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Cista2
Hydra Investment Fund
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Posted - 2010.12.10 18:37:00 -
[1]
Ok, inspired by the creativity of the returned Liberty Eternal,a allow me to float another idea. That of a "free" ship shop.
The business idea is that any pilot can borrow any ship for free in this company. The company of course does not hand over the ships for free, the customer has to pay a deposit that is comparable to the price of the ship. However, the ship can be returned after 2 days or 2 years and the customer is guaranteed his money back.
The way that the company makes money is of course that the deposit must be higher than the buy price of the ships. To be succesful there must be a stock of ships that have been aquired when the market price is low, or directly from a producer.
The company could also take ships in as a pawn shop, providing a loan based on a value that is lower than the actual value.
Please provide your criticism here.
And if anyone is interested in working with such a ship business, I would be willing to finance it.
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"Signatures" chatroom / LLSE Stock Market |
Tanith YarnDemon
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Posted - 2010.12.10 18:44:00 -
[2]
While it's an interesting idea it feels like it has no winners.
The company would indeed make some isk, but it would fade in comparisson to just downright selling the ships. Moreover the only way for the corporation to be useful for it's clients, would be t have near enough all ships in stock at any given time, meaning you WILL have more isk locked up in assets than the added interest from their deposits can ever compensate for.
As a meassure to saturate stock, sure, but this assume you're already in bulktrading of ships and with no timeframe or fees for the clients it'd still just turn out to be a long term loss.
I just don't see it working.
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Liberty Eternal
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Posted - 2010.12.10 18:52:00 -
[3]
This is a brilliant idea [you have evemail]. Apart from the fact that faction-equipped ships are like drugs to the MD elite  there are also service roles for people like myself.
My EVEwalletaware shows that I paid 600 million isk in broker fees in the last month.
I don't have very good ship skills so a faction ship that I could rent for a month would really help get me through those missions and build my standings.
I'm sure there are others in MD in the same boat - need to mission up their standings, could do with a ship boost.
If you could post up some details of a ship that someone like me [with weak ship skills] could fly, I will be knocking down the front door of your shop to get my hands on one of your ships 
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Cista2
Hydra Investment Fund
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Posted - 2010.12.10 18:53:00 -
[4]
 Originally by: Tanith YarnDemon
The company would indeed make some isk, but it would fade in comparisson to just downright selling the ships.
The deposit would have to be higher than the current sell price. For a Hurricane, Jita buy price might be 25 mil and sell price 28 mil. However, the company might originally have acquired the Hurricane for 23 mil and the deposit would be 30 mil, just as a hypothetical example.
Originally by: Tanith YarnDemon
with no timeframe or fees for the clients it'd still just turn out to be a long term loss.
The "no time frame" is what would make it a potential succes. The moment a ship leaves the docks the company has received isk which can be used for business. The longer the customer uses the ship, the longer the company has use of the isk. If the customer loses the ship in battle, or never returns it for some other reason, then the isk remains with the company.
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"Signatures" chatroom / LLSE Stock Market |
Fleshbot
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Posted - 2010.12.10 18:54:00 -
[5]
Edited by: Fleshbot on 10/12/2010 18:55:34
I like the idea and proposed something not dissimilar a while back in the form of micro loans (cruiser sized, 3M-ish).
The problem I can see from your program is,
*If you sell at less than market rate, lots of loaners would be flipping you ships onto the open market, if you sell at higher why should anyone buy it.
*Prices rise and fall, sometimes it may make sense to return that ship, sometimes it will make sense to loan out a ship, and people will take advantage of those variations.
*This loots like a lot of overhead for a very small margin, one that is effectively competing against the market. Unless you are talking about very, very expensive ships (CAPs, Freighters, marauders maybe) I can't see how there this would be worth your time, and even for the more expensive ships I'm not sure it would be.
*If it's cheaper ships (Frigs, cruisers), you are rich enough to simple give those out ask that people repay 10%= the ship on the honor system.
As a test scenario, lets say I want Rhea. Would you charge me market rate to loan the ship? If the ship increased in value 50% would you pay me that value when I returned it? If it dropped 50% would I get my original deposit back?
Pawn shops works, as demonstrated by all the collateral based loans out there.
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Cista2
Hydra Investment Fund
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Posted - 2010.12.10 18:55:00 -
[6]
Originally by: Tanith YarnDemon
it would fade in comparisson to just downright selling the ships.
You are right in the sense that the workload of running such a company would not be rewarded by enough isk, compared to just selling the ship for almost as much isk. It would take someone who really loves to handle ships
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"Signatures" chatroom / LLSE Stock Market |
Loki Vengeance
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Posted - 2010.12.10 18:58:00 -
[7]
How do you handle a run on working capital (ie majority of users returning their ships about the same time), be it intentional or coincidental?
Otherwise this has great potential if there is great trust (or great collateral) between the manufacturers producing for it and the front-end salespeople. Of course, then you're getting into a lot of issues of trust. After all, what are your operating hours? 24/7? Or just one timezone for 4 hrs a day 5 days a week?
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Cista2
Hydra Investment Fund
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Posted - 2010.12.10 19:04:00 -
[8]
Originally by: Loki Vengeance
After all, what are your operating hours? 24/7? Or just one timezone for 4 hrs a day 5 days a week?
I am not going to work it it is just a suggested idea. I would maybe finance it by buying the ships on the market.
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"Signatures" chatroom / LLSE Stock Market |
Tekota
legion industries ltd
Veni Vidi Vici Alliance
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Posted - 2010.12.10 19:05:00 -
[9]
Watched this form in Signatures channel and kinda like the idea. I like it, but the necessities that would have to be imposed upon renters to ensure their honesty would likely make it unattractive to those same renters.
If I wanted to try out (eg) a Dominix - I deposit 50m (or equiv collateral) with you, play with it a bit, and return it to get my 50m back (minus your cut). Why wouldn't I just buy a dominix for 45m or whatever it is, play around then sell it, even if I sold it for 43m I've probably only lost what would be your cut, plus I, the renter, didn't have to worry about whether I'd really get my isk back or not (not suggesting this is likely but it always has to be a thought in the back of one's mind).
I used to rent cars quite a bit as I only occasionaly had need and a motorbike served my needs otherwise. I'd never consider (or be able) to do this if the deposit I had to put down was equal to the value of the car + x percent, but that is pretty much the deposit which would be required as a result of the nature of Eve.
If we could figure out a way of guaranteeing (or better securing at the least) that the principal (ie. the ship) would be returned without having to take the full value of the ship in advance then we're onto something - at the same time opening a world of other business options; unfortunately of course this may also be to the detriment of the "Eve flavour".
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Mistress Iceka
Caldari
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Posted - 2010.12.10 19:07:00 -
[10]
Something like this would probably work best with the higher end ships (faction, T2, caps) as each transaction is going to be time consuming. Someone may want to test a shiny ship, or only needs one to accomplish a short term goal. You could also include full fittings, but you would then need to deduct the cost of any missing fittings upon return of the ship. The revenge market alone might make this a popular service.
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Cista2
Hydra Investment Fund
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Posted - 2010.12.10 19:10:00 -
[11]
Originally by: Tekota
If I wanted to try out (eg) a Dominix - I deposit 50m (or equiv collateral) with you, play with it a bit, and return it to get my 50m back (minus your cut).
No, you would get the full 50 mil back, that's why it's called "free".
The company would only make profit because
1) While the ship is rented the company would posess the extra isk. It's like a financial loan, an injection of isk into the company.
2) If the ship is not returned for any number of reasons.
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"Signatures" chatroom / LLSE Stock Market |
Tanith YarnDemon
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Posted - 2010.12.10 19:12:00 -
[12]
Originally by: Cista2
Originally by: Tanith YarnDemon
The company would indeed make some isk, but it would fade in comparisson to just downright selling the ships.
The deposit would have to be higher than the current sell price. For a Hurricane, Jita buy price might be 25 mil and sell price 28 mil. However, the company might originally have acquired the Hurricane for 23 mil and the deposit would be 30 mil, just as a hypothetical example.
See that's the issue. If it's above sell orders - the client would have no real incentive to buy it from you rather than just pick it off market. UNLESS you can at any given time hand back the isk with little to no delay. Same way for buying the ship, your clients would be interested only as for the ease of access of said ships meaning they have to be able to "buy" the ship and "sell" it back instantly for it to be any point - for them.
This means the company will have to sit in a noticable amount of liquid isk. For the venture to even break even you need to have enough clients so that the margin from sell orders to deposit covers more than the liquid isk and ship assets locked down. Basically you would need such a huge amount of clients to make it work that it's just not worth it in the end. We'd be talking 12 digits of investments at the very least and the return would still be very low. While you could cut this drastically, it would also cut the usefulness of the service and hence the number of clients.
tl;dr: You can't reach critical mass, and if you could said isk could be making alot more with alot less overhead.
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Cista2
Hydra Investment Fund
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Posted - 2010.12.10 19:13:00 -
[13]
Originally by: Mistress Iceka
each transaction is going to be time consuming.
Damn right.
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"Signatures" chatroom / LLSE Stock Market |
Cista2
Hydra Investment Fund
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Posted - 2010.12.10 19:15:00 -
[14]
Originally by: Tanith YarnDemon
the client would have no real incentive to buy it from you rather than just pick it off market. UNLESS you can at any given time hand back the isk with little to no delay.
Yes that would be the point - he would not buy it but borrow it, and he would get his isk back whenever he wanted.
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"Signatures" chatroom / LLSE Stock Market |
Loki Vengeance
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Posted - 2010.12.10 19:22:00 -
[15]
So at this point, I see six major issues:
- Incredibly high startup costs to reach sufficient inventory
- Location choice is a challenge (multiple locations creates logistical problems)
- High working capital must be maintained to prevent runs
- Trust must be maintained between manufacturers and operators
- Need essentially 24/7/365 availability (which means a staff to pay)
- Low profit magins (very low considering it's low divided into a transact pool with zeros)
In short, I only see someone doing this if they have a ton of money, a ton of free time, and aren't really interested in doing much else.
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Tekota
legion industries ltd
Veni Vidi Vici Alliance
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Posted - 2010.12.10 19:25:00 -
[16]
Originally by: Cista2
Originally by: Tekota
If I wanted to try out (eg) a Dominix - I deposit 50m (or equiv collateral) with you, play with it a bit, and return it to get my 50m back (minus your cut).
No, you would get the full 50 mil back, that's why it's called "free".
One day I'll learn how to read :) That does make indeed more attractive to those who want to save every last broker fee. Whether you'd find enough people who think this way to make it pay rather than people being willing to lose a few mill on broker fees and slipped prices to an experiment is, I suppose, the million isk question.
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Liberty Eternal
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Posted - 2010.12.10 19:33:00 -
[17]
Edited by: Liberty Eternal on 10/12/2010 19:35:16
I'm going off at a tangent, however all these problems would be solved if you got 10 or 20 faction ships, based them in Jita, and rented them out for a fixed deposit and fixed fee on a monthly basis.
A transaction would go like this
1) You provide someone with a 2 bil faction ship with good mods for speeding through mission or other purpose.
2) You charge the customer x% of ship value for the service, per month - ie fixed fee of 100 mil per month if set at 5%.
Other high net-worth individuals can do the same thing, for missions, pvp, jump freighter deliveries or general ego-preening. It saves people having to understand and buy all the faction mods, or put a ship together. They can also just hand it back when they're finished.
High-value specialised ships like carriers, faction ships, jump freighters etc would probably make for easier business arrangements.
Edit: typo
Also, you get an excuse to put together a big collection of really, really cool ships
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Netheranthem
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Posted - 2010.12.10 19:38:00 -
[18]
I don't see any problem, excepted that I don't see many people willing to use this kind of ship renting.
However, being working with quite a good amount of ships on the market, I wouldn't mind running such a business.
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Kei Darker
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Posted - 2010.12.10 20:22:00 -
[19]
I would use this...
Also, I'd invest in it depending on the business plan.
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Kendra Coldera
Ripoff Industries
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Posted - 2010.12.10 21:47:00 -
[20]
This could be very interesting on a larger scale.
Tbh I would not bother with normal T1 ships.
It could be very useful for expensive stuff, namely:
-Faction Battleships
-Marauders
-Capitals
-Jump Freighters and Freighters, Orcas
The first two are for the Missionrunners that want to test a new toy before comitting or PvPers that need to have their ISK restocked. I am currently in exactly that situation. I don't want to buy a Paladin (i usually can not be arsed to set up market orders, so I would buy one where its cheap, and sell it in Jita (basically making 50+ mil loss) when I am done. Thats why I am not going to do it.
Capitals is basically the same (Carrier plexing anyone?). I highly doubt it would get used a lot though.
The freighter/jump freighter thing is again more reasonable. Corps moving should suffice as a reason.
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Liberty Eternal
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Posted - 2010.12.10 22:08:00 -
[21]
Edited by: Liberty Eternal on 10/12/2010 22:09:38
Hmm.. just throwing another idea in - how about if you took collateral in the form of stock rather than just isk?
Some situation might be if a corp got war-dec'd, they would be able to transfer their stock into heavy ships, for the duration of the fighting, and then back again. Thus they could keep more of their value in blueprints, stockpiles etc rather than having unwanted ships lying around in-between wars.
Same with a miner or manufacturer who got bored - let them swap out their POS, stocks, blueprints, ore or whatever for a month. They could take a faction ship out missioning and return to all their old equipment at the end of the month. Gives them a change of pace without seriously impacting their business model.
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Brigge Tremdut
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Posted - 2010.12.10 22:10:00 -
[22]
I would be very interested in seeing how this would work in finalization. I don't have billions or even really "extra" millions to invest, but there has to be a way to involve others for manufacture, purchase, or some other aspect of this.
I am curious how insurance on a rental would work in the case of a 2 Billion ship though.
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Ave Volta
Red Frog Freight
Red-Frog
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Posted - 2010.12.10 23:56:00 -
[23]
Marketing, availability, and convenience of locality are the biggest impediments to this working well.
-For Marketing you would have to put in a long time to working up a big brand name that people knew about it and suggested it to their friends etc. Not hard, but just a long term commitment.
-In terms of availability you would need people working around the clock ready to make the transaction at a moments notice. Otherwise the first time someone wants to use the service, but finds you either aren't available or it's going to take a while, they will just click buy off the market. I mean people are willing to pay double for ships to not have to make 1 jump. You can't underestimate the lazy factor for most pilots.
-And that's pretty much the convenience factor. No one is gonna make 10 jumps to use this service. Most people will give up ISK for convenience without hesitation and I'm not sure the service provides anything attractive enough to overcome that. Time = ISK and this business seems too be time inefficient unless it's scaled into a massive, high availability service.
Cool idea though. 
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chown -R us:us /yourbase |
Jay Wareth
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Posted - 2010.12.11 01:18:00 -
[24]
Originally by: Liberty Eternal
Edited by: Liberty Eternal on 10/12/2010 19:35:16
I'm going off at a tangent, however all these problems would be solved if you got 10 or 20 faction ships, based them in Jita, and rented them out for a fixed deposit and fixed fee on a monthly basis.
A transaction would go like this
1) You provide someone with a 2 bil faction ship with good mods for speeding through mission or other purpose.
2) You charge the customer x% of ship value for the service, per month - ie fixed fee of 100 mil per month if set at 5%.
Other high net-worth individuals can do the same thing, for missions, pvp, jump freighter deliveries or general ego-preening. It saves people having to understand and buy all the faction mods, or put a ship together. They can also just hand it back when they're finished.
High-value specialised ships like carriers, faction ships, jump freighters etc would probably make for easier business arrangements.
Edit: typo
Also, you get an excuse to put together a big collection of really, really cool ships
Why would anyone pay 100mil per month when they could just pay for the ship in the first place and use it for free? The way I see it this idea is doomed to failure because you have to fully collateralize all loans in Eve.
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Nikolai Kondratiev
Sphere Design Inc.
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Posted - 2010.12.11 02:59:00 -
[25]
As someone said in the thread already, for common items like ships there is no point to ever rent one since you have to provide a collateral at least equal to its value and market is liquid enough to be able to resell them quickly when they're not needed anymore.
The only ships I've ever seen rented successfully were Jump Freighters (by Raging Tauris iirc) but it's probably the only one that makes sense to rent.
If you want to get in the renting business, BPOs are probably a better item to look at (even if it probably doesn't work very well outside of T2 BPOs)
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WTS Capital BPOs |
Silver Drag0n
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Posted - 2010.12.11 05:24:00 -
[26]
I logged in just to say this;
Cista, were you to do this, the concept of it catering to faction/tech 2 ships (as posed by the previous speakers) is really the only thing you can do.
I would actually suggest you do NOT do this in Jita, for the obvious reason that Jita is Jita.
Rather, I would recommend you find 2 major L4 mission hubs (one for Caldari, one for Amarr for example), and at each one rent out specific ships. Like, for example, the Amarrian shop would offer Nightmares, Paladins, and Navy Issue Apocs. While the Caldari shop would offer Golems, Navy Ravens, and Navy Scorpions.
Mind you this is just suggestions as clarifications on a proposed idea.
But I like it; I could rent a NM and earn it back from missioning until I could afford one of my own.
~Silver
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Cesar Menage
MenageTech
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Posted - 2010.12.11 05:47:00 -
[27]
something like this would be a good idea for items like frieghters, and other items people need. but really dont want to keep around forever.
Like today I had to buy a frieghter. I didnt want to but needed it. Again!
 So got it and ofcourse I can see my self droping it back on the market in a few weeks after Im done using it.
Had to drop my 0.02 ISK in.
We sell anything that we can make a buck on |
Kithran
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Posted - 2010.12.11 09:53:00 -
[28]
I've actually done something similar in my corp for Covetors. I picked up some covetor bpcs cheap and built them with corp minerals. I then sold them to people in the corp who had the skills to fly a covetor but not the isk to buy a hulk yet with a guaranteed buyback. This gave them the higher yield over sticking with a retreiver while they raised the isk for a hulk without leaving them the dilema of buying on the market and potentially losing isk.
Kithran
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Cyaxares II
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Posted - 2010.12.11 10:51:00 -
[29]
Originally by: Jay Wareth
Why would anyone pay 100mil per month when they could just pay for the ship in the first place and use it for free? The way I see it this idea is doomed to failure because you have to fully collateralize all loans in Eve.
if you only need the ship for a limited amount of time you have the choice between
(a) buy now, sell later
(b) lease from Cista2
now, market spreads on hulls alone are usually pretty small which might make (b) look unattractive.
However, even if you sell your ship on contracts (which is :effort:) you can't expect to get full-value for your rigs and the markets for many faction/deadspace/officer modules are not very liquid either.
So for a rigged ship with some bling on it, (b) might easily end up cheaper than (a).
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Abdiel Kavash
Caldari
Paladin Order
Fidelas Constans
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Posted - 2010.12.11 17:07:00 -
[30]
I could find benefits of this for people who need a specialized ship for a one-time job, and don't want to pay a contractor to do it because of security / privacy / standings / etc. issues. Perhaps the best example would be Freighters and Jump Freighters. But to be honest, I can't see anyone buying a missioning or PvP ship like this.
EVE-O U-Haul, anyone?
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