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Post by semperfi on Oct 31, 2021 4:16:05 GMT
I am adding this post because I can see that since the introduction of Food there has been a significant shift in profitability of some items in Electronics Retail. I am inviting Electronic Retailers to add their observations here, in hopes that we get a more solid picture that can be investigated. I had let Patrik know on day one and have also entered a Bug Report a week later - maybe I just don't know where those are listed, but I haven't heard back about it.
Correction: I did receive an email Oct 25. I just don't monitor that email at all - so, my bad. I will summarize the main points in a post below. Thanks to Alzeyer for letting me know.
I've reached out to several other Electronics Retailers and have been told anecdotally that they are seeing a similar / same problem. The challenge is "proving" that there is a problem needs more than anecdotal statements, but real facts. Of course, unless anyone has tracked the "before" picture, it is very hard to get an apples to apples comparison. How do we know it is not just your mix of Executives have changed? You are just paying more for your product? Maybe you forgot to maintain your Park and lost your Sales Bonus? You get the point... there are a lot of factors that go into how much profit you can make for a given product and quality level. So, if you were impacted, please be as detailed as you can to help prove that there is indeed a problem. I will go first in the next post.
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Post by semperfi on Oct 31, 2021 4:16:27 GMT
THE RECORD:
Let me start by saying I do have a record.
I maintain a spreadsheet to help me calculate profitability with data from the Encyclopedia.
It is structured by product (six retailable electronics) and quality (0 through 5 - actually, only up to Q4 in some cases, as Q5 does not change the factors) and that combo is repeated three times so that I have a separate view for each Recession, Normal, and Boom economies.
It contains a field for cost of product, unit sales per hour, and contribution margin (revenue less wages) per unit. It calculates the unit margin (contribution margin less cost) and the profit per hour (unit margin times sales rate per hour).
I have that matrix essentially twice.
One is used to calculate the optimal price to sell a product at (max profit per hour) - taking figures from the Encyclopedia at that time.
The other I keep record of the most pessimistic sales rate and contribution margin I have encountered - I can put any purchase price for a product in and see how much I can expect in profit.
And, I have a table adjacent to that second record with three more columns. Each column is for a set profit per hour target - for example, one column is $150/hr. I use it to do a quick lookup when checking the Exchange out to find worthwhile purchases.
Each cell below is the purchase price I'd need to have in order to get that column's profit per hour. That value is calculated backwards from those "pessimistic" values I mentioned earlier. So, we have that for each product, quality level, economy combination.
I mention all the detail above to show, this is not just off the top of my head, but is from a deliberately measured approach.
Especially the last bit. I have been using those three columns and pessimistic values for some time and it has proven solid.
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Post by semperfi on Oct 31, 2021 4:16:46 GMT
MORE BACKGROUND:
I run three Recreational Buildings and have them maintained consistently. It is obvious when they are due, as the sales rate and contribution margin are way off. They were fine.
My Simboost Realignment is maxed out to the sales side. That doesn't change.
My Executives are the next Sales Boosters and Admin Overhead managers. The kicker here is that I had the strongest lineup of Execs ever!
My COO was 23 for Management skill and 24 for Communications skill (what luck to have this high in second skill!!!). My CMO was in the 35 for Communications skill (my highest ever!!) and 9 for Management. My CFO was 18 for Management and 13 for Communications. My CTO was 20 for Communications and 7 for Management.
The point is, with this best ever combo, my net Sales Bonus was 35% - my Sales Rate and Contribution Margin should have been exemplary given all the above - they should exceed my "pessimistic" values.
One last thing, I was in the middle of upgrades to buildings to make room for a Food building. I thought perhaps the Admin OH from those extra employees was kicking in (prematurely, as the upgrades hadn't completed).
When all was done (I did several in a row), I went from 272 combined levels to 280 levels.
I used the Executive Value Sheet by SkyCo to determine the impact and calculated it myself too to validate.
The difference was really only 3.25% (113.24% less 109.99%) - so, even if the first set of upgrades triggered the extra OH, it was not enough to make the difference that I was seeing.
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Post by semperfi on Oct 31, 2021 4:17:14 GMT
THE OBSERVATIONS:
1) Food Launch - Boom Economy
On the day of the Food intro I started my sales cycle - I normally try to do a 24 or 48 hour run in my stores. It was in Boom (before the econ change happened - where it stayed Boom)
For Q4 Tablets, with my super team of exec, from the numbers in my price optimizing calculation (the first matrix) from the day before, I got a sales rate of 1.29 and contribution margin of 949.51.
That morning the Encyclopedia was showing 1.08 sales rate and CM of $884.94.
My most pessimistic numbers should be 1.23 and 919.93. My cost of $775 should be well above $150/hr (that column has $798).
It went from ~$225/hr to ~$118/hr = down $107/hr
Quads Q5, going thru the same calculation was down $40/hr
I reported this to Patrik
*** I just now realized after checking the Q4 Tablets Normal section - the 1.08 and $884.94 is AWFULLY close to my pessimistic values for Normal - 1.08 and $883.52 *** *** Though that doesn't explain the Quad Q5 difference ***
2) Now - Normal Economy
Ever since the change to Normal economy, I still see different numbers from expectation.
I entered a Bug Report after that econ change.
I didn't keep the numbers I reported then, but will report what I see today on a select few items (which I commonly sell).
My current Sales Bonus is 29% and Admin OH is 100.11%. My old Sales Bonus was 35% and Admin OH was 109.99%
I will report my Pessimistic numbers from my spreadsheet, the current numbers, and current numbers adjusted for the old bonuses.
Quad Q5 - $878 cost
Pessimistic 1.61 and $980.88 = $166 profit per hour minimum expected historically Today, Current 1.42 and $942.06 = $91 profit per hour Today, Adjusted 1.55 and $951.48 = $114 profit per hour
Conclusion: A $50 to $75/hr drop in profitability from the "Pessimistic" numbers - reminder: was down about $40 in Boom.
I was #1 in Quad Sales Sep 2021 - so this hurts BADLY! My upgrades were based on the economics before the intro.
Tablets Q4 - $775 cost
Pessimistic 1.08 and $883.52 = $117 profit per hour expected Today, Current 1.16 and $842.06 = $78 Today, Adjusted 1.27 and $853.58 = $100
Conclusion: A $17 to $39/hr drop in profitability - reminder: was down about $107 in Boom
Smartphones Q5 - $585 cost
Pessimistic 2.91 and $658.50 = $214 profit per hour expected Today, Current 3.51 and $676.88 = $322 Today, Adjusted 3.83 and $680.69 = $366
Conclusion: A massive increase between $108 to $152/hr
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Post by semperfi on Oct 31, 2021 4:17:32 GMT
Clearly, something is up. If I go by the SimTimes article series on the Retailing model, the curves on this article have changed significantly: www.simcompanies.com/newspaper/141/I presume saturation hasn't changed, because the pricing behaves differently on each product with economy changes. This suggests to me that it is one of A, B, C, D, or E in this article: www.simcompanies.com/newspaper/138/If I were to spend more time thinking about it, I might be able to say which has changed (if only one of those factors), but I spend enough time already. I hope that whoever else posts can provide detail that makes it equally as clear the impact they are seeing, and not leaving the question open that it might just be their Executives, or something else that affects their bonuses.
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Post by Deleted on Oct 31, 2021 5:20:00 GMT
Did you not receive Patrik's response to your ticket 6 days ago? I´ll send you a screenshot of it via PM ingame
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Post by marsh0lion on Oct 31, 2021 6:22:23 GMT
While I can't go into as much detail as others have, I've recently found that when I prioritise profit per unit (usually to a point of a price increase of 50c increases profit of 1c per Q5 tablet), I get a lower profit, but sell about 10 more per day.
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Post by greens7777 on Oct 31, 2021 6:43:47 GMT
I don't have so detailed data as Semperfi has, but I can add my observation. It was october 15. It was friday, last day of boom cycle and I was waiting to see what will be next economic cycle. My routine is to set my production and retail that the 24h cycle ends 9pm. And as it was last day of boom, I was used what is my 24h cycle production/ retail volumes. And then came 15 of october. I saw that economics cycle will remain the same - next week also will be boom. Great news for me as a retailer. Nothing should change in 24h cycle numbers. But at 9pm, when my 24h cycle ended and I had to fill up stores I noticed that something is wrong. I evend did not know that food expansion is live.
Here is what I noticed: profit per unit, as far as I remember, was similar, but number of how much i can sell during 24h was dramatically decreased. My assumption is that the drop was around 25%. At first I thought there is mistake in displaying economic cycle, because feeling was that we are in normal economic phase, not boom any more. But no, it remained as boom. I was really confused. And up to now nothing has changed.
That is what I noticed and wht impact I felt on 15.10.2021. Definitely there was changes, but don't know exactly what. Maybe it was planned to lower profitability on electronics but was kept silent.
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Post by brownsandpartner on Oct 31, 2021 7:35:11 GMT
Same here:
Smartphones are okay, but all other products are not profitable anymore.
Laptops Q3 for example: I used to buy for 1160.- and made a profit. Now I make a 100.- per unit loss with these products. I would need to buy for 1040.- to make the same profit, but NOBODY IS ABLE TO PRODUCE AND SELL THEM FOR THAT PRICE!
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Post by semperfi on Oct 31, 2021 16:19:28 GMT
This thread was posted because I didn't hear back in-game, and had heard from a couple other players that they also inquired and were told that there "wasn't a problem". As mentioned in the correction in the OP, I did receive an email. Unfortunately, I've never really had a need to monitor that email account, so it is idle, thus missed an email from Patrik. It sheds some light on what happened (at a high level) and the rationale behind it. I will see if I can give it justice here, in summary: 1) ALL retail product models were updated. I take this to mean all those products sold in some kind of store (i.e. not AS). 2) The update was to retailable volume a day and price for input resources. For instance, leather would experience a major change with the Food intro. Reading between the lines, I think system wide adjustments were made to anticipate a ripple effect that Food would have across supply chains. I'm not certain why Electronics would be part of that. 3) Part of the calculation is based on cost to manufacture products and adding extra margin for complexity and building costs. I would guess that how Electronics fits in is in trying to make all products conform to the notion that profitability should be based on complexity (and building price) - a tier of profitability. (Go here to item #2 for a discussion on this flawed concept simcompanies.proboards.com/post/5265 ) 4) With that target profit, then it was a matter of adjusting the A, B, C, D, and E of the products to match that target. See this article to know what this is about: www.simcompanies.com/newspaper/138/5) These price "fluctuations" were / are to be expected. 6) Also expected is that they will eventually return to previous levels. If I understand correctly, this is based on the assumption that as players move towards Food and abandon the other products, the supply will decrease and cause the Saturation value to change favorably to the Retailers. That dynamic is described in this article:
7) Given that this is expected, there isn't (by definition) "a problem".
8) The best path forward for players impacted is to re-orient their operation toward what is now their most profitable (electronics) product.
This is my understanding in summary of what that email said.
If I have this wrong, completely or in some aspect, I am happy to be corrected.
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Post by semperfi on Oct 31, 2021 16:42:29 GMT
One unfortunate aspect of this is that it was unannounced, or at least not made clear enough to current players that this may 1) occur and 2) have possible major impacts (especially for Electronics Retail) In my case, I made ~$9M investment in upgrades and lost as much or (probably) more in forgone profits while the upgrades were underway. This was to produce more Quads with fewer buildings, as I was intending to make space for some Food buildings. Also, anticipating an impact on supply (having learned my lesson with AS introduction) I began accumulating inputs for that manufacturing.
Quads happen to be one of the products that were evidently (from the above observations) "nerfed" big time by these changes.
Unlucky me.
Had I known I surely would have made different choices.
Of course, that may revert to where it was before - but that is an IF and WHEN question.
Now with all that investment and lost profits worth naught (for the foreseeable future) I need to figure out which product to switch to, or change industries altogether I suppose.
Ugh! More investment and lost profit.
The extraordinary Unicorn profits made in two weeks in Food by some is just salt on the wound. Not exactly a satisfying experience, especially after spending 2 years working to tweak and perfect that model. THIS is a big reason why I am advocating Multiple Game worlds that expire. simcompanies.proboards.com/thread/1657/game-worlds-expireIf you were impacted by this change, please go there to voice your support for that idea.
There seems to be resistance to the idea but I think that appears to mostly be from a misunderstanding of the concept.
Edit: And the (evidently, mistaken) belief that this is a long term build game.
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Post by flintcorp on Nov 1, 2021 1:23:43 GMT
I don't have all the details as others, but I definitely observed a huge change as well. The volume that I had to sell each changed significantly up, and the price way down. I was averaging about $400k to $500k per day in profit, and now I do about $150k to $200k per day. Something is definitely changed.
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Post by flintcorp on Nov 1, 2021 1:26:06 GMT
PS - I currently sell exclusively Q5 Monitors. Clearly one of the products that tanked.
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Post by Deleted on Nov 1, 2021 7:19:02 GMT
I just made some calculations. If i built 18 lvl-2 electronic stores and buy all smartphones (Q0) from exchange, i make a daily profit of 180k. 208/hr/lvl, totally ok i think, via contract it will be more.
Edit: Sorry for giving an example, my bad.
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Post by semperfi on Nov 1, 2021 15:10:51 GMT
I just made some calculations. If i built 18 lvl-2 electronic stores and buy all smartphones (Q0) from exchange, i make a daily profit of 180k. 208/hr/lvl, totally ok i think, via contract it will be more. Dude. My own report above says Smartphones have been boosted significantly (though I don't know their behavior in Recession). The trouble is, this "nerf" to Quads came out of the blue. Take a look at what building they are produced in - Aerospace Electronics. I upgraded two levels to that building (ironically, as part of other upgrades to make space for Food buildings). Now, it is an albatross. I'd have to essentially scrap that building to focus on Smartphones. Or, I have to completely reorient my business to be a producer of something else with it - but now, my Sales Bonuses are maxed out and Production bonuses minimized - so I'm not really all that competitive in that space. This change completely messed up 2 years of work to build and optimize my position in Electronics Retail. When AS was introduced, there was massive change to the supply chain for Electronics Retail. I lost MANY suppliers.
I decided I had to invest in producing my own product just to have a smooth, reliable and scalable supply - in case of future such disruptions. Turns out that was a smart move. Quads have been a very good profit maker. BUT, it is ONLY because I produce them. I could never find a reliable supply of Quads on the scale I need and for any decent volume I could always make them cheaper than I could get (probably because other Aerospace Electronics are more profitable for Mfrs) - especially with the 3% off Exchange as "fair" price myth. Furthermore, now that the demand model has changed, to really assess where to go in Electronics Retail, I need to observe pricing behavior for all products through an entire cycle of economies (Recession to Boom), before I go all in on producing any specific product. That can be a month or more - depending on how quickly the random changes happen in a direction and back. Why the wait? Because there is a different mix of inputs. I already invested in inventory for Quad production ahead of the Food expansion, anticipating supply troubles. Now I need some other inventory.
OR, maybe I need to scrap those Electronics Mfg plants now (where I just upgraded 4 levels to), if they prove they are no longer economically viable to make products for my own Retail, and get rid of all that input inventory.
But then, are there suppliers who can produce the volume at prices commensurate with the profits I once made?
Another issue, I had a backlog inventory of Tablets saved up for that anticipated upgrade period. They were already significantly lower profit to begin with than Quads (but retain their profit better than other electronics with econ shifts, so were a safer bet), but then they got nerfed too just as I needed to sell them. There is a WHOLE CHAIN of consequences.
And, how much time must I spend to figure this all out?
So, it is rather flippant to, after the fact, suggest one need only change focus onto some other product. I've got to believe other Electronics Retailers had accumulated some inventory only to see their value plummet, so that message will ring hollow in their ears too. Part of the enjoyment in this game is the complexity. I think there ought to be some respect for that complexity when changes are made, rather than assume players can make simple changes, and introduce industries that give players unicorn profits (like, we need to nerf the few dollars extra in one industry to what(?), make it more "fair" - meanwhile absurd profits are made in another over a period of days/weeks?). The game has to decide, is it a long-term build, or a short term race. Pick ONE!
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