Quality vs Quantity

Low production cost vs. mass production

make it yourself vs. outsourcing

They´re all kinda the same thing, just basically the pro´s and con´s for each one. If i ever get tíme i might expand on this, but someone must know more about this than me and have the time, so its better if you just do it

Quality vs. Quantity has to do with what your product is worth to you, or to the people who you are selling to.

For example, if I am selling X amount of product to someone else, I have to find out how much a quality increase is worth to them, and if they are willing to pay me more for the extra quality.

OR

If quality is not a concern for them, then extra volume would be worth more because more units at x cost gives you more profits!

Unless...

On certain products, increasing the volume you output could lower you Gross Profit Margin. This means that the difference between revenues (how much money to receive), and profit (how much money you keep after expenses), will decrease. Thus an increase in volume is un helpful!

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If at first you don't succeed, you're running about average. — If at first you do succeed, try to hide your astonishment. — Quote: I have to complement the Devs on what they have accomplished, not what they haven't. Nice job creating Simunomics! Weeeeeeeeeeeeeeeeeeeeeeeeeeeeeee!

Smurphy i do not think if that's what Reynolds has asked for.... nah

He knows that already..

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I love Simunomics

Let´s see if I can answer my own question here. In this example, lets say I want to sell bottled water and I don´t want to spend more than 5 land slots for this product.

For simplicity prices/selling rates are based off of PHIL and at 100ft.

100ft store will sell 100ft factoy´s worth per day at average prices.

So, my options:

1) Build 5 stores and buy bottled water from someone else.

2) Build 2 stores, 2 bottled water factory and 1 water well buy plastic from someone else.

Well, there´s actually a lot of options, but lets make it easy and just use 2..

Option 1.
Find a supplier of Bottled water for 17 bucks each. Sell for 34 each 17 bucks per item mark-up.
1 stores sells 1290 per day at 17 bucks per item gives me profit of 21,930 per store times 5 stores gives me daily profit of 109,650.

Option 2.
First I have to find out how much my bottled water will cost. My water costs me .06 from my well, and I have to buy plastic from the market at 25 each. So, 1 water .06 + .1 plastic or 2.50 + production cost of 1 = 3.56 is my cost, I sell at 34 so my profit per bottled water is 30.46. Each store sells 1290 per day at 30.46 = 39,293 per store, x2 = 78,296 profit.

So, From the example, it seems that Option 1 is the better option because you make more profit.

And in theory, it is more profitable to outsorce your production. However, theory and practice are usually different and this example is very simple to say the least, there are many other factors that have not been considered, namely:

- quality, and effect on sales/price
- dependible suppliers, what happens if your supply runs out?
- store training, can have up to 50% affect on sales
- Prices, sales prices and supply prices are always changing affecting your bottom line

In the end, it is all about RISK. Option 1 is more profitable but also more risky because many of these factors you have no control over. Whereas Option 2 you run much less risk (and less profit) since you only need worry about the supply/price of plastic.

Reynolds Inc. wrote:

Let´s see if I can answer my own question here. In this example, lets say I want to sell bottled water and I don´t want to spend more than 5 land slots for this product.

For simplicity prices/selling rates are based off of PHIL and at 100ft.

100ft store will sell 100ft factoy´s worth per day at average prices.

So, my options:

1) Build 5 stores and buy bottled water from someone else.

2) Build 2 stores, 2 bottled water factory and 1 water well buy plastic from someone else.

Well, there´s actually a lot of options, but lets make it easy and just use 2..

Option 1.
Find a supplier of Bottled water for 17 bucks each. Sell for 34 each 17 bucks per item mark-up.
1 stores sells 1290 per day at 17 bucks per item gives me profit of 21,930 per store times 5 stores gives me daily profit of 109,650.

Option 2.
First I have to find out how much my bottled water will cost. My water costs me .06 from my well, and I have to buy plastic from the market at 25 each. So, 1 water .06 + .1 plastic or 2.50 + production cost of 1 = 3.56 is my cost, I sell at 34 so my profit per bottled water is 30.46. Each store sells 1290 per day at 30.46 = 39,293 per store, x2 = 78,296 profit.

So, From the example, it seems that Option 1 is the better option because you make more profit.

And in theory, it is more profitable to outsorce your production. However, theory and practice are usually different and this example is very simple to say the least, there are many other factors that have not been considered, namely:

- quality, and effect on sales/price
- dependible suppliers, what happens if your supply runs out?
- store training, can have up to 50% affect on sales
- Prices, sales prices and supply prices are always changing affecting your bottom line

In the end, it is all about RISK. Option 1 is more profitable but also more risky because many of these factors you have no control over. Whereas Option 2 you run much less risk (and less profit) since you only need worry about the supply/price of plastic.

The flaw here is, try buying Bottled water at 17 each.
Well, it sometimes can be done, but for many products u cant buy for half the salesprices.
Like in Canjara Bottled water is at sale for like 25 each, so ur profit would dwindle very very fast.
If u make stuff urself, ur sure to make that 30 profit per unit, if u buy the final product u dont.

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Salesleader in all 3 cities

But more stores at less profit, in this game, is better than making it yourself. This game is a retail game. Not a producer one.

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Making the Devs understand. They must hate me.

winnerman16 wrote:

This game is a retail game. Not a producer one.

I disagree. It depends on how you structure your business from a very small level. I sell over 1 million units of a product a week, and my profit is one third my revenue. And that is just one of my products.

In my opinion, supplying others as a producer, and buying from others as a seller is an optimum choice.

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If at first you don't succeed, you're running about average. — If at first you do succeed, try to hide your astonishment. — Quote: I have to complement the Devs on what they have accomplished, not what they haven't. Nice job creating Simunomics! Weeeeeeeeeeeeeeeeeeeeeeeeeeeeeee!

smurphy832 wrote:

winnerman16 wrote:

This game is a retail game. Not a producer one.

I disagree. It depends on how you structure your business from a very small level. I sell over 1 million units of a product a week, and my profit is one third my revenue. And that is just one of my products.

In my opinion, supplying others as a producer, and buying from others as a seller is an optimum choice.

There are so many ways to make a profit in this game, sometimes its good to be a retailer, next time its better to be a raw materials producer, and after that producers get rich from there sales.
I remember the first time NPC stopped selling stuff, producers were sooo darn happy, cus than product prices skyrocketed.
With that in mind, everyone wanted to be a producer, so now we have an overproduction in some goods and now ppl complain cus they dont make these enormous profits anymore.
But they forget that at this time a retailer is making more money, and will grow, which results in bigger needs for the producers products again.

Guys, try to understand, we all need to grow, not only the producers or sellers or farmer or researchers, we ALL need to.

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Salesleader in all 3 cities