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Commander Pan
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Posted - 2009.11.15 02:41:00 -
[1]
So I'm new at manufacturing. I downloaded an Excel profit sheet. After plugging in different numbers (and assuming all LVL 5 and a reasonably high ME / PE), it seems that NOTHING manufactured (T1 or T2) is profitable if all raw materials and blueprints are purchased at market value?
Is that true? Or is the spread sheet wrong?
I must be missing something, because otherwise, it is more profitable to mine and sell raw materials.
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Tyranus vonCarstein
Caldari Deep Core Mining Inc.
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Posted - 2009.11.15 03:02:00 -
[2]
If you purchasing all your blueprint copies from the market, you'll probably find it very difficult to make a profit on nearly any item. You'll need to invest in BPO's and research them (or purchase researched ones) and either make copies of them to use yourself (or sell) or use the BPO directly in manufacturing.
It is possible to make a profit purchasing just the minerals at market prices on some items, but again... Factoring in any blueprint cost will be difficult to turn a major profit.
Consider blueprints an investment, you'll never actually have to sell them below what you paid, and will probably earn more money if you have researched them and find the need to sell them.
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Commissar Veldt
Caldari Progressive Systems
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Posted - 2009.11.15 03:04:00 -
[3]
You will probably find that most T1 items are not worth the time. Might aswell sell your minerals. The market is saturated, any man and his dog can manufacture T1. I know a lot of people who make a pretty decent living off T2/Invention. However, this doesnt mean your spreadsheet is incorrect. The item may not be profitable (You can find countless forum debates about this and why 'T2 is just not profitable' because of BPO holders/minerals I mine are free people/introduction of T3 etc... so I wont bother starting another ten page post). If its not profitable then try another item, or try the same item in a different location, or source your raw materials from another location etc... There are plenty of variables you can play with so just keep doing the numbers. If it doesnt add up then forget it and try another item. If, like me, you find the whole thing is one big pain in the arze then just flog your minerals straight off. All depends how much time your willing to put in. Hope this helps.
Fly safe
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EvilCheez
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Posted - 2009.11.15 04:40:00 -
[4]
did the numbers for a brutix, buying all your minerals from the sell side you will still make 6+% selling the ships also on the sell side. Those are jita prices.
If you are isk poor, I suggest using bpc's. Your margin won't be as high, but you also won't mess up your cash flow by sinking money into a bpo. Bpc's also allow you to only be building what is most profitable at the time - rather than being locked into what you happen to have a bpo for. I have Billions of isk, and am only now buying battlecruiser and battleship bpo's.
It also depends where you are, what your manufacturing, and where you sell it. Out in the stix, you can generally find trit and pye for dirt cheap, while meg and zyd maybe not available at all.
You should be able to make isk on any tech I ammo, but remember some sell in much higher quantity than others.
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Zifrian
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Posted - 2009.11.15 05:39:00 -
[5]
Originally by: Tyranus vonCarstein
It is possible to make a profit purchasing just the minerals at market prices on some items, but again... Factoring in any blueprint cost will be difficult to turn a major profit.
Don't factor in BPO costs. They are sunk costs and you can recoup any BPO cost by selling it on the market or on contracts if you "went out of business" so to speak.
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Fist1
KryTek Armaments Tread Alliance
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Posted - 2009.11.15 05:43:00 -
[6]
Edited by: Fist1 on 15/11/2009 05:45:01 Edited by: Fist1 on 15/11/2009 05:44:49 1. best bet for stable market pricing is to go to the system called Jita (if you havent been there yet) and use those prices. Its the universe trading hub.
2. some people will put out low-ball buy orders for ore and minerals on the market. This cuts your cost to build but tends to be slow to accumulate and a PITA to go pick up when you want it(I just had to pick up ore from 300 different systems, take my word, don't do REGIONAL buy orders lol)
3. many miners will train for manufacturing after they max their mining skills. They will use their mining to supplement their supply and cut cost.
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Zifrian
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Posted - 2009.11.15 05:50:00 -
[7]
Originally by: Fist1
1. best bet for stable market pricing is to go to the system called Jita (if you havent been there yet) and use those prices. Its the universe trading hub.
2. some people will put out low-ball buy orders for ore and minerals on the market. This cuts your cost to build but tends to be slow to accumulate and a PITA to go pick up when you want it(I just had to pick up ore from 300 different systems, take my word, don't do REGIONAL buy orders lol)
3. many miners will train for manufacturing after they max their mining skills. They will use their mining to supplement their supply and cut cost.
No need to go to Jita, just use Eve Central. Plus, regional prices are what dictates prices of manufactured goods most times. Time = money and Hauling = time. The more time you spend hauling the more time you could have got the minerals from local markets or mining.
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Vigilant
Gallente Vigilant's Vigilante's
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Posted - 2009.11.15 06:20:00 -
[8]
BPO's are isk sinks...recoup over time. Dont' factor them in.
Second, use buy orders in less traveled regions to get your minerals a bit cheaper. Also, mine a bit.
Lastly, find a good BPC dealer to hook ya up front with a deal on bulk buy to get you started. Look for packages on Cruisers / BS/ BC usually around 25 mill for a bunch ships copies at 5 to 10 runs.
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Yarinor
Lone Star Joint Venture Wildly Inappropriate.
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Posted - 2009.11.15 09:52:00 -
[9]
Guys remember: 1) My minerals are cheap because I get them from buy orders 2) I can sell that item there for higher profit doesn't make an item profitable to make.
In both cases you're just earning a bit on trading and losing some of it on manufacturing. In essence it's exactly the same as "I mined my minerals so they're free".
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Sulaxxanna
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Posted - 2009.11.15 10:11:00 -
[10]
Originally by: Yarinor Guys remember: 1) My minerals are cheap because I get them from buy orders 2) I can sell that item there for higher profit doesn't make an item profitable to make.
In both cases you're just earning a bit on trading and losing some of it on manufacturing. In essence it's exactly the same as "I mined my minerals so they're free".
http://wiki.eveonline.com/wiki/Economics_101
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Baka Lakadaka
Gallente Agony Unleashed Agony Empire
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Posted - 2009.11.15 13:13:00 -
[11]
It's not hard to regularly make 100% or more on certain T1 items......but not if you try to sell in trade hubs.
You need to base your mineral buys on being the highest buy order and your sales should be based on being the lowest sell order. If you base everything on the average prices, then the speadsheet will give you the average answer - which is that if you buy and sell at the average, then there is no profit.
______________________ Agony Unleashed is proud to support TeaDaze for CSM |
Sulaxxanna
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Posted - 2009.11.15 14:07:00 -
[12]
Originally by: Baka Lakadaka It's not hard to regularly make 100% or more on certain T1 items......but not if you try to sell in trade hubs.
You need to base your mineral buys on being the highest buy order and your sales should be based on being the lowest sell order. If you base everything on the average prices, then the speadsheet will give you the average answer - which is that if you buy and sell at the average, then there is no profit.
If you base minerals on highest buy order so your manufacturing works, wouldn't you better off just selling the minerals at lowest sell order in the same station instead? Obviously I'd still buy the minerals at highest buy order, but I'd only manufacture items that make a profit at mineral sell order prices.
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Vaerah Vahrokha
Minmatar Dark-Rising IT Alliance
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Posted - 2009.11.16 00:48:00 -
[13]
I am making up to 100% profit on some T1 items and about 200% on few T2 (108 sold today). Don't see this so bad income tbh. - Auditing and consulting
Before asking for investors, please read http://tinyurl.com/n5ys4h and http://tinyurl.com/lrg4oz
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Zifrian
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Posted - 2009.11.16 02:32:00 -
[14]
Originally by: Vaerah Vahrokha I am making up to 100% profit on some T1 items and about 200% on few T2 (108 sold today). Don't see this so bad income tbh.
You factor in your datacore costs on T2? My guess is no.
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Breaker77
Gallente
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Posted - 2009.11.16 02:42:00 -
[15]
Originally by: Zifrian
Originally by: Vaerah Vahrokha I am making up to 100% profit on some T1 items and about 200% on few T2 (108 sold today). Don't see this so bad income tbh.
You factor in your datacore costs on T2? My guess is no.
Profits that are are very possible on T2 if you know where to buy and sell at.
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Zifrian
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Posted - 2009.11.16 03:56:00 -
[16]
Originally by: Breaker77
Originally by: Zifrian
Originally by: Vaerah Vahrokha I am making up to 100% profit on some T1 items and about 200% on few T2 (108 sold today). Don't see this so bad income tbh.
You factor in your datacore costs on T2? My guess is no.
Profits that are are very possible on T2 if you know where to buy and sell at.
200%? Perhaps if you go to 0.0. Maybe other locations.
But then you are making money off of production and hauling. In the end, it all comes down to isk profit per hour. Buying mats in Jita and selling them 20 jumps costs more than the mats you buy.
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Yarinor
Lone Star Joint Venture Wildly Inappropriate.
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Posted - 2009.11.16 16:21:00 -
[17]
Originally by: Sulaxxanna
Originally by: Yarinor Guys remember: 1) My minerals are cheap because I get them from buy orders 2) I can sell that item there for higher profit doesn't make an item profitable to make.
In both cases you're just earning a bit on trading and losing some of it on manufacturing. In essence it's exactly the same as "I mined my minerals so they're free".
http://wiki.eveonline.com/wiki/Economics_101
...
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Vaerah Vahrokha
Minmatar Dark-Rising IT Alliance
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Posted - 2009.11.16 17:17:00 -
[18]
Quote:
You factor in your datacore costs on T2? My guess is no.
Since I perform production and cost analysis from the basic components up for third parties I am pretty sure my Excel files cover datacores pretty well. - Auditing and consulting
Before asking for investors, please read http://tinyurl.com/n5ys4h and http://tinyurl.com/lrg4oz
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mxzf
Minmatar Shovel Bros The Phenom Alliance
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Posted - 2009.11.16 17:25:00 -
[19]
Originally by: Zifrian
Originally by: Breaker77
Originally by: Zifrian
Originally by: Vaerah Vahrokha I am making up to 100% profit on some T1 items and about 200% on few T2 (108 sold today). Don't see this so bad income tbh.
You factor in your datacore costs on T2? My guess is no.
Profits that are are very possible on T2 if you know where to buy and sell at.
200%? Perhaps if you go to 0.0. Maybe other locations.
But then you are making money off of production and hauling. In the end, it all comes down to isk profit per hour. Buying mats in Jita and selling them 20 jumps costs more than the mats you buy.
I regularly make 200% profit on certain T2 items in highsec, after inventing and then buying the mats on the market (our corp can't moon mine because we're in highsec) and factoring in success rates on invention I still get around 200% returns (or ~10% for corp-mates since I provide for the corp around at-cost too).
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Midnight Dawn
Minmatar
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Posted - 2009.11.17 01:36:00 -
[20]
I'm really not sure if it's more profitable to sell the minerals or manufacture stuff. What I usually do is mine Veld, Scordite, etc., highsec ore as much as is in my system, refine it, and buy whatever I'm missing on the market. Since trit is what is usually needed in the greatest amount, I focus on Veld, but sometimes those rocks are gone by the time I log in.
It's been my limited experience that T1 ships provide the smallest profit margin. Maybe it's just that everyone wants to make ships. I don't know, but since I can't make any T2 stuff yet, I stick with T1 mods, not ships.
Rigs are great if you have a mission runner getting you salvage material. I run L4's on an alt and contract all the salvage material to my manufacturer. However rig prices are falling so I wouldn't buy salvage to make rigs unless you really do your homework.
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Tau Cabalander
Caldari
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Posted - 2009.11.17 04:28:00 -
[21]
Keep in mind that we are 2 weeks from an expansion, which historically means the market crashes as everyone is hoarding.
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MightyRhinox
Minmatar Rhinox Heavy Industries Twilight Military Industrial Complex Alliance
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Posted - 2009.11.17 06:05:00 -
[22]
Originally by: Sulaxxanna
Originally by: Yarinor Guys remember: 1) My minerals are cheap because I get them from buy orders 2) I can sell that item there for higher profit doesn't make an item profitable to make.
In both cases you're just earning a bit on trading and losing some of it on manufacturing. In essence it's exactly the same as "I mined my minerals so they're free".
http://wiki.eveonline.com/wiki/Economics_101
Yeah, that needs a rewrite...
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Estel Arador
Minmatar AFK
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Posted - 2009.11.17 08:33:00 -
[23]
Note it's currently profitable to build T1 battleships, insure them, and self-destruct.
It's the best thing that could happen, you don't have to wait for people to buy your stuff!
Free jumpclone service: Thread |
Chainsaw Plankton
IDLE GUNS IDLE EMPIRE
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Posted - 2009.11.18 02:56:00 -
[24]
Originally by: Tau Cabalander
Keep in mind that we are 2 weeks from an expansion, which historically means the market crashes as everyone is hoarding.
if everyone is hording right now......
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Dr BattleSmith
PAX Interstellar Services
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Posted - 2009.11.18 05:19:00 -
[25]
Originally by: Estel Arador Note it's currently profitable to build T1 battleships, insure them, and self-destruct.
It's the best thing that could happen, you don't have to wait for people to buy your stuff!
A glaring example of just how fake and over-supported the Eve market is.
You know I can go down to the Toyota dealer, buy a car, drive it around to the wreckers, sell it for scrap metal for more then I paid. lol right....
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Borun Tal
Minmatar
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Posted - 2009.11.18 06:38:00 -
[26]
Always keep in mind that you will rarely know what someone else's costs are. Just because it isn't profitable to you don't stupidly assume that the other guys is a "minerals are free" type; he/she may just know more and have access that you don't.
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Jacabon Mere
Caldari Capital Endeavours
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Posted - 2009.11.18 07:55:00 -
[27]
Originally by: Dr BattleSmith
Originally by: Estel Arador Note it's currently profitable to build T1 battleships, insure them, and self-destruct.
It's the best thing that could happen, you don't have to wait for people to buy your stuff!
A glaring example of just how fake and over-supported the Eve market is.
You know I can go down to the Toyota dealer, buy a car, drive it around to the wreckers, sell it for scrap metal for more then I paid. lol right....
Its mroe like buy your new Aurion, insure it and go write it off by dropping it off a cliff and getting more than what you payed for it without the insurance company caring. -----------------------
Capital Endeavours is recruiting Aussies/players active around DT. Check us out here |
Ben Harrigan
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Posted - 2009.11.18 12:17:00 -
[28]
Originally by: Sulaxxanna
Originally by: Baka Lakadaka It's not hard to regularly make 100% or more on certain T1 items......but not if you try to sell in trade hubs.
You need to base your mineral buys on being the highest buy order and your sales should be based on being the lowest sell order. If you base everything on the average prices, then the speadsheet will give you the average answer - which is that if you buy and sell at the average, then there is no profit.
If you base minerals on highest buy order so your manufacturing works, wouldn't you better off just selling the minerals at lowest sell order in the same station instead? Obviously I'd still buy the minerals at highest buy order, but I'd only manufacture items that make a profit at mineral sell order prices.
I generally agree on that. Basing production cost on buy orders and income on sell orders will give a false result, since it might have been better to just resell the original item.
There's a lot of exceptions though. Sometimes buy orders is the price, since some items almost never sell at sell orders. In this case its not possible to resell, but transforming it into something else may make it possible. Whether a profit like this is based on trading or manufacturing is a matter of definition I guess. Both are needed to make it work.
In other cases its possible to buy materials at buy orders, sell some of them, convert some of them and sell the end result. Manufacturing can be a way to add demand in cases where the market is the bottleneck.
While in general its a good idea to isolate different types of business to see if they turn a profit individually, its not always possible. Sometimes its worthwhile to do part of a production chain to open up more demand, or to make logistics easier, even if that production technically is a loss.
A production chain also adds mobility and more choices. A trader limited to buying and selling the same product is more vulnerable to price movements, than someone who can choose to either resell immediately, or to convert the materials before reselling.
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Darcon Kylote
Terminal Impact
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Posted - 2009.11.18 13:49:00 -
[29]
Edited by: Darcon Kylote on 18/11/2009 13:54:10
Originally by: Borun Tal Always keep in mind that you will rarely know what someone else's costs are. Just because it isn't profitable to you don't stupidly assume that the other guys is a "minerals are free" type; he/she may just know more and have access that you don't.
Well, depends on how you look at it. I used to live in NPC 0.0 and there was trit on the local markets at around 1 to 1.5 when it was selling in empire for over 4. This happens because of hauler spawns dropping 100mil trit several times a week in some constellations. On most jump freighter runs I was going back empty anyway, so I'd load up on trit and jump it back.
So now I got a massive load of trit in empire that I paid 1.5 for. I could sell it locally for about 4.0, or I could build a battleship and sell that battleship for market value or just under to move it fast. Let's disregard hauling and say I can sell either the BS or the trit equally quickly in my local highsec.
So, what's my cost of trit on that battleship hull? Is it the 1.5 I paid or the 4.0 I could have gotten? There's no question in my mind, it's the 4.0 I could have gotten.
It's the guys that think their cost is 1.5 that keep prices low. Not that I'm complaining, I'll take their money. -- Terminal Impact is recruiting PVPers for fun ops in lowsec/0.0/wormhole space. Visit our website or join ingame channel "the tict pub". |
Zifrian
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Posted - 2009.11.18 19:06:00 -
[30]
Edited by: Zifrian on 18/11/2009 19:07:13
Originally by: mxzf
I regularly make 200% profit on certain T2 items in highsec, after inventing and then buying the mats on the market (our corp can't moon mine because we're in highsec) and factoring in success rates on invention I still get around 200% returns (or ~10% for corp-mates since I provide for the corp around at-cost too).
I guess I wasn't paying attention to my profits but I guess I make 100% more often than not, sometimes I make more but I don't think I have anything you can make 200% off of. I'd love to see an example but since people don't like to share that information here (not that I blame you) I'll take your word for it.
Thing is though, making isk is all about time spent. It takes a significant amount of time making T2 items. Then the market for those items can be fast or from my experience, mostly slow. There are some items that fly off the shelf, which of course even more people know about adding to more competition, but others that you have to get involved in market wars with other people trying to sell the same stuff. I remember a few weeks ago having issues trying to sell mackinaws because where I built them I had to fight with someone else on the market doing the same thing. I ended up selling them by ferrying them to different systems that I thought they would sell in. Then they sold, probably faster than the guy that I was in market war with but at what cost? I spent a bit of time and some risk moving around those items. Maybe it doesn't matter but it was a few hours of time I could have been doing something else.
Anyway, I think as some of you have already noted well, the EVE market is far more dynamic and complex than I think a lot of people give it. When you can refer to items as "sunk costs" and people say that they had analyzed their "opportunity cost" you are getting into a more realistic market system than any MMO I've seen. Of course it's not perfect but it really is nice.
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LHA Tarawa
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Posted - 2009.11.18 19:20:00 -
[31]
Based on the OP, are these the... I guess you'd call them counter arguments.
1) Use BPO and don't include the price of a BPC run into the price. 2) Ensure you are using well researched BPO to cut down and waste.
3) a) Be sure to buy your minerals for below Jita average sell order price. or b) Be sure you will be able to sell for above the Jita average buy order price. or even better... c) both a and b.
And above all else, 4) be sure to consider the minerals as free or discounted if you got them from mining or reprocessing loot.
Okay, 4 is just to see if you are paying attention.
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ddooxx
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Posted - 2009.11.18 19:46:00 -
[32]
Originally by: Dr BattleSmith
Originally by: Estel Arador Note it's currently profitable to build T1 battleships, insure them, and self-destruct.
It's the best thing that could happen, you don't have to wait for people to buy your stuff!
A glaring example of just how fake and over-supported the Eve market is.
You know I can go down to the Toyota dealer, buy a car, drive it around to the wreckers, sell it for scrap metal for more then I paid. lol right....
http://en.wikipedia.org/wiki/Chop_shop An illegal chop shop can disassemble your Toyota into component parts that sell for more than you paid for it.
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Dr BattleSmith
PAX Interstellar Services
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Posted - 2009.11.21 00:37:00 -
[33]
Originally by: ddooxx
http://en.wikipedia.org/wiki/Chop_shop An illegal chop shop can disassemble your Toyota into component parts that sell for more than you paid for it.
What about the legal chop shop? Not so profitable when you have to pay for the car?
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Jesnens LoveSlave
Koichi Scientific
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Posted - 2009.11.21 06:48:00 -
[34]
Edited by: Jesnens LoveSlave on 21/11/2009 06:52:39
Originally by: Darcon Kylote Edited by: Darcon Kylote on 18/11/2009 14:08:03 Edited by: Darcon Kylote on 18/11/2009 13:54:10
Originally by: Borun Tal Always keep in mind that you will rarely know what someone else's costs are. Just because it isn't profitable to you don't stupidly assume that the other guys is a "minerals are free" type; he/she may just know more and have access that you don't.
No. Even it they aren't considered free, it's still the same error in judgement. Here's an example.
I used to live in NPC 0.0 and there was trit on the local markets at around 1 to 1.5 when it was selling in empire for over 4. This happens because of hauler spawns dropping 100mil trit several times a week in some constellations. On most jump freighter runs I was going back empty anyway, so I'd load up on trit and jump it back.
So now I got a massive load of trit in empire that I paid 1.5 for. I could sell it locally for about 4.0, or I could build a battleship and sell that battleship for market value or just under to move it fast. Let's disregard hauling and say I can sell either the BS or the trit equally quickly in my local highsec.
So, what's my cost of trit on that battleship hull? Is it the 1.5 I paid or the 4.0 I could have gotten? There's no question in my mind, it's the 4.0 I could have gotten. No matter how smart I am or how much access I have to a good deal, my cost is always 4.0 because that's the opportunity cost of my minerals.
It's the guys that think their cost is 1.5 that keep prices low. Not that I'm complaining, I'll take their money.
Except, since you were coming back empty anyways you are making a profit as your opportunity costs are zero. You would have taken that JF to 0.0 anyways, so the opportunity costs involved are those related to the jump freighter trip, not hauling the trit back. When you resell the trit in empire you get 4isk pu, whether it is in the form of a battleship or as raw mins makes no difference, you still make a profit you would not have made otherwise.
edit, You ever think that maybe the ships in empire are the result of people getting mins for dirt cheap in 0.0, then building them into ships for the favorable volume so that can be shipped to empire and resold easily and quickly?
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Lord Fitz
Project Amargosa
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Posted - 2009.11.21 11:06:00 -
[35]
Edited by: Lord Fitz on 21/11/2009 11:07:03
Originally by: Breaker77
Originally by: Zifrian
Originally by: Vaerah Vahrokha I am making up to 100% profit on some T1 items and about 200% on few T2 (108 sold today). Don't see this so bad income tbh.
You factor in your datacore costs on T2? My guess is no.
Profits that are are very possible on T2 if you know where to buy and sell at.
Alternately you can just buy and sell and not actually do any of the building bit and still make most / all of the profit.
Quote: Thanks - we are debating in alliance about whether it's just cheaper to buy @ Jita than do the work ourselves, and the BPOs are always a question. I'd love to buy an old char that owns a couple of T2 ship BPOs...
BPOs only have any effect at all on invention profitability, if the market for the item is less than what can be produced by all BPOs, in which case, the BPO itself is unlikely to be profitable (and many T2 BPOs simply aren't). Prices are determined by the lowest price people are willing to invent for, and in many cases, that's an on-paper loss.
With the amount T2 BPOs have been devaluing of late (due to reduced material and invention costs), it's likely that if you sold a T2 BPO a year ago, and spent the year inventing you would be far better off than if you held onto it and spent the year building from it. Basically, they're great big money pits whose value is determined not by their very small profits (compared to profits from other similar sized investments) but by their rarity (and there are over 10,000 of them).
Most importantly, if something is not profitable, don't whinge about it, just don't do it. The reason it's unprofitable is because there are 500 people out there who are still doing it and undercutting each other despite there being no profit.
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Yarinor
Lone Star Joint Venture Wildly Inappropriate.
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Posted - 2009.11.21 11:18:00 -
[36]
Originally by: Lord Fitz BPOs only have any effect at all on invention profitability, if the market for the item is less than what can be produced by all BPOs, in which case, the BPO itself is unlikely to be profitable (and many T2 BPOs simply aren't). Prices are determined by the lowest price people are willing to invent for, and in many cases, that's an on-paper loss.
With the amount T2 BPOs have been devaluing of late (due to reduced material and invention costs), it's likely that if you sold a T2 BPO a year ago, and spent the year inventing you would be far better off than if you held onto it and spent the year building from it. Basically, they're great big money pits whose value is determined not by their very small profits (compared to profits from other similar sized investments) but by their rarity (and there are over 10,000 of them).
Most importantly, if something is not profitable, don't whinge about it, just don't do it. The reason it's unprofitable is because there are 500 people out there who are still doing it and undercutting each other despite there being no profit.
The problem I see with the eve economy atm is there is at least SOME "My minerals/datacores are cheap cuz I got them from buy orders" perhaps even some "my lab slots are free cuz I used a corp lab".
This puts basicly everything below the profitable to build margin. Then add on top of that the fact that many people are too lazy to put up their own buy orders which gives traders items for cheap, and why would a trader care if the T2 mod he just bought for + the build cost sells for 60% of buildcost? He still made a profit. Obviously this puts manufacturers/inventors at a disadvantage, but there's nothing really to do about it.
The only way to fix it, as I see it, is to blow more stuff up so more stuff needs to be produced. We haven't seen any major wars recently, which also explains why mineral prices are at the insurance fraud level. (However, IT seems to be messing a bit around with PL atm, so maybe that can evolve a bit.
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Jon Rackham
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Posted - 2009.11.21 19:58:00 -
[37]
Well, I can't speak specifically about anyone else's experience, but I've been operating as a T1 Battleship dealer in Jita for the last several months, and I've made a pretty decent profit. I buy minerals at the Jita buy order price, haul them 1 jump away, and manufacture using BPCs (always buy the lowest price BPCs you can so long as the ML is at least 10). Then I haul the ships back and sell them for Jita sell order price. My profit margins are narrow (only 5%-10%) but they're consistent. And before you ask, yes, I've checked to see if I could make more by selling the minerals directly, and I couldn't. I'm sure I could make ISK faster some other way, but the game's about having fun not just getting rich.
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Nahkep Narmelion
Gallente Center for Advanced Studies
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Posted - 2009.11.24 04:55:00 -
[38]
Quote: Don't factor in BPO costs. They are sunk costs and you can recoup any BPO cost by selling it on the market or on contracts if you "went out of business" so to speak.
Yes and no. No, BPO's are not sunk costs. You can recover the isk you spent by reselling the BPO at any time. As such, this makes BPO's a fixed cost. However, the poster above is correct in that neither fixed costs or sunk costs are used in setting the price--only variable costs.
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Kolatha
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Posted - 2009.11.24 09:07:00 -
[39]
Originally by: Borun Tal Always keep in mind that you will rarely know what someone else's costs are. Just because it isn't profitable to you don't stupidly assume that the other guys is a "minerals are free" type; he/she may just know more and have access that you don't.
You will also find that in a lot of those "below cost" sales the seller is more interested in a quick sell and quick return rather than high profit margins.
Also, a lot of people just don't care if they aren't selling at the maximum achievable profit, they are happy if they start the day with 20 million isk and end the day with 30 million isk. It plain and simply just does not matter to them that they could have ended the day with 35 million isk instead if they had followed the market trends. They are happy with the profit made and don't care to put the extra effort in to sc**** out a few extra isk.
To these people profit is profit and it doesn't matter them that the profit could have been larger.
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Andron Blaxcor
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Posted - 2009.11.24 11:20:00 -
[40]
Originally by: Dr BattleSmith
Originally by: Estel Arador Note it's currently profitable to build T1 battleships, insure them, and self-destruct.
It's the best thing that could happen, you don't have to wait for people to buy your stuff!
A glaring example of just how fake and over-supported the Eve market is.
You know I can go down to the Toyota dealer, buy a car, drive it around to the wreckers, sell it for scrap metal for more then I paid. lol right....
Yep, we can't have a fake and over-supported market in a game full of spaceships shooting lasers at each other now could we? This is a game and the lower cap on mineral costs from insurance stops markets collapsing to zero price and destroying the game. This isn't the real world, different rules apply, get over it.
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Nahkep Narmelion
Gallente Center for Advanced Studies
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Posted - 2009.11.24 14:47:00 -
[41]
Edited by: Nahkep Narmelion on 24/11/2009 14:54:59
Quote: Yep, we can't have a fake and over-supported market in a game full of spaceships shooting lasers at each other now could we? This is a game and the lower cap on mineral costs from insurance stops markets collapsing to zero price and destroying the game. This isn't the real world, different rules apply, get over it.
Quite correct. The BS insurance provides a soft price floor for minerals. It insures that there is at least some isk to be made by mining. This in turns keeps the market going. If it were removed then the lower bound price on minerals would be zero.
Contrary to some posts I've seen on these forums the major problem with the Eve economy is not inflation, but exactly the opposite--deflation. Prices generally trend down over time, not up. Look at each new ship as it is introduced. I make T2 items and the price there has also been trending down.
Quote: Except, since you were coming back empty anyways you are making a profit as your opportunity costs are zero. You would have taken that JF to 0.0 anyways, so the opportunity costs involved are those related to the jump freighter trip, not hauling the trit back.
No. The opportunity cost is the next best option he has for the trit. So if he builds BSs then the next best option is to sell it directly for 4.0/unit. If he sells it, it is using in module/ship construction. The jump freighter costs are sunk costs and totally irrelevant since he cannot recover the cost (the fuel is used and gone--hence unrecoverable).
Seriously, sunk costs are just that sunk...gone. Ignore them. Simple example, you plan a vacation and the hotel has a $100 non-refundable deposit. The day you are to leave you feel sick and really just want to stay home. Now do you still go because you'll lose that $100 or stay home? You stay home because the depost was lost to begin with, it is non-refundable and hence sunk.
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GrandPa Throttlebottom
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Posted - 2009.11.25 22:24:00 -
[42]
Originally by: Darcon Kylote Edited by: Darcon Kylote on 18/11/2009 14:08:03 Edited by: Darcon Kylote on 18/11/2009 13:54:10
Originally by: Borun Tal Always keep in mind that you will rarely know what someone else's costs are. Just because it isn't profitable to you don't stupidly assume that the other guys is a "minerals are free" type; he/she may just know more and have access that you don't.
No. Even it they aren't considered free, it's still the same error in judgement. Here's an example.
I used to live in NPC 0.0 and there was trit on the local markets at around 1 to 1.5 when it was selling in empire for over 4. This happens because of hauler spawns dropping 100mil trit several times a week in some constellations. On most jump freighter runs I was going back empty anyway, so I'd load up on trit and jump it back.
So now I got a massive load of trit in empire that I paid 1.5 for. I could sell it locally for about 4.0, or I could build a battleship and sell that battleship for market value or just under to move it fast. Let's disregard hauling and say I can sell either the BS or the trit equally quickly in my local highsec.
So, what's my cost of trit on that battleship hull? Is it the 1.5 I paid or the 4.0 I could have gotten? There's no question in my mind, it's the 4.0 I could have gotten. No matter how smart I am or how much access I have to a good deal, my cost is always 4.0 because that's the opportunity cost of my minerals.
It's the guys that think their cost is 1.5 that keep prices low. Not that I'm complaining, I'll take their money.
Almost, while you have opportunity costs accounted for (heh I crack myself up) you need to pay some more attention to the next chapter in your microeconomic textbook, price elasticity. You say, ôàI can sell either the trit or the BS equally quickly in my local Highsec.ö You canÆt. The purpose of manufacturing an item for isk is to swap the velocity of sales for the velocity of production where, and only where, the velocity of production is much faster than the velocity of sales of the underlying materials. A BS priced at its mineral sales value will sell instantly, while the minerals themselves will need daysàweeksà months to sell.
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MightyRhinox
Minmatar Rhinox Heavy Industries Twilight Military Industrial Complex Alliance
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Posted - 2009.11.26 05:42:00 -
[43]
Edited by: MightyRhinox on 26/11/2009 05:42:58
Originally by: Nahkep Narmelion
Yes and no. No, BPO's are not sunk costs. You can recover the isk you spent by reselling the BPO at any time. As such, this makes BPO's a fixed cost. However, the poster above is correct in that neither fixed costs or sunk costs are used in setting the price--only variable costs.
Yeah, you need to go learn what a sunk cost and fixed cost before you open your mouth again.
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Arron S
Gallente Final Conflict UK Warped Aggression
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Posted - 2009.11.26 09:22:00 -
[44]
T2 Production is still profitable even from buying BPC's off the market on some items. Some times your better off trading that item.
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Vaerah Vahrokha
Minmatar Dark-Rising IT Alliance
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Posted - 2009.11.26 09:36:00 -
[45]
Quote:
I guess I wasn't paying attention to my profits but I guess I make 100% more often than not, sometimes I make more but I don't think I have anything you can make 200% off of. I'd love to see an example but since people don't like to share that information here (not that I blame you) I'll take your word for it.
Oh, it's an easy list: take the T2 items that sell for high number per day and check their graph.
Periodically (economics 101) they rise and form speculative bubbles. Have the stuff made for the bubble peak (or have a varied inventory) and pronto you get your 200% margins. Ie an item usually selling for 850k sometimes goes up to 1.8M, and that's when I sell it.
- Auditing and consulting
Before asking for investors, please read http://tinyurl.com/n5ys4h and http://tinyurl.com/lrg4oz
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Athamai
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Posted - 2009.11.27 18:14:00 -
[46]
First, congratulations on the correct way to calculate profit.
Second, you can find profitable t1(and t2) things to produce... You might be looking somewhere with a very efficient market so try going somewhere else. There are plenty of places where a variety of items simply are not available and plenty of places where you can sell them for a reasonable profit.
T2 takes a TON more research, and has many additional risks so I focused on T1.
Originally by: Commander Pan So I'm new at manufacturing. I downloaded an Excel profit sheet. After plugging in different numbers (and assuming all LVL 5 and a reasonably high ME / PE), it seems that NOTHING manufactured (T1 or T2) is profitable if all raw materials and blueprints are purchased at market value?
Is that true? Or is the spread sheet wrong?
I must be missing something, because otherwise, it is more profitable to mine and sell raw materials.
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