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Is It More Profitable to Buy Your Own Products?
Categories: Main Page
Last Modified: February 21, 2007 15:02
Article ID: 10053

You can supply and buy your own products by structuring your Holding so that, for example, you buy a raw material Licence which can supply an intermediate Licence which can supply an
end-consumer Licence. Scenario - buy Iron Ore, High Grade Steel and an automobile Licence. Your High Grade Steel Licence would require Iron Ore to produce steel - your motor vehicle Licence would require high grade steel to produce motor vehicles. However, it does mean that you must overstock the Licence, in order to have stock available to your own companies during the material buying process. Overstocking attracts penalty discounts on sales.

GO (Get Offers) automatically offers your own products first and no "Get Offers" fee is paid. If your own product is out of stock, then you are offered stock in the usual GO rotation or buy the National Industry. The advantages is the saving in the Get Offers fee and the ability to sell your own stock more quickly - selling to yourself at every turn.

By upsizing your raw or intermediate licence you can drive down prices of the materials you buy and make substantial savings in material costs, thereby increasing the profits of your consumer licence, which would be partially at the expense of your supply sector licences

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