Volu 7 Chapter 54 - Rise In Cost
The news of the new continent naturally stirred the appetites of all the countries, but they also understood that without the ability to travel on the seas, all discussion was aningless.
Compared to this, consolidating their own developnt was more important because only by doing this would there be a chance to grasp the chance to develop the new continent.
If they fell behind before this, then there was no need to ntion anything.
So once the news of the new continent was released bit by bit by the Frestech Chamber of Comrce, the other countries started investing more and more into developing their magic machine industries.
The companies under the Frestech Chamber of Comrce received many applications to cooperate every day from the various companies and countries of the continent. It had caused all the workers of the Frestech Chamber of Comrce to be swamped.
Actually, the busiest and the most popular was without a doubt the Frestech Household Magic Machine Chamber of Comrce led by Ankhto.
Household magic machines had already entered the hearts of the people, so everyone understood that household magic machines would make their lives more convenient and comfortable. There was more and more investnt into household magic machine companies being made.
Just in the first four months of the year, there were over a hundred companies that made applications to the Frestech Chamber of Comrce to purchase household magic machine technology. Among them included applications for all the current technology the Frestech Chamber of Comrce released.
In order to satisfy this large demand, the Frestech Chamber of Comrce agreed with the appeals of countless people and announced at the beginning of the year that they would be releasing another thirty seven household magic machine technologies. Among them would include technologies like the Magic Air Conditioner, the Magic Refrigerator, and other high end magic machines that they had never released before.
Like this, all of the Frestech Chamber of Comrce’s current household magic machine technologies were released. This made it so that all the other companies could produce the household magic machines that only the Frestech Chamber of Comrce could produce before, causing them to lose their monopoly.
Of course, the Frestech Chamber of Comrce still led all the other companies when it ca to technology and craftsmanship. Even if they had the sa things, the quality of the Frestech Brand was still better than the brands of the other companies.
Then adding the fact that the Frestech Chamber of Comrce had already beco the symbol of magic machines in the minds of the people, having a high fa and prestige, so no matter which country it was, the Frestech Brand was always the most popular product and never lacked sales.
Once June ca, this advantage had shown itself just like in the past years.
According to the report from the Frestech Household Magic Machine Chamber of Comrce, their sales had increased once again compared to last year. Just in the month of May alone, their sales had reached one million and seven hundred thousand gold coins.
But through detailed reports, they found that compared to last year, while the profit of the Frestech Household Magic Machine Chamber of Comrce had increased, it didn’t increase as much as their sales.
The reason for this was that as more and more household magic machine companies appeared, the price of raw materials kept increasing, as well as the cost in manpower. It had increased the base cost of these household magic machines, which had decreased their profits.
In the years that the Frestech Chamber of Comrce had been ford, the profit margins of the Frestech Brand household magic machines were at lowest 50% and were as high as a shocking 80%.
But as the household magic machines beca more and more popular, the Frestech Brand household magic machines’ profit margins kept dropping.
Based on the stats this year, among the Frestech Brand household magic machines, the one with the highest profit margins, the Magic Air Conditioner only had 30% profit margin. As for the lowest, the Magic Lamp, it only had less than 10% profit margins.
Based on this, one could say that the period of explosive profits from household magic machines had already passed.
Although Xu Yi had already expected this, he never thought that it would co so quickly.
It had to be known, on earth, the household appliance industry had to develop for several decades to reach this level.
On the Sines Continent, it had only been sixteen years since the household magic machines had appeared.
But if he thought about it, Xu Yi could only admit that he was the one that created this situation.
Because he always had the idea of promoting the magic machine industry, he didn\\\'t keep the household magic machine technology at all. There were many companies that could produce household magic machines, so they shared the market with the Frestech Brand, creating competition that reduced the profits of the Frestech Brand.
And when it ca to the increase in materials and manpower, it couldn’t be said that it was unrelated to him.
First when it ca to manpower.
Before the Frestech Chamber of Comrce, although there wasn’t a fixed value for the companies hiring their staff, for most staff, most companies wouldn’t give them a high wage.
Seventeen years ago, when the Frestech Chamber of Comrce was ford, the highest wage in Banta City was only around ten gold coins a year.
When the Frestech Chamber of Comrce was ford, they actually started off by giving their workers five gold coins a month.
This was over sixty gold coins a year!
This salary for most people in the Banta City and the Lampuri Kingdom that could barely fill their stomachs was an extrely large amount. Almost all the people of Banta City had thought that the Frestech Chamber of Comrce and Xu Yi were crazy.
But it was also because of this that the Frestech Chamber of Comrce was able to quickly recruit enough workers at that ti, quickly increasing their production capacity. The Frestech Chamber of Comrce in the beginning didn’t even face the problem of not having enough production capacity.
At the sa ti, because of the Frestech Chamber of Comrce’s sharp rise in fa, it indirectly helped the Frestech Chamber of Comrce’s speed of growth.
From this perspective, for the Frestech Chamber of Comrce, the benefits outweigh the disadvantages.
But for the companies that entered this industry after the Frestech Chamber of Comrce, the salary standard that Xu Yi had set in the beginning was the biggest cri.
Because the Frestech Chamber of Comrce had cast pearls before swine and set the standard, the other companies couldn’t give a lower wage when they wanted to enter the magic machine industry. Otherwise, it was impossible for them to recruit people and it was even more impossible for them to poach skilled workers from the Frestech Chamber of Comrce.
So after all these years, because the various companies competed with each other, the salary kept increasing.
Right now, the Frestech Chamber of Comrce’s salary wasn’t the highest and could be considered low among the magic machine industry companies. The salaries that the other companies gave were much higher.
This had affected the Frestech Chamber of Comrce in turn.
Before the household magic machine departnt separated, they still followed Xu Yi’s standard and no one complained.
After the Frestech Household Chamber of Comrce was ford, Ankhto wanted to increase the morale of the workers, establish his fa, and because of other considerations, he had raised the standard salary. The standard salary of the Frestech Household Magic Machine Chamber of Comrce had been raised to a relatively high salary compared to the other companies.
So the Frestech Household Magic Machine Chamber of Comrce’s labour costs had increased. In just the month of may, the labour costs had reached six hundred and thirty thousand gold coins. This was a large increase compared to before and it had greatly increased the costs of the Frestech Brand household magic machines.
And then there were raw materials.
When the Frestech Chamber of Comrce had just been ford, no one on the Sines Continent attached importance to the raw materials needed to produce magic machines. So out of the Frestech Chamber of Comrce’s material costs, the biggest were the magic materials needed by the magicians to draw the Magic Arrays.
As for the iron ore that they used the most, although the Falcao Chamber of Comrce controlled it, their price wasn’t that high.
As the most important Magic Crystal, because it was all over, it didn’t take any money at all.
As the magic machine industry beca more and more important, the countries all cared more and more about the magic machine industry related materials in their borders.
Naturally, the price of these materials kept increasing.
Take the highest demand iron ores. The Frestech Chamber of Comrce bought them for two gold coins a ton from the Falcao Chamber of Comrce in the beginning, even the slted iron only took ten gold coins a ton.
Now, based on the Falcao Chamber of Comrce’s newest June price.
The iron ore had gone to six gold coins a ton and the slted iron was suddenly raised to twenty seven gold coins a ton.
Compared to before, it was more than double!
Even the Magic Crystals that were worth nothing unless they were special products that no one cared about, now because they had beco the energy source of all magic machines, their prices had soared.
Take the standard dium sized Magic Crystal the Frestech Chamber of Comrce bought from the Candra Empire, its price had reached ninety three silver coins per ton.
Moreover, because of the high demand of Magic Crystals, this price continued to quickly grow.
Last year, it was only seventy six gold coins a ton and now it reached ninety three gold coins a ton this year.
With this speed, there was no doubt that it would reach one gold coin a ton within the year.
The demand for these materials increased with the price which naturally created a series of problems.
First, the countries of the Sines Continent strictly controlled the resources in their country. Headed by the Candra Empire and the Marlow Empire, most of the countries no longer exported materials.
Even the Candra Empire only exported materials to the Frestech Chamber of Comrce alone. The only reason was because the Frestech Chamber of Comrce were the only ones that could slt the steel, the non-ferrous tals, and refine the Magic Crystals.
Then adding in the fact that the Candra Empire had many cooperation deals with the Frestech Chamber of Comrce, the Frestech Chamber of Comrce was able to buy materials from the Candra Empire without limits.
However, even if they had received preferential treatnt, the prices of the raw materials still increased, which had increased the cost of their magic machines.
The Frestech Chamber of Comrce was already like this, so one could imagine what it was like for the other companies and countries.
It was fine for the countries that had enough materials, but the countries that didn’t have the materials had to find another way to solve this problem.
The most common and the most frequent thod of this was warfare.
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