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Cylon Starbello
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Posted - 2010.11.02 15:59:00 -
[1]
So it seems we are back to this point where you actually lose isk if you build an item instead of sell to the Jita buy order. All the way through capital parts. We finally seeing the impact of the macro miner ban and adjustment to salvage?
Second PI.. again you 'lose' isk by making pi item.. and the ones that are still profitable are falling fast. Yes i watch daily. And here also the 'mined' mineral is worth more then the finished product.
Couple things I think this could be... to many people looking at the raw minerals/PI as FREE and just selling at whatever price they can get AND not enough people consuming the higher end products. Will anything change to make this different? PI system change will make it easier to manage..have to see how that affects prices. But you wil never get rid of enough folks who look at PI and minerals as 'Free' and just sell it.
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TheBlueMonkey
Gallente Macabre Votum Morsus Mihi
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Posted - 2010.11.02 16:18:00 -
[2]
Please tell me more about basic economics --
Nothing is worthless, you may have gotten it for free but it still has an inherent value
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Xearal
Minmatar SOL Industries Black Thorne Alliance
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Posted - 2010.11.02 16:22:00 -
[3]
Actually, no matter what the prices, some of those higher end PI products will stay low for a while due to several reasons:
1) Stockpiles from NPC buy orders that are keeping the price down. 2) Volume reduction: While it's true that extracting P0s and selling those directly might gain a little more profit than building them up to a higher product, this does reduce volume, so you can ship more per trip. Especially for places that have good extraction rates, aka way out in null sec, this is an important factor to consider. Because if you can't ship all that P0 product properly, you can't make those oodles of money. As such, it's generally preferable to upgrade them to P1 or P2, and ship those. Making your value per trip higher. Which effectively reduces your shipping cost per unit extracted, so also increases your profit again.
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Cipher Jones
Minmatar
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Posted - 2010.11.02 16:35:00 -
[4]
not every t1 product is manufactured at a loss, but the markup and competition on the ones that produce profit is absolutely cuthroat.
I'm currently making 50 mil on a bil. That's ridiculous.
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Berikath
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Posted - 2010.11.02 16:40:00 -
[5]
Originally by: Cylon Starbello So it seems we are back to this point where you actually lose isk if you build an item instead of sell to the Jita buy order. All the way through capital parts. We finally seeing the impact of the macro miner ban and adjustment to salvage?
"Selling for less than mineral prices" all the way through capital components? Well..... I mean, yeah. People buy minerals. People build stuff. People price their product based on how much they paid for raw minerals. When mineral prices go up, everything is going to fall below input prices at more or less the same time, no matter how big the items are.
Quote: Second PI.. again you 'lose' isk by making pi item.. and the ones that are still profitable are falling fast. Yes i watch daily. And here also the 'mined' mineral is worth more then the finished product.
1. The PI products which REALLY aren't profitable are pretty much the ones which were seeded by NPCs.
2. PI profitability has been fairly stable for a good while... slowly declining as people build stockpiles/supply more closely and efficiently matches demand, but pretty reasonable. My factory planet profits have dropped somewhere in the neighborhood of 10% over the past 2 or so months; now I'm only making something like 45% profit rather than 50%. That isn't (IMHO) "falling fast".
3. "Profitability" for some PI goods is harder to figure than for most any other product in EVE, because transporting costs play a much more complicated role. Now, true- you can't go to Jita, buy P1s, produce P2s, and sell back to Jita for a profit on some goods. That doesn't mean it isn't more profitable to make the P2s for some people. Going to P2 = about a 75% reduction in volume.
Let's say I'm in 0.0 with extractor planets. I refine my stuff up to P1, then carrier-jump it to high-sec. I can hold about, what, 14000 m3 of stuff per jump? That works out to something like 37000 P1s. For most P1s, that works out to about 11 mil worth of product. Let's be charitable and figure 3 mil in fuel per jump; 1 jump to high-sec, one jump back. That means over 1/2 of your profit goes to paying for jump fuel. If, on the other hand, you process up to P2 then you can move about 28 million ISK worth of a mediocre P2 (~3,000 ISK p/u), cutting your fuel costs to about 20% of total. They make more ISK producing "at a loss" then they do selling P1s.
Keep in mind- that's BEFORE putting a value on the time they save by hauling it to high-sec less.
Quote: Couple things I think this could be... to many people looking at the raw minerals/PI as FREE and just selling at whatever price they can get AND not enough people consuming the higher end products. Will anything change to make this different? PI system change will make it easier to manage..have to see how that affects prices. But you wil never get rid of enough folks who look at PI and minerals as 'Free' and just sell it.
Sure, there might be people doing that. But there are people who do it because it makes the most profit for them, or because they haven't updated their prices (as I have stated). *** Wish list for PI:
*One-click input routing *Copy product, inputs & outputs in factories *Launchpad upgrades: twice the space, twice the cost, half the hassle! |
Brian Ballsack
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Posted - 2010.11.02 16:44:00 -
[6]
Maybe there is a way you can profit from this trend ????
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Celgar Thurn
Minmatar Sebiestor tribe
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Posted - 2010.11.02 17:17:00 -
[7]
I'm not sure where you're getting your figures from. Unless you have been ripped off part way through the process it will be cheaper to build an item than buy it ready made.I am in the process of building a 'large item' which will be way cheaper than if I bought 'off the shelf'. If you into selling the P3/P4 then there is a lot of isk to be made. I would rather use it myself than sell it but each to their own.
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rain9441
Big Head Want Dolly
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Posted - 2010.11.02 17:39:00 -
[8]
Originally by: Cylon Starbello So it seems we are back to this point where you actually lose isk if you build an item instead of sell to the Jita buy order.
Why would anyone want to setup a buy order for an item at a price higher than that which they could've manufactured the item for? They could just build the item themselves. Some people sell at a loss to get rid of assets that are useless, and traders will buy those assets and resell them to those who need them.
As a side note, mission runners get loot which is free and supplies the market adequately. There is no need to manufacture items which fall from the sky (or items which are inferior to those which fall from the sky) at a constant rate. A prime example of this is armor plates. Everyone uses reinforced rolled tungsten plates because they are superior to the others and are readily available (superior to T2 even). Same goes for afterburners and mwds (and wmds for that matter).
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Cylon Starbello
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Posted - 2010.11.02 18:19:00 -
[9]
Edited by: Cylon Starbello on 02/11/2010 18:23:56
Originally by: Celgar Thurn I'm not sure where you're getting your figures from. Unless you have been ripped off part way through the process it will be cheaper to build an item than buy it ready made.I am in the process of building a 'large item' which will be way cheaper than if I bought 'off the shelf'.
I spent a few hrs doing the number the past few days. Its not hard to see. Example: Figure out the amount of minerals it takes to build the capital parts for say any freighter... i'll use a Fenrir as example. Using the 'buy' order to get a value for our minerals... that we mined and could sell for... the 'cost' to build a Fenrir for example is ~680mil, well above the cost to just buy off the shelf. Its like that on 95% of the items I looked at.. 110 so far. Grats on finding that needle int he hay stack... I'm still looking for it. :)
And to previous poster... simple economics are hard to apply to a game where a lot of people don't put a value on time or a value on the item it took time to get. We examine numbers as if its real life, but it wont be. Some aspects its harder ha. Still enjoy the game tho.
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Greg Huff
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Posted - 2010.11.02 19:01:00 -
[10]
What ME are you basing the calculations on? Going from ME0 to ME1 is going to cut 5% off the cost right off the bat. If the Capital components are well researched that will drop the cost significantly (assuming the ship building is also building their own components)
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Berikath
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Posted - 2010.11.02 20:04:00 -
[11]
Originally by: rain9441
Originally by: Cylon Starbello So it seems we are back to this point where you actually lose isk if you build an item instead of sell to the Jita buy order.
Why would anyone want to setup a buy order for an item at a price higher than that which they could've manufactured the item for? They could just build the item themselves. Some people sell at a loss to get rid of assets that are useless, and traders will buy those assets and resell them to those who need them.
Same reason people would go out and buy minerals instead of mining 'em for themselves; they need more than they can acquire/make alone.
It takes almost 29 days of production with max skills and perfect PE prints to produce 1 freighter. For one character using 11 slots 24/7, that works out to over 2 and a half days for each freighter. If they can, say, buy the cargo bays somebody else makes at 5% above mats cost, drop their average time per freighter down to 1.6 days, and increase their overall profit why wouldn't they?
Quote: As a side note, mission runners get loot which is free and supplies the market adequately. There is no need to manufacture items which fall from the sky (or items which are inferior to those which fall from the sky) at a constant rate. A prime example of this is armor plates. Everyone uses reinforced rolled tungsten plates because they are superior to the others and are readily available (superior to T2 even). Same goes for afterburners and mwds (and wmds for that matter).
....
Yes, there are some items which are not profitable to make because of NPC drops. There are also some items which aren't profitable to make because they're just plain useless (Small sentry drone rigs?). That doesn't mean manufacturing anything is useless or that there's never any reason to buy for more than mats cost.
Incidentally, unless the 2nd-best meta of an item sells for at or below mats cost, "everybody" doesn't use meta 4. *** Wish list for PI:
*One-click input routing *Copy product, inputs & outputs in factories *Launchpad upgrades: twice the space, twice the cost, half the hassle! |
rain9441
Big Head Want Dolly
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Posted - 2010.11.02 21:01:00 -
[12]
Because in terms of profit per slot per day, building cap components vs cap ships should be equal. Suppose you net 100 million in profit from selling a freighter you built entirely yourself. You spent 30 days manufacturing. 10 of those days were spent building the freighter, and 20 were spent building components. So the profit from building components is 66 mil and the profit from building the freighter is 33 mil.
Now lets say you outsourced the component construction and just bought off the market. Now you are spending an extra 66 mil on components. You're manufacturing 1/3rd as much and making 1/3rd the profits. You've gained nothing.
Seeing as the profits for cap component parts are so miniscule compared to the price of the BPOs (not to mention copying cap component BPOs is useless), I see no reason for anyone to enter the cap component market at all unless they fully plan on making cap ships for a very long time.
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Berikath
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Posted - 2010.11.02 21:37:00 -
[13]
Originally by: rain9441 Because in terms of profit per slot per day, building cap components vs cap ships should be equal. Suppose you net 100 million in profit from selling a freighter you built entirely yourself. You spent 30 days manufacturing. 10 of those days were spent building the freighter, and 20 were spent building components. So the profit from building components is 66 mil and the profit from building the freighter is 33 mil.
Now lets say you outsourced the component construction and just bought off the market. Now you are spending an extra 66 mil on components. You're manufacturing 1/3rd as much and making 1/3rd the profits. You've gained nothing.
Seeing as the profits for cap component parts are so miniscule compared to the price of the BPOs (not to mention copying cap component BPOs is useless), I see no reason for anyone to enter the cap component market at all unless they fully plan on making cap ships for a very long time.
1. In pure theory, yes, you would expect that to be the case. In reality, the market rarely works that flawlessly. In my experience, some cap components are pretty consistently profitable, and some are pretty consistently being sold at or below mats cost.
2. Capital ships are not the only use for capital ship components. I have 3 cap component BPOs, (try to) have them running 24/7, and still use more than they can pump out. *** Wish list for PI:
*One-click input routing *Copy product, inputs & outputs in factories *Launchpad upgrades: twice the space, twice the cost, half the hassle! |
TheBlueMonkey
Gallente Macabre Votum Morsus Mihi
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Posted - 2010.11.03 09:23:00 -
[14]
Originally by: Cylon Starbello
And to previous poster... simple economics are hard to apply to a game where a lot of people don't put a value on time or a value on the item it took time to get. We examine numbers as if its real life, but it wont be. Some aspects its harder ha. Still enjoy the game tho.
So you mean it's nothing like countries where life is cheap so labour is paid\valued less and the final products get ships for a great deal less than other countries?
If I were you in this situation, I'd keep the info to my self, buy the items, reprocess and then sell the materials back to market. Obviously you need to work out tax's and reprocessing less first. I used to do that on many items, including T2 and capital.
There can be quite alot of profit in it. --
Nothing is worthless, you may have gotten it for free but it still has an inherent value
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