Inside Scoop page 1

PROD-PROUD OR DEF-DEFYING... THE HAVES AND HAVE-NOTS OF HAULING FOR PROFIT

by Jezz

Now a few of you have heard me talking about hauling when you're a PO, and some haven't agreed when I make the statement, "All other factors being equal, a deficit will make more groats for your planet than a producer". So I thought I'd spend a little time expanding on that statement and sharing the math behind it. Of course, many POs do make a lot more groats out of their producers than their deficits, but if you look at it ton for ton you'll see what I mean.

Lets' just look at one commodity for a moment. I'm going to pick Hides simply because it has a base price of 400 and I like nice round numbers. I'll also use a spread of 40% because that will give the treasury the best return.

Say you have a decent stockpile of hides and you want to haul out. You'll buy the hides from your exchange at the exchange selling price. This is where the maths comes in. Base price for hides is 400ig/ton. Because you have an excess of hides, (more supply than demand) the value will be an average 25% lower than base price. That makes the value 300ig/ton. Your exchange will sell the hides to you at value plus 20% which means you'll put 360ig into your treasury for every ton you buy. But now your exchange will replenish the stockpile by buying from the planet at value which is 300ig/ton. That means your treasury ends up with 60ig per ton of hides that you move.

Got that? Good... ok, let's move on.

Now let's say you have a deficit in hides. Because you have more demand than supply, the value is 25% higher than base price so that's 500ig/ton. The exchange will buy at value minus 20% which is 400ig/ton and sell to the planet at the value price of 500ig/ton. This means your treasury made 100ig on each ton you sold and your planet used.

You still made the 20% of value on both deals, but because the value of a deficit commodity is higher than the value of a producer with the same base price, you'll make more, ton for ton, on the deficit.

So why do so many PO's make more groats from producers than deficits? The answer is clear when you look at efficiency and planet level. If the efficiency builds have been done for the level of the planet, then the greatest efficiency will be in the commodity group where there are most producers with the high production numbers. All this doesn't effect the price you make per ton but it does mean that you can haul out those high efficiency producers a lot more often.

Every exchange is different, of course, and so are individual hauling styles. If you like to haul a lot and you have lots of fast moving, high priced producers then hauling out is probably going to be your major earner. However, if you don't want to haul much but have a lot of deficits, hauling in the high priced deficits can help you maximize earnings from what little work you do. Naturally, if you are one of those over-achieving types you could just haul everything, all the time, you don't really need to worry about which commodities yield most profit. Just remember that no matter what your hauling plan looks like, 20% of a big number is more than 20% of a small one whether it's a deficit or a producer, so the best plan will include the most expensive commodities on both sides.

Actually I take that back... the best plan would be to get somebody else to do it. Oh Zaaaarrrdddozz! Where are you, Zardy-snookums?...

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