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Calculating crafted item prices (worksheet)

Discussion in 'Crafting' started by Neil, Apr 4, 2013.

  1. Neil

    Neil Adviser Pro Users Arkadia Adviser

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    I've been watching the Arkadian key prices lately, and either some people enjoy selling crafted items at a loss or they're not sure how to calculate actual cost to craft. I realize this happens with all items and that there are a number of reasons why items are sold at a loss, but it's a good bet that a number of people click the "construct" button without really knowing what selling prices will bring them a real profit versus a loss.

    So, I thought I'd share my own calculation and log sheet. It may be a little more complicated than some you have seen, but it has a lot of automation and useful info in there, including automatic calculations of cost per crafted item, how much materials need to buy to get X number of clicks taking into account what you have in storage, estimated time to craft, TT return, etc.

    I just ran off 100 clicks of Arkadian Key 3 to show you some real life numbers. When you do a run, enter the number of clicks you made and then info from the "Statistics" button in the crafting interface and the sheet does the rest. The sheet can be modified for any BP, just insert rows in the recipe section and make sure the formulas stay consistent row to row.


    Key 3 worksheet

    (New) Fuel Cells Ongoing Log Sheet

    A few notes:

    Input your info into the boxes in green (materials MU, number of ingots in storage, MU of residue, etc). If you've done it properly, the sheet calculates precisely what MU you need to charge in order to break even on your run (in terms of TT+? for non-stackables and a % MU for stackables). When entering the amount you have in storage, make sure you only enter EITHER number or TT for each row, not both (rows can be different).

    A couple notes about the Key 3 in particular: I use my own Alloy plate bp (QR>75) and generally use khorum that I mine efficiently myself (so ~ 110% MU). This means I can make alloy plate at ~ 130% MU, if I don't use expensive amps for the mining. Therefore, most key crafters are going to have higher costs than I had on this run. If I had bought my alloy plate at MU (180%) it would increase the break even price of a key to TT + 9.87. You can plug various material MUs into the page to see how it would affect the price. For my run, the real cost per key is TT + 7.57, which means I'd need to sell it at ~ TT + 8.4 on auction just to break even (with the .85 ped fee). A 42% success rate is typical for a maxed key BP with QR 27.

    I think all the formulas are correct but if you see anything you think is an error, or if you see a better way to calculate something, please let me know.
     
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  2. harmony

    harmony Active Member Pro Users

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    Welcome to the world of crafting :)

    On a side note, why do you take into account such a low %tt return, it's not like you would give away the keys after a hof is it?
    I would suggest doing maths with a 90% tt return and a 40-50% succes rate, then you can see what the long term selling price for break even is.
     
  3. Snape

    Snape Master of the BanHammer Staff Member PAF Administrator

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    Glad to know that someone else thinks along this path as well. Its the main reason why SFE is STILL around after nearly 7 years! Keyword here is Sustainability.

    I'm going to sticky this thread as i think its something a lot of potential crafter and even some existing crafters should read and comment on/discuss.
     
  4. Neil

    Neil Adviser Pro Users Arkadia Adviser

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    Good point. But I think that method of estimating cost may not be appropriate to this particular BP since it's only done a few clicks at a time; I wouldn't like to base my costs on getting large hofs. If you're doing more than a couple hundred clicks on keys, you're most likely not crafting them to sell but to TT. At least at the rate they're used now.

    I've added the theoretical calculations to the sheet; you can input a theoretical long-term TT return percentage and see the adjusted (approximate*) break-even prices.


    * It's approximate because it assumes the extra TT value contained in those hofs will not have extra MU on it. Nor does it take into account the MU of looted BPs, since that kind of thing is completely dependent on the particular BP you're clicking.
     
  5. Neil

    Neil Adviser Pro Users Arkadia Adviser

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    Update... for those who haven't noticed yet, Mindark has completely nerfed success rates. Success rate is about half of what it used to be in April, around 20% instead of the comfortable 40%. You see things like strings of 25 near successes on quantity runs, and when crafting on condition, 100 clicks with only one success is not unusual now. It's really sad MA would make such a radical change like this 1) without warning and 2) apparently without thinking it through. I suspect it's done to funnel your peds into the big HOFs that the lucky few are likely to get. Whatever the rationale behind it, many crafters have stopped crafting everything but what's absolutely necessary, and consequently ore MUs are very low. It'll hit hunters and everyone else too, once all the crafters realize that they need to sell their items for higher MU just to break even.

    The point of saying that all is that if you're still crafting, you NEED to re-evaluate your cost to craft your items and components and raise your markups accordingly. Markup has a lot of psychological momentum, and you might assume that if ore MU goes down, cost to craft also goes down... but this isn't necessarily true when chance of success is reduced so radically.
     
  6. Kri

    Kri New Member

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    Brilliant stuff!

    May I suggest to make this available as a Google document? Then anyone, without having to have Excel, can just make a copy of it using their favorite browser and start using it.
     
  7. Neil

    Neil Adviser Pro Users Arkadia Adviser

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    Added a sheet for recording an "ongoing" log (a run made up of multiple small runs), and converted the links to google sheets.
     
  8. Warmdogg

    Warmdogg New Member

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    Great thread! Thank you for the information, i have started to take crafting seriously over the past few weeks and have formed a few spreadsheets of my own but these seem much more efficient and accurate, just waiting to be approved on the log sheet.

    I have to say i spend a lot of my forum time on PCF but after visiting AF today i think i will be spending alot more time here, a much more positive attitude!
     
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  9. WhiningSkeptic

    WhiningSkeptic Active Member

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    I see lots of incorrect numbers;

    - Success rate is well above 20%
    - Returns are to be calculated at 90%. Even though Crafter A only does 5 clicks at a time, the market represents Crafter A to Crafter Z and their combined clicks. On top of that, it doesn't matter if you do 50,000 clicks in one go or 5 clicks 10,000 times.

    On top of this, it doesn't make sense for everyone to sell at break even, due to the nature of the game.
     
  10. AxeMurderer

    AxeMurderer Active Member Pro Users

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    One way to sell at brake even or profit is to fix prices with other that craft or sell the same item. Not sure if this is against game rules.
     
  11. svena

    svena Active Member Pro Users

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    That only works with unique/very rare bps or ones that take absurd skills such as the level 13 amp. There are almost no bps rare enough to do price fixing that are worthwhile to craft.

    Happy to see this bumped though, might make a few others pause and think about what they are doing. Though considering they still love to crash item prices and list 3x the number sold in a month at one time I do not have high hopes :stats:
     
  12. Bradley Killer Kell

    Bradley Killer Kell Member

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    It let's you now what Break Even is... then YOU decide how much to go OVER that.

    Does it need to make waffles, brush your teeth, and give you the Profit Return you are looking for?

    I mean, once you know Break Even... the rest should be easy enough to decide yourself.
     
  13. Shamshe

    Shamshe Member

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    as a hunter I strongly disagree with some points. I get it that crafters need to raise the mu to break even but then again who breaks even anymore in this game. The mu on hunting materials and even ores has lowered drasticly in the past few years . crafters get their materials rly cheap these days so I dont see the point in raising the mu :p It has come to a point that most hunting materials are just tt-food and like u said noone is crafting anymore except for explosives. nowdays there are only a few crafts to rly make money in and I dont think key3 is one of them. another thing if you would raise the mu to break even you wont sell or peopel will keep undercutting you. some people just won't accept the game isnt the same as it used to be and keep clinging onto MU prices of few years ago.
     
  14. KikkiJikki

    KikkiJikki Well-Known Member Pro Users

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    Your necro is full of bollocks. It's absolutely feasible to profit in crafting.
     
  15. Shamshe

    Shamshe Member

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    I still dont see the point in raising the MU on crafted items while hunting mats and ores have gone down by a lot. crafters get their materials fairly cheap nowdays so they are the only ones profiting from the low MU's. Like I said its feasible to craft weapons and other stuff and make a profit but then u got to sell at a higher MU wich is not fair towards hunters. u'd need to sell weapons at a mu of 130 or more, while the normal weapon drops usualy go for about 110-120%. I don't see the bollocks in that? before saying something is bullshit explain to me why it's bullshit. I saw your shop the other day and you are selling weapons over 140% MU. yeh then you can make a profit if people are buying them. But dont tell me they are not overprized :p and should go for a lower MU
     
    Last edited: Mar 14, 2017
  16. KikkiJikki

    KikkiJikki Well-Known Member Pro Users

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    HI Shamshee.

    So here is how it works. I run a business in EU to make money. I determine what price I need to set to make money and that's the price in my shop. I leave it to my customers to decide if that price works for them and make a purchasing decision. And a lot of people choose to purchase. I'm currently at my day job so don't have access to my crafting spreadsheets but my monthly profit is usually around the order of 3-4k peds. So nothing huge but better than a loss :p

    I calculate my prices based on my long term cost to craft each item plus a margin. I may lose on an individual sale if I had a lot of clicks to make the item but overall I come out ahead. The last time I had a loss (I calculate profit/loss on a monthly basis) was June 2013.

    I don't worry about trying to compete with hunters who loot weapons and armours. They tend to try to and undercut each other in the auction house - that's why they lose money. I'm quite happy to advise people to check auction first, to think about buying pirons.

    You say my stuff is overpriced or not fair. I say it's the price it needs to be allow me to make money in this game. That's neither fair nor unfair. It's economics. I'm more than happy to compete with other sellers. If they can sell at cheaper than me and still make money then congrats. If they sell at cheaper than me but are consistently losing money well that's a bit foolish and I am a patient man. I can wait till they get bored or sick of throwing money away.

    What am doing is not rocket science, nor is it unethical. So it's absolutely feasible to profit at crafting without being an arsehole.

    Hope this clarifies my concise earlier response.

    Regards,
    KikkiJikki
     
  17. svena

    svena Active Member Pro Users

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    You are looking at this backwards. Hunting and mining material MU are down because nobody is crafting anymore. It doesn't matter if ores and mats go down to tt price, crafting can not compete with looted weapons, easy to get unL armor and cheap unL faps. You could sell crafted weapons for tt price and their eco would come no where near as good as looted weapons even at their MU price.

    Plenty of people would love to do more crafting, but as it stands KJ can fulfill all of ark's demand for anything crafted and I doubt that he is playing a massive amount of hours a day doing it. Even if someone wanted to undercut him for whatever reason (his prices are pretty spot on even with most mats being cheap) there is nobody to buy any of the crafted stuff.


    MA killed off crafting with unL and L item rain and then killed off mining with explosive bp and people wonder why there is no more MU in loot anymore :dead:
     
  18. Shamshe

    Shamshe Member

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    what do you mean noone is crafting anymore? people are crafting more then before just all Explosives :p It's not about people not crafting it's about what they are crafting. at least we can agree on one thing and that is explosives ruined the game and the MU's and I myself stopped crafting them a year ago just for this reason. we need to massively stop crafting Ep to make Entropia great again (no pun intended :D). But we all know that will never happen.

    as for what KJ said its his full right to raise the mu fo items he crafts to at least break even. But I still believe and this is my personal opinion that this isnt fair to the other people, mainly the hunters that want to buy one of his sib guns to skill and have to pay over 140% mu for it. While they are the people who suffered the most from the change in loot in the past x years. I'm 100% sure a lot of people go to buy a weapon see this and say fuck it i'm not paying that. Imo by raising to this MU you punnish the people who alrdy have the worst returns in history of EU and now have to pay even more MU cause some crafters desperitly want to break even or make profit.
    The succesrate has gone down I get that, but you are letting the customer pay for that wich is not cool (but I guess that's how economy works in and out EU).

    I'm not telling you how to craft or what MU you should put it up for. I just feel (its a feeling I have :p) If we have to mine and hunt at a loss these days I understand why some crafters sell and should sell stuff at a loss .
    The MU on guns should be a fixed MU and crafters shouldnt change this MU just to make up for a bad crafting run and correct me if I'm wrong but reading your posts gives me this impression. And a lot of people agree with me on this even some high lvl crafters.
     
    Last edited: Mar 15, 2017
  19. KikkiJikki

    KikkiJikki Well-Known Member Pro Users

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    this is where you and I fundamentally disagree. EU is a game with a real economy where prices are mostly driven by supply and demand.

    I choose the price I want to sell at. You choose whether to purchase or not or if instead you want to go elsewhere. I don't operate a monopoly (with the exception of Koroma) so it's not like people need to buy from me or not at all. In fact when people do question my prices I generally suggest they might find a better deal in auction or they should really look at pirons which I think are superior weapons to hermans.

    Yes I tweak my prices from time to time, not based on a single bad run, but on re-assessment of my long term cost to craft. Prices do go up and down, but the reality is, that after over 5 years running this business, my prices are reasonably stable with the exception of L armour which is trending down in MU over time.

    As an aside I am not inclined to agree with Svena that I am able to supply all the arkadian demand for weapons and armour. I think there is room for more players in this space and personally I would welcome an increase in crafting activity that would drive up demand for mined loot and perhaps encourage some more consistency in the level of mining activity from week to week.

    Back on topic, it's nonsense to claim profit oriented pricing is unfair to anyone. It's nonsense to advocate fixed MU on crafted gear. I'm not interested in running a business at a loss. I'm not even interested in running it to break even. It's my decision, my right to set my prices to support my goals in EU. (My goals are craft for profit, hunt for fun.) It's your right, your decision to make as to where to shop.

    Hunters and miners can choose what price they are prepared to sell at. If you don't like the current market then don't sell until the price goes up. Of course this comes at cost and risk. You might build up a stockpile in inventory, tying up peds. You may misjudge where the price is going to go and never be able to sell at your price. I've done this in hunting, holding onto oils and looted guns until the price was more favourable. And I can confirm that I have had conversations with loot sellers who would not sell to me at current MU because they thought the market was depressed and they wanted to see what would happen over the next week.

    I take the same risks in crafting. I have over 200k ped tied up in shop inventory. Last I checked, I turn over around 25% of my stock each month but a significant proportion of stock sits on the shelves for many months and there is a risk I may never sell some items. Those are consequences that I own and accept.

    So I reject the assertion that Hunters and Miners necessarily need to operate at a loss. I accept that its not easy. Not everyone can come out ahead. And in my view it takes money to make money, just like real life. I reject the assertion that its unfair to set my prices to meet my game goals. I reject the assertion that by setting my prices to be profitable that I am punishing anyone. There are always other options for people who want to buy gear.

    I reject any form of price fixing as being totally at odds with the spirit and format of a game that touts itself as having real cash economy.

    That's how I see it.

    Regards,
    KikkiJikki
     
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  20. Shamshe

    Shamshe Member

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    allow me to correct myself on the fixed MU. I didn't mean like a fixed MU in like have the same price forever. what I mean is like selling at the same average MU that other people sell for at auction. and that MU can fluctuate and I agree that that makes this game fun for trading and selling.

    I myself craft enhancers mainly for myself and sometimes to sell them. Enhancers are a different thing I'll give you that cause you can post below auction price cause you dont have to pay the auction fee for small stacks when owning a shop. But the idea is the same, they have an average MU and sometimes on some rly bad runs I do have to sell at a loss or I wont be able to sell at all. It seems imoral to me to sell them for 200% higher MU just to make up for the abd runs we get nowdays in crafting.

    Thats exactly what I dislike about crafters. All MU's of materials have shrinked but they are still selling for the same MU like 5 years ago. So basicly we have to sell stuff for a lower MU but if we want some crafted items we still pay around the MU of the items it was couple of years ago wich in my opinion isnt accurate.
    There are a lot of crafted items that cost a lot less to craft now but have the same MU as 10 years ago.
    This is basicly the point I'm trying to make.

    Like you said it is your goal to sell at a profit even if that means raising the MU. It is your right and if peopel don't like it they should go elsewhere. But that doesn't take away the fact that the people who are buying your stuff are basicly paying for your bad crafting runs wich still isnt fair Imo. And I strongly believe that crafters these days are clinging to MU's that are from the past and are not accurate this day anymore.
     
    Last edited: Mar 15, 2017

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