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1) Make sure your factory is maxed out on workers to produce optimally
2) Make sure you produce timber in a city that has "High" production of timber and not medium
3) You really only start making a profit once you build 3,6, and 9 factories. This is because you get a "bonus" cost reduction, making the avg price you pay to produce it less. I think it was something like up, 5%,10% and 15% ?
At the beginning of a game there is always a glut of products. Next time you start a game look at hemp supplies in each city you visit. You will find that all the cities start out with between 25-35 hemp in stock. Later in the game you will find that cities that have high production on hemp will have 10-15 in stock, low production cities will have 6-9, and demand cities will have 0-4.
If the cities didn't start out with a glut of products the economies of all the cities would immediately crash and you would not be able to recover it with your single crayer.
truthfully you should only build lumber yards to support your other businesses like salt works, bricks. pitch and Cattle farms. nothing like paying workers to stand around doing nothing.
the funny thing is after you add in transport and storage cost timber never really turns a profit. build as needed for support. efficiency doesn't matter. but try not to build it till the town struggles to keep you in enough wood.
if you look at the total population of the Hanse and use the wedding food guide numbers you can figure out what is needed. its like 20 barrels per thousand people I think 4 of the big ones per 1k. remember the AI is trading too. so if you do build one to support the Hanse just sell it for a loss and let the AI distribute it.
To add to this, cost also changes based on where you park it too.