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With so many Logistics Management companies reporting income levels that would make Jeff Bezos blush, speculation mounts that profits will soon be nerfed. But is this likely?
It's just over a month since the Logistics Management company was released, and the official figures say that the 72 firms currently in operation have made a combined total of $67,609,593,118 so far. Company experts have suggested that Logistics firms are massively overpowered right now, and this figure will do little to dissuade them. But are they right? Can we expect to see Logistics Management firms nerfed sometime soon? We spoke to Chedburn and some of the top Logistics company owners to find out.
The top Logistics Management company in operation is The Pony Express, a five-star firm owned by Rockem which has an income of $570,900,000 at the time of writing. Fifteen five-star companies are running at present, with M_S_Gamer's K&S Logistics Hiring representing the low end of the income scale at $410,000,000 - that's still a pretty penny.
By comparison, top TV companies are earning over a billion dollars each, with the best-performing Oil Rigs also outstripping the Logistics Company by a few hundred million. It is thought unlikely that the Logistics companies will earn much more than they are currently doing, though, as despite what some people believe, a company's income is not affected by star rating - it's actually vice versa - so reaching ten stars will not increase profits. Chedburn elaborates below:
"Yeah, I would say they're near their peak. There are potentially things like 'Customer loyalty' which could be built up over time by reducing their costs/income now and cashing in in the future... it's possible that a company that finds a perfect combination of employees or builds up customer loyalty could increase it."
Nevertheless, some believe that the amount LM's are currently earning is still excessive. Tarelli, the owner of the four-star Tarellis Logistics, feels this is especially true in the context of the income made by Mining Corporations.
"Probably a bit [OP]. The fact I can easily make as much as a salt mine while lowering takings to be safe as I build a strong team is a bit silly."
Indeed, the $4.5 billion startup cost of a Mining Corp does not compare favourably with the $1.8 billion required to begin a Logistics Firm. Their respective incomes are uneven too; Rekker's ten-star A SALT & BATTERY company is currently the highest earning Mining Corp, with its income of $462,255,200 being $108,644,800 lower than that of Rockem's Logistics firm. On reflection, however, this comparison seems to illustrate that Mining Companies don't earn enough, rather than making a case for a reduction in Logistics company profits.
Pictured: A typical salt mine, many of which have become unprofitable due to the combined effects of Brexit, Donald Trump's election, and the final season of Game of Thrones.
Moreover, many of the Logistics company owners I spoke to aren't making the insane profits some people suggest. SoberRage said that "Life sucks to be a logistic boy... and people demand so high in salary... so I'm not making anything". Mnky_Jung_ling of the delightfully named Retarded children's is in a similar situation, telling the TCT that "I ain't making a penny, spending all money on advertisement cost mostly to star up weekly. But making 20 to 25 mil is possible if you are not worried about leveling star up."
Despite what Mnky suggests, many company owners have managed to level up to five stars and earn profits in excess of those earned by her firm. UberDaddy is one such individual, with his five-star S.S. Logistics Inc. taking $26.5 million profit most days. He achieves this by paying $10 million in advertising - something he has recently increased to $15 million in the hopes of securing an $81 million contract - but he knows he'll have to decrease his overall expenditure if he wants to make more profit.
"The company does seem to be producing some profits, though I will probably need to lower the pay of my employees in order to get more profits, but that will mean losing them. I have a few friends with TV companies, and they say they do not sell as high contracts as we did for being a 0* and them being a 7* or 8* TV company, some are mad they tell me."
Pappilon, the owner of Shade Logistics HIRING, feels that Logistics companies were overpowered at the start, but they've now balanced out due to the advertisement and wage costs being on par with those of TV and Oil companies. He also feels that competition among Logistics firms is only starting to build, and that this will affect everyone's incomes eventually - with some companies already running at a loss today.
At the other end of the scale, Junkie of GEODIS ~ H I R I N G believes he is making the most profit, with his firm's overheads being as low as $25 million in some weeks. Scalper was another director who was willing to share his books with us, revealing that he pays $15 million in advertising per day, and his employees between $500k - $4.5 million, all resulting in a weekly profit of between $50-150 million. However, it should also be noted that at one point, Scalper's advertising and wage bills were $25 million and $31 million respectively, so it may pay to start big and reduce expenditures gradually, to ensure you get a head start on your rivals.
Tarelli's company is yet to reach four-stars, but he seems to be making huge profits too. His $16.25 million wage bill is smaller than most, and this means he can spend $23.75 million on advertising, resulting in a $38.5 million daily profit from takings of $78.5 million.
"On mobile, so a bit of rough maths means I need 170 days to make my money back. Some people are so stupid, I saw one offering 5m daily, and they wonder why they make no money."
Pictured: Business 101.
Wages are often the defining factor in whether a company can make a profit, but as usual, it seems many directors are paying over the odds and losing profit as a result. Mnky_Jung_ling says she's paying $3.5-4 million for the top four positions, with the rest averaging between $3-4 million. UberDaddy's top salaried employee earns $4.5 million, and he thinks that's too much. Missrosenqvist is paying roughly the same, and she feels that supply and demand are dictating these absurdly high wages.
"I think the profit is good. But due to high employee demand, you get reduced profit. If we had normal pay, the profit would be too good, and I believe it would get nerfed and still think it will soon enough."
Logistics company wages have been inflated by the existence of a poaching culture between rival firms, which DoubleG told me has resulted in some staff commanding up to $7 million per day, even those with terrible working stats. SoberRage, for example, has found himself paying $42 million in wages now, with one employee earning $6 million per day - no wonder he's not making any money!
Furthermore, Chocobo, the owner of Booty Bay Cargo, believes that the competition for staff provided by TV Networks and Oil Rigs is "driving up wages even more while having a lower income ceiling". He adds that "I'm guessing that's a compensation for the lower startup cost, and perhaps the 10* special, but we'll have to wait and see what that's going to give."
Yet despite these high wage demands, I haven't spoken to many directors who have found it hard to find employees, even if they do have to pay them a little more than usual. Pappilon managed to attract a good-sized staff purely through curiosity, and he claims he was able to fill his roster out due to him being on the companies on the first page of the listings. And Tarelli says he has found employees easy to come by too, but that may be because he's a well-known name in the companies scene.
Pictured: Tarelli, the Torn companies very own Messiah.
As Chocobo implied earlier, the high-level specials may help struggling Logistics companies to reduce their wage bills, but only if directors can convince employees of their usefulness. It seems that few find the one-star Efficiency perk worth the cost, with Missrosenqvist having calculated that this special, which provides speed boosts in return for job points, equates to one job point for four energy - she notes this compares poorly to a farm which gives you the equivalent of seven energy spent.
On the other hand, many directors said that the three and five-star specials have proven extremely popular. DoubleG's team are enjoying the additional mission contract selections provided by the Organised perk, and so are Rockem's staff, as it allows them to keep "more attacking missions open between chaining while not to waste too much e during training." Scalper's company found it useful too, "especially as players tend to hold contracts that will use a lot of E until they chain - this allows more options and multiple contracts to be completed together."
The five-star Repatriation special allowing players to fly back from overseas while receiving medical attention should also prove useful during war, says Rockem, and peacetimes too, as it will help endure "attacks from sad losers." Missrosenqvist added that "it is purely here for the people who fly and travel a lot and people who want to help boost their factions companies or simply just make money." Either way, it seems many players are using Repatriation to great effect already.
But most employees have been told to hold their points until the seven-star Contraband perk is made available, allowing them to receive a random shipment of foreign items for 50 job points. This special is an unknown quantity, as nobody is quite sure whether it will represent good value for money. Scalper has already started a forum thread in anticipation of companies reaching seven stars, with the hope being that players will share their returns so an average value can be calculated.
Until then, we can but speculate on the value of this perk. SoberRage points out that Adult Novelty stores allow you to swap 20 job points for a $4 million-valued E-DVD, giving us a point value of roughly $200,000 if we look at the best possible exchange rate. This means that the 50 job points required for Contraband would need to pay out at least $10 million to make it worthwhile - I've been led to believe that on most occasions, it will.
Pictured: How much will you be worth, long-necked fren?
The valuation of the ten-star special, Logistics Report, isn't as easy to estimate. For 250 job points, players can boost the productivity of any other company (aside from Logistics Companies) for seven days. This item will be more valuable to low-star companies as its effects are reduced the more stars the target company has. Several directors seemed to believe the report will sell for a huge fee when it becomes available - HonorableRrez of Unrelenting Trucking suggests $70-90 million - but Tarelli feels the value will drop once competition and knowledge enter the equation.
"I will imagine the first 10* companies will probably set a price amongst themselves which will be quite high for the 10* time will tell on how effective that special will actually be. And when, for example there are 10 10* companies that makes 160 people selling these boosts so I should imagine the value will lower."
One thing which won't be dropping is the value of the contracts awarded to Logistics Management companies, despite the hefty profits they stand to make from the seven and ten-star specials potentially adding to their overpowered nature. When the Logistics firms were released, their directors noticed they were selling lots of Local and Domestic contracts, with Global contracts rarely making an appearance in their sales. This was changed a short while after, with Logistics firms now prioritising Global contracts over others as D3vl of HT-Logistics notes.
"For now, it seems you sell either just one of the contracts only and not a mix between them like it did in the first week."
This change was not introduced to nerf Logistics Firms, however; Global Contracts were always supposed to be prioritised, with Chedburn telling the Times that an error upon release led to large contracts not working as intended. Nevertheless, the likes of Tarelli, Rockem, and Chocobo aren't a fan of this major contract style, with the latter claiming that it "took a bit of fun out of the pricing game and made competing a lot easier." DoubleG added the following:
"Competitivity will be an issue down the line with the current sales structure it's kinda one contract a day or peanuts so one or two bad days could cost you a star hopefully this changes as we star up we get additional contracts otherwise you will have the same profitability from 2* to 10*"
Chedburn responded by saying that "If your company is in a position to, you'd chase the high contracts over anything else?", adding that "From what I've seen, their overpricing is not building them any 'customer loyalty' meaning they are literally capped out, while other companies who are taking a more careful approach are actually building their trademark."
"That's how the system has been built; the company focuses the highest contracts above all else. I don't really understand the issue with that. That's ideally what the company should be doing. I don't have any plans to change the Logistics Firm, and am not aware of any issues currently."
The last part of Chedburn's statement should allay directors' fears that their profits are about to be nerfed. Barring unforeseen events, the Logistics Management companies will continue to operate as they have done already, and with valuable perks on the horizon, the future looks bright for those who have chosen to invest in this exciting new industry.
Even SoberRage says he won't be tempted to sell his company, despite it not making a profit just yet. Everyone seems keen to stick with what they've got and hold on until the ten-star specials make their appearance. However, Scalper predicts that the current rate of companies gaining one star per week will likely slow down soon, meaning that it will be several months at least before anyone reaches the ten-star limit.
When they do, and the power of the ten-star Logistics Contract finally comes to light, only then will we know the true value of the Logistics Management company.
The top Logistics Management company in operation is The Pony Express, a five-star firm owned by Rockem which has an income of $570,900,000 at the time of writing. Fifteen five-star companies are running at present, with M_S_Gamer's K&S Logistics Hiring representing the low end of the income scale at $410,000,000 - that's still a pretty penny.
By comparison, top TV companies are earning over a billion dollars each, with the best-performing Oil Rigs also outstripping the Logistics Company by a few hundred million. It is thought unlikely that the Logistics companies will earn much more than they are currently doing, though, as despite what some people believe, a company's income is not affected by star rating - it's actually vice versa - so reaching ten stars will not increase profits. Chedburn elaborates below:
"Yeah, I would say they're near their peak. There are potentially things like 'Customer loyalty' which could be built up over time by reducing their costs/income now and cashing in in the future... it's possible that a company that finds a perfect combination of employees or builds up customer loyalty could increase it."
Nevertheless, some believe that the amount LM's are currently earning is still excessive. Tarelli, the owner of the four-star Tarellis Logistics, feels this is especially true in the context of the income made by Mining Corporations.
"Probably a bit [OP]. The fact I can easily make as much as a salt mine while lowering takings to be safe as I build a strong team is a bit silly."
Indeed, the $4.5 billion startup cost of a Mining Corp does not compare favourably with the $1.8 billion required to begin a Logistics Firm. Their respective incomes are uneven too; Rekker's ten-star A SALT & BATTERY company is currently the highest earning Mining Corp, with its income of $462,255,200 being $108,644,800 lower than that of Rockem's Logistics firm. On reflection, however, this comparison seems to illustrate that Mining Companies don't earn enough, rather than making a case for a reduction in Logistics company profits.
Pictured: A typical salt mine, many of which have become unprofitable due to the combined effects of Brexit, Donald Trump's election, and the final season of Game of Thrones.
Moreover, many of the Logistics company owners I spoke to aren't making the insane profits some people suggest. SoberRage said that "Life sucks to be a logistic boy... and people demand so high in salary... so I'm not making anything". Mnky_Jung_ling of the delightfully named Retarded children's is in a similar situation, telling the TCT that "I ain't making a penny, spending all money on advertisement cost mostly to star up weekly. But making 20 to 25 mil is possible if you are not worried about leveling star up."
Despite what Mnky suggests, many company owners have managed to level up to five stars and earn profits in excess of those earned by her firm. UberDaddy is one such individual, with his five-star S.S. Logistics Inc. taking $26.5 million profit most days. He achieves this by paying $10 million in advertising - something he has recently increased to $15 million in the hopes of securing an $81 million contract - but he knows he'll have to decrease his overall expenditure if he wants to make more profit.
"The company does seem to be producing some profits, though I will probably need to lower the pay of my employees in order to get more profits, but that will mean losing them. I have a few friends with TV companies, and they say they do not sell as high contracts as we did for being a 0* and them being a 7* or 8* TV company, some are mad they tell me."
Pappilon, the owner of Shade Logistics HIRING, feels that Logistics companies were overpowered at the start, but they've now balanced out due to the advertisement and wage costs being on par with those of TV and Oil companies. He also feels that competition among Logistics firms is only starting to build, and that this will affect everyone's incomes eventually - with some companies already running at a loss today.
At the other end of the scale, Junkie of GEODIS ~ H I R I N G believes he is making the most profit, with his firm's overheads being as low as $25 million in some weeks. Scalper was another director who was willing to share his books with us, revealing that he pays $15 million in advertising per day, and his employees between $500k - $4.5 million, all resulting in a weekly profit of between $50-150 million. However, it should also be noted that at one point, Scalper's advertising and wage bills were $25 million and $31 million respectively, so it may pay to start big and reduce expenditures gradually, to ensure you get a head start on your rivals.
Tarelli's company is yet to reach four-stars, but he seems to be making huge profits too. His $16.25 million wage bill is smaller than most, and this means he can spend $23.75 million on advertising, resulting in a $38.5 million daily profit from takings of $78.5 million.
"On mobile, so a bit of rough maths means I need 170 days to make my money back. Some people are so stupid, I saw one offering 5m daily, and they wonder why they make no money."
Pictured: Business 101.
Wages are often the defining factor in whether a company can make a profit, but as usual, it seems many directors are paying over the odds and losing profit as a result. Mnky_Jung_ling says she's paying $3.5-4 million for the top four positions, with the rest averaging between $3-4 million. UberDaddy's top salaried employee earns $4.5 million, and he thinks that's too much. Missrosenqvist is paying roughly the same, and she feels that supply and demand are dictating these absurdly high wages.
"I think the profit is good. But due to high employee demand, you get reduced profit. If we had normal pay, the profit would be too good, and I believe it would get nerfed and still think it will soon enough."
Logistics company wages have been inflated by the existence of a poaching culture between rival firms, which DoubleG told me has resulted in some staff commanding up to $7 million per day, even those with terrible working stats. SoberRage, for example, has found himself paying $42 million in wages now, with one employee earning $6 million per day - no wonder he's not making any money!
Furthermore, Chocobo, the owner of Booty Bay Cargo, believes that the competition for staff provided by TV Networks and Oil Rigs is "driving up wages even more while having a lower income ceiling". He adds that "I'm guessing that's a compensation for the lower startup cost, and perhaps the 10* special, but we'll have to wait and see what that's going to give."
Yet despite these high wage demands, I haven't spoken to many directors who have found it hard to find employees, even if they do have to pay them a little more than usual. Pappilon managed to attract a good-sized staff purely through curiosity, and he claims he was able to fill his roster out due to him being on the companies on the first page of the listings. And Tarelli says he has found employees easy to come by too, but that may be because he's a well-known name in the companies scene.
Pictured: Tarelli, the Torn companies very own Messiah.
As Chocobo implied earlier, the high-level specials may help struggling Logistics companies to reduce their wage bills, but only if directors can convince employees of their usefulness. It seems that few find the one-star Efficiency perk worth the cost, with Missrosenqvist having calculated that this special, which provides speed boosts in return for job points, equates to one job point for four energy - she notes this compares poorly to a farm which gives you the equivalent of seven energy spent.
On the other hand, many directors said that the three and five-star specials have proven extremely popular. DoubleG's team are enjoying the additional mission contract selections provided by the Organised perk, and so are Rockem's staff, as it allows them to keep "more attacking missions open between chaining while not to waste too much e during training." Scalper's company found it useful too, "especially as players tend to hold contracts that will use a lot of E until they chain - this allows more options and multiple contracts to be completed together."
The five-star Repatriation special allowing players to fly back from overseas while receiving medical attention should also prove useful during war, says Rockem, and peacetimes too, as it will help endure "attacks from sad losers." Missrosenqvist added that "it is purely here for the people who fly and travel a lot and people who want to help boost their factions companies or simply just make money." Either way, it seems many players are using Repatriation to great effect already.
But most employees have been told to hold their points until the seven-star Contraband perk is made available, allowing them to receive a random shipment of foreign items for 50 job points. This special is an unknown quantity, as nobody is quite sure whether it will represent good value for money. Scalper has already started a forum thread in anticipation of companies reaching seven stars, with the hope being that players will share their returns so an average value can be calculated.
Until then, we can but speculate on the value of this perk. SoberRage points out that Adult Novelty stores allow you to swap 20 job points for a $4 million-valued E-DVD, giving us a point value of roughly $200,000 if we look at the best possible exchange rate. This means that the 50 job points required for Contraband would need to pay out at least $10 million to make it worthwhile - I've been led to believe that on most occasions, it will.
Pictured: How much will you be worth, long-necked fren?
The valuation of the ten-star special, Logistics Report, isn't as easy to estimate. For 250 job points, players can boost the productivity of any other company (aside from Logistics Companies) for seven days. This item will be more valuable to low-star companies as its effects are reduced the more stars the target company has. Several directors seemed to believe the report will sell for a huge fee when it becomes available - HonorableRrez of Unrelenting Trucking suggests $70-90 million - but Tarelli feels the value will drop once competition and knowledge enter the equation.
"I will imagine the first 10* companies will probably set a price amongst themselves which will be quite high for the 10* time will tell on how effective that special will actually be. And when, for example there are 10 10* companies that makes 160 people selling these boosts so I should imagine the value will lower."
One thing which won't be dropping is the value of the contracts awarded to Logistics Management companies, despite the hefty profits they stand to make from the seven and ten-star specials potentially adding to their overpowered nature. When the Logistics firms were released, their directors noticed they were selling lots of Local and Domestic contracts, with Global contracts rarely making an appearance in their sales. This was changed a short while after, with Logistics firms now prioritising Global contracts over others as D3vl of HT-Logistics notes.
"For now, it seems you sell either just one of the contracts only and not a mix between them like it did in the first week."
This change was not introduced to nerf Logistics Firms, however; Global Contracts were always supposed to be prioritised, with Chedburn telling the Times that an error upon release led to large contracts not working as intended. Nevertheless, the likes of Tarelli, Rockem, and Chocobo aren't a fan of this major contract style, with the latter claiming that it "took a bit of fun out of the pricing game and made competing a lot easier." DoubleG added the following:
"Competitivity will be an issue down the line with the current sales structure it's kinda one contract a day or peanuts so one or two bad days could cost you a star hopefully this changes as we star up we get additional contracts otherwise you will have the same profitability from 2* to 10*"
Chedburn responded by saying that "If your company is in a position to, you'd chase the high contracts over anything else?", adding that "From what I've seen, their overpricing is not building them any 'customer loyalty' meaning they are literally capped out, while other companies who are taking a more careful approach are actually building their trademark."
"That's how the system has been built; the company focuses the highest contracts above all else. I don't really understand the issue with that. That's ideally what the company should be doing. I don't have any plans to change the Logistics Firm, and am not aware of any issues currently."
The last part of Chedburn's statement should allay directors' fears that their profits are about to be nerfed. Barring unforeseen events, the Logistics Management companies will continue to operate as they have done already, and with valuable perks on the horizon, the future looks bright for those who have chosen to invest in this exciting new industry.
Even SoberRage says he won't be tempted to sell his company, despite it not making a profit just yet. Everyone seems keen to stick with what they've got and hold on until the ten-star specials make their appearance. However, Scalper predicts that the current rate of companies gaining one star per week will likely slow down soon, meaning that it will be several months at least before anyone reaches the ten-star limit.
When they do, and the power of the ten-star Logistics Contract finally comes to light, only then will we know the true value of the Logistics Management company.
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