Post by Silicon Consolidated Products on Jun 25, 2020 19:00:06 GMT
Yo wazzup guyz it's ya boi here again with another quick knaalige bomb 4 ya out der!
Renting is a topic that pops up frequently in public chat, but most of the time nobody wants to answer it since it requires a bit of explanation and can't be really answered in a sentence or less, not to mention that there are some concepts that need to be explained first which a newbie might not be familiar with, so this is an attempt at a complete answer that can be pointed towards whenever somebody asks the question.
WHAT IS RENTING?
Basically, Renting is when you have an agreement with another player, the "renter", to rent one or more of your building slots, which means that you agree to produce a product on those slots and the renter will buy all the daily production from those slots at an agreed price. At its core renting is just another agreement between players in game, much like a regular contract. The difference lies in that most of the time it's a long term contract that requires a bit of effort for the parties to set up and maintain.
For example:
For example:
Company A rents 2 building slots of Company B to build a Plantation and a Fashion Factory, with the goal of producing q2 fabric to be delivered daily to Company A. Company A wants, say, 50k q2 fabrics everyday, so if Company B accepts the rental agreement, Company B needs to build and upgrade their Plantation and Fashion Factory, and raise the quality of their fabric to q2, and their cotton/power to q1, and get a cheap source of seeds and water.
Company A might agree to provide the construction materials or the research needed at a discounted price, which will be paid by Company B by delivering q2 fabric at a slightly lower price for a period of time, or by Company A allowing some of the fabric to be sold on the market, or Company B can shoulder all the expenses, then deliver the daily fabric at a slightly higher price for a period of time, and so on depending on the agreement.
Company A can even agree to provide all the input materials, process them on the buildings rented out on Company B's map, then deliver them back to Company A. Just like in real life.
WHY WOULD I AGREE TO ENTER INTO A RENTAL CONTRACT?
For the renter, most of the time it's to expand the company's building slots by shifting some of the production to another account. To use the example above, If Company A is producing cars and needed fabric for car interiors, they may not have space for a plantation and a fashion factory in their map, so they would find somebody willing to rent out their building slots. This of course also makes sure the company gets the raw material they need for their business.
For the producer, Company B, they might have some building slots that they're not using right now, and maybe they're interested in entering in the fabric business but don't have enough capital to do it, not to mention the hassle of finding a buyer for their product. By entering into this kind of agreement they can be sure that no matter how much fabric they produce in a day, Company A is there to buy it all up because of the agreement.
Some businesses might also enter into this kind of agreement due to their specialized needs, maybe they needed q4 steel (for example) and nobody's producing them, so they find somebody to produce it for them through renting some of their building slots. Of course, if the company is already producing steel anyway, they might just enter into a normal contract and pitch in on the research needed to take it to q4.
THINGS TO CONSIDER
In a normal supply contract, you can call off the agreement at any time. Once both parties can't agree on the price, or one of the parties doesn't fulfill their end of the contract, then it can be called off without issue. In a rental contract though, any party might lose money since both of them need to maintain the contract for a period of time to break even, depending on the conditions of the agreement.
Which brings me to the most important part, Trust. As with any expenditure, there are some risks involved.
For the renter, they may lose their investment if the other company doesn't follow through with the agreement, so it's important to find a reputable company willing to rent out some of their building slots, since new players could just reset and start over.
For the producers, the risk is much lower, since if the renter doesn't accept the product, it can be sold on the market, although of course, if you're shouldering all the construction/upgrade and research cost and the product doesn't have a big market, you may end up losing much of your capital and you're stuck with an unsellable product. In that case, feel free to rant about it in chat, you might find some buyers in there
As usual, comments and criticism are welcome! Until next time!