Zifrian
Licentia Ex Vereor
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Posted - 2009.12.20 09:41:00 -
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Edited by: Zifrian on 20/12/2009 09:44:08
The "I mined it so it's free" line only goes so far. I have yet to see areas of the market that would reflect this directly. It's usually due to other factors that people don't bother to consider.
The easiest is that T1 modules are not profitable because they are dropped from rats. Even when you get a 1400mm Howitizer, you can get more money from reprocessing it than selling 90% of the time. That has nothing to do with "I mined the materials so they are free". It's that there is a large supply of T1 modules that people will sell for below cost prices because they didn't produce them. Since the demand is low, they will continue to try and sell them at lower than cost prices. Typically this price is somewhere between the cost to build and the gain from reprocessing, which is reflected in the buy orders.
A second thing is that the market fluctuates and the "buy low, sell high" rule applies. If I buy materials that to build an item and in one month that item goes up in price, then I clearly can sell 'below mineral cost' because I'm selling for what I paid in minerals, not what they would be worth now. Of course you want to get that price now but if someone goes below that price, are they still losing money? All depends on how long they waited and the rate of return they could get all things being equal. Since there is no interest that you could realistically get to do a present value calculation, then inflation is really the only thing you could look at. I'm not sure what EVE's inflation rate is but mineral prices haven't changed much in 2 years so I'm betting it's not much.
Third, what if someone buys materials in another region for below the cost of materials in your comparison region? Are they selling below cost or are they making profit?
Another minor thing I notice is that frigate prices are generally pretty poor near newbie systems because they give those as mission rewards. So you will see T1 frigate prices (for that faction) below cost or pretty near it.
But all in all, the eve market works really well. People can argue the "I mined it so it's free" is the reason for the prices they see, but there are a lot of other things going on that go into the prices you see. I think if you look around you can find profit in T1 production. It might not be huge and flashy, but it's there.
My suggestion is to look into Ammo and maybe Cruiser production. After that, maybe items that are not dropped by rats on missions. I think if you poke around, you will find out what works and what doesn't. Good luck.
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