POCO Tax and You

When I moved into my wormhole, all the POCO taxes were set to 100%. This is absolute folly, and betrays both a feeling of insecurity and a lack of understanding of economics. Insecurity because holding on to your assets so closely and guardedly is silly. You can't hold on to anything you own, neither in game or in real life so closely, and trying to just drives people away, but I digress. Setting POCO tax high also shows you don't really understand economics. You want people to use your POCOs, that's why you own them, so you can make money off of people doing PI. And a lot of times, when someone sees a high tax in a system, they won't contact you to try and get standings to lower the tax. They'll just move on and you will make no money.

Because of both reasons (although primarily the second) you should set your POCO tax low. By low I mean 5-10% max. I can hear some objections from here. "But with tax that low you won't make anywhere close to the amount of money you would if the tax was higher, like 30% or 50%!"
While true, there is an assumption in that statement, namely that the same amount of people will be using your POCOs at any tax percentage. There are parts of space where this is true, and that you don't want people using your POCOs if they aren't blue, which is sov-null. That's something else entirely, and not in the scope of what I'm talking about. I'm meaning high, low, and low-class wormholes (with high or low sec statics.)

Sweet, sweet ISK.
Let's imagine for a minute, that you run a little corner store. You sell some produce, and some utilities and suchlike. You're positioned very close to some apartments in the city, and you have a fair amount of customers. Let's say you're telling your goods for around the same price, maybe a little bit higher, as Walmart down the road. The people in the apartments are buying things from you because it's pretty much the same price as Walmart down the road, and it's considerably closer, and they're willing to pay your slight markup for that convenience. Now, let's suggest that a new apartment building is going up just a block down the road, and say to yourself, "This is an excellent time to make some more money. With more people wanting my things, I can raise my prices and make more money!" So you do. You raise your prices, say, 20%. Now you're a fair bit more expensive than Walmart down the road. You've got some customers that still come in, but you've been noticing that your normal customer base is dwindling slowly. They've noticed your price hike, and suddenly it's not longer worth it to them to pay your markup than going to Walmart, which has better prices but is farther away.

In the same way, having high prices (taxes) on POCOs will drive people to look farther away or in different places than your POCOs. Your convenience isn't worth the high tax they'll have to pay, so almost everyone moves elsewhere, and the people that stay aren't giving you nearly the same amount you were getting before.

Be good to your wallet, keep the POCO tax low.


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