Cheap commodities being...useless?

[Boomer Kay]

But Coca Cola costs a fraction of a penny per litre and has an astronomical profit margin (for selling delicious brown water)

Contribution Profit Margin to be precise.
Real bottled water has even higher Contribution Profit Margin. It's all about the MOGEs and somesuch.
The contribution profit margin on frozen pizza fluctuates somewhere between mildly profitable and "selling it below it's production price", depending on what you're trying to achieve.

So while the economy in ED might be oversimlpified and sometimes whack, it's nowhere near the complete whack of our real economy.

 

[Mephane]

Well, part of the underlying problem is the entire concept of buy-low-sell-high trading. If trading put less emphasis on being like a stock exchange and more like, well, businesses having delivery contracts to fulfill (with us as the logistics operator) - in other words: transport missions - the question would be rather moot, because the payment for the contracts would be relevant, not the actual value of the transported goods.

 

[Boomer Kay]

Well, part of the underlying problem is the entire concept of buy-low-sell-high trading. If trading put less emphasis on being like a stock exchange and more like, well, businesses having delivery contracts to fulfill (with us as the logistics operator) - in other words: transport missions - the question would be rather moot, because the payment for the contracts would be relevant, not the actual value of the transported goods.

That was my point in regards to trading missions, which are actually haulage contracts, but are calculated based on the price of the shipped goods, which is whack.
A 10lb brick costs more shipping than an iPhone. Duh.

The self employed trader career is actually quite fine the way it is. At least if you have a thing for that kind of enterpreneurial activity. But .. ermm.. you need to know your tools (my little side business is more profitable than my billion euro employer and gives me a higher hourly pay ).
The trading tools contain much good raw data, they can not calculate you the most profitable routes, though. That depends too much on too many variables.

 

[Jukelo]

When was the last time you bought a frozen pizza for more than 5 bucks at a supermarket? And how high do you think the profit margin on that 1,99 Pizza really is?

Obviously it's not just about price, as a mentioned earlier. In RL each corner of the market is occupied by a few companies, and if you want to enter that corner of the market you have to compete. So obviously each company picks its niche and adapts its business to the realities of that niche. Those selling frozen pizza try and shift as much volume as they can (it's food, there's always a high demand for that) and they make a decent profit despite the lower margins. It's okay, not everybody can sell diamonds or iPads.
But in ED there is enough availability and demand for high value goods that you don't need to compete with other players, and therefore don't have to pick anything else.

Well, the incentives are not obvious.
If you don't consider them serious enough to bother with .. as I said .. nothing to see here, move along. ;p

That's the second time you allude to these 'incentives' without going into more detail. If you could elaborate I'm sure it could help the thread going forward.

 

[Lowievisser]

sometimes its needed with cg

 

[Boomer Kay]

That's the second time you allude to these 'incentives' without going into more detail. If you could elaborate I'm sure it could help the thread going forward.

Well, I did mention the BGS and reputation. If you want to flip a system with economic means or gain reputation and all they buy or sell is scrap, it's scrap you're hauling. Of course there's substitute activities to play the BGS, but economically, scrap is as good as palladium.


Second is the composition of trade routes and your own profit goals. Mine are to pack as much profit in as little time as possible, which means I can afford to fly grain on a return trip and will not deplete small market-high profit sources on my own, since I'm usually done for the day when prices drop and profitability suffers (I just make sure to update the trade network with the prices I get after I've finished my business ;P )
Low profit good's contribution profit margin is as high as that of palladium. But only because the running cost of trade vessels is so low. (and it's only meaningfull, if you care about junk like contribution profit margin and somesuch).

And the existence of those trade routes is no secret. There's even a post here with "ZOMG 4k per ton profit in one jump" (<- that's not the average profit). They just don't usually show up in the trade tools, since they're small markets that get trashed fast. The stable stuff for ok-ish but sustained profit does show up.

 

[X-Terminator]

Well only thing is if carrying cargo is you get Pirates that do attack instead of a scan and then letting you go.

 

[tooterfish]

So I was thinking about all the cheap stuff that we have at our disposal, and how literally nobody trade it thanks to laughably little value per ton. Currently only very expensive commodities make sense while doing point to point hauling.
What if commodities were not measured in strictly 1 ton per unit, but had different mass for every specific commodity.
1 unit of rare ore can take over full 1t cargo space, but cost alot. At the same time 1 unit of very cheap commodity could be 0.1 or even 0.05 ton, so you could fit 10-20 of those in 1t cargo space and bringing profit/t more in line with the most attractive goods.
I understand that it's very easy to mess up this system, by equalizing all goods and making trading even more boring. But something should be done, there's just no point in having so many commodity types. It's a wasted potential.
Thoughts on proposed solution?

Cheap commodities aren't useless, they're for newer players.

Not everyone's been playing this game for two years and has a spare 300 million in the bank.

 

[Caramel Clown]

Cheap commodities aren't useless, they're for newer players.

Not everyone's been playing this game for two years and has a spare 300 million in the bank.

I keep seeing people talking about this...My idea does not reduce usefulness of cheap commodities for new player. In contrary, it makes it even better.
Maybe people didn't even read to the end? I see lots of answers that have little to do with the topic :/

 

[Boomer Kay]

I keep seeing people talking about this...My idea does not reduce usefulness of cheap commodities for new player. In contrary, it makes it even better.
Maybe people didn't even read to the end? I see lots of answers that have little to do with the topic :/

I did read it to the end and as already mentioned, that sort of fix would work wonders for trade related missions.

As for the market .. if you still don't see why I ship T9s full of grain and wine .. can't explain it any better, but your assessment that "literally noone is shipping them" is wrong.

 

[shadragon]

Little brooks make great rivers

When trading, I always try to turn a profit on each run. If I'm on a mission to a specific place, I'll consult Thrudds, Slopeys, or EDDB and see what the best trade item to take with me is. I will then fill the remainder of my hold with whatever will bring the best profit. Leather, tea, clothes, etc. Imperial slaves and palladium are not available everywhere. So you make do with what is there.

It may not make much, but I'll make enough to cover my gas consumption and maintenance at the very least. If you make 1,000 Cr extra on each run and make a thousand runs you'll have a million extra credits to play with. Every ship has a basic disco scanner. Even that fired off in each system can make you a few thousand each session. It adds up over time as well. I've made three million in exploration data on one of my chars just from bopping around core space.

To address the OP point, when the BGS can be manipulated by players like blockading a station generating starvation, then food prices would soar and profits could be made.

 

[Derath]

Cheap commodities aren't useless, they're for newer players.

Not everyone's been playing this game for two years and has a spare 300 million in the bank.

They are useless after like the first hour you don't need 300 million you need about 6k x your available cargo space to make over half of the commodities worthless

 

[Ignition]

Commodities in this game are tiered, thats the worst thing to do in a game.

FD said in a recent video that security will affect prices, that should have been like that since the begining.