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PassingThrough
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Posted - 2009.03.28 17:17:00 -
[1]
All minerals from mining are free so it's all extra profit!
If you had sat at a gate all day pvping instead of mining you would have had to buy the minerals which would have been extra costs to your production.
Since you spent that time doing something to reduce your production costs instead of something useless and unproductive like pvping, your production costs are less.
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PassingThrough
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Posted - 2009.03.28 22:39:00 -
[2]
You pay a little over 2 cents an hour so your character will continue training even when you aren't playing.
Originally by: Breaker77
Originally by: Imertu Solientai When I mine I do not pay anything for doing it.
I pay $15 a month to mine.
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PassingThrough
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Posted - 2009.03.28 22:43:00 -
[3]
Well, this post is about how to price minerals that you mine yourself. For a manufacturer, time spent pvping is a waste of time when you could be spending the same time reducing your manufacturing cost.
My comment was to the people that want you to add the minerals that you mined yourself into your production costs instead of using them to reduce your production costs.
Originally by: 3Bird and if people didnt pvp you would be out of a job because supply wouldnt be there. no supply no sales, no sales no need to build new ships, no new ships no need to mine.
befor you talk out your ass again please o god please think about what you about to say, pvp is not useless, pvp drives the game as much as manufacturing does. without one side the other will not work.
and as for the Op, my self i go for lowest sell price, basicly what would i buy if i didnt spend the time mining.
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PassingThrough
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Posted - 2009.03.29 03:00:00 -
[4]
Edited by: PassingThrough on 29/03/2009 03:05:32
Yes, the TIME you spend at your computer is worthless. If you are going to value the TIME that you are mining then you'll have to value the time that you aren't mining as lost isk.
Who said anything about selling anything below mineral costs? If I can refine something for more than it's worth then I'll just buy it all up, refine it and build something else. I'm not stupid. LOL
Originally by: Breaker77
So the TIME you spend at your computer mining is worthless? Even as you say you pay for skill traning, I can spend time doing real life stuff instead of mining and still not lose anything. However the time I spend in Eve is worth something even if I am just mining.
If you wish to continue to sell items for below mineral costs because "the minerals you mine are free" I will gladly buy everything you price like that, then reprocess it, sell the minerals, and be the one actually making ISK.
Example.
You spend an hour mining 10 million in minerals. You produce items with minerals and sell them "at the lowest sell order price" so you can move them which comes to 9 million. I buy them, reprocess, sell minerals and make 1 million profit.
You spent 1 hour doing that, I spent 10 seconds.
You made 9 mil/hr. I make 360 mil/hr
Who is the person doing it wrong now??
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PassingThrough
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Posted - 2009.03.29 03:04:00 -
[5]
I'm glad someone in here gets it.
Originally by: Beth Korai Edited by: Beth Korai on 29/03/2009 01:17:51
Originally by: brinelan You would rather take 10m worth of mined minerals, make something that sells for 5 m and be happy? Why not just sell the minerals for the 10m? ugh
Your example is a bit silly.
You: mine 10 million in minerals, and sell for 10 million, making 10 million profit Non-miner: buy 10 million in minerals, make something, sell for 15 million, making 5 million profit Me: mine 10 million in minerals, make something, sell it for 15 million, making 15 million in profit
You guys really need to stop equating value with cost; they're not the same thing. I would love for someone to explain how something that cost me zero isk suddenly cost me 10 million isk ifI use it to build something. Just because I CAN sell it for 10 million does NOT mean it has a 10 million isk cost on it suddenly.
Edit: and in answer to the original poster, I value the minerals much as others have: essentially an average between buy and sell wherever the manufactured/mined item will be sold.
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PassingThrough
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Posted - 2009.03.29 06:02:00 -
[6]
But if I value my minerals at zero isk then I have no capital value to add to the production costs.
You may value my minerals at 10 million isk, but if I don't value them at that on my books then it really doesn't matter what you think they are worth. On my books the capital value of the minerals that I mined is zero isk.
The value of those minerals will eventually get on my books in the form of net profit.
In the end either accounting practice works out to the same amount of isk in your wallet.
Using your way, if you use 10 million of your capital and sell something for 15 million you made 5 million in net profit and have 15 million in your wallet.
Using my way, if I use 0.0 in capital and sell something for 15 million I've made 15 million in net profit and also have 15 million in my wallet.
It all works out the same in the end.
Originally by: Ashen Angel
http://en.wikipedia.org/wiki/Cost-of-production_theory_of_value
quote: In economics, the cost-of-production theory of value is the theory that the price of an object or condition is determined by the sum of the cost of the resources that went into making it. The cost can compose any of the factors of production (including labour, capital, or land) and taxation.
It does not matter how you acquired the resources, they are still a cost of production factor based on their value. You can steal minerals worth 10 mil isk, mine for an hour to get the ore and refine it, or buy it on the market. The value is still 10 mil. To produce something using those minerals means there was a mineral cost in production of 10 mil.
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PassingThrough
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Posted - 2009.03.29 15:37:00 -
[7]
Edited by: PassingThrough on 29/03/2009 15:42:54
It only has value if you have it on your books as such.
The math is simple. 0 x 500 = 0.
In your case you place a value on those assets so what you are saying is true for you.
In my case I don't place a value on those assets so what I'm saying is true for me.
Originally by: Kanikara yeah people forget basic of accounting... and math.
If it has value, then to use it in producing something costs you that value.
So you use say 500 trit that was laying around your hangar in making a couple runs of ammo... that cost you 2000 isk or so in assets.
Simple and easy to understand... which is why most don't get it.
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PassingThrough
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Posted - 2009.03.29 15:51:00 -
[8]
That's so wrong that it's not even funny. Why don't you call up Wal-Mart's home office and tell them how much money they are loosing every day. Tell them that they should move their items to the local mom and pop store because they could sell it for a lot more there.
It all depends on how much that 4000 trit cost you not how much it's worth to someone else.
Originally by: Ion Dex no it always has value.
If you produce an item with 4000 trit and you make less by selling the produced item then you would have selling the 4000 trit on the market you would have just lost money.
But if you value your ore at zero you can not possibly make a bad deal because to you it is always 100% profit which is wrong.
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PassingThrough
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Posted - 2009.03.29 16:32:00 -
[9]
Based on your earlier statement, if Wal-Mart sells something for 3 dollars when they could sell it somewhere else for 4 dollars then they lost 1 dollar for every item that they sell.
That's your logic not mine. I understand selling cheap items in large quantities.
You can't make up your mind though.
Originally by: Ion Dex Edited by: Ion Dex on 29/03/2009 16:18:18 Edited by: Ion Dex on 29/03/2009 16:17:58 Edited by: Ion Dex on 29/03/2009 16:06:19
Originally by: PassingThrough That's so wrong that it's not even funny. Why don't you call up Wal-Mart's home office and tell them how much money they are loosing every day. Tell them that they should move their items to the local mom and pop store because they could sell it for a lot more there. It all depends on how much that 4000 trit cost you not how much it's worth to someone else.
You are correct in saying "it's is not even funny" You fail to see that Wal-Mart makes money by selling items dirt cheap and selling them in huge quantities. Now the items Wal-Mart sells do not just magically appear in there stores but are purchased from all over the world. Each item they purchase and place into their store has value. They purchase low and sell high, NOT get the item for free and sell them. Every item has value, there is no way around it or you get 100% profit which you claim you make
Edit: Yes you are making 100% profit of course because in EvE items do magically appear. But to properly calculate profit you have to assign value to every item.
You also don't take the ore issue far enough. Not only do you have to assign value to your ore in order to know if you are making profit but you also have to assign a value to the time it takes to mine and adding that to the ore. Then compare the number you get to purchasing the ore and picking the item up with a transporter.
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PassingThrough
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Posted - 2009.03.29 16:36:00 -
[10]
Your link just proves my point. Thanks!
I was being sarcastic in my response to him because he seems to not understand the concept. Maybe he can get something from that link.
Originally by: Breaker77
Originally by: PassingThrough That's so wrong that it's not even funny. Why don't you call up Wal-Mart's home office and tell them how much money they are loosing every day. Tell them that they should move their items to the local mom and pop store because they could sell it for a lot more there.
It's called Economies of scale. Yet again you have proven yourself wrong.
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PassingThrough
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Posted - 2009.03.29 16:40:00 -
[11]
Lean to Read English Online
Originally by: Governor LePetomane Edited by: Governor LePetomane on 29/03/2009 16:21:07
Originally by: PassingThrough That's so wrong that it's not even funny. Why don't you call up Wal-Mart's home office and tell them how much money they are loosing every day. Tell them that they should move their items to the local mom and pop store because they could sell it for a lot more there.
It all depends on how much that 4000 trit cost you not how much it's worth to someone else.
Hey that's great, actually. It just so happens I'm currently in the process of training up scrap metal reprocessing and I've been looking for somebody like you... somebody who gets it, unlike the rest of these chumps.
If you'd care to evemail me a list of your products and where you sell them I'm quite confident we can come to a mutually beneficial business arrangement.
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PassingThrough
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Posted - 2009.03.29 16:43:00 -
[12]
Exactly! I'm glad someone else finally gets it.
You posted in the wrong forum though. WTB is
Originally by: Kanikara
Well if all the ore you mine, and the minerals you get from it are worth 0 isk on your books... I'll pay you 1 isk for all you mine a day, plus the contract fee.
congratulations you will now make 1 isk profit!
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PassingThrough
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Posted - 2009.03.29 17:01:00 -
[13]
I prefer:
Profit = [Sell Price ] - [Cost of Materials] - [Production Fees] - [Taxes].
I don't care about what the minerals are valued at by someone else. I only care about what I spent to get them.
What's so impossible about that? I don't mine all of my minerals so I do have some mineral production costs.
I'm not saying that your accounting practice is wrong. I'm just saying that it's not the accounting practice that I use in a video game where most of the reasons for those real life accounting practices don't apply.
You play the game the way you want to and I'll play it how I want to.
At the end of the day I'll be happy about making lots of profit and you'll be upset that someone has undercut you and you are now loosing isk.
Sounds like I win.
Originally by: Ion Dex I am bored so I am responding to you again.
You claimed earlier that ore has no value via your formula of 0 x 500 = 0 Now let me take this and prove to you that you need to assign value to calculate profit and item vlaue.
I use the formula value * resource + markup to calculate the sales price. This is pretty much what most business do but in a very simple form.
We will build an item which requires 1000 trit and 200 Mexalon and a markup of 5% So according to you: 0 * 1000 + 0 * 200 + ( (0 * 1000 + 0 * 200) * 0.05 ) = 0
Now let's assign 4.10 to trit and 24 to mexalon 4.1 * 1000 + 24 * 200 + ( (4.1 * 1000 + 24 * 200) * 0.05 ) = 9345
As you can see it is impossible to calculate profit or even item value if you don't assign a value to your resources.
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PassingThrough
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Posted - 2009.03.29 17:02:00 -
[14]
I may value them low but I love huge profit.
Originally by: Kanikara
Originally by: PassingThrough Exactly! I'm glad someone else finally gets it.
You posted in the wrong forum though. WTB is
Originally by: Kanikara
Well if all the ore you mine, and the minerals you get from it are worth 0 isk on your books... I'll pay you 1 isk for all you mine a day, plus the contract fee.
congratulations you will now make 1 isk profit!
Well i figure if you value them that low, I'll buy them... and turn around and sell them for several million and make a lot of profit for my 10001 isk.
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PassingThrough
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Posted - 2009.05.05 12:05:00 -
[15]
Wow, I can't believe that this thread is still going.
Well, for one thing I would never sell the raw minerals on the market. That's the stupidest thing that you can do. If I could sell the minerals on the market for more isk than the item that I'm producing then I stop producing that item and start producing something that brings in more profit.
Whether you value your mined minerals in Eve is still just a personal choice. There really isn't a right or wrong way of doing it no matter what the first year college/university students think. This is a game and not real-life. The main force in real-life that drives all the theories that people are quoting is how to reduce the amount of taxes that you have to pay when you sell something. We don't have a complicated tax law in Eve to worry about so stop pretending that we do.
The really dumb people are the ones that can't grasp that Eve is a game.
Originally by: Needs NOK People are dumb, and people like Passing is dumber than most, cos they think they are smart.
The easiest example to illustrate why mined mats has a value is this:
You have 1 million Trit. You have 2 options when it comes to selling it.
A) selling the trit. B) Manufacture something
Let's say u do the easiest and sell the trit. With today's prices you would get approx 4.1m.
If u manufacture something using that 1m trit and nothing else you need to sell it for more than 4.1m to make it the best solution. THE END. If u can sell the minerals on market for more than u can sell the manufactured item for, Dont manufacture!
This ends the kid's corner, this next paragraph will have some grown up words. Who cares about the cost of your time, it's impossible to estimate and can even be 0 if you're a complete loser or love playing EVE so much that you dont want to do anything else. Look at the alternative cost of your mats. And if you dont want to do the math, you'll probably make more Isk by selling the mats without manufacturing.
rant over.
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PassingThrough
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Posted - 2009.05.08 12:08:00 -
[16]
Well, to begin with I never said that I'd sell items below the component mineral costs. Some people seem to read between the lines that when people value their minerals at zero it means that they'd sell them to you for 1 isk and be thrilled.
No, I don't assign a value to my minerals without realizing it. I assign a value of zero to the minerals that I mine. It's the people on the market that assigns a value to my minerals. It's also the people on the market that assign a value to the items that I produce. To me it's all about how much profit I can bring in. I have a rule that I never sell raw minerals because I know it's the stupidest thing to do. I use the market's assigned value to determine which item I can make the most isk from.
As I've said before, we all do pretty much the same thing but the only real difference is what you value your minerals at that you mine yourself. I value mine at zero and you value yours at the market rate. You may make 10% profit on an item while to me it's 200% profit. The isk we bring is in still the same.
Yes, I could sell my products below your production cost and still be happy with the profit I'd make but why would I do that if there is something else to make that brings in more profit?
Originally by: Josef Huffenpuff
Out of this whole thread this is the post that made me smile most. Finally you admit that you DO actually sell your manufactured items for more than the component mineral costs because doing otherwise would be stupid.
This is what everyone has been trying to tell you for 4 pages. Do we really need to explain it to you AGAIN why you should assign a "value" to the minerals that you mined for free? It appears that you have actually been doing it all along without realizing it.
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