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Setting a Price for a Spirit Spell Matrix


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All I would add is that prices have definitely dipped in RQG.  Back in RQ2, a "battle magic" (read "spirit magic") matrix, cost 1000L per point of POW that went into its creation.  These days, as a rule of thumb, you seem to divide that by 10 for most items.  Transactions involving magic items are generally handled by temples who will cut your tithe right out of the money you would earn.  As matrices are expensive, there is plenty of room for shenanigans if temples are not involved.

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On 5/8/2021 at 9:19 PM, Shiningbrow said:

What I'm mostly getting at is - a flat "max of 50%", while simple, is unrealistic for all situations. Your Merchant Will Vary. Especially depending on where in the chain they are. (and, obviously, their overheads)

As well as the more obvious - place of transaction... This is something I hope an upcoming book will address. 

 

On 5/9/2021 at 4:43 AM, French Desperate WindChild said:

of course

you're right , another point I have this morning: the customers.

In our case: who will be able to buy a  200+ silvers item ?  ......Probably the farmer who sells carrots to the local merchant (who sells himself every week in the local market the carrots) may expect more than 50%.

But there are so many possibilities. I m not sure we may have rules for everything. My point is only to say you cannot sell at the price you buy and there must be a big difference.

Re. "Your Merchant Will Vary":

As a guideline, the merchant's % markup on price should vary with (A) Expected speed of turn-over of the item (B) Overhead cost of keeping the item, (C) The size of the market the merchant is in.

Examples:

(A) If the merchant is selling carrots in accord with French Desperate Windchild's example, I judge that he expects this stock to turn over in a week, probably on market day. (If it doesn't the carrots will be dried up and less saleable.)  If he maintains a stock of all goods worth 600L, and is in local trade only (and not selling in Sacred Time), then each week to break even on a Free Standard of Living(60L)  he only needs to make a profit of 1/40th of that or 15L, = 2.5%, without accounting for compounding on his rate of return. But If you account for compounding then a 0.3% margin will provide that.  [1.003^40 =    1.127 so he actually needs a hair less margin, but let's deal in round numbers here.]  That is AFTER and in addition to margin for overhead and risk.

On the other hand if your merchant expects to have to keep the goods on hand for a year before it sells, then he needs a 10% margin to break even on a Free Standard of Living(60L).  Our matrix will probably not sell as fast as carrots.  If the merchant expects it to sit in his house for a year then the margin  should be 10%  before item (B), overhead.

(B) Overhead cost:  This is the fee for selling in a market, or the cost of maintaining a shop. Plus any guards, caravan animals etc.  Clearly overhead can be significant if your goods need a guard or if you run a caravan. 

Bronze Age through Medieval Real world merchants' homes would also be their shops, YGMV, but applied to the merchant's assumed stock of 600L, a house would seem to be included in the Standard Of Living for a merchant operating in a fixed location.   The book has no standard cost on renting a whole house, only costs for inns. (p.413) - but presumably rent on an average house would not be greater than a year's entire Free SOL of 60L which covers an entire household.  Presumably this would also vary between rural and urban areas.  This is worth its own discussion thread

A local merchant might keep an item as valuable as a matrix on his own body, so would not necessarily employ a guard for it.  He might expect a return on use of the Rune spell "Lock", though, if he kept it in a strongbox.

So the merchant's fee for selling in the local market would seem to be the significant cost here.  YGMV for that fee.  But the local Issaries priest expects fees to cover maintaining the market and to contribute to his own SOL.  So market fee setting would seem to be a significant part of the merchant's mark-up.  This is worth its own discussion thread.

For a traveling merchant overhead cost is obviously higher.  To the extent that he stays in inns or caravanserais,  if the private-room rate of 5L per day applies (even if his whole group sleeps in that room), that will be a major increase in overhead.  If the 'dormitory' rate of 3c applies then a whole caravan can sleep cheaper than that.  And animal, wagons - those things don't last for ever, depreciate, and may be casualties of violence or accident on the road. 

(C) The size of the market:  This is "place of transaction" that Shiningbrow refers to:  Big cities have more customers, and more rich customers, and so will support a higher rate of turn-over of the merchant's stock.  Given competition that should drive the merchant's margins down.    In a distant village maybe only the Chief and Ring would be customers for our merchant's matrix, and if they don't buy it our matrix may sit for years, so the merchant should hang on to the matrix there only if he expects to soak an eventual buyer like an adventurer wandering through.

Selling in the local market on market day provides more customers, because people come from the countryside and other villages and also traders roaming the roads.  That is what makes it worth while to pay the market fee, it's a trade-off with rate of turn-over of the merchant's stock of goods.   It's also a fee for entry to the area at all: In a distant village the ring might object to a merchant just setting up his own market on the edge of town.

But in Nochet there may be a thousand potential customers, and our matrix may sell in a week or a season.  So larger places give quicker turn-over and therefore the mark-up that a merchant needs will be less. 

Based on all this, I object to a single rule of thumb on mark-up in matrix sales and urge adjusting to circumstances based on expected rate of turnover, overhead, and the size of the market.

Edited by Squaredeal Sten
more thoughts - more examples -
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