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Vaerah Vahrokha
Minmatar
Dark-Rising
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Posted - 2009.06.22 09:06:00 -
[1]
Edited by: Vaerah Vahrokha on 22/06/2009 09:09:48
After a fairly decent start as trader, I found out that often times I'd find specific niches - even in T1 markets - where there was a demand apparently not matched by offer.
As such I decided to dust off my industrial and research alts and put them to good use: I'd find item XX in need of love on trade hub YY and my industrial would build it.
So far so good. The industrial character has skills to 5 and high standings: the best combo. I also got a nice stash of *perfect ME* (not just optimal) BPOs to shave off even the smallest cost (Edit: the research was totally free and by a friend, hence the above statement).
But now I have stumbled on some roadblocks I never noticed when "just" trading and I'd like to know from others if they found ways to "adapt and overcome" them.
As trader I don't really know nor care about the goods cost, as long as I find some juicy 30% prices spread I can jump in and did impressive gains even on a 57K SP trading alt (!) (Expecially comparing on the totally awful returns for my previous levelling multiple miners and hulks and paying for multiple accounts for it).
As industrial who wants to actually earn an income past the minerals and BPO costs I feel cumbersome, slow, totally not agile nor flexible.
- A continuous materials chain feed is cumbersome and accumulating quick deteriorating goods like Zydrine is a big loss already.
- Moving those goods is also cumbersome. As long as you move off the default stuff, storage issues arise. The margins don't look high enough to pay off a continuous request for freigthing but buying a freigther looks also like a very very long road back to profitability.
- There's also a security cost. Moving a nice stash of T2 small items in anything smaller than a freigther will get you suicide ganked for sure. Even using a freigther does not reduce the risk to zero as the suicide ganker with todays ship prices can easily decide to setup a coordinated big attack for a total net loss of few tens of millions with a prize of a billion+.
- There's an opportunity cost. Having a billion immobilised in items is a billion less that could be used for trading. This is not even taking into account how liquids may also produce interests, while items easily devalue as their market fills up.
Then there are the scenarios. Scenarios that make me smile as trader but pull my hairs as industrialist.
Example: buy orders
- Buy orders are often set to the closest amount to 0 as possible. The only reason to be > 0 is because traders are playing 0.01 ISK games or because someone is manipulating that market.
Thus as industrial would be suicidal to sell to those buy orders.
- When buy orders are not stupidly low, they are still below minerals value.
- When buy orders are above minerals value, it's usually not because of real need but because there's a manipulation in act.
Now, as trader it's easy to switch market or could "tag along" in the manipulation.
As industrial it may have taken 3 days to get i.e. 500 items out and then you find out the manipulation is over, the manipulator dumped all and crashed the buy orders market to 10% mineral value.
Sure, I could have 500-5M of everything and diversify but then it'd mean an huge immobilized capital doing nothing but slowly lose value.
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Vaerah Vahrokha
Minmatar
Dark-Rising
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Posted - 2009.06.22 09:09:00 -
[2]
Edited by: Vaerah Vahrokha on 22/06/2009 09:14:58
Second example: sell orders
- Sell orders are usually heavily influenced by missioneers dumping butt-tastic amounts of stuff and killing any possible industrial competition.
- When it's not a missioneer, it's a ******ed "minerals are free" other industrialist.
Once again, lack of agility kills my business as I find a nice "clean since days" market with good margin. Say I find an item costing my maxed industrialist with perfect ME BPO 54k to make *considering I mine or buy minerals with buy orders already*. ATM the item is sold for 80k.
I go make the items (and I am lucky to have many researched BPOs already!), ferry them and... ALWAYS, ALWAYS discover how someone else just put 1 month worth of items for at 55k.
How to counter this?
Third example: ships
I just can't find a viable market strategy for ships. At this point everyone and their dog got 50ME+ BPOs for everything up to including battleships.
The BPCs sell for 1.5M, EvEMEEP tells me that if I buy a pre-researched BS BPO for 1.6B I'll gain about 1.3M per produced ship and thus will take FOREVER to repay the startup cost.
Yes, there are *somewhere else* some good markets where I see a 5-7M gain but then time is money, and ferrying a BS thru 35 jumps does not justify this gain.
Of course I can't afford capitals for now.
But I can see the capital parts BPOs costing well above 1B each... and as trader I can buy the finished parts for 1M *below mineral cost*, so where would I gain in this if I expore myself to such huge investments (and basically need to buy a POS as well or sustain significant research costs).
What am I missing here?
At the same time I keep reading on this forum how building Orcas became worthless (in fact the last days there's people dumping Orca BPOs..) and freigthers are also borderline bad gain.
So? Am I supposed to grind 80B as trader, buy a Titan BPO and then pretend I did well as industrial?
Fourth example: T2 items
"LOL noob go T2".
Ok, this is where I am making good cash as trader, so why not.
But wait. I am the first to buy T2-everything at 300k-500k, that is well below production cost.
This means those selling traders such low priced items are pirates who are dumping "free" T2 drops?
Even in the best case, that is Jita right before a manipulation ends, I need *time* to build the items so I am going to miss the opportunity.
Yeah I keep my trade-acquired stash of 10MN ABs and Inv Shields II like everyone else and ready to dump them in those quite busy markets.
This is an apparent good "buy order" niche at last, but still not good enough to pay for components value if I wanted to make those items myself instead of "stealing" them elsewhere at 300k to dump at Jita.
Sell orders for the only T2 items that actually sell are often 100k-200k above the buy orders (which are below minerals value).
So, what am I missing here? I keep being easily pleased as trader but as industrialist it seems a world of hurt.
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Jagga Spikes
Minmatar
Sebiestor tribe
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Posted - 2009.06.22 09:27:00 -
[3]
there is WAY too much stuff/ISK in EVE. forces of destruction need a buff. |
Ji Sama
Caldari
Tash-Murkon Prime Industries
Sex Drugs And Rock'N'Roll
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Posted - 2009.06.22 10:27:00 -
[4]
production is a supplement to trading not the other way around.
i get most of my items below cost, because apparently people mine stuff for free.
also more stuff needs to get blown up, and to help with this i already did my part and lost a freighter!
speaking of, evalf i need another delivery of pos fuel :( |
Vaerah Vahrokha
Minmatar
Dark-Rising
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Posted - 2009.06.22 11:45:00 -
[5]
 Quote:
i get most of my items below cost, because apparently people mine stuff for free.
This is exactly what I get as well.
But should it be so?
I mean, for what I learned so far, the whole mining + industry huge department of the game is effectively pointless.
Yes you might buy GTCs / farm money / trade and buy yourself a capital BPO to play industrial skipping the whole "road up", but is it even worth it in the end?
Those already i.e. in T2 since years may still net a good penny but what about the new players? Are they just supposed to go mine in a WH and crash Zydrine price or GTFO?
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Tekota
legion industries ltd
Veni Vidi Vici
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Posted - 2009.06.22 12:11:00 -
[6]
I've dabbled in both (although lets be clear, my dabbling isn't at your level yet) and I'm sticking with industry (with trading on the side, as already stated the two are so interlinked you can't really do one without at least an awareness of the other).
Trading can make me 20-50% and up. Manufacturing will struggle to just about hit 10%. Furthermore, as you note, manufacturing requires far more capital tied up (typically one third in the oven, a third on the market, a third buying mats for the next round of cooking). But I'm sticking with manufacturing because the work involved is more lumpy. I'll spend a few hours lumping finished goods around, collecting up buy orders and setting up new ones, then that'll be it for a few days. Trading is more of an active task, sure your wallet will flash while you're asleep but it'll flash far more rapidly when you're awake and keeping on top of orders. |
Jagga Spikes
Minmatar
Sebiestor tribe
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Posted - 2009.06.22 12:16:00 -
[7]
look, it's normal. game is getting older. stakes are raised higher. cheaper the investment, bigger the competition, lower the profits. chars get more skills, stuff stays same, price goes down. and the "stuff for free" crowd isn't helping either.
what exactly could be different, given the conditions?
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Vaerah Vahrokha
Minmatar
Dark-Rising
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Posted - 2009.06.22 12:23:00 -
[8]
Quote:
what exactly could be different, given the conditions?
In other games it'd be called "gear reset", that is a new expansion makes older stuff obsolete due to outlevelling it and new "gear" being made with better stats but also requiring an higher level.
Sure, the veterans still keep an edge because they learned how to win in the game but it's still a fresh breather every some months.
In EvE I think they tried with T3 (just read about the intended "audience") but... they failed.
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Jagga Spikes
Minmatar
Sebiestor tribe
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Posted - 2009.06.22 12:51:00 -
[9]
expansions won't help much in EVE. i would prefer to see item and BPO decay, which would create demand and add costs of production. i doubt we will see producer brands, but one can hope.
personally, idea of "gear reset" through tiers is stupid. it obsoletes designer's own invested time. growth should be in complexity, not in stats. T3 has only one redeeming factor in my eyes. hopefully, it will become inherent in T1/T2 designs.
so, back to my first statement. what EVE needs is more destruction. faction war or two. pirates going totally berserk. CONCORD taking a vacation, or at least getting lazy.
people have grown too fat. time to trim down a bit. |
Clair Bear
Perkone
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Posted - 2009.06.22 16:38:00 -
[10]
Manufacturing is a volume game. Look at it this way -- people are glad to hand their ISK over to a complete stranger for a 0-10% return. Does your analysis show manufacturing yelding a worse return?
Let's take your battleship example. Yes, tier3 battleships as a rule are awful because of tiny demand. Let's go with a much more popular tier 2 BS BPO for 1.0 B instead. Plus two months of research, so let's generously value that at 1.3B.
If you're making 1.5M per item x 6 per day that's 9M/day from *ONE* production slot. 270M a month, in other words. Two production slots and suddenly a ~3 billion investment + some logistics and clicks per day is paying for the whole account forever(*) with a few hundred mil/month to pay for the effort of running the thing.
Compare a roughly 12 month 100% RoI (2 month research included) to a 2-6 year return on t2 bpos and suddenly it's not so bad.
(*) forever figure based on current unreasonably low GTC pricing and IMO way too high return on industry.
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Saehta
Sigillum Militum Xpisti
Novus Ordo Mundi
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Posted - 2009.06.22 16:52:00 -
[11]
Originally by: Jagga Spikes
...CONCORD taking a vacation...
CONCORD disappearing for a weekend would effectively kill trade in EVE. I would love to see this happen once. Like a strike or something. Would be hilarious to see the damage done and people hiding in spacestations for it to end
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Drab Cane
Mining Emporium inc.
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Posted - 2009.06.22 20:41:00 -
[12]
Generally speaking, if you can buy minerals outside of a region hub, and sell your product outside of a region hub, you'll have a better profit margin. The tradeoff is, you'll probably have to buy minerals in several places, and sell in several places, to get the volume you want/need.
I have a partner in a small T1 manufacturing operation. When deciding whether to manufacture an item, we look at:
1) How much will it cost to make, using Jita mineral prices and including factory costs. If we can't get this price lower than Jita/regional hub prices, than we would be better off buying the thing off the market to begin with, instead of manufacturing it.
2) What are the minimum sell prices and volume we can get? Here, we're looking to sell away from the region hubs to get higher prices and better profits. If the demand isn't there, or if there's already an oversupply on the market, we won't touch it.
Ideally, we'll find a product that gives us a good profit margin and sells as fast as we can make them. This gives us the ability to function in a three-cycle rhythm like Tekota mentioned. If we can get the manufacturing/sell cycle to one week at roughly 15% gross profit, we can turn a monthly gross ROI of 20%.
That gross ROI will initially go towards paying off the BPO, after which we have full profitability.
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Tasko Pal
THE IRIS
Intrepid Crossing
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Posted - 2009.06.23 01:54:00 -
[13]
If you're carrying a pile of small t2 gear, try flying a blockade runner, frankly they're even harder to gank in high sec (or anywhere else for that matter) than a freighter. A good cloaking setup costs around 90 mil total. Or fly a combat ship. You're going to have to be carrying some valuable stuff before someone will pop a passive tanked domi or drake.
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Tasko Pal
THE IRIS
Intrepid Crossing
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Posted - 2009.06.23 02:24:00 -
[14]
Ok, reading through your post a bit, I have a couple of ideas to throw out. You need to be faster. The key way I see this happening is by having the goods already in stock when the big opportunity comes around. But at the same time, you don't want to be sitting on a bunch of stock waiting for the golden score. Those goods probably should be turned over on a regular basis. So here's a scheme that might work for you:
1) Find a collection of goods to manufacture that works for you. You already have a feeling for what's likely to run out in the places you check. You don't want manufacture to soak up too much of your time and a good may normally be made below cost, so you may want to buy some of the goods at a convenient market rather than make them.
2) Put these goods on sale for relatively low markup in "sure" markets. The idea is that you start with a modest, high turnover revenue stream for a default. This funds your manufacture lines and keeps the cash and goods flowing for your real operations. If you find one product piles up, that's a good sign to switch over to something else for a bit.
3) When you find a good opportunity, you grab the goods out of the manufacture line or off the market order and move them promptly to the opportunity.
4) When the opportunity is exhausted, you can leave the material on the market and/or in a conveniently located hangar for immediate relisting, or you can return the material back to your high volume markets to unload the excess.
My take is that this scheme allows you a way to solve the manufacture/trade coupling problem. Namely, how to match the output of a clumsy, lagging manufacture line to the short lived market opportunities out there without building up a huge pile of unsold product.
There's a lot of traders with experience in this as well, so I imagine there are plenty of solutions. You might even want to see how other manufacture/traders operate. There's plenty of them to spy on in Eve.
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