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It helps to sell overproduction manually from time to time, too.
It would be helpfull to post an example screenshot of your trade route, to see wich amount of goods you are selling and to what price.
Regarding production of other goods, you need them for satisfaction rating of your towns and for building stuff, but selling colonial goods at a faction capital right after the treasure fleet visits is where the money is.
You also get mad amounts of fame doing this. And if you can build a colonial good plantation right at your faction's capital, it becomes a continuous fame generator.
as far as trade goes... flooding the market kills your profits. Shut down your businesses that are overproducing for a while, fire the workers, whatever, for the short term.
In the long run, you need to make stuff that either your own businesses need to make other stuff, or you need to make the things that are in demand along your route, in the quantities that are wanted. For example, just because florida keys wants rum does not mean you need to fire up 30 stills and haul 100000 barrels up there. They probably want like 10 units...
the key mid game is to control towns so you can get their populations very high so they have big demand for stuff, coupled with learning who wants how much of what things.
If you are overproducing, you can shut off businesses for a while until you can create demand for your excess or find new routes to peddle it.
Different countries' Capital Cities will buy more of the 4 Colonial Goods than others. Spain usually buys a lot more than the other Countries. So being a Spanish Player avoids the problem of what do you do if the Capital City you want to sell to is AT WAR with your Country, i.e. an English Player who wants to sell a lot of Colonial Goods to the Spanish Capital, and England and Spain are at War for the moment.
Learn by close observation of the Ports on which day of the month, it can vary by a day or two each month plus or minus, the Treasure Fleet(s) (Spain can have 2 Treasure fleets per month) arrive at the Viceroy's Capital for each Nation. The arrival date is different for each Nation, because of transit times.
Ideally you want to sell as much Colonial Goods as the Treasure Fleet will haul away , just after the previous Treasure Fleet has left the Viceroy's Capital. You can figure how how much the Treasure Fleet will take away by careful observation each month.
If you have larger quantities than the Treasure Fleet will haul away, then sell them at another Viceroy's Capital.
It can take a lot effort to build up the capacity of Industries and cargo Ships to produce enough to saturate the market at a Viceroy Capital. I used to be able to sell over 4000 units of Colonial Goods total (between the 4 types) per month at the Spanish Capital. The other Capitals can be half that amount or less. The 2 Spanish Treasure Fleets between them would take away about 5600 to 6000 units total per month. But Since the Capital usually produces one of the 4 Colonial Goods, and other game controlled ships are selling as well, you can not sell that much per month at good prices, i.e. not at 3 to 4 Green Bar prices which make you no (or very small) profits.
With careful timing of sales at the Capital (i.e. just after the Treasure Fleet(s) leave), It is quite possible to make a net 300k to 400k per month (and EVERY month) selling Colonial Commodities to Spain. Where you are producing all of the goods in your own businesses/industries and hauling them on your own ships.
Other Nations will be smaller amounts at their Capitals.