Tessy's Thinkatorium

Tess

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FAMOUS DESIGNERS
Vonatella Persace (Donatella Versace)
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Tess

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DETAILS

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Threads

 

Tess

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Negotiating with a Fee Schedule

A Fee Schedule (FS) is a comprehensive listing of fee maximums used to reimburse providers on a fee-for-service basis. Fee Maximums are agreed upon by the Galactic Senate (New Republic, FWA, ISC, etc), are only used in high cost, contract, or bulk dealings, and can be changed (raised or lowered) on a quarterly basis by a vote in the Senate if the need arises. The FS is priced in standard credits and no one can charge higher than 100% FS for a service or product.
  • Every product has its own FS (Food, Alcohol, Drugs, Freighters, Cruisers, etc)
  • Costs to "produce" a product can shift between 25-50% of FS depending on complications in variables.
  • Example: If you produce a product for 25 credits, the FS may say you can sell it for up to 100 credits. If it later costs you 45 credits to produce it due to a bad trade deal, you can still only sell it for up to 100 credits. You may have been happy to sell at 50 credits when it cost you 25 to make, but will not be happy with 50 credits when it costs 45 to make. You will push your sell price up closer to the cap to make the same profit - if possible.

Ruling-Class (very wealthy) Planets – Want to buy at less than 90%, Want to sell at as close to 100% as possible.

Upper-Class (wealthy) Planets – Want to buy at less than 80%, Want to sell at at least 90%.

Middle-Class Planets – Want to buy at less than 70%, Want to sell at at least 80%.

Lower-Class Planets – Want to buy at less than 60%, Want to sell at at least 70%.

Poor Planets – Want to buy at less than 50%, Want to sell at at least 60%.

Complications that can alter price:


Tight Deadline = higher price

Complications (production/trade) = higher price

Lack of Choice (sole provider) = higher price

Lack of Providers (few providers) = higher price

Lack of Buyers (few buyers) = lower price

Massive/Bulk/Long-Term Deals = lower price

Delayed/Stalled Deals = lower price

Diplomatic Sanctions = lower price


Example 1 of a trade deal using the fee schedule:

Ruling-Class Planet: We want 30 tons of your fresh produce.

Poor Planet: We will sell you 30 tons for 90% of fee schedule.

Ruling-Class Planet: We'll offer you 60%.

Poor Planet: 80%.

Ruling-Class Planet: 65%.

Poor Planet: 75%.

Ruling-Class Planet: Done.

Poor Planet: Then we are agreed. We will have the paperwork drawn up and the shipments will begin by end of day.

Outcome: Both planets are very happy. Poor Planet wanted at least 60% and got 75% (+15% profit). Ruling-Class Planet wanted the cost to be less than 90% and got 75% (-15% cost).


Example 2 of a trade deal using the fee schedule:

Middle-Class Planet: We want 30 tons of your high grade starship fuel.

Poor Planet: We will sell you 30 tons for 70% of fee schedule.

Middle-Class Planet: We'll offer you 60%.

Poor Planet: We want at least 67%.

Middle-Class Planet: No. We will not agree to 67%.

Poor Planet: Would you agree to 65%?

Middle-Class Planet: We can live with 65%.

Poor Planet: Then we are agreed. We will have the paperwork drawn up and the shipments will begin by end of day.

Outcome: Both planets are moderately happy. Poor Planet wanted at least 60% and got 65% (+5% profit). Middle-Class Planet wanted the cost to be less than 70% and got 65% (-5% cost).


Example 3 of a trade deal using the fee schedule:

Lower-Class Planet: We want 30 tons of your natural mineral.

Poor Planet: We will sell you 30 tons for 70% of fee schedule.

Lower-Class Planet: Are you insane? We'll offer you 50%.

Poor Planet: We want at least 67%.

Lower-Class Planet: No. We will not agree to 67%.

Poor Planet: Would you agree to 65%?

Lower-Class Planet: No. How about 55%?

Poor Planet: We can't agree to anything under 60%.

Lower-Class Planet: Then can we agree to 60%?

Poor Planet: <after some debate back and forth> Yes.

Lower-Class Planet: 60% it is. Have the paperwork drawn up.

Outcome: Both planets have met their minimum percentages for a profitable contract, but neither are particularly happy about it. Poor Planet wanted at least 60% and got it (but would have preferred more profit). Lower-Class Planet wanted the cost to be less than 60% but had to agree to it (may have to raise their own prices if they use the product they bought in the manufacturing of products they themselves sell).
 
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