I dont know what I just did...

AustraliaConnect · **on:** April 06, 2008, 04:12:47 am

I clicked a button and it said I offered to be a broker to something...
HELP!

dktc · **Reply #1 on:** April 06, 2008, 05:23:33 am

Self help = read the fantasic wiki

Thanks_for_the_upgrade · **Reply #2 on:** April 08, 2008, 07:10:17 am

You brokered a plane for me for a tidy profit.

Thanks.

As a side note, this is meant only for fun... But after an in game private message, he offered to go ahead and let me have the plane if I explained how the brokering worked.

:D:D:D Yea, it's in the air already.

Hot Drink · **Reply #3 on:** April 08, 2008, 09:17:21 am

How much markup for the planes bokerage

zkvac · **Reply #4 on:** April 08, 2008, 09:40:40 am

Quote from: "Hot Drink"

How much markup for the planes bokerage

It depends what the player that needs a plane brokered set it as. If you are wanting a plane brokered, a higher markup will attract brokers, but will cost you more.

Thanks_for_the_upgrade · **Reply #5 on:** April 09, 2008, 04:34:34 am

I think I put them in at 15 and 20% just to entice people to buy from me rather than buy for themselves and ergo, be in direct competition.

One person I think is only brokering and selling because they're having problems with the Safari glitch.

yourefired · **Reply #6 on:** April 09, 2008, 04:48:32 pm

Speaking of brokering, I just realized that if you broker a plane that takes 24 hours to build at 10%, you just financed it at 120% APR. Not even credit card companies are allowed to charge that kind of interest.

Now it's a different story when you broker a 747 at 10% (in which case you financed it at 12%-which is more reasonable) but still. That's a little, um, usurious.

Not that I dislike the practice.....it gets you into a plane faster, which is good, and you're basically leveraging someone else's money, which is also good. But um 120% APR...hmm.

dktc · **Reply #7 on:** April 09, 2008, 05:40:37 pm

See it as a private loan company instead of a commercial bank.

yourefired · **Reply #8 on:** April 09, 2008, 07:19:48 pm

Quote from: "dktc"

See it as a private loan company instead of a commercial bank.

If you charge more than like 25% or so, that's probably loan sharking....lol.

dktc · **Reply #9 on:** April 09, 2008, 07:32:05 pm

Depends on the inflation rate I guess :wink:

Thanks_for_the_upgrade · **Reply #10 on:** April 09, 2008, 08:10:15 pm

quote="yourefired"]Speaking of brokering, I just realized that if you broker a plane that takes 24 hours to build at 10%, you just financed it at 120% APR. Not even credit card companies are allowed to charge that kind of interest.

Now it's a different story when you broker a 747 at 10% (in which case you financed it at 12%-which is more reasonable) but still. That's a little, um, usurious.

Not that I dislike the practice.....it gets you into a plane faster, which is good, and you're basically leveraging someone else's money, which is also good. But um 120% APR...hmm.[/quote]

I'm not sure what you're driving at. The logic or the practice.

Let's say I have 4M cash and want to buy a 4M plane. Since I'm only fronting 35% plus a variable "brokerage fee" (let's say 5% for this example), I'm putting down 1.6M up front with 2.4M still left over, which I could then use to broker ANOTHER plane at the same time. If I have a little more cash I could even broker a THIRD plane at the same time.

Assuming they get picked up at the same time, I'm paying 600,000 for the benefit of getting three planes in the same time period as I would get one. Obviously the higher you offer your mark up too, the more likely it is to be accepted.

Secondly, if each of these planes can earn me a profit of 300,000 per day, those two extra planes I brokered already pay off that 600,000 brokerage mark up in one game day.

Whenever you buy a plane on 133% mark up or broker one at a mark up, you need to weigh the price overrun against the DOP that you are forbearing by NOT paying the mark up. Paying 15 million euro more for a plane, versus a 250k DOP (6 million MOP) is a bad idea, but if the DOP for the plane can be 1 million then it's a no brainer.

yourefired · **Reply #11 on:** April 09, 2008, 09:11:39 pm

My point is that if you look at brokering as a form of financing, the "interest rate" is usurious. That's the way I look at it-it's a short term loan for the amount of the price of the plane plus markup minus down payment.

dktc · **Reply #12 on:** April 09, 2008, 09:19:12 pm

The issue is that interest rate should be compared to potential return of investment when concerning financial leverage. The return on investment in AM is a lot higher than in real world. Interest rate is not really that high when compared to what you could get out of it. Real world interest rate and brokering in AM are not technically comparable, at least not by figure solely.

yourefired · **Reply #13 on:** April 09, 2008, 09:43:37 pm

Well in the case of like a 30 million euro plane, I just write off the interest I pay from financing through a broker as a cost of doing business, because even at 10% it's only 3 million, not a lot of money frankly. But I have to consider ROI when I decide if I'm going to finance, say, a concorde through a broker, since the debt service is like 35 million (equivalent to the price of a DC9-50) at 10%. As amounts go up it becomes a little harder for me to just write off the brokerage cost....

Thanks_for_the_upgrade · **Reply #14 on:** April 09, 2008, 11:24:56 pm

All I know is that brokering has given me a profound edge in the last three rounds. I started a year and a half late the first time and finished #9 in the game. Last round I started on time and won, this round I'm #1 again with a 21.2% value lead.

Only this round have a gone with the approach of essentially bribing people to stay out of my way. The girl that was brokering for me at first was at one point #1 because by offering 20% she DID make a profit, but she also did not have a plane in the air making money. The 800,000 euro she earned in that 24 hour period was probably 30-70% less than what she could have earned by buying the plane for her personal use.

Of course on the other hand, they're only brokering at this point due to the Safari burp.