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Sharing trading costs

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Sharing trading costs

Post  Yamel on Thu Aug 19, 2010 11:27 am

I was doing some research on the East-Indian Trading Company this morning, and it gave me an idea.
The EI company was the very first company to sell shares of itself; I was thinking we could do the same thing. We could do our trading together to safe money and time on transport and taxes.
So basically: If anyone has got money in surplus that he wants to use to trade and get an interest, or if someone really trades by himself, we could with sufficient organizing and patience, do some trading expeditions together.

As I read this, I don't find it very clear myself, so allow me to give an example:
Say I buy Chalcocite on ambush to sell at Wenslydale. If I buy 50 by myself, I pay 681 x 50 = 34 050
+ 1737(taxes) = 35 787
I can sell them at Wenslydale for 825 x 50 = 41 250
That is a profit of 5463 poe ( 14.7%; profit depends on commodity; best i've had is 30%)

Now, If I had a trading partner, we could buy the chalcocite together : 681 x 100 = 68 100
+3440(taxes ) = 71540 or 35770 each
The profit difference is minimal, however, the fact that we move the goods together gives us a better chance to survive brigands, or safes one of us a trip.
Aside from this, if people were to invest, they could get interest on their money (of course the trader keeps a commision). This has for consequence that the money can not be accessed until the trip is over (which can take 3 weeks on some goods).

Now that I keep thinking about it, I do see a few complications come up, and I understand if people find it all a bit complicated, but I'm just throwing this up for suggestions and to see if anyone would be interested, so feel free to comment. (positive and negative are welcome of course)
Oh, and thanks if you've bothered to read it to the end Wink
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Re: Sharing trading costs

Post  JamesStGeorge on Fri Aug 20, 2010 4:04 am

Like the real world, investors of cash would need security as well as interest. (Perhaps a ship deed would work, to be held until investment and interest is paid.) For example 100,000 could be lent for a week at 5%, so in seven days you either repay 105,000. Or you may be allowed to roll it on another week by paying that week's interest only, of 5000. Perhaps a WB deed would be about the security needed.

Partners in trading would need to have very similar log on times and time to do the runs but could share all risk and reward.

Either might work.

(Something is wrong with the maths you did I think. You doubled the first purchase, so the profit would simply be double without accounting for rum transport costs etc. Too lazy to work out where it is wrong, the principle of using more money by either method for larger loads is still valid.)
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Re: Sharing trading costs

Post  Yamel on Fri Aug 20, 2010 6:36 am

Yes, of course, I meant that the profit per person doesn't change much
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Re: Sharing trading costs

Post  Piratus on Sat Aug 21, 2010 4:23 am

Seems a bit to complex for me, the only trading I do is occasionally shipping iron to my stall. I have traded Chalcolite a few times, but I don't have any plans on doing it in the future, so I don't think I am going to bother with this Smile
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