Tools of the Trade
To optimize your ability to account for all factors (taxes, infrastructure, upkeep of structures) you must download this spreadsheet http://www.burningsea.com/forums/showthread.php?t=51665 . This will allow you to input values effecting the price of production; each change will effect the final cost price. This ensures that you will never sell for less than what it cost you to produce. The spreadsheet can also help you realize just what you need to produce the final product you have in mind. This spreadsheet is updated regularly to keep up with various recipe changes or to further streamline certain aspects, so keep in mind that you want to have the latest version as it does change.
Having a Free trader alt
It is highly recommended you use a free trader alt for your economy. This will free up your fighting captain to do what he does best and the Free trader (FT) has many skills that are useful for producing and hauling goods. A FT alt can start producing at Lv1 and it won't take long to get up to L35 where all the econ benefits become available.
How much time do you want to spend?
The more time and effort you put into the economy the bigger profits you will make. However not everyone enjoys this play style. This page will show you how you can set-up a simple economy which will only take 5 minutes a week to run and can net profits of 300k a week as well as helping lower the price of ships. Higher profits can be gained from playing the market, which takes more time but can be great fun. Ultimately it is up to you to decide how you want to play the econ game.
Asking for help
As well as the information here you can ask our econ experts for help. They will be able to tell you what goods are selling at a high price and how to find a gap in the market. You can Request help with the economy buy posting on the forums. One of our econ experts will reply with suggestions.
Some example set-ups are listed on the right, these are basic ideas to get you started. However we recommend you ask for help on the forums as the experts will be able to tell you where a gap in the market is.
Recent templates. Click the link above for the full list of business templates. <DynamicPageList> namespace=main category=Business Templates count=10 ordermethod=lastedit </DynamicPageList>
Using the Auction House
Auction House Tips
- Compare prices in different ports. Sometimes hauling a short distance is worth it.
- Placing a buy order at a higher price will encourage people to haul to you, saving you time and effort.
- Lowest list price sells first. Most people pay the last price so you can list yours for less to make sure they sell first.
- Sell at the right place. Shipwright materials sell well in St. johns. PVP consumables and fittings sell well in Port Royal.
- Don't be afraid to use other nation's ports. Many governors will set low tax rates of British captains, use it to your advantage.
- Don't be afraid to sell to other nations. Selling at the highest price means more money to spend on the British war machine.
- Stockpile. Buy goods cheap while you can, if their production port is taken the supply may dry up.
Building your structure
You'll find structure deeds on the Port Royal and Charlestown AH, basic structures sell for 1000db each with advanced and shipyards going for more. We also try to maintain all the usual build materials at Charlestown but you can usually find them in other ports. Business templates include a list of the materials you'll need to build the structures.
Once you have everything you need sail to the port and open a warehouse. This will then allow you to build the structures. After a short construction time your structure will start to store labour. The maximum that can be stored is 3 days so you should plan to run your economy every 3 days.
Placing Buy Orders
Advanced Economic Fundamentals
Within Pirate of the Burning Sea there are two competing methods of applying a "markup" on the products that are produced.
Econ 201: Labor Hours vs Percent Markup
(Disclaimer: for sake of discussion, we will start off ignoring taxes and infrastructure)
So there you are with your glorious empire of hemp production. You see that the recipe costs 30 doubloons to run and gives you 10 hemp. 3 doubloons per hemp. You look on the auction house and see hemp selling for 30 each. Why, that's 10 times your money! 1000% markup! You'll be RICH! But wait... hemp labor is 4 hours per click. So that's 6 clicks per day for 60 hemp. You'll spend 180 doubloons and sell it off for 1800 doubloons. You're netting 1620 doubloons per day from 1 hemp plantation. Times 10 plantations, that's only 16,200 doubloons per day. That's less than 2 dailies. Where are your riches? How do people get rich on the market like this?
This is where DLH, "doubloon lot-hours" comes into play. DLH is the amount of money you make per lot hour. In this case, since 10 hemp is 4 lot hours, 1 hemp = .4 lot hours. 27 doubloons net profit for 1 hemp divided by .4 lot hours = 67.5 doubloons per lot hour. Regardless of how high your percent markup is, 67.5 DLH is pretty low and is never going to make you rich.
Now lets look at teak logs. 400 doubloons gives you 10 logs, so 40 per log. We look on the AH and see that the price has been 60 each. "50% markup?", you say, "That's not nearly as good as hemp. I should keep making hemp." Ah, but lets look at the DLH. 10 logs takes 2 hours of labor, so 1 log = .2 lot hours. So you make the log for 40 doubloons, sell it for 60 doubloons, profit 20 doubloons / .2 log hours = 100 DLH. So hemp at 1000% markup is making you less money per day than teak logs at 50% markup.
This is why "% markup" is fairly useless for calculating what's really profitable and what's not. Without factoring in the time spent, you could be earning pretty low hourly wages despite what looks like a good markup. Just like in the real world, time must be factored in, not just a percent markup of the materials used.
The 3 components of market-based econ
In order to use your limited econ lots and limited gameplay time to earn wealth as efficiently as possible, it helps to break the aspects of econ down into it's parts. It's not just about costs, but is about effort too. There are basically 3 parts to consider. These are the actual cost and lot labor hours, hauling costs, and nuisance costs. Let's take a look at each of these individually:
Actual Costs and Lot Labor Hours
Every product you can make will require up to 3 "costs".
As mentioned earlier, every product you make uses up some of your limited labor. Once you figure out the cost for a product, it's best to figure out how profitable it is on the market in terms of dbs/labor hour, since labor is the only thing truly limiting you from having unlimited production.
2) The cost of the inputs:
Raw materials require doubloons as the only input, but other items require materials as well doubloons as inputs. When calculating the cost of material inputs, it's a good idea to use the market price of the inputs (the price you would be able to buy or sell those materials). For example, if you are making oak planks, you will need oak logs. Even if you make the oak logs yourself, you should consider their cost to be market price rather than base cost since you are basically choosing to not sell the oak logs in order to make the oak planks. This is known as "opportunity cost" in economics. This way, you can see what the profits are on each segment of your production, in case one intermediate segment is more profitable than the final product.
3) Listing fees and relisting fees:
Listing fees are 1% of the prices you list. So listing products worth a total of 1,000 doubloons will cost 10 dbs listing fee. For cheaper items or items that use a lot of labor, the listing fee is a smaller factor (the listing fee on each item costing 50 doubloons is only half a doubloon). The listing fee on more expensive items or that use low amount of labor is more significant (Lignum vitae listed at 220 incurs 2.2 dbs listing fee each, which eats up 20% of the profit since lignum vitae cost 210 each to make). So when figuring out what is profitable to sell, be sure to include the listing fee as a cost. (When using the Production planner spreadsheet, I recommend setting it show a db/hr markup plus a 1% markup to account for listing fees)
Hauling goods takes time and effort. You could be spending that time earning money in other ways such as through dailies or fleeting, or you could be fighting our enemies. So it is important to consider hauling to be a cost. You shouldn't be willing to sail across the map and back to save 20,000 doubloons when you could have earned 50,000 or 100,000 doubloons in the same amount of time from dailies.
Often, you will be able to buy or sell goods in one port where the items are made for one lower price, as well as having the option to buy or sell for a higher price in the port where the items are needed. Even if the items are not for sale in both ports, you can often use a buy order to get them where you want them.
Assuming you would be hauling full shipload of materials, you can determine how much "savings" or "cost" there is for hauling by dividing the cargo space of your hauling ship by the weight of the item you wish to haul, multiplied by the different in market prices between the two ports. So if oak logs cost 15 each in Bridgetown and 25 in St. Johns, they weigh 1 ton each, and your ship holds 2980 tons, your calculation is 3000/1x10 (3000 tons / 1 ton x 10 dbs price difference) = 30,000 dbls. So you earn 30,000 doubloons for that trip, which is most likely a two-way round-trip since you'll rarely be hauling anything on the trip back. If you'll earn more in that time by doing dailies or fleeting, you may decide that the hauling isn't worth it. In that case, let someone else do the hauling.
Hauling costs should be considered separate from your production profits. If you were making oak logs in Bridgetown which sell in bridgetown for 15 each and you were hauling them to St. John to sell for 25 each, you should not use the 25 dbs sale price in determining your per hour profit. Instead, your logs are really worth 15 dbs, and you are making 10 doubloons on the hauling. If you really like the profit in the hauling rather than the profit producing the logs, then you could just buy oak logs in Bridgetown to haul to St. J to sell for profit. Hauling for profit should be considered a separate use of your time, just like doing dailies or fleeting.
When hauling for profit by buying in one port to sell in another for a higher price, you can help make the markets more steady and reliable by pricing your hauled goods at a price that will give you sufficient profit to the point where you wouldn't mind doing the hauling on a regular basis and keeping the port supplied. Often, there will be constant shortages of materials in a port where the materials are needed, yet the most recent prices are fairly low and don't make hauling worth it. So everything is bought out when it arrives, but few people are willing to do the hauling. In this case, you should raise you prices. This gives potential buyers the option to buy if they are willing to pay more, while encouraging more suppliers to do the hauling for the better profits.
Nuisance Costs, Planning, Calculating, Micromanaging
A lot of time can be spent on figuring out what to make, where it's needed, figuring costs, proper pricing, listing and extending listings, finding materials you need, and whatever else takes away from your valuable game time.
Just like hauling, the time you put in to econ is time that could have instead been used to earn income in other ways such as through grinding fleets or doing the daily repeatable missions. The goods you can choose to make will not only earn different amount of profit, but they will also take different amounts of time and effort as well as market expertise. For this reason, you should consider the time and effort spent doing econ as time that can't be spent doing other things in the game or earning income on fleeting or dailes. It also means you should try to maximize the time-efficiency of your econ by avoiding micromanaging just to "save a buck" or "make a buck".
It's actually not a bad idea to have a very simply setup of 10 raw material structures producing and selling on the AH in bulk. The profit may not be as good as more complicated things, but it may free up a lot of your time so that you could actually make more doubloons doing other things if you wanted, compared to someone who has no time because they spend it all squeezing extra doubloons out of econ.
No matter what you do, it is often good for both you and potential buyers when you deal in bulk. In fact, many buyers don't even bother trying to buy a material that is not available in large amounts unless they are desperately in need of that material. Large amounts show the buyer that it's worth it to check the price and resupply their warehouse. Large amounts also indicate that there is a stable supply of the material so that people can set up econ to use those material.
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