This material is intended to clarify the rules for calculating production costs, to prevent losses in Entropia Universe.
Many Entropia Universe members produce items, without thinking about profit, and auction prices are set the same, like other participants.
We believe, that this approach is wrong, and therefore we will tell, how to calculate the minimum markup on any item, which you produced, provided, that your drawing skills and Quality Rating allow you to produce at least 33 items per 100 attempts in the Quantity mode. If you produce less than 33 items with 100 production attempts — count margin for less, if more, then consider the margin based on more items produced. If you use drawings with a low Quality Rating, the number of successful attempts per 100 will be less, e.g. 25-28. And in the case of using drawings with Quality Rating equal to 100 or when using limit drawings, the number of successful attempts in such drawings can reach 35-38.
For an example of calculation, we take the drawing EK-2350, final product — this is a pharmacy, drawing from the book Tools Vol.I. Rare drawing, and can cost between 500 and 1,500 PED.
Let’s get started:
First you need to calculate the cost of production, based on TT values of ingredients. If you look at Item Info drawing, you will see, what is on the list of ingredients. Knowing the TT value of each ingredient, you can count, how much is 1 attempt at production without margins:
1 attempt : (0,51×3)+(0,45×2)+(0,25×2)+(1.8 x 4) =10,13 PED
With a significant number of production attempts (let it be 1000 for simplicity) subject, loot system will provide a return of approximately 90% on TT, that is, in this calculation we take the tax on loot equal to 10%. Therefore accept, that each attempt to produce a loss of 1,013 PED TT. While, that the finished product is 33%, every 3 attempts will be considered successful. Resulting tax costs, that is, the costs of the participant in favor of MA, for the production of EK-2350 TT will be:
Rounded up: 3 x 1,013 PED ~3,35 PED
The calculation does not end there. For each component, which you used in production, you paid the extra charge, who bought this component. At the beginning of 2017, component margins are:
- Cumbriz Ingot — 106% (TT+6%)
- Caldorite Ingot — 102% (TT+2%)
- Quantium Ingot — 118% (TT+18%)
- Magerian Mist — 106% (TT+6%)
It will be easy to calculate, that the total markup on components in one attempt will be:
(0,45×6/100×2)+(0,51×2/100×3)+(1,8×18/100×4)+(0,25×6/100×2) ~1,41 PED
Since only every third attempt will be successful, then multiplying 1,41 on 3, we get the markup value, which was spent just like that. In this case, Near Sucess results are not taken into account, when material returns, as well as drawings, dropped out on successful attempts, because that’s it — your bonuses and pros.
so, we got the markup value, which is spent on the production of 1 finished pharmacy EK-2350: 1,41×3 = 4,23 PED
Total Cost: 3,35 + 4,23 PED =7,28 PED.
With such a mark-up, you can sell the finished item with your hands and are guaranteed to pay back the cost of its production.
Of course, the total amount of your costs will be slightly less, t.to. at the time of receipt of the result Near Sucess, part of the return is made by materials, and with successful production you can get drawings. it — already your net profit.
In addition to taxes and margins on the EK-2350 itself, which are included in production costs, there is still an auction tax when selling a lot. For a lot with TT 10 PED and extra charge of 7,28 PED it is about 1 PED, therefore this 1 PED just needs to be added to your costs, to be paid by the buyer, not you.
Total amount, which the buyer will pay for Ek-2350, should be no less, than TT+8,3 PED . TT value is not important here, only the value of the markup is important.
If you sell a manufactured item for less, what did you do with a similar calculation of another subject, you will have a loss.
You ask, but how to calculate the margin on limit items? Answer — very simple.
Let’s assume for simplicity, that this pharmacy suddenly became limited, and called Ek-2350 (L). The full TT at this pharmacy is 49 PED. However, with a successful attempt at production, TT she will have only 10.13 PED. The rest for the limited item must be finished to full TT with the recommended chips (in the production interface you can see, what kind of shavings do you need, and which one fits there, if you have chips at all).
Suppose, did you buy Metal Residue shavings at TT price+2% (102%). It fits almost all items.
We calculate the required amount of chips, subtracting from the full CT the cost of 1 attempt to produce CT: 49 — 10,13 = 38,87 PED.
We calculate the margin, which you paid for shavings, which was consumed by increasing the item’s TT to full, in our case, 49 PED: 38,87*2/100 = 0,78 PED.
Now you need to calculate the total costs, adding up the cost of production costs with a margin, paid for shavings: 8,3 + 0,78 = 9,08 PED.
It will turn out, that a similar margin on a limit item EK-2350 (L) will be 9 already,08 PED, and the resulting MU for the limit item will be:
If you see, that the market margin for the item is less, than your production costs, then you should not engage in such production, EU tax system is relentless, and sooner or later he’ll eat all your money.
Once again we want to note, that the material is not entirely accurate, as it does not take into account chip delivery, drawing drawings and returning materials, but all these nice factors are in your favor, and therefore it is better to consider your maximum costs, than rely on chance in the form of expensive drawings.