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Stall re-opening. - Preperations.

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Stall re-opening. - Preperations.

Post  Piratus on Sat Feb 13, 2010 5:36 am

Ahoy everyone, as you know I used to own a stall wich I closed down by the end of last year. The reason I closed down was because of increased competition and lower cannonballprices (presumably because fo the new deluxe labor badge), before that happened I could make a profit on the stall.
But I feel I didn't run the stall right that time. During the early months I regulary poured in money from my own pockets to keep it afloat, without keeping any records. Because of that, I am not sure how much money I made from the stall.

I am going to start a stall again. This is where I will write my observations and ideas, before and while I am running this stall. All help and opinions are welcome!

Before opening - deciding wich island to open from
My first stall was located on Wenslydale, I started out shipping iron from Scurvy reef and later Scrimshaw island to supply it(later I decided to let others ship for me, i.e. I made sure my prices was competetive so they would sell me some Razz ). I got my wood from bids on Wenslydale itself.

But something struck me last night. It's cheaper to ship cannonballs than it is to ship iron. Hear this:
To make 10 small cannonballs you need 5 iron and 1 wood.
10 cannonballs have a weight of 71kg and a volume of 10 L.
5 iron and 1 wood have a weight of 214kg and a volume of 255L.
. This means a trader can put 3 times as many cannonballs on a ship than he can with raw materials for cannonballs. In other words, shipping cannonballs is 3 times cheaper than shipping iron and wood.

My idea is to start an Iron monger on Scrimshaw Island, where iron and wood is very cheap because of spawns (iron spawn on that island. Wood on Bowitch, wich is very close) and sail my cannonballs to another stall in the Gull archipelago where I can sell them cheaper that the people who ship in supplies to make their own balls.

Is my thinking correct?
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Re: Stall re-opening. - Preperations.

Post  Piratus on Sat Feb 13, 2010 12:48 pm

Warning for huge post full of mathematics and economics!

Before opening - basic prize check.
Thanks to a spreadsheet I have made some calculations. Assuming I have to pay the current buy price for commodeties, and the highest labor price on the noticeboard on respective island:

1. Making cbs on Scrimshaw and selling them there will make me 8 poe per 10 small cannonball. And similary small profits on the rest (even a loss on larges!).

2. Making cbs on Scrim and sailing them to Wenslydale or Admiral will give me much higher profits. 18 poe per 10 small balls and a lot more on larger ones.

3. Making and selling CB on wenslydale will give me tiny profits except for mediums where I make almost 10%. And doing the same on Admiral will make a loss!

I'm sure if I keep track on the price cycles, so I can buy low and sell high I can make a lot more than what I can see on my spreadsheet, but it still gives a good idea wich strategy is best.

Shipping
The kind of balls that make most profit are the medium ones. Selling them on Wenslydale for the price of making them on Scrimshaw will give me 4.9 poe per medium ball. Filling a cutter with mediums and shipping them to Wenslydale or Admiral (the have pretty much the same prices) will give a profit of over 100K per trip. While at the same time have healthy supply of commodeties (about 10.000 kg) in my stall.

Calculation, for thoose who are interested(skip this is if you don't like maths):
Code:
A cutter has room for 40.000 kg = 2816 medium cannonballs = approx 14K poe in profits.
(actually a bit more, but for simplicity let's say rum and small shots for defence takes 500kg of hold space. I'm a big drinker, you know ;) )
s how fast I can make medium cannonballs, and I can't possibly know that before I open the stall and see how many workers I attract. But for the sake of preparation I made a little table to compare how many medium balls I can make with a certain amount of labor hours. Beginning with 2100 hours (70 hours a day, 30 days a month), to account my own labor with a deluxe badge. and increasing with 50 wich would be a few hours a day. Or a worker giving almost all his labor to other stalls.[table border="1"]
Labour hours210026003100360041004600 5100 5600610066007100
Units42052062072082092010201120 122013201420
Profit(poe)20580(too lazy)etcetcetcetcetcetcetcetc69580

Using this table, we will see that I can easily fill one cutter a month, as long as have at least one extra worker. (an alt for instance).
In other words, I can make 130K per month by sailing a cutter between Scrimshaw and Admiral (and if/when prices drop, Wenslydale).

Costs
Allright, let's have a look at the costs, I have feeling it will be painfully much. No pain, no gain...

First the costs of opening the stalls.
Primary stalls:
Code:
Scrimshaw: 14400 poe and 10 dubs. Around 38K.
Admiral:  17400 poe and 10 dubs. Around 41K.
I need at least these 2 to make my plan work
Secondary stalls:
Code:
Wenslydale 13800 and 10 dubs. Around 37K
Lincoln 13800 and 10 dubs. 37K

The primary plan will cost 78K. Thankfully, I have a lot of money right now thanks to poker and selling my Dhow. I can invest 100K to stock the Scrimshaw stall. According to my spreadsheet one medium ball cost 28.1 poe to make, therefore 100,000 poe will make 3558 mediums. More than enough for a month of supplies.
Now I only need to estimate how many commodeties I can fit in the stall (to maximize production) and check when prices are low and when they are high (to maximize profits).


Last edited by Piratus on Wed Feb 17, 2010 1:49 pm; edited 1 time in total
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Re: Stall re-opening. - Preperations.

Post  Pishkirlin on Sun Feb 14, 2010 12:24 am

tl;dr

In the new year's speech, I wrote:Ascalon's house and stalls. I want to put pressure on Apollo to build a Manor on Lincoln as he hinted a while ago, as that in my opinion would be the best location. I would like also to open a couple of stalls in order to manifacture ourselves the stuff we usually buy (including furniture for the house).
How about including your stall in my plans? It should be on Lincoln, though.
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Re: Stall re-opening. - Preperations.

Post  Piratus on Sun Feb 14, 2010 4:57 am

Pishkirlin wrote:tl;dr

In the new year's speech, I wrote:Ascalon's house and stalls. I want to put pressure on Apollo to build a Manor on Lincoln as he hinted a while ago, as that in my opinion would be the best location. I would like also to open a couple of stalls in order to manifacture ourselves the stuff we usually buy (including furniture for the house).
How about including your stall in my plans? It should be on Lincoln, though.

I can open a stall on Lincoln. But it's not my primary plan so it will take a while depending on how much I make on the first stalls.
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Re: Stall re-opening. - Preperations.

Post  Piratus on Wed Feb 17, 2010 1:55 pm

Code:
A cutter has room for 40.000 kg = 2816 medium cannonballs = [b]approx 14K poe [/b]in profits.
(actually a bit more, but for simplicity let's say rum and small shots for defence takes 500kg of hold space. I'm a big drinker, you know ;) )
Fixed!

Anyway, a simple check shows that prices are now the same in Admiral as on Scrimshaw, so I will scrap the plan.
I have no idea where my plan went wrong, but I must have made serius mistake.
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