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Mining your own ore increases manufacturing profits?

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Shakul	Posted - 2004.10.15 03:42:00 - [1] Its funny how often i see people saying this. People will say that they build an item and mine all the low ends, therefore the item sale price-high end cost=profit. This is completely wrong. Your profit from manufacturing is the item sale price-mineral value. If you could sell all the minerals for 4mil, or you could build an item and sell it for 4mil, your profit from manufacturing is 0 (or even negative because of factory costs). Auction your items for isk, works sort of like ebay.
Shakul	Posted - 2004.10.15 03:42:00 - [2] Its funny how often i see people saying this. People will say that they build an item and mine all the low ends, therefore the item sale price-high end cost=profit. This is completely wrong. Your profit from manufacturing is the item sale price-mineral value. If you could sell all the minerals for 4mil, or you could build an item and sell it for 4mil, your profit from manufacturing is 0 (or even negative because of factory costs). Auction your items for isk, works sort of like ebay.
Excavation Svcs	Posted - 2004.10.15 04:02:00 - [3] yeah some people need economy 101.
Excavation Svcs	Posted - 2004.10.15 04:02:00 - [4] yeah some people need economy 101.
Workdawg	Posted - 2004.10.22 04:28:00 - [5] thats very true. you could also consider time a factor. though in eve manufacturing time isnt really an issue because you just put the BP in the factory and let it go.
Workdawg	Posted - 2004.10.22 04:28:00 - [6] thats very true. you could also consider time a factor. though in eve manufacturing time isnt really an issue because you just put the BP in the factory and let it go.
Sergeant Spot	Posted - 2004.10.22 06:52:00 - [7] A very valid point. Another factor to think on is 'invested time/effort' vs 'return'. Buying low ends, and even high ends, can often be the most efficient choice. It all depends on what is the profitable use of a player's time, which can vary from player to player depending on their skill, available working assets, access to superior mining systems, etc...
Sergeant Spot	Posted - 2004.10.22 06:52:00 - [8] A very valid point. Another factor to think on is 'invested time/effort' vs 'return'. Buying low ends, and even high ends, can often be the most efficient choice. It all depends on what is the profitable use of a player's time, which can vary from player to player depending on their skill, available working assets, access to superior mining systems, etc...
FunGuy	Posted - 2004.10.23 11:48:00 - [9] Actually, although you are right in what you say, thats not how things happen. You could mine minerals worth 4 mil (4mil profit) you could then manufacture something which sells for 8mil (another 4mil profit) which gives you 8mil profit overall (- factory costs) You could buy 4mil minerals (zero equity) and then manufacture something worth 8mil which gives you a 4mil profit you could mine 4mil minerals and sell them for 4mil (4mil profit) Now I know that most T1 items don't make 100% profit but this is just an example. Noone would use 4mil minerals to build an item which sold for 4mil (except a lot of cruiser producers.... something I've never understood) There is one advantage to mining your own minerals, since its just your own time used (or your corps) you can value the minerals at slightly less and under cut someone (mine 4mil worth of minerals, make a product and sell it at only 7mil, you still are making 7mil profit overall even though the manufacturing process only added 3mil to the worth of the minerals) FunGuy Proud to be Xanadu Xanadu T2 BP's
FunGuy	Posted - 2004.10.23 11:48:00 - [10] Actually, although you are right in what you say, thats not how things happen. You could mine minerals worth 4 mil (4mil profit) you could then manufacture something which sells for 8mil (another 4mil profit) which gives you 8mil profit overall (- factory costs) You could buy 4mil minerals (zero equity) and then manufacture something worth 8mil which gives you a 4mil profit you could mine 4mil minerals and sell them for 4mil (4mil profit) Now I know that most T1 items don't make 100% profit but this is just an example. Noone would use 4mil minerals to build an item which sold for 4mil (except a lot of cruiser producers.... something I've never understood) There is one advantage to mining your own minerals, since its just your own time used (or your corps) you can value the minerals at slightly less and under cut someone (mine 4mil worth of minerals, make a product and sell it at only 7mil, you still are making 7mil profit overall even though the manufacturing process only added 3mil to the worth of the minerals) FunGuy Proud to be Xanadu Xanadu T2 BP's
J'Maybe Keens	Posted - 2004.10.23 13:43:00 - [11] Lets set up two people and see what happens. Player A mines for his minerals. Player B buys them, they cost 4million isk. Conveniently they both have 4million ISK. Player A now has 4million isk Player B has 0 isk. Now player A and Player B make stuff. They put their efforts on the market. They sell for 8million ISK. Player A has 12million ISK. Player B has 8million ISK. There are no time factors in this alarmingly simple model and feel free to add them as you see fit. ******** AUTHOR of the COMPLETE mineral and ore Price guide, updated weekly, see Eve Guardian for details
J'Maybe Keens	Posted - 2004.10.23 13:43:00 - [12] Lets set up two people and see what happens. Player A mines for his minerals. Player B buys them, they cost 4million isk. Conveniently they both have 4million ISK. Player A now has 4million isk Player B has 0 isk. Now player A and Player B make stuff. They put their efforts on the market. They sell for 8million ISK. Player A has 12million ISK. Player B has 8million ISK. There are no time factors in this alarmingly simple model and feel free to add them as you see fit. ******** AUTHOR of the COMPLETE mineral and ore Price guide, updated weekly, see Eve Guardian for details
Ada Isdead	Posted - 2004.10.23 15:22:00 - [13] Originally by: J'Maybe Keens Lets set up two people and see what happens. Player A mines for his minerals. Player B buys them, they cost 4million isk. Conveniently they both have 4million ISK. you need a section in here that says something like: Player B spends the time when Player A is mineing shooting NPC's in low-sec, and makes 4 million isk. As you mentioned - without time factors it's a bit missleading, the point is that the end Player B has 8 million + however long it takes to mine 4million isk's worth of mins, which he is free to spend doing whatever he likes. Quote: Player A now has 4million isk Player B has 0 isk. Now player A and Player B make stuff. They put their efforts on the market. They sell for 8million ISK. Player A has 12million ISK. Player B has 8million ISK. There are no time factors in this alarmingly simple model and feel free to add them as you see fit.
Ada Isdead	Posted - 2004.10.23 15:22:00 - [14] Originally by: J'Maybe Keens Lets set up two people and see what happens. Player A mines for his minerals. Player B buys them, they cost 4million isk. Conveniently they both have 4million ISK. you need a section in here that says something like: Player B spends the time when Player A is mineing shooting NPC's in low-sec, and makes 4 million isk. As you mentioned - without time factors it's a bit missleading, the point is that the end Player B has 8 million + however long it takes to mine 4million isk's worth of mins, which he is free to spend doing whatever he likes. Quote: Player A now has 4million isk Player B has 0 isk. Now player A and Player B make stuff. They put their efforts on the market. They sell for 8million ISK. Player A has 12million ISK. Player B has 8million ISK. There are no time factors in this alarmingly simple model and feel free to add them as you see fit.
J'Maybe Keens	Posted - 2004.10.23 16:45:00 - [15] Edited by: J'Maybe Keens on 23/10/2004 16:54:17 Originally by: J'Maybe Keens There are no time factors in this alarmingly simple model and feel free to add them as you see fit. Agreed Ada Isdead, it is misleading is exactly why I added the detail, I wished to see what other people came up with. It might be your mineral buyer spends the first 20 minutes hauling the minerals about, not having the time of his life in 0.0 (how long did it take him to travel there?) How about this, for a complication: There is an advantage to putting your product on the market first because it mean you can charge a higher price than the person putting it onto market second. So now not only is there the extra hour or so messing about shooting NPCs, he is getting a market bonus for putting his product on first. But the point of making it so brutally simple was to show, that those people that mine minerals and imagine they are free do in fact have a considerable advantage. Unless they actual sell their product below cost price (which does happen on occassion but does tend to be loot sellers or those with agent rewards, who dont know how much it is and has nothing to do with miners) they will be coming out on top of the profit pile. ******** AUTHOR of the COMPLETE mineral and ore Price guide, updated weekly, see Eve Guardian for details
J'Maybe Keens	Posted - 2004.10.23 16:45:00 - [16] Edited by: J'Maybe Keens on 23/10/2004 16:54:17 Originally by: J'Maybe Keens There are no time factors in this alarmingly simple model and feel free to add them as you see fit. Agreed Ada Isdead, it is misleading is exactly why I added the detail, I wished to see what other people came up with. It might be your mineral buyer spends the first 20 minutes hauling the minerals about, not having the time of his life in 0.0 (how long did it take him to travel there?) How about this, for a complication: There is an advantage to putting your product on the market first because it mean you can charge a higher price than the person putting it onto market second. So now not only is there the extra hour or so messing about shooting NPCs, he is getting a market bonus for putting his product on first. But the point of making it so brutally simple was to show, that those people that mine minerals and imagine they are free do in fact have a considerable advantage. Unless they actual sell their product below cost price (which does happen on occassion but does tend to be loot sellers or those with agent rewards, who dont know how much it is and has nothing to do with miners) they will be coming out on top of the profit pile. ******** AUTHOR of the COMPLETE mineral and ore Price guide, updated weekly, see Eve Guardian for details
Enderweeks	Posted - 2004.10.23 17:51:00 - [17] Originally by: FunGuy Now I know that most T1 items don't make 100% profit but this is just an example. Noone would use 4mil minerals to build an item which sold for 4mil (except a lot of cruiser producers.... something I've never understood) Two very good reasons I can think of; 1) Its a game and its fun to build things. 2) Sometimes its easier to sell an object than a collection of minerals I have to say that whilst the economic discussions are very enlightening (mostly about other players mental states), they always seem to bypass the fact that Eve is meant to be enjoyable - some players like to mine, some like to build, some like to shoot things. There is an inevitability about these discussions that someone will imply that you are cr*p if you are not making x million per hour or destroying npc homebases in a noob ship and that makes it hard to hold onto the simple fact that playing Eve should be fun.
Enderweeks	Posted - 2004.10.23 17:51:00 - [18] Originally by: FunGuy Now I know that most T1 items don't make 100% profit but this is just an example. Noone would use 4mil minerals to build an item which sold for 4mil (except a lot of cruiser producers.... something I've never understood) Two very good reasons I can think of; 1) Its a game and its fun to build things. 2) Sometimes its easier to sell an object than a collection of minerals I have to say that whilst the economic discussions are very enlightening (mostly about other players mental states), they always seem to bypass the fact that Eve is meant to be enjoyable - some players like to mine, some like to build, some like to shoot things. There is an inevitability about these discussions that someone will imply that you are cr*p if you are not making x million per hour or destroying npc homebases in a noob ship and that makes it hard to hold onto the simple fact that playing Eve should be fun.
J'Maybe Keens	Posted - 2004.10.23 18:46:00 - [19] Originally by: Enderweeks I have to say that whilst the economic discussions are very enlightening (mostly about other players mental states), they always seem to bypass the fact that Eve is meant to be enjoyable - some players like to mine, some like to build, some like to shoot things. And for some the economic discussion is the fun. ******** AUTHOR of the COMPLETE mineral and ore Price guide, updated weekly, see Eve Guardian for details
J'Maybe Keens	Posted - 2004.10.23 18:46:00 - [20] Originally by: Enderweeks I have to say that whilst the economic discussions are very enlightening (mostly about other players mental states), they always seem to bypass the fact that Eve is meant to be enjoyable - some players like to mine, some like to build, some like to shoot things. And for some the economic discussion is the fun. ******** AUTHOR of the COMPLETE mineral and ore Price guide, updated weekly, see Eve Guardian for details
Kaladryn	Posted - 2004.10.23 21:28:00 - [21] This is a great example or how people over simplify things with basic math (and simple thinking), of course there can major advantages to mining your own minerals. I'm not even going to take the time to explain, because if you don't get it, well I don't think I can convince you of the logic you are missing. Kaladryn
Kaladryn	Posted - 2004.10.23 21:28:00 - [22] This is a great example or how people over simplify things with basic math (and simple thinking), of course there can major advantages to mining your own minerals. I'm not even going to take the time to explain, because if you don't get it, well I don't think I can convince you of the logic you are missing. Kaladryn
Enderweeks	Posted - 2004.10.24 08:33:00 - [23] Originally by: J'Maybe Keens Originally by: Enderweeks I have to say that whilst the economic discussions are very enlightening (mostly about other players mental states), they always seem to bypass the fact that Eve is meant to be enjoyable - some players like to mine, some like to build, some like to shoot things. And for some the economic discussion is the fun. Mmmm - as I said very enlightening about your mental state
Enderweeks	Posted - 2004.10.24 08:33:00 - [24] Originally by: J'Maybe Keens Originally by: Enderweeks I have to say that whilst the economic discussions are very enlightening (mostly about other players mental states), they always seem to bypass the fact that Eve is meant to be enjoyable - some players like to mine, some like to build, some like to shoot things. And for some the economic discussion is the fun. Mmmm - as I said very enlightening about your mental state
J'Maybe Keens	Posted - 2004.10.24 12:02:00 - [25] Edited by: J'Maybe Keens on 24/10/2004 12:05:53 Originally by: Enderweeks There is an inevitability about these discussions that someone will imply that you are crp if you are not making x million per hour or destroying npc homebases in a noob ship and that makes it hard to hold onto the simple fact that playing Eve should be fun. Originally by:* Enderweeks Mmmm - as I said very enlightening about your mental state And is that your attempt at implication? ******** AUTHOR of the COMPLETE mineral and ore Price guide, updated weekly, see Eve Guardian for details
J'Maybe Keens	Posted - 2004.10.24 12:02:00 - [26] Edited by: J'Maybe Keens on 24/10/2004 12:05:53 Originally by: Enderweeks There is an inevitability about these discussions that someone will imply that you are crp if you are not making x million per hour or destroying npc homebases in a noob ship and that makes it hard to hold onto the simple fact that playing Eve should be fun. Originally by:* Enderweeks Mmmm - as I said very enlightening about your mental state And is that your attempt at implication? ******** AUTHOR of the COMPLETE mineral and ore Price guide, updated weekly, see Eve Guardian for details
Excavation Svcs	Posted - 2004.10.25 08:57:00 - [27] Its so easy, no need for calculations or anything. Just think of it this way: Theres no difference if you mine or buy minerals, because you can in boths cases sell them again. So the cost for building something is the sell value of the minerals. Doesnt matter is you mined them,stole them or bought them.
Excavation Svcs	Posted - 2004.10.25 08:57:00 - [28] Its so easy, no need for calculations or anything. Just think of it this way: Theres no difference if you mine or buy minerals, because you can in boths cases sell them again. So the cost for building something is the sell value of the minerals. Doesnt matter is you mined them,stole them or bought them.
Toran Mehtar	Posted - 2004.10.25 13:41:00 - [29] Mine/buy/repro, doesn't make a huge difference, the only thing that bothers me is those people that effectively sell items at less than mineral value because they didn't pay for the raw materials (well, not with isk anyway). This is just one of the reasons why the tech 1 economy is all but dead.
Toran Mehtar	Posted - 2004.10.25 13:41:00 - [30] Mine/buy/repro, doesn't make a huge difference, the only thing that bothers me is those people that effectively sell items at less than mineral value because they didn't pay for the raw materials (well, not with isk anyway). This is just one of the reasons why the tech 1 economy is all but dead.

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