In the article High Finance by Terry McInnes from JTAS #13
"After a character has reached his late 50's or early 60s - an age when rough and tumble adventuring loses its appeal, he may wish to . . . settle into the brokerage business. Cargo brokers help ship captains get increased prices for their goods and charge a percentage of the final price for their services. Brokers also arrange the sale of goods by planetside farmers and manufacturers to ship captains who invest in these cargoes for resale to another world."
Cargo Brokering. Wow. You can make an absurd amount of money with this little technique, all without the wear and tear of adventuring. I ran the numbers, keep reading and you'll see.
|So you're sure this cargo isn't illegal on this world, right? Ohhh-kay.|
Each captain presents the good they want to move. Of course, the PC has the option to pass on any deal if they don't think it will be profitable.
The PC and NPC negotiate a percentage of sale price for the service. While the article does not state this, I assume that the PC's Admin or Bribery skill [Book 7, which introduced Broker skill, did not drop until 3 years after this artice's publication date] acts as a +DM on the throw to seal the deal.
The first round of negotiations is for a 20% cut of the sale price. If that is not acceptable, the PC incurs a -DM and can try again for 15%, then 10%, then 5%. It is possible for the deal to fall apart and the PC gets no contract. Time to move on to the next customer.
The -DMs stack up with each failed round of negotiation. If your PC skill is only skill-1, you'll get either the 20% or 15%, or fail. The -DMs make the other two cuts difficult, then impossible to get. That seems backward to me.
I rolled 10 sets of contract negotiation, assuming a Broker of Admin-1.
Deal % Cut Result
1 20% sold Body Armor at a loss of 140,000
2 15% Sold Radioactive for 1.6 Mcr, earned 900,000
3 15% Sold Farm Machinery at a loss of 270,000
4 Lost No contract
5 15% Sold Tin for 1.18 Mcr, earned 178,200
6 Lost No contract
7 Lost No contract
8 Lost No contract
9 20% Sold Grain for 85,000, earned 17,000
10 Lost No contract
The article does not elaborate on what happens when the Broker fails to make bank for the client. Does the Broker get his contract percentage regardless? This does not sound right to me.
As given in the article, and no offence to Mr. McInnes, there is literally no down-side to being a Broker. In two weeks, more or less, the PC made 1,365,200 Credits without breaking a sweat, and with no risk to himself.
That's it, I'm retiring from adventuring and becoming a Broker!
A PC with skill-2 or skill-3 would make even more, surely. Fewer lost contracts, and greater likelihood of pushing the sale price above the purchase cost.
How to balance this?
Without some risk of loss to the PC, this mechanism becomes a bottomless ATM. Here are a few ideas I had about introducing some uncertainty and risk into the Brokerage business:
- If a Broker loses say half of the contract offers in a week, the next week's throw for number of contracts is decreased by -1 or -2. This DM stays until the Broker lands all their contracts in a week.
- If a Broker loses money for two of their clients in a week, the next week's contract negotiations face an additional -DM. Word's gotten around, and the Brokers reputation takes a hit.
- If a Broker loses money for the client, their fee is reduced, or the Broker is forced to pay the client for the difference!
- If a Broker loses money, an angry Captain may take direct action against the Broker (Mugging, robbery, forcing Legal Encounters with accusations of fraud, etc.)
The broker will be subject to taxes and regulations. No government is going to let that amount of money churn about untouched. I've always abstracted the brokerage fee as including the government fees, permits and such.ReplyDelete
A guy I've played with is a customs broker. Without him his company can't trade anything at all, and legally they require a certain number of brokers in their place, as only a licensed broker can sign off on transactions and certify that all the appropriate fees have been paid, that the thing is allowed though customs, and so on. He makes a salary working for a shipping company.
You also have to decide how much of your world's trade is speculative. In the real world, profitable trading routes are soon taken over by large companies who underbid all the others, and keep their ships at the absolute minimum standard, flagging them in some place which allows them to mistreat their crews.
That leaves the unprofitable trade routes for people who are desperate, like smaller shipping companies - and adventurers! And occasionally the unprofitable route pays off BIG.
You don't get ships just sitting around outside Broome waiting till the spot price of iron ore is just right so they can snag some and sail off to China with it. That iron ore is already accounted for years in advance.
So in a real economic system, there's actually not that much speculative trade.
As well, your broker can't do a trade every day. Notice that in the rules the crew spends a WEEK looking for a cargo, and only MAYBE gets one. That means the broker themselves can't be doing a trade every day, they're spending a week on each possibility. With this is mind, the broker is more like a used car or real estate salesman.
So your example is more like 14 weeks, and probably more.
Thank you for the insight! It may bring this more into balance by cutting down the frequency of spec-trade opportunities. Do you have any suggestions on what to do if the Broker can't push the sale price high enough for the customer to make a profit?Delete
Then the cargo won't move. But if the broker is smart, he'll try to persuade them to take the deal anyway. In the real world, many people take on 1-2 unprofitable jobs to build relationships in the hopes of getting a better job later on.Delete
"I know it sucks, guys, but... do this for me, as a favour. Then The Boss will owe us. And there's a bigger one coming soon!"
Remember too that the broker is not always working for the crew. Their loss may be someone else's profit.
"Six months ago, he was paying about $2,500 to ship a 40-foot container to California.ReplyDelete
“We just paid $67,000,” he said. “This is the highest freight rate that I have seen in 45 years in the business.”"
At the same time, there are ships around the world sitting idle because of quarantine rules, or because the shipping line owner went bust - and the crew are sitting on the ship waiting for it to be sold so they can get their six months' back pay.
Something to consider with the trade rules, you can look at it either way:
First, maybe there's some sort of crisis or boom which affects both the cost of goods, and the costs of shipping them.
Secondly, when you roll up a really good or bad price for something, is there a reason for it? What else is going on with that world or subsector that might have made prices go weird?
On the last page of Book 2 Starships, the text says, "Each must be paid his fee even if the seller decides not to sell his goods," which seems fair. After all, just because you don't feel like selling, that won't help the broker get that week of his life back.ReplyDelete