FUI Presents:

Why Trading Sucks, A Beginner’s Guide

            As you are likely aware, in recent times jump costs have risen tremendously.  Gone are the days when a trader blessed with a warp percentage of 100 or more could hop clear across the galaxy to a hot market for only a few hundred energy.  Today such a trip for the same vessel might take six or seven hops.  A starship captain hoping to make it in the commodities trade  these days must make the painful decision of whether to stay near his factory of choice and net the frequently low returns of heavily served colonies, or lengthen the duration of each trade run by making more jumps to better markets while reducing the total number of trade runs he can make in any given period of time, which also negatively impacts his profit. 

            What you may not be aware of is just how much increasing jump costs have changed trading returns.  The difference is staggering.  Once upon a time, a ship could purchase an item, jump in one hop to a colony buying at 250% or more for maybe $100 in average jump cost each way at most, and sell it for a tidy profit.  After selling he could jump straight to the factory and repeat with whatever colony was then the best highest bidder.  That typical case profit works out to around ((500 * 2.5) + (500 * 2.15) + (500 * 1.80) – 200 - 1500)/4 = $381 per turn for three goods bought at $500 each. (which happens to be the optimal number for a 250% profit colony)  It’s nothing like optimal returns on medicine or intimidating homeworlds, but it’s decent money.

            In the new paradigm, reaching a high demand colony buying your good will often take two hops, or perhaps three, and that's presuming you have accurate information on where it is.  The increased travel time raises the total time per trade run to four to six turns plus the turns spent selling, directly raising that pesky divisor in the equation above.  The difference is staggering: $500 energy goods would bring you an average per turn profit of $191-$254 depending on whether it takes 2 or 3 hops to travel in each direction at the same total warp cost as before, a drop of up to 50% from trading before the warp change.  The average ship in TBG is worth around $33,000 right now.  I for one can be patient, but not that patient, especially considering that profits on lower priced goods are even worse.

            Of course a clever trader can change the formula; for example, he might find trade routes that consolidate buying one good and selling another at the same location, or at least that are within one hop of each other.  He could also stock up on a several turns of trade goods and deliver them to different colonies that are close to one another.  These are easier said than reliably accomplished, sadly.  Carrying multiple good types or many of a good at once requires many pods, which dilutes warp and other potentially important percentages discussed below.  More important to a purist trading vessel, there are a great many ships also trying to optimize their trading in exactly the same way, meaning that prices at colonies in efficient loops will constantly be driven down, while prices at a few fringe systems must become extreme before they achieve economic viability, likely too extreme to raise prices at loop worlds in a consistent manner.  That likelihood is difficult to solidly support without galactic analysis beyond the scope of this work, but ambitious readers are welcome to attempt it. 

            Also worth noting is that trade goods may be blown off alien vessels essentially for free.  (Thanks go out to Captain Andy of the Constitution for making this point)  The reliability of alien combat as a source of trade goods is probably directly purportional to the size of a player's warship, the larger the more aliens can be successfully harvested in this way.  A free slew of 3 $500 value trade goods would bring average income per turn up to ~$750 under reasonably optimal jump cost and time presumptions.  However, the average case might involve $150 trade goods, lowering the return to  ~$190 per turn for a 250% selling location two hops distant that isn't itself a good hunting location.  The sale value of the pod itself is worth considering, increasing the per turn income by $25 per  mediocre pod blown off at the average combat rate of once per 4 turns.  In any case, regardless of whether the goods are gotten or misbegotten, supply and demand has become a very painful thing under this warp paradigm.  The new localization of markets constantly works against any single captain’s attempts to achieve real efficiency for himself in the galactic commodities trade.

            All this isn’t to say that trading can never be an optimal choice in energy income at all.  Consider the example of someone who uses medicine as a primary income source.  Average income can be estimated via a process similar to the one above to be $700-$1000 energy a turn, as readily achievable.  A player who trades as well as engages in medicine sales might potentially add a significant sum to that average income. 

There are downsides, however.  Pods necessarily dilute percentages, including the sickbay percentage crucial to medicine value.  Further, the gain from trading as auxiliary to medicine hunting is unlikely to net as much as the income from trading as a primary activity.  When primarily trading, a ship is free to jump to star systems with the best deals, and to do so as often as possible.  Since oceans and particularly medicine delivery locations will not always line up with trading destinations and factories, choices are going to have to be made by the dual medicine dealer and commodity trader.  With some work the process could generally be streamlined to avoid any turns lost delivering medicines and minimize the number of turns not spent trading goods, but the difficulty is still there. 

Finally, the work is, well, work.  Work sucks, and lazy solutions are always preferable.  Consider the multiplication of effort required for a ship trying to use multiple available sources of income with trading.  Medicine, star skimming, intimidating, criminal hunting, asteroid mining, adventuring, and alien or player ship hunting all involve some degree of location restrictions that will inevitably conflict with the needs of procuring and delivering cargo.  The restrictions are a problem because maximizing per turn trade income requires finding the most efficient path between trading destinations, and location restrictions throw a big monkey wrench into that calculation.  For those familiar with the famous traveling salesman problem, all the factors involved rapidly make this situation far worse.  Star skimming, adventuring and asteroid mining also work best with undiluted percentages made worse by pods exactly like medicine hunting, as an added drawback of including trading as a secondary income strategy.  In short, trading sucks!  It just happens to not always be totally worthless.

Why is trading to be demonized in particular despite the location restrictions inherent in all the other available income sources?  Well, consider the level of restriction.  Medicine is perhaps the worst, with a random one-world-only delivery requirement.  However, the pickup can be done anywhere there is an ocean, which is quite broad.  Trading is a pile of options consisting of one pickup destination and seven or eight delivery destinations, with a commitment to engage in a given set of delivery destinations upon pickup.  That doesn’t sound so bad to start, but there are two additional caveats; because of restrictions on how much of a good may be bought and sold in one turn and the lowering of prices as a good is delivered, trading is most efficient with high value goods, reducing the pool of reasonably profitable origin and delivery locations drastically.  Trading is also only efficient if goods are delivered to whatever colonies have high prices, further lowering the pool of potential delivery points to only two or three destinations per factory.  Without even attempting to numerically account for the chance that someone will ruin the sale price at your intended destination just before you arrive, the location strictures situation for trading goods is perfectly awful.

For further comparison, adventuring can theoretically be done almost anywhere.  As a practical matter, its efficeincy as a source of income increases with officer skill, raising the number of adventures that are performable out of those found, and sensor %, revealing adventures unknown to available databases as well as eliminating the one turn delay associated with exploration.  Asteroid mining can be done at an abundance of locations with no origin or destination requirements.  Star skimming can be done at even more locations, with the corresponding offsetting factor of solar flares.  Alien hunting is widely available.  Player hunting is less so, but I am not convinced that player hunting is a terrific income strategy in any case, be it labeled piracy or not.  Intimidating may be done at any homeworld location where the effects of kamikaze tactics may be minimized, generally but not directly increasing with ship size, as the minimization is subject to optimizations like a high sensor percentage.  Of course, intimidation requires a high power index, and intimidation income is somewhat unpredictable since it depends on the time since someone else last intimidated.  Intimidation might involve significant warp costs and travel time that could cut into average profit.  Anything that potentially nets +$1000 per turn at a fair number of locations isn't to be disregarded, though.  To paint with a broad brush, trading efficiency strictures due to location requirements wind up being far more restrictive than the other readily available forms of income, making it a problematic choice of activity at best.

            Our kindest regards,
            FUI Public Essay Series, Article 1

Coming soon in our public essay series, ‘How I Learned to Quit Worrying and Sell All My Warp Drives’, or possibly: ‘The Insane Player’s Guide to Demo Ship Design’.

For questions, comments, suggestions, or spotted errors, please feel free to contact FUI Here or the author directly Here.  While acknowledging that some educated guesswork is often unavoidable in this sort of analysis, we strive for accuracy in every detail and welcome corrections and improvements from the community.