think that profit for higher quality products is decreasing faster for retailers and slower for producers? I don't think so. By the way, I still pay higher prices than IMU to my suppliers. I buy silverware q80-85 for IMU+q10 and q70 ceramics for 30xQA from them.


I am aware that you are still paying more than IMU prices. I have decided to pay only IMU prices. I do not object at all to IMU prices for product QA from QA40 to QA80. Above QA100, my sense is the profits are very high for producers and not as high for retailers, so I am slightly less excited about adding new large suppliers with lots of production when QA is over 100. I only have a few suppliers who are selling me products with QA over 100, but for those who are doing so, I would like to see some slight reduction in the incremental value of the highest premium that is paid for high QA products from those top producers. I believe IMU prices currently over reward high QA for the producer, at the expense of the retailer. Not all retailers agree with me, however, and one of my largest suppliers of QA100 plus products is now shifting to becoming a retailer as well because he is upset with me for pushing for a reduction of IMU bonus level for QA for very high QA products.


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PostPosted: Thu Apr 18, 2013 9:59 am 

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Emerald City
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I think IMU should increase their prices for bricks and pipes to the prices we are willing to pay in Builders Trade Group. I don't see any reason why IMU members should sell for less than we are willing to pay for these commodity products used only in construction and for which quality does not matter at all.


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PostPosted: Fri Apr 26, 2013 12:42 am 

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User avatarVIP Trader
I am not in IMU now, but I was a very active member for a while when I was there. I can say that having been both a retailer and a producer, retailers are getting a very good deal with current IMU prices, and I believe IMU has room to push for a price increase. With inflation in the game, and with Builders Trade Group raising their prices, it seems like IMU should do so as well. It sure looks like there is some room for retailers to start paying more for their products, and a lot of players (including me) have switched from production to retailing due to higher profits from running stores. I find it hard to believe that IMU can't make some modest increases in prices to respond to higher ticket costs and higher building costs in the game.


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PostPosted: Fri Apr 26, 2013 2:31 am 

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User avatarTifanta World
Bellerive Chamber of Commerce
trader imu wrote:
I am not in IMU now, but I was a very active member for a while when I was there. I can say that having been both a retailer and a producer, retailers are getting a very good deal with current IMU prices, and I believe IMU has room to push for a price increase. With inflation in the game, and with Builders Trade Group raising their prices, it seems like IMU should do so as well. It sure looks like there is some room for retailers to start paying more for their products, and a lot of players (including me) have switched from production to retailing due to higher profits from running stores. I find it hard to believe that IMU can't make some modest increases in prices to respond to higher ticket costs and higher building costs in the game.


There is room for price increases, certainly. But one thing I'd point out is that IMU probably shouldn't design those price increases around inflation from exploit cash, since a lot of that is probably going to be removed from the game. And they also shouldn't assume that every single retailer in the game benefited from the cause of that inflation. Whatever cash the exploiters are left with is going to be icing on the cake for them, while players who didn't engage in exploits won't see any of those "rewards," because they did the right thing and played the game clean. This is why I'd urge IMU to not make any rash decisions at the moment. We're still waiting to see how this thing will shake out, and I think IMU should seek, above all, to be fair, given their clout when it comes to standardizing prices.


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