Raw materials

[therealevan]

Is it possible to have a sustainable/profitable company just by selling raw materials? I would really like to know how, I can't ever figure out what raw materials are needed, despite using the product charts most of the AI already supply their own materials..

[Esoteric Rogue]

Is it possible to have a sustainable/profitable company just by selling raw materials? I would really like to know how, I can't ever figure out what raw materials are needed, despite using the product charts most of the AI already supply their own materials..

It's possible, but I never had much luck. The AI's aren't in a hurry to use new materials as they appear, and even once it starts being profitable, it's a management hassle, imo, to run a monopoly where you're constantly building new mines. As you alluded to, too often when a manufacture starts paying you well, they're apt to start harvesting their own resources instead of paying you, which is why I say "monopoly"; it works better if you squat on all of you resource spots. I wouldn't recommend it exclusively, the real profit only comes from selling to customers -- by which I mean, sure a factory might seem to be paying you well, but they can only pay as well as the final customer pays them, of course.

You'll learn the materials over time, the scenarios should get you pretty familiar with a few industries. Most people approach the game from the top down rather than bottom up, that is, pick an industry and consider what materials are needed to make the end products rather than picking a material and figuring what end products you can make.

Still, if you want to keep stabbing at it, consider the final products that only have one input. Only timber is needed for beds. Only leather is needed for wallets. Only gold is need for gold rings. The reason I mention that is so that AI's will be quicker to buy your supplies since they it doesn't depend upon the existence of others. Harvesting Timber has been popular choice among players, but only harvesting is not I have fond memories of "Bed Wars".

Good luck

[therealevan]

Thanks for the response. There is definitely a hassle I've noticed trying to monopolize resource sites. And towards later in the game site values go over 1B in some of my games...

[therealevan]

One thing I have noticed is how volatile demand is for any resource. I managed to scrape up enough funding to build several mines covering gold / silver / aluminum / chemical minerals. I didn't earn any revenue for almost an entire year until Gold & Silver began selling to firms. Once these firms started to buy product, it was in very volatile amounts. Sometimes the mines would go for 100% utilization for a week, sometimes for an entire month, and then a day later the firms would stop buying from the mines. Even if I cut my product pricing down to just a few dollars above the breakeven, the firms who were buying still wouldn't continue. Not only did the demand create a wildly volatile revenue stream, the market share of each product I was producing would wildly fluctuate for seemingly no reason. I checked to see if the firms that were buying from me had their own mines else where to buy from and they did not until a while later. They had built a gold mine and started to sell internally for a few months, then sold off their mine and started buying from elsewhere. In regards to market share fluctuation, I can understand supply & demand levels. But I can't understand how firms can just go from product to product. It's almost as if the firms would randomly stop selling product and completely change their product line, thus removing the demand for specific materials. My previous game, gold had a market share of almost $20M, within months that $20M had dropped to just above $10M and those firms who were buying gold shifted it's product line, hence the drop in market share.

ALL THIS RAMBLING, I STILL HAVE A POINT TO MAKE:

Correct me if I'm wrong, a major component to business is a supply & demand factor, but I feel that it is entirely too volatile and unpredictable in caplab. One month you're raking in millions in profit at 100% utilization, next month you're in the red with 0% utilization. And once you've been running at 100% utilization for a while and the minesite runs dry, depending on where you are in game, you may have to fork out $1B in cash to purchase a new site that if you're lucky will give you $40M in revenue.

[Esoteric Rogue]

Correct me if I'm wrong, a major component to business is a supply & demand factor, but I feel that it is entirely too volatile and unpredictable in caplab. One month you're raking in millions in profit at 100% utilization, next month you're in the red with 0% utilization. And once you've been running at 100% utilization for a while and the minesite runs dry, depending on where you are in game, you may have to fork out $1B in cash to purchase a new site that if you're lucky will give you $40M in revenue.

Well, I hope my indirect responses can shed some light.

In business, market demand generally refers to consumer demand. When you're running a mine, you're selling to other corps, not to consumers. You will have much more control of the situation if you also build your own factories and stores. This point was to clarify that actual consumer demand is very stable in the game, with the prime exception of recession / depression, which has huge but relatively slow effects and can be shut off.

Resources generally have those jagged sales lines simply because of inventory fluctuation more than final sales fluctuation. A little bit of resources generally goes a long way. AI Clients often buy from you only once every 2 or 3 months, because it takes him that long to use up his stock. If a client still has your product in stock, he's not going to buy more no matter how low your drop your prices.

Inconsistency is certainly part of the reason why it's very difficult to run only resource or semi-product businesses. In the game, if you're dependent on the AI clients to fuel your business, you need a better business model.

[therealevan]

I let the clock run out about 5 years and noticed that timber had about a $10M market share where other raw materials barely peaked $5m. So I bought two logging sites and started they've slowly started to produce profits. I'm now operating in the black and both sites have a little over half of their reserve left, each site supplies 5 or 6 other firms on a monthly basis. A different approach to this is eventually the price to buy sites become greatly inflated as the game progresses, I can recall several occasions where a site is over $1B to buy, but can only produce maybe $20-40M in profits. Ultimately phasing out the need of having a business solely reliant a product line of raw materials.

And an edit to show how absurd pricing gets when buying new sites later in game:



Really.. $1B for the land..

[Esoteric Rogue]

Really.. $1B for the land..

Well, that sounds like you're playing CapLab rather than Cap2, right?

[therealevan]

Correct

[Esoteric Rogue]

Really.. $1B for the land..

Well, that sounds like you're playing CapLab rather than Cap2, right?

Correct

This is the Cap2 section rather than CapLab, so I was originally referring to Cap2. I don't have any particular expertise at CapLab yet. But my general point will still apply, that being that money enters the corporate sector via retail, and as you progress down the production chain, there is less realized value and increased instability, so that raw material will only get remaining crumbs of profit in the best of circumstances. At any rate, if you want to control your fate, you'll want to control as much of the supply chain as possible.

[therealevan]

Oh. I just realized this is for cap2 and not caplab.

Ouch.