Kitah Ferranti
Tulip Factory
4
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Posted - 2016.01.22 00:07:04 -
[1] - Quote
Mad Vemane wrote:First of all, what to do with products that don't sell well? Is it worth keeping orders up at 30-50% markup for those items? Or I am better off dumping them back at Jita?
If you're short on market slots, and the orders have been up for some time, absolutely cancel them and send them back to Jita. Your shipper will be happy to have a return trip.
Mad Vemane wrote:Is it a good idea to plug the market holes (especially ships and t2 items commonly used) in the idea that a pilot who can buy everything localy will?
Absolutely.
Mad Vemane wrote:I have been mostly looking at the market graph to decide what items to bring in. In some cases, the lack of item or huge overprice seems to kill those prices. Any other way to determine if the item will sell well at a smaller markup in there?
It's trial and error.
Personally, I am more likely to bring in an unrepresented item than an overpriced unpopular item. The reason being that when I'm developing a station, I'm trying to expand selection for my customers. I sometimes also want to bring down prices, but on a more selective range of items.
Other traders are generously donating their market slots to your station. You generally want to maximize this donation by leaving those items alone to add variety for your customers. Usually when I undercut another trader in a seeding station it's because I want to lower the overall price point for the customer. In such cases I will often enter the market, slash prices incrementally forcing other traders to pricematch me, get the price to where I want it to be, and then leave the market entirely, freeing up my market slot. Now the other traders are selling an item for 5-10% above Jita instead of 30-50% markup, happy customers are flocking to the station to purchase these cheap items - and my overpriced accessories.
Mad Vemane wrote:
Contracts? Do they work well in remote areas? (Mainly for selling fitted ships)
The thing with contracts is that customers will not think to check contracts on their own. So you must advertise for your fitted ships in the beginning, until you have a regular customer base and word-of-mouth working for you.
The one exception to this is if someone is already has a fitted ship service in your station. In that case customers are already trained to look in the contracts section. You are then free to go in and undercut the existing service, or expand on their service by offering different ships (preferred).
Fitted ships seem at first like a grand idea because they do not use a market slot, the most important factor for a marketmaker and seeder. However, for the work that you're going to put into developing a good fit with universal appeal, fitting up the ships themselves and deciding on a price point - this is only worth it if you're a natural EFT/pyfa monkey and otherwise interested in fostering a community in your minihub. Any profit that arises will be quite negligible compared to other things you could have been doing with your time.
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This is my process for setting up a market: first I go in and do some market research. I check out the volume and pricing for about 20-40 absolutely essential items, things that every station requires, stuff like nanite paste and Damage Control II. Check out the margins and volume on those items. Usually I want to see low margins and high volume.
- If you see high margins and low volume, that's bad. It means volumes on side accessories are going to be nonexistent. You're going to have to slash prices everywhere to get people to come to this market.
- If you see low margins and low volume, that's super bad and it's not a good market to enter. Other traders have already used your main bargaining chip - price slashing - and failed to bring anyone in. Likely this region is devoid of traffic or there's a nearby hub that's eating up potential customers.
- If you see high margins and high volume, well that's weird, but get in there and make bank before other traders find out about your hidden paradise!
Once I've done my check on those essential items, I then branch out into popular items, a list of 100-200 items that I'm likely to stock. Using the market's price history info, I enter into my spreadsheet the volume of items I expect to sell in a given batch (typically I take the average of one week's sales volume, but you could go shorter or longer dep on how often you intend to restock your inventory), the price point, and the Jita buy price (or whichever hub you are buying from). From there I calculate the profit-per-batch (or profit-per-market-slot) on each item. And then I bring in those most profitable items per batch.
Now if you have more market slots than you have money, you may prefer to bring in the items with the highest markups, and branch out to even more items with high markups.
Once I have those popular items, I look to specialize in a less popular items, and cover that entire market. So let's say I decide I want to cover warp disruption modules, I'll go through warp scram II, the meta 4 and meta 3, disruptor II and the meta 4/3 versions, and I'll bring in all of those (if they are not already provided by other traders). Or if I want to do prop mods, I'll check to make sure 1mn/10mn/100mn AB are covered in the tech II, meta 4 and meta 3 varieties, as well as microwarpdrives.
In general I try to avoid stocking ships and leave that to other traders, just because they are very expensive to get shipped in, but I will do it if no one else has, treating it basically as a loss-leader. Some items like Station Containers cannot reasonably be shipped in because of their size, but you can manufacture them locally using ingredients that take up much smaller volume (which you can buy from another trader if it's stocked, or ship in).
No more characters left, hope that helps! |