DeODokktor
Dark Templars
The Fonz Presidium
45
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Posted - 2016.06.17 17:15:49 -
[1] - Quote
Zad Murrard wrote:In general if you put 5 different people to calculate profit / item, you are likely to have 5 different results.
Eg. one might state that the production price for an item is based on Jita sell price. Sounds simple, right?
In reality there can be several complications:
1) if you operate near Dodixie, it would not be practical to have Jita prices there.
This idea is wrong. You should work on what the lowest sell price is, ideally something near a bulk value. One single unit doesn't matter, but 10% of the daily volume does.
If "Jita" price is below your build cost, then moving to Dodixie will not earn you more money, it will just hide the fact that you spent time and effort building and moving a product when it would have been much easier to just buy it in Jita and move it to Dodixie.
If your based in Dodixie then sure it would have relevance as you don't need to move things around, but most builders move things.
Zad Murrard wrote:
2) you will rarely/never have perfectly up to date price information, how do you take this into account?
3) your item requires 1000 pieces of material A. If you look at min price in Jita, but there is only 1 item sold with that price, it gives very wrong results to you. Should you use average price? Should you calculate average prices of items with lowest sell prices until they add to 1000 items? Should you leave some error of margin just because you have no idea how old your data is.
4) you should most likely use system cost index of your manufacturing location. What if you have 2 locations next to each other and you use both? How old is your cost index data, is it reliable at the point that you want to manufacture something? How should you take this into account?
5) what if you operate between 2 trade hubs. It is possible that 1 of the hubs which is not Jita has items which are regularly sold cheaper than in Jita. If this is the case, is this just extra 'lucky' profit which you should subtract from your win calculations?
6) What do you use as sell price? Long term average? Min sell price? Last week's average? Forecasted price of tomorrow? Again if you are selling 1000 items it might not make sense to use min sell price if there is only 5 items sold with that price.
7) Are you looking to sell it aggressively with low price? Are you willing to wait for a few days to sell it with slightly higher price? The choice is yours but it may heavily influence the answer to the equation.
=> All in all, if some methods show profit, some loss, there is not large enough room for variation
=> Try manufacturing some other product which shows you to make profit no matter which calculation system you use.
For most of the other things above, you should ideally use something like the 5 day, or 20 day rolling average of the item. As the average is in the middle of buy and sell then anything positive should be okay to build, anything that is negative could be a loss maker (but not guaranteed). I have about 1.5 billion units of trit, some purchased back when the price was around 2.5 a unit. When I build something I will use the current price of trit in calculating if what I am doing is worth it. There are a lot of players who would use the 2.5 - thus selling final product below build cost. if trit was valued around 1.5 a unit then I would use that price. Sure my wallet would take a hit, but I am not looking for the profit value of my trit, I am looking for the profit value of my product. Me having tons of product saved up is something I take a risk in doing.
If your really eager then track your purchases and work on a FILO system and keep your exact running average. For most people that would be too much work. |