Managing a Trading Company

One or more players can choose to have their characters spend funds and time running a mercantile trading operation as a part of their downtime activities. The funds they spend in most cases return a profit, while the time invested increases the potential of that profit. This downtime activity provides in-depth guidance for running a regional or even world-spanning trading company and is not for players who want to run a single smithy, bakery, or similar small, local business where they practice their profession. Use this downtime if your players want to jointly run a large business, have an impact on local economies, or build up a region through trade.
Founding the Company

To establish a company and begin trading, the characters must first establish a headquarters. This locale functions as a central hub for their trade routes as well as a local point of sales and the center of the business’s financial dealings. The size of the community in which the headquarters resides plays an important role in how large the company can eventually grow.
For the characters to build an initial hub where they can begin their foray into the trade business, they must visit the locale, succeed on a DC 10 Charisma (Persuasion) check to convince the locals of the benefits of the new business, and provide 5,000 gp to construct the physical building and hire employees to operate it. At that point, the characters have an established trading company, but it operates only locally, buying goods wholesale from other traders to sell. If the characters want to expand their enterprise, they must establish trade zones.
Expanding the Company

Expanding the business by adding trade zones to and from more distant locales broadens the scope of goods available—and the potential profits. Each zone they wish to establish requires the characters to construct hubs, as shown on the Trade Zones table. For the purposes of this downtime, “trade zone” refers to the movement of goods within a type of region and not a specific road, river, or sea lane. For example, a kingdom trade zone might involve three cities and the myriad of roads and rivers that carry trade between them.
[Trade Zones Table]

Zone Type

The trade zone indicates how far afield trade takes place.

Local.
Trade that takes place at a single site, like a market or trading post.

Provincial.
Trade routes that cover only short distances within a single province or similar. Travel times between markets or trading posts are typically 2 to 5 days each way.

Kingdom.
Trade that connects hubs across an entire kingdom. Travel times between hubs are usually 10 to 15 days each way.

Continental.
Trade that connects hubs across an entire continent. Travel times for these trade routes can last 30 to 50 days or longer each way and may be via road, river, or coastal ship routes.

World.
Trade that crosses oceans and connects the most distant known points of the world. Travel times vary greatly based on the world’s geography and are usually measured in months.

DC Check

The Charisma (Persuasion) check needed to establish the trade zone. This assumes the efforts made to convince local governments to grant charters and licenses, local merchants to sell or buy the goods to the characters’ company rather than to competitors, and similar. The difficulty increases the greater the distance the zone covers due to shifts in cultural norms, lack of familiarity with officials, language barriers, and the increased number of needed business relationships.

Persuasion Failure.

If the characters fail to convince a population center of the benefits of their new business presence, they can make the check again in 1 month’s time. Subsequent checks are each made with a cumulative +5 bonus. This reflects the characters’ efforts to progress successfully through convoluted bureaucracies, win over locals, hire charismatic managers, grease palms, and similar.

HQ City Size

This indicates the minimum population of the urban center where the headquarters is based that is needed to establish a trade zone. No headquarters for a trading company can be established in any place with fewer than 500 people, and a community that small can support only a local trading post. To conduct trade to more distant places, the headquarters must be placed in a larger town or city with sufficient population to support it.
Hub Cost

The expense of establishing the far end of a trading zone from the headquarters. The local zone is also the site of the headquarters. It costs 5,000 gp to set up the initial headquarters hub, as described at the beginning of this downtime, and only local trade can occur there. To expand to provincial trade, a second hub must be established for an additional 2,500 gp. At the GM’s discretion, additional hubs can be specific urban centers within the campaign world, but for the purposes of the downtime activity, it is enough to establish the zone at the listed costs without specifying the location of each trade route destination. If the characters choose to relocate their headquarters—perhaps to a larger city with more distant trade potential—it costs 2,500 gp each time they relocate it.
Time

The trading company collects whatever profits are made at the end of each listed timeframe. Larger trading companies often run multiple shipments within the same zone type with staggered departure times for the lengthier trips so that cost and profits can be spread out more evenly.
Trade Limit

This column indicates the maximum amount of trade, in units of goods, that can occur within the timeframe listed in the Time column. For example, a provincial trade zone can handle only 100 units of goods, in any combination, traded in a given month. This reflects the limits of what the markets can bear within a given area.
Trade Infrastructure

For a trading company to expand, it must establish a second hub within a zone type and have one or more vehicles for moving goods between those hubs. The Trade Infrastructure table lists each type of vehicle (or group of vehicles), the cost to build and staff it, and the units of cargo it can hold. Trade zones can be made up of combinations of vehicles.

Wagon.
A single vehicle with horses used to transport cargo along overland routes.

Caravan.
A group of wagons that can operate more efficiently together.

Barge.
A riverboat that can haul large amounts of cargo along the interior of a landmass with minimal crew.

Ship.
A seagoing vessel that can make coastal trips as well as cross oceans to islands and other continents.

Fleet.
A group of ships that operate more efficiently together.

Trade Infrastructure

Vehicle

Cost

Capacity

Wagon

100 gp

1 unit

Caravan

400 gp

5 units

Barge

2,000 gp

15 units

Ship

10,000 gp

20 units

Fleet

40,000 gp

100 units

Trade Runs

Once the trading company is set up (or expanded), the company must conduct trade runs to make a profit. Each run can be tracked on the Trade Sheet where all the details of the cargo and potential earnings are recorded. A trade run represents the movement of all trade goods along all routes within a particular zone in the given timeframe (as detailed in the Time column of the Trade Zone table). The characters can’t conduct trade runs outside of their trade zone. For example, a trading company that has been expanded to continental can’t do a provincial trade run because provincial trade is already assumed to be included in the continental trade run. This means the characters must track fewer trade runs and receive profit less frequently the larger the company gets, but the profits are potentially much higher as the company grows.
[Trade Sheet Table]

Zone Type

This is a spot to record whether the trade is local, provincial, kingdom, continental, or worldwide. If the company has more than one trade run occurring within the allotted timeframe, some additional identifying information—such as the name of the NPC caravan master—could also be included.
Time

This is the timeframe listed in the Time column of the Trade Zone table and represents the amount of time the trade run takes for that zone.
Vehicles and Capacity

Record the types and numbers of vehicles included in the trade run here, followed by the total capacity of all the vehicles together. The number of units of various types of trade goods can’t exceed the total capacity of the vehicles holding the goods. The number of units also can’t exceed the trade limit for the trade zone, even if the characters have enough money to move more units.
Units, Cost/Unit, and Expense

Record the number of units the characters purchased, the cost of those units, and the financial expense (calculated by multiplying cost/unit by number of units) here.
Trade GoodS

A variety of goods can be bought, transported, and sold. Some are very common and safe investments—but with more limited profitability—while others can be moved great distances to locales where they would be considered valuable exotic goods. Each kind of good to be traded should be entered onto its own line on the Trade Sheet. The cost per unit for each trade good can be found on the Trade Good Costs table and includes normal fees, taxes, and other expenses related to that trade good.

Durable Goods.
Trade goods that have longevity and can easily withstand travel, such as lumber, iron, tools, furniture, armor, or weapons.

Foodstuffs.
Perishable, edible trade goods, such as grain, flour, fruits and vegetables, cheese, fish, or meats.

Livestock.
Living trade goods, such as horses, sheep, cattle, oxen, goats, or chickens.

Luxury Goods.
Extravagant trade goods that are valued highly, especially to the social elite, such as jewelry, art, edible delicacies, luxurious dresses, or rare spices.

Precious Metals.
Raw metals are valuable due to their use as coinage, for jewelry, for high-quality armor and weapons, or similar, such as adamantine, copper, silver, electrum, gold, platinum, or mithral.

Spices.
Edible, typically dried, trade goods used medicinally or to add flavor to food or beverages, such as salt, peppers, saffron, ginger, cloves, or other herbs.

Textiles.
Trade goods of cloth or woven fabric, either raw or worked into clothing or other cloth-based goods, such as simple dresses or workwear, wool, furs, sails, cotton, silk, canvas, or other clothing.

Trade Good Costs

Trade Good

Cost/Unit

Durable goods

150 gp

Foodstuffs

100 gp

Livestock

100 gp

Luxury Goods

5,000 gp

Precious metals

10,000 gp

Spices

1,000 gp

Textiles

200 gp

Participation Modifier

The likelihood of profitability is influenced by how much time the characters devote to operating the trading company they created. Character participation involve negotiating favorable prices, interviewing and hiring shipping agents, caravan masters, and ship captains, inspecting equipment, picking up the latest trade news and gossip, or similar. Characters can participate in managing the trading company by spending one or more workdays at the company’s headquarters. Character participation is calculated as a percentage of days spent managing during a trade run, as detailed in the Character Participation table. This means characters must spend more days managing a larger company to receive the same participation benefit they would from spending fewer days managing a smaller company.

Character Participation

Percentage of Days

Modifier

0%

–1

5%

+0

10%

+1

15%

+2

20% or more

+3

Profit Percentage

This value is determined by consulting the zone’s Profit table then rolling the indicated dice and applying any modifier from character participation to the die result. Values listed at less than 100 percent mean the business made less than it spent on the trade run, while values greater than 100 percent indicate the business made more than it spent on the trade run. A value listed as “TL” means that trade run was a total loss; the business spent money buying and moving goods on the trade run without making any money in return. Shipwrecks, banditry, and natural disasters can all results in a total loss.
For example, if a trade run cost the characters 100 gp, a value of 90 percent means the business made 90 gp at the end of the run, while a value of 110 percent means the business made 110 gp in the end, and a value of TL means the business made 0 gp in the end. In this example, a value of 90 percent means the characters would need to pay 10 gp out of their pockets to make another trade run that costs 100 gp, while a value of 110 percent means the characters could add 10 gp to their group treasury and could spend the other 100 gp on another trade run that costs 100 gp. A total loss means the characters would have to pay the full 100 gp to send goods on that trade run again.

Profit Tables.

As the trading company grows, it faces risks associated with transporting goods over greater distances and through more hostile terrain, fees and exchange rates in foreign lands, complications related to changing laws or political atmospheres as the goods cross borders, and so forth. The profit tables are divided by zone to reflect these varying challenges.

Unlike most downtime activities, which often include complications—either adverse or beneficial—as part of the results, this downtime provides such developments abstractly through profits and losses, represented by the profit percentages on the profit tables. When a shipment of goods pays out only a fraction of the initial coin spent, or when the trading company experiences a huge windfall, the details of such results are left to the GM and players to determine. Perhaps bandits struck a caravan and made off with part of the shipment, or maybe demand for commodities has risen during a wartime economy. Such events can become part of the ongoing dynamics of the campaign and can be the seeds of a new adventure for the characters.

Return

Multiply the Total Expense by the Profit Percentage and enter the result in this column. This is the amount of coin earned from selling that trade good in this trade run. Add together all of the results in this column to get the total earnings from this trade run. By also adding together the expenses in the Expense column, the characters can compare their total expenses and total return to discover how lucrative (or not) this trade run was for them, giving them insight into what changes they might want to make for the next trade run, such as more or less participation, changing the goods they trade, or even expanding their trade zone.

Example of Managing a Trading Company

The characters decide to start up a trading company using 12,000 gp of accumulated wealth, intending to start off conservatively, with lower-risk commodities. They sink 5,000 gp into establishing a trade company headquarters in the local town (population 1,500) where they spend most of their time between adventures. They then spend another 2,500 gp to establish a hub in order to create a provincial trade zone. Though setting up the headquarters in a larger city would allow for greater future business growth, they decide to place the headquarters closest to where they are adventuring, allowing them to spend downtime participating in the business. This means they can conduct trade only within the province for now.
With the hubs established, they begin the process of convincing the authorities and merchants of the value of their trade plans. The group’s bard, with the aid of the paladin using the Help action, rolls a Charisma (Persuasion) check with advantage, resulting in a 19—exceeding the DC 15 required to succeed for provincial trade. (If the check had failed, the group could try again after a month, gaining a +5 bonus to the check. If that roll failed, the next check would be made another month later with a +10 bonus, and so on, until they finally manage to work through all the bureaucracy and glad-handing necessary to establish the zone.)
Now that the zone is established, the group needs transportation and goods. They invest in two caravans, spending 800 gp and gaining a load capacity of 10 units. This leaves the fledging business with 3,700 gp to buy trade goods. They purchase 4 units of durable goods (600 gp), 4 units of textiles (800 gp), and 2 units of spices (2,000 gp) for a total cost of 3,400 gp, leaving them with 300 gp in the group treasury for the future.
The caravans are ready to go, and the group figuratively waves goodbye to them as they depart. Over the next month, the group strikes out on other excursions, but each time the members return to the town from their adventuring, they take a day or two to check on the business, making sure operations are running smoothly and that any unexpected challenges or set-backs are handled. Over the 30 days of the provincial trade run, they devote 6 days toward managing the trading company, enough to gain the +3 Participation Modifier.
At the end of the month, it’s time to see what kind of success they garnered from the trading. Because the trade route is at the provincial level, the players use that table to determine what kind of profits or losses they incur for the month. The Provincial Profit table indicates the die roll is 2d4 + the modifier, which in this case is +3 due to their participation. Each kind of trade good gets its own roll. For the durable goods, the final result is 9 (3 and 3 on the d4s plus 3 for the modifier) and, reading across the row marked “9” to the column where Durable Goods results are listed, the income shown is 126 percent. They record this value on their Trade Sheet. For textiles, the players roll another 9, resulting in 119 percent return, and the result for spices is only 6 with a 109 percent return.
Now that they have recorded their investment returns, they multiply the total expenses for each trade good by its profit percentage (for the durable goods, that’s 600 gp times 126 percent, which equals 756 gp), then record each result in the Return column, as shown in the Trade Sheet Example. Adding the values in the Return column together shows a total of 3,888 gp. Adding the values in the Expense column together shows their expense of 3,400 gp. This means the characters spent 3,400 gp on the trade goods and received 488 gp of net profit for the month, which is not a bad start to their trading enterprise.
The group could now choose to keep doing this same trade run with the same sets of goods by spending 3,400 gp of the money they just earned, or they could expand things by investing in more wagons or perhaps some barges and increasing their load capacity. Depending on their other sources of income and where their adventures take them in the coming months, they might choose to move their headquarters to a bigger city (by spending 2,500 gp) and expand their trading company to handle larger trade zones, increasing their chances at greater profits—or losses.
{Trade Sheet Example Table]