Why should I build a Warehouse?

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Why should I build a Warehouse?

Postby Kit on Sat Oct 25, 2008 8:31 pm

I have had a number of players ask me why it's worth building a warehouse.

While it is true that you can create a profitable company with only factories and stores, a warehouse will increase your profits in 3 ways.

  1. It is a place to store excess goods so that your factories can always operate efficiently.
  2. It gives you access to the market
  3. It gives you access to supply contracts

Let's examine each of these in more detail.

Storing Goods

Your factory will only operate at 100% efficiency if at the start of the turn it contains full supplies for all its inputs and if there are no goods in the output storage. This is because to produce goods it must fully consume the inputs and place the newly build product in the output storage. If there are already some goods in the output storage then it will only produce goods to fill the open space.

Example: If the factory would normally produce 12 goods, but there are 5 goods sitting in the output storage then only 7 goods will be produced this turn. It will only consume 7/12ths of the inputs. It will, however, still have to pay full labor costs. Just because your workers are not productive, does not mean that they don't still want to be paid.

Therefore it is important to have a warehouse with sufficient space to hold any goods produced by your factory, but not sold on the market, or used in your stores.

The turn sequence is as follows: Stores Sell, Factories produce, Warehouses Buy, Factories Buy, Stores Buy.

Thus your factories produce goods, they are sold to your warehouse who holds them until your store is ready to buy them. Over time excess may build up at which point you can increase the marketing in your stores to sell more units, lower your prices to sell more units, offer them via a supply contract, or offer to sell them on the open market.

In any case, you will maximize profits when your stores have full stockpiles, factories have full inputs, and factories have empty outputs. Warehouses can help absorb or supply those extra units when you are away from your computer.

Access to the Market

By default a warehouse will buy and sell goods only from your own factories and stores. But by turning off the internal sales only (Image) you gain access to the market, letting other players either buy or sell the goods is your factory. If offering to sell goods to the market you may want to set the price higher than you would if only selling to your stores (you might have to change the buy price in your stores as well).

Selling goods an the market allows you to take advantage of the fact that you are not playing the capitalism game alone, rather you are playing on the Internet with other players.

Access to Supply Contracts

Another way to obtain extra goods, or sell off excess goods is to use supply contracts. A supply contract is simply an agreement between two companies to transfer goods from one company to another for a set period of time for a specific price. This allows you to obtain or sell a known amount of goods each turn. This can be a great way to cope with an excess or deficit of production capacity and keep your warehouse from either running out of, or filling up with, a particular good.

To set up a supply contract go to the warehouse storage unit and click the supply contract button (Image). This will take you to a page that will let you set all the parameters for the contract.

Final Thoughts

As you can see warehouse give you important control over your excess production and can be used to keep your stores and factories producing at peak efficiency. By keeping your company operating efficiently you will be on track to earn maximum profits.
Kit
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Re: Why should I build a Warehouse?

Postby Shimizu on Wed Jun 17, 2009 3:58 pm

Thank you for explaining this so well ...;)

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Re: Why should I build a Warehouse?

Postby toastmachine on Wed Jun 17, 2009 10:51 pm

the guide is a little outdateded. Factories always produce "full" regardless of wherehouse space nowdays.
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Re: Why should I build a Warehouse?

Postby imberzionizta on Thu May 24, 2012 1:42 pm

Kit, I would like to ask you about the benefits of having supply contract against the market either to buy or sell.

Others players opinions are welcome!
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Re: Why should I build a Warehouse?

Postby Kit on Thu May 24, 2012 11:57 pm

When you buy via an automatic contract from another player you don't pay any market overhead. You just pay the midpoint of the markets bid and ask prices. So both player benefit some by selling direct rather than going through the market. The disadvantage is that you are locked into the contract for some period of time.

With a fixed price contract you can set the price at whatever you can get another player to accept. This can be a way to bet that the market will move in one direction or another.

-- Kit
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Re: Why should I build a Warehouse?

Postby Alexander on Sat Jul 21, 2012 12:25 am

You mention in your dialogue that we can "turn on internal sales". How do I do that?
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Re: Why should I build a Warehouse?

Postby Kit on Mon Aug 06, 2012 11:35 pm

Goods in a warehouse are not automatically sold on the market unless there is no more space in the warehouse.

Warehouses are thus internal sales only by default. This changed quite a while back, but after the above guide was written.

-- Kit
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