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retro vertigo
KWSN Inc
0
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Posted - 2014.09.02 20:56:00 -
[1] - Quote
HI,
I was just wondering what prices people use to calculate profit on manufacturing?
Do you go by how much the lowest sell order is for the minerals? For example if i was to take all my Trit to amarr i could put it on the market for 5.24 right now. Do i value it at the cost of the highest buy order? Currently 5.15, which is how much i could sell it for immediately. Is that how much i value the mineral at?
Do you go by how much you bought the mineral for? I bought said Trit @ 5.09. Is that the price i use in my build cost?
I am looking at putting a spreadsheet together to work out the build costs and whatnot to check profit. I have inherited a fair few BPC's to start me off building but i cant seem to find many that beat the mineral cost if i set it at its highest level.
Thanks |
Kenneth Feld
Habitual Euthanasia Pandemic Legion
111
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Posted - 2014.09.02 20:58:00 -
[2] - Quote
retro vertigo wrote:HI,
I was just wondering what prices people use to calculate profit on manufacturing?
Do you go by how much the lowest sell order is for the minerals? For example if i was to take all my Trit to amarr i could put it on the market for 5.24 right now. Do i value it at the cost of the highest buy order? Currently 5.15, which is how much i could sell it for immediately. Is that how much i value the mineral at?
Do you go by how much you bought the mineral for? I bought said Trit @ 5.09. Is that the price i use in my build cost?
I am looking at putting a spreadsheet together to work out the build costs and whatnot to check profit. I have inherited a fair few BPC's to start me off building but i cant seem to find many that beat the mineral cost if i set it at its highest level.
Thanks
generally profit is pretty simple
Sell price - cost to manufacture and sell item = profit
This includes sales tax in stations, or contract fees etc - basically every isk you use to build and sell it
I use mineral price for what I pay - I don't care what buy orders or sell orders are, I care what it costs me |
retro vertigo
KWSN Inc
0
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Posted - 2014.09.02 21:08:00 -
[3] - Quote
Kenneth Feld wrote:retro vertigo wrote:HI,
I was just wondering what prices people use to calculate profit on manufacturing?
Do you go by how much the lowest sell order is for the minerals? For example if i was to take all my Trit to amarr i could put it on the market for 5.24 right now. Do i value it at the cost of the highest buy order? Currently 5.15, which is how much i could sell it for immediately. Is that how much i value the mineral at?
Do you go by how much you bought the mineral for? I bought said Trit @ 5.09. Is that the price i use in my build cost?
I am looking at putting a spreadsheet together to work out the build costs and whatnot to check profit. I have inherited a fair few BPC's to start me off building but i cant seem to find many that beat the mineral cost if i set it at its highest level.
Thanks generally profit is pretty simple Sell price - cost to manufacture and sell item = profit This includes sales tax in stations, or contract fees etc - basically every isk you use to build and sell it I use mineral price for what I pay - I don't care what buy orders or sell orders are, I care what it costs me
Thanks for the reply,
If the sale price of the item is less than the sell price of the minerals is this not a loss though?
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Kenneth Feld
Habitual Euthanasia Pandemic Legion
111
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Posted - 2014.09.02 21:20:00 -
[4] - Quote
retro vertigo wrote:Kenneth Feld wrote:retro vertigo wrote:HI,
I was just wondering what prices people use to calculate profit on manufacturing?
Do you go by how much the lowest sell order is for the minerals? For example if i was to take all my Trit to amarr i could put it on the market for 5.24 right now. Do i value it at the cost of the highest buy order? Currently 5.15, which is how much i could sell it for immediately. Is that how much i value the mineral at?
Do you go by how much you bought the mineral for? I bought said Trit @ 5.09. Is that the price i use in my build cost?
I am looking at putting a spreadsheet together to work out the build costs and whatnot to check profit. I have inherited a fair few BPC's to start me off building but i cant seem to find many that beat the mineral cost if i set it at its highest level.
Thanks generally profit is pretty simple Sell price - cost to manufacture and sell item = profit This includes sales tax in stations, or contract fees etc - basically every isk you use to build and sell it I use mineral price for what I pay - I don't care what buy orders or sell orders are, I care what it costs me Thanks for the reply, If the sale price of the item is less than the sell price of the minerals is this not a loss though?
Yes, so either:
A) you shouldn't buy the minerals b) you should sell the minerals and not produce
I can't tell you what makes a profit and what doesn't, you need to decide that for yourself based on literally dozens of factors |
Shoogie
Serious Pixels
128
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Posted - 2014.09.02 21:35:00 -
[5] - Quote
Correct. Don't build something if it is going to result in a loss, just sell the minerals instead.
The prices for everything on the market (minus a couple NPC supplied items) are based on supply and demand from other players. So prices are constantly fluctuating. Quite a few things are unprofitable to make. Eventually supply will go down and they will become profitable again. In the meantime, build something else.
I use the current sell order prices of the minerals and the current sell price of the finished good. You could use buy order prices instead. Just be sure to be consistent.
Note: for a manufacturer, it doesn't matter what you paid for a mineral, just what it is worth now. |
retro vertigo
KWSN Inc
0
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Posted - 2014.09.02 21:44:00 -
[6] - Quote
Shoogie wrote:Correct. Don't build something if it is going to result in a loss, just sell the minerals instead.
The prices for everything on the market (minus a couple NPC supplied items) are based on supply and demand from other players. So prices are constantly fluctuating. Quite a few things are unprofitable to make. Eventually supply will go down and they will become profitable again. In the meantime, build something else.
I use the current sell order prices of the minerals and the current sell price of the finished good. You could use buy order prices instead. Just be sure to be consistent.
Note: for a manufacturer, it doesn't matter what you paid for a mineral, just what it is worth now.
Thanks for this.
This is pretty much what i thought but just wanted some assurance. It seems like most of the blueprints i have result in a loss.
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Tau Cabalander
Retirement Retreat Working Stiffs
4098
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Posted - 2014.09.02 22:09:00 -
[7] - Quote
I value the materials I buy at sell order prices, even if I get them at buy order or lower prices.
I value the items I sell at sell order prices, or higher.
I rarely sell to buy orders, except in one very specific case: items that are quick to manufacture, slow to sell, and have a reasonable buy order price. The rest of the time selling to buy orders is not worth the time, or not (very) profitable. |
SJ Astralana
Syncore
64
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Posted - 2014.09.03 12:33:00 -
[8] - Quote
For production materials, sell order prices are purely academic. If you want to post a billion trit at sell minimum, it's going to sit there precisely until the buy maximum increases to that level. Average prices are pegged almost identically to buy prices because that's where the volume lies. Hyperdrive your production business: Eve Production Manager |
Pookoko
Sigma Sagittarii Inc.
53
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Posted - 2014.09.04 07:42:00 -
[9] - Quote
Another thing to consider is that you can't just go by the lowest sell order price when calculating potential profit. If you need 10mil units of trit and the lowest sell order is 5.15, but only 3mil units, then that's not really the right price for you to base your calculations on. When doing quick calculations on how much profit I can make on a new item I'm thinking about building, I look at the price of materials sell order that has the volume I would need. There will be many sell orders below that, but if all of them combined won't fulfil the volume of materials I need then it's no use to base my calculations on them, because realistically I would be buying at higher price where such volume is available. |
SJ Astralana
Syncore
64
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Posted - 2014.09.04 07:46:00 -
[10] - Quote
Jesus the spreadsheet jockeys in this thread explain SO MUCH. Keep on doing what you do guys, I'm loving you hard. Hyperdrive your production business: Eve Production Manager |
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Velicitia
Arma Artificer
2628
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Posted - 2014.09.04 10:40:00 -
[11] - Quote
Pookoko wrote:Another thing to consider is that you can't just go by the lowest sell order price when calculating potential profit. If you need 10mil units of trit and the lowest sell order is 5.15, but only 3mil units, then that's not really the right price for you to base your calculations on. When doing quick calculations on how much profit I can make on a new item I'm thinking about building, I look at the price of materials sell order that has the volume I would need. There will be many sell orders below that, but if all of them combined won't fulfil the volume of materials I need then it's no use to base my calculations on them, because realistically I would be buying at higher price where such volume is available.
buying from sell orders is generally a bad idea ... One of the bitter points of a good bittervet is the realisation that all those SP don't really do much, and that the newbie is having much more fun with what little he has. - Tippia |
Shoogie
Serious Pixels
135
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Posted - 2014.09.04 14:27:00 -
[12] - Quote
I never said you should buy all your raw materials from sell orders. I only said you should value them as if you did.
Imagine I have a stack of 1,000,000 tritanium. My market currently has buy orders for tritanium at 4.9 isk ea, and sell orders at 5.1 isk ea. I have a blueprint for an item which requires that stack of tritanium. There are sell orders for that item at 5.0M isk. Is this a profitable thing to make?
If you value your tritanium at 4.9M isk, and assume you can sell your item at 5.0M, then you may think this is profitable. However, you could have simply sold your tritanium for 5.1M isk and made even more profit. So in reality, manufacturing this item would have lost you 100k isk (plus installation costs.) So make your profit calculations assuming you are buying from sell orders. If you cannot make a profit under that assumption, then you should be building something else.
Of course, take advantage of buy orders to get your raw materials more cheaply. However, sometimes the market doesn't give you everything you need exactly when you want it. If you have found something profitable to manufacture, then you do not want your production lines to go idle. You can go out and immediately get that last raw material from a sell order and know that you will still be profitable, because that is the way you calculated it in the beginning.
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Absolutely Not Analt
Caldari Provisions Caldari State
36
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Posted - 2014.09.04 15:07:00 -
[13] - Quote
Shoogie wrote:I never said you should buy all your raw materials from sell orders. I only said you should value them as if you did.
Imagine I have a stack of 1,000,000 tritanium. My market currently has buy orders for tritanium at 4.9 isk ea, and sell orders at 5.1 isk ea. I have a blueprint for an item which requires that stack of tritanium. There are sell orders for that item at 5.0M isk. Is this a profitable thing to make?
If you value your tritanium at 4.9M isk, and assume you can sell your item at 5.0M, then you may think this is profitable. However, you could have simply sold your tritanium for 5.1M isk and made even more profit. So in reality, manufacturing this item would have lost you 100k isk (plus installation costs.) So make your profit calculations assuming you are buying from sell orders. If you cannot make a profit under that assumption, then you should be building something else.
Of course, take advantage of buy orders to get your raw materials more cheaply. However, sometimes the market doesn't give you everything you need exactly when you want it. If you have found something profitable to manufacture, then you do not want your production lines to go idle. You can go out and immediately get that last raw material from a sell order and know that you will still be profitable, because that is the way you calculated it in the beginning.
One other thing I will add to this amazing post is to never discount your associated costs. They can add up quickly, especially on things will small margins to begin with. Things like sales tax, brokers fees, installation fees, fuel costs (if you manufacture at a POS), and costs to transport (especially fuel if you use JFs to move things around) all add up and can nickel and dime you into an unprofitable position if they aren't accounted for.
One thing I have never been clear on though is how you depreciate the cost of the blueprint and research (if you're using an original)? Eve is a multi player game.-áAnd you are the content. - Ralph King-Griffin |
Shoogie
Serious Pixels
136
|
Posted - 2014.09.04 16:14:00 -
[14] - Quote
Factoring in BPO costs is tricky. Unlike tools in the real world, BPOs in game don't depreciate. Definition-lose value with use or over time.
You obviously know what you paid for the BPO. Then you can add what it cost you to research it. Remember POS fuel if that research is done in a POS. After this point, there are two ways to do things.
A) The quick and lazy way (this is me.) Assume that the BPO is a capital asset. I always have the option to sell that BPO via contracts, and can probably get approximately (purchase cost + research cost) for it. Therefore, I do not need to factor in a blueprint costs into each item I sell.
B) Build quota. Assume that over the lifetime of a blueprint, you are going to build X runs. Divide (purchase cost + research cost) by X to get the per run cost to add to each item you build. After you have built the X runs, congratulations, the blueprint is now paid off. If you sell it now, then whatever you get is pure profit. If you sell it before building X runs, you can still calculate how much you still owe on the blueprint. Subtract that from the price you sold it for, and learn how much isk the BPO made for you.
The second method is probably "better" from a business perspective. I currently have a number of BPOs in my library for which I am pretty sure I'll never recoup the cost. Then I have a number of blueprints for which I have no clue if they have made me money or not. However, I don't like method B for three reasons: first, it is extra bookkeeping which isn't strictly necessary if you go with method A. I prefer to avoid unnecessary bookkeeping in a game I play for fun. Secondly, how do you choose X? That is a big headache which can be avoided simply by going with method A. Thirdly, method B may subliminally push me toward building sub-optimal things. "The widget blueprint is not quite paid off yet. I should build some of those even though the profits are a bit slim."
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Gilbaron
Free-Space-Ranger Nulli Secunda
1507
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Posted - 2014.09.05 03:05:00 -
[15] - Quote
Things I need for manufacturing at min sell
Things I will make also at min sell (but sanity checked via historical market data)
This approach saves me from accidentally building stuff with one-digit margins Build your empire ! Start today ! Rent Space in Perrigen Falls and Feythabolis Contact me for details :)
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