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Determining the True Value of T2 BPO's

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Aldelphius Caldari	Posted - 2008.01.08 21:43:00 - [1] After an interesting discussion in another thread (apoligies to the OP) about T2 BPO's, Im wondering what people think is the value of any T2 BPO. From reading on the forum I have come down to 3 basic answers. a. Whatever people are willing to pay b. The profit that can be made from the BPO over a period of time, most commonly a year c. Some other valuation formula Now if you hold a T2 BPO, obvioulsy having a second could help you sieze more marketshare, but there is a price ceiling due to invention. So for those of you who are industrialists and do shop for T2 BPO's, how do you determine the value, and therfore max price, of BPO's.
Kazuo Ishiguro House of Marbles Zzz	Posted - 2008.01.08 21:52:00 - [2] Considering 1 year's profits makes a good start, but most buyers would want to consider whether any major changes are likely to happen to the market for the item over the next year and are likely to be more conservative. My research services Spreadsheets: Top speed calculation - Halo Implant stats
Shadarle	Posted - 2008.01.08 21:55:00 - [3] The amount you can make in one year, producing at 100% capacity in a POS. This has been the standard for quite a while. Some people will pay more, sometimes they sell for less. If a certain T2 item does not sell well, perhaps selling less per day in Jita than can be produced from a single BPO then this has to be taken into account of course. You also have to try to guess which way the price will go over the course of the next year. It seems prices may be drifting, in general, in an upward direction. But this could shift drastically if more details of a future change from BPO > High Run BPC is made. Tanking Setups Compared Stacking Penalty / Resists Explained
Leowen Industrial Giants	Posted - 2008.01.08 21:57:00 - [4] The going rate broadly speaking seems to be 12 months of profit = BPO value. In calculating the profit you also need to check the expected sales volume - ie is it feasible to expect to sell 100% of your production over that 12 month period. Modifiers to that calculation: a) Rarity of the print, something like a Crow would probably fetch 15 months+ just for the fact that none have come up for sale for ages, and it's always been a high-demand ship b) Upcoming patch expectations - is there a nerf or boost expected that will affect the profitability of the print c) Importance of self-sufficiency - classic example here would be a 0.0 corp paying over the odds for a BP of a 0.0-critical item d) General timing, what else is there to spend money on at the time, and so how much spare ISK is in circulation e) Buyer egos, if you can get two competitors bidding this can add 10-20% to the realistic value That's all I can think of for now... Leo
Shadarle	Posted - 2008.01.08 21:58:00 - [5] Another thing to note. Most T2 BPO's are worth 100%/12= 8.33% per month. This drops if you pay over the 1 year figure. So T2 BPO's are not exactly the highest earning items in the game, plus they require you to run a POS to maximize them. But they are indeed good for rich players who can't find uses for all their money as it is. Tanking Setups Compared Stacking Penalty / Resists Explained
Leowen Industrial Giants	Posted - 2008.01.08 22:10:00 - [6] Originally by: Shadarle Another thing to note. Most T2 BPO's are worth 100%/12= 8.33% per month. This drops if you pay over the 1 year figure. So T2 BPO's are not exactly the highest earning items in the game, plus they require you to run a POS to maximize them. But they are indeed good for rich players who can't find uses for all their money as it is. Indeed, though of course appreciation/depreciation of the asset is also a factor that doesn't apply in many other types of investment. I have a question on the POS thing actually - I could look it up but hopefully someone here will be nice enough to answer it for me... What is the actual benefit of T2 production in a POS? It's material efficiency and production time right? What are the actual numbers? Until recently I've been out of game since high-sec POSs came in.
Khatred Fluffy Mungoose Guinea Pigs	Posted - 2008.01.08 22:13:00 - [7] I am mostly using the c) option however I consider a) to be right one and I start negotiations with b) :)
Shadarle	Posted - 2008.01.08 23:24:00 - [8] Originally by: Leowen Originally by: Shadarle Another thing to note. Most T2 BPO's are worth 100%/12= 8.33% per month. This drops if you pay over the 1 year figure. So T2 BPO's are not exactly the highest earning items in the game, plus they require you to run a POS to maximize them. But they are indeed good for rich players who can't find uses for all their money as it is. Indeed, though of course appreciation/depreciation of the asset is also a factor that doesn't apply in many other types of investment. I have a question on the POS thing actually - I could look it up but hopefully someone here will be nice enough to answer it for me... What is the actual benefit of T2 production in a POS? It's material efficiency and production time right? What are the actual numbers? Until recently I've been out of game since high-sec POSs came in. POS manufacturing arrays generally speed up production and make building less efficient. Meaning it costs 10-20% more to build things but they build 10-25% faster. T2 items generally have a large markup, so the increased build cost is a much smaller detriment than the increased production speed is a benefit. Tanking Setups Compared Stacking Penalty / Resists Explained
Bob Odd	Posted - 2008.01.09 00:08:00 - [9] Gotta be a. You can "value" T2 BPOs based on 1 year profit, but if you want to buy one then in most cases you will need to pay more than that. There's enough folks with enough isk that "overpaying" by a few billion isn't going to deter them from getting something they want.
Treelox Amarr Market Jihadist Revolutionary Party	Posted - 2008.01.09 00:12:00 - [10] I think all the ideas from all the previous posters are about right. I would suggest that the phrase that you used in the thread title might lead you into problems though. There is no "True Value", there cant be a "True Value" because no on can predict with 100% accuracy what the trends of the market and what changes CCP might introduce into the game might do to the "Value". At best it is a "Subjective Value". One other thing to consider when using formula's such as the one that Shadarle suggest. Look at total volume traded in the markets in comparision to what volume your BPO can produce at full tilt production. This is why some BPO's are overvalued, since it can be hard to sell your total production at the price that the market averages. --
Danari Amarr Viper Squad Triumvirate.	Posted - 2008.01.09 03:34:00 - [11] Interesting that my conflag L bpo is worth about a bil, which includes market conditions in its valuation, while a raven bpo which also costs a bil breaks even in 1/3 the time.
Benvie Benvie Enterprises	Posted - 2008.01.09 04:45:00 - [12] People tend to overvalue T2 BPOs because of their "celebrity" status. People want them because they're T2 BPOs, not because of a rational profit analysis.
Astorothe Aperture Science Industries	Posted - 2008.01.09 04:56:00 - [13] I think it's mentioned above already, but the CCP plan to turn all BPOs into hi-run BPCs should have a fairly dramatic effect on the BP market. Eve Corp and Fansite Web design, development and hosting services
Treelox Amarr Market Jihadist Revolutionary Party	Posted - 2008.01.09 05:09:00 - [14] Originally by: Astorothe but the CCP plan to turn all BPOs into hi-run BPCs should have a fairly dramatic effect on the BP market. Could you please provide me a link to this "plan"? I do know that in a dev thread about invention, that changing all BPO's into hi-run BPC's was suggest by a few players, and a single dev responded that they would look into and consider it. OFC they have been looking into and considering the Amarr buff for +2yrs. --
Shadarle	Posted - 2008.01.09 05:09:00 - [15] Originally by: Danari Interesting that my conflag L bpo is worth about a bil, which includes market conditions in its valuation, while a raven bpo which also costs a bil breaks even in 1/3 the time. A raven BPO breaks even in 1/3 the time eh? Assuming 100% production? 100% production on a Raven takes an absolutely massive amount of minerals which means quite a bit of work to handle it. Not to mention that at some points in time producing a Raven is actually going to get you a loss. If you instead have the Raven BPO and copy it, instead of producing with it, you will have almost none of the work and you will make more profit most likely. Raven production is such a horrible thing for most people to get into. People look at buy prices for minerals and say "Oh look, I can make an 8% profit" or some such. They don't look at the fact that if they sold those minerals without building the Raven they'd have made 10% profit. This is not true of T2 BPO's (at least any worth buying). Tanking Setups Compared Stacking Penalty / Resists Explained
Astorothe Aperture Science Industries	Posted - 2008.01.09 05:23:00 - [16] Originally by: Treelox Originally by: Astorothe but the CCP plan to turn all BPOs into hi-run BPCs should have a fairly dramatic effect on the BP market. Could you please provide me a link to this "plan"? I do know that in a dev thread about invention, that changing all BPO's into hi-run BPC's was suggest by a few players, and a single dev responded that they would look into and consider it. OFC they have been looking into and considering the Amarr buff for +2yrs. Heh, good luck finding a clearly detailed plan officially sanctioned by CCP on this :) Eve Corp and Fansite Web design, development and hosting services
Treelox Amarr Market Jihadist Revolutionary Party	Posted - 2008.01.09 06:20:00 - [17] Originally by: Astorothe Originally by: Treelox Originally by: Astorothe but the CCP plan to turn all BPOs into hi-run BPCs should have a fairly dramatic effect on the BP market. Could you please provide me a link to this "plan"? I do know that in a dev thread about invention, that changing all BPO's into hi-run BPC's was suggest by a few players, and a single dev responded that they would look into and consider it. OFC they have been looking into and considering the Amarr buff for +2yrs. Heh, good luck finding a clearly detailed plan officially sanctioned by CCP on this :) That was exactly my point..... --
Danari Amarr Viper Squad Triumvirate.	Posted - 2008.01.09 06:47:00 - [18] Originally by: Shadarle Originally by: Danari Interesting that my conflag L bpo is worth about a bil, which includes market conditions in its valuation, while a raven bpo which also costs a bil breaks even in 1/3 the time. A raven BPO breaks even in 1/3 the time eh? Assuming 100% production? 100% production on a Raven takes an absolutely massive amount of minerals which means quite a bit of work to handle it. Not to mention that at some points in time producing a Raven is actually going to get you a loss. If you instead have the Raven BPO and copy it, instead of producing with it, you will have almost none of the work and you will make more profit most likely. Raven production is such a horrible thing for most people to get into. People look at buy prices for minerals and say "Oh look, I can make an 8% profit" or some such. They don't look at the fact that if they sold those minerals without building the Raven they'd have made 10% profit. This is not true of T2 BPO's (at least any worth buying). Um do you actually play eve-online? Can't actually tell because you never discuss actual specifics of what it is you do logged in your empire station all week long. You seem to be nothing but opinions but with nothing of actual value to contribute. You're hardly alone in this regard. pvpers share advice and tactics with each other, help each other out, and have their successes, failures and setups publicly visible. You market people hide in ridiculous fear that someone is going to find out your setup and own you. What a laff. A setup that can't stand up to being posted publicly is a **** setup end of rant. First off, that triple-speed payoff is based actual market sales, not on 100% production. My raven bpo takes up probably about 15% of a slot. Second off, the 15% markup I get on my ravens is about 350% higher than the spread between buy and sell price of minerals, converting the effort of a push of a button and time into over triple the profits.
Astorothe Aperture Science Industries	Posted - 2008.01.09 06:53:00 - [19] Originally by: Treelox Originally by: Astorothe Originally by: Treelox Originally by: Astorothe but the CCP plan to turn all BPOs into hi-run BPCs should have a fairly dramatic effect on the BP market. Could you please provide me a link to this "plan"? I do know that in a dev thread about invention, that changing all BPO's into hi-run BPC's was suggest by a few players, and a single dev responded that they would look into and consider it. OFC they have been looking into and considering the Amarr buff for +2yrs. Heh, good luck finding a clearly detailed plan officially sanctioned by CCP on this :) That was exactly my point..... Mine was that it is likely to happen regardless of said missing plan - in my opinion. Eve Corp and Fansite Web design, development and hosting services
Robacz Essence Trade Essence Enterprises	Posted - 2008.01.09 09:25:00 - [20] Originally by: Leowen I have a question on the POS thing actually - I could look it up but hopefully someone here will be nice enough to answer it for me... What is the actual benefit of T2 production in a POS? It's material efficiency and production time right? What are the actual numbers? Check Rapid Equipment Assembly Array: 5 Manufacturing slots Base time multiplier: 0.65 Base material multiplier: 1.2 I produce all my Tech2 modules in highsec POS'. Even with current inflated prices it is still worth of it. As for BPO->BPC change, CCP said "no plans for it" on last Fanfest, so for now they seem to be safe.
Leowen Industrial Giants	Posted - 2008.01.09 13:47:00 - [21] Originally by: Robacz Originally by: Leowen I have a question on the POS thing actually - I could look it up but hopefully someone here will be nice enough to answer it for me... What is the actual benefit of T2 production in a POS? It's material efficiency and production time right? What are the actual numbers? Check Rapid Equipment Assembly Array: 5 Manufacturing slots Base time multiplier: 0.65 Base material multiplier: 1.2 I produce all my Tech2 modules in highsec POS'. Even with current inflated prices it is still worth of it. As for BPO->BPC change, CCP said "no plans for it" on last Fanfest, so for now they seem to be safe. Same deal with ships? Thanks
Robacz Essence Trade Essence Enterprises	Posted - 2008.01.09 15:25:00 - [22] Originally by: Leowen Same deal with ships? Thanks Ships are a bit different (Advanced Small/Medium/Large Ship Assemly Array): Base time multiplier: 0.75 Base material multiplier: 1.1 Each type of Array can build only certail types of ship.
RaTTuS BIG Ka-Tet	Posted - 2008.01.09 16:02:00 - [23] F60 Implants FTW -- BIG Lottery, BIG Deal, InEve [Now Verified] & Recruiting
Aldelphius Caldari	Posted - 2008.01.09 17:53:00 - [24] Lot of interesting thoughts here, most that fall into line with what I have been thinking. I proposed this question because the few T2 BPOS I have seen for sale seem to have opening bids in the 3 year profit area. While there will most certainly be people with far too much money, I cant see any serious industrialist paying those types of prices becasue they know they can make more profit elsewhere. 6, 8, and 10b isk for BPO's cant be right, unless you have a Dyspro or Promethium moon and are trying to diversify you long term income sources.
Daerkannon Shimmerscale Gallente Paxton Industries Paxton Federation	Posted - 2008.01.09 18:11:00 - [25] Edited by: Daerkannon Shimmerscale on 09/01/2008 18:11:54 You would have to be insanely wealthy looking at a 3 year ROI on a T2 BPO and consider that a good use of funds for diversifying your portfolio. I think the tendency to price T2 BPOs on the high side can be mostly linked to greed and historical prices. Even crappy T2 BPOs used to fetch nice sums of ISK. Now days only a few star performers are worthy of those sums of ISK and even their value is much less than it used to be. To address the OP's question, I use method B (combined with later comments, like volume traded) when evaluating a T2 BPO for purchase. If it's a particularly good BPO with a high volume traded and unlikely to be 'nerfed' by CCP in the near future then I may consider more than a 12 month period of return, but likely not more than 14-15 months. --- Honest officer, the dwarf was on fire when I got here! Can't find a mechanical engineering agent? Need a non-Caldari Navy agent? http://www.eve-agents.com/ for all your agent needs!
Benvie Benvie Enterprises	Posted - 2008.01.09 18:36:00 - [26] Due the prices demanded, t2 bpos are generally a bad investment. Not only that but as more people start getting datacores prices will go down. This can already be seen in action with stuff that uses molecular engineering and nanite engineering datacores like expanded cargoholds which have dropped 25% in price in the last few months. If you had priced a bpo for an expanded cargohold a few months ago you'd already have lost more than you made in the meantime due to dropping price.
Shadarle	Posted - 2008.01.09 18:40:00 - [27] Edited by: Shadarle on 09/01/2008 18:42:10 Originally by: Danari Second off, the 15% markup I get on my ravens is about 350% higher than the spread between buy and sell price of minerals, converting the effort of a push of a button and time into over triple the profits. This is all you need to look at to realize you are either A) Lying, B) Bad at math. Your claim is: 15% markup on Ravens = 350% Buy/Sell Differential on Minerals Well, using Jita prices for minerals for a Raven you get, Buy: $81,928,636 Sell: $86,825,013 Differential: $4,896,377 Differential * 350% = 17,137,319.50 So you make 17.1 million profit per Raven? This would mean you would sell your Ravens for 99,065,955. The Price of Ravens in Jita is: 83,895,000. I find it very hard to believe you're selling them at nearly 100 million per Raven, considering they sell for no where close to that anywhere I've checked. You claim a 15% markup on Ravens. This means $94,217,931.40 is your sell price. This is 10 million above Jita prices, 6.5 million above Motsu prices, 5 million above Kaunokka prices. I have absolutely no clue where your 350% markup on the differential comes from. In most regions the differential in mineral buy/sell prices is 6-7%, in Jita it is anywhere from 3.5-10%, averaging at 6.21%. 6.21% * 350% = 21.72%, not 15%. 15%=350%x where x=4.29%. I doubt there is a single market in EVE where the differential in mineral buy/sell prices is only 4.29%. I've seen it over 10% many times in the past, it's at its lowest point I've seen it right now at only 6.21%. Your statements don't hold water mathematically. Mine do. If you had been producing BPC's from a Raven BPO for the last 10 months you'd have made over 1 billion ISK profit for 99.9999% passive income. If you had instead been building off of it you'd have had to ship in minerals or placed large buy orders, waited for them to fill, constantly modify your orders to be #1. Perhaps you can convince people who never build anything that this is "passive" but it is not even close. This can take a lot of work, especially for people just getting into it. Tanking Setups Compared Stacking Penalty / Resists Explained
Akita T Caldari Navy Volunteer Task Force	Posted - 2008.01.09 20:21:00 - [28] Originally by: Shadarle Originally by: Danari Second off, the 15% markup I get on my ravens is about 350% higher than the spread between buy and sell price of minerals, converting the effort of a push of a button and time into over triple the profits. This is all you need to look at to realize you are either A) Lying, B) Bad at math. Or C) a 0.0 (Venal/Tenal) Raven seller. Hints : Triumvirate alliance tag 1\|2\|3\|4\|5.
Shadarle	Posted - 2008.01.09 20:38:00 - [29] Edited by: Shadarle on 09/01/2008 20:40:02 Originally by: Akita T Originally by: Shadarle Originally by: Danari Second off, the 15% markup I get on my ravens is about 350% higher than the spread between buy and sell price of minerals, converting the effort of a push of a button and time into over triple the profits. This is all you need to look at to realize you are either A) Lying, B) Bad at math. Or C) a 0.0 (Venal/Tenal) Raven seller. Hints : Triumvirate alliance tag Ah, so as a newbie trader/manufacturer all you need is a Raven BPO and access to 0.0 space, supply lines to get all the minerals you need, etc? Seems like his advice is really good for the general player! As to his alliance tag, I know next to nothing about alliance politics... nor do I care to. If people want to wage an intergalactic war around me that is their business, as long as I'm the one profiting from it. Call me MM if you will. Tanking Setups Compared Stacking Penalty / Resists Explained
Akita T Caldari Navy Volunteer Task Force	Posted - 2008.01.09 20:47:00 - [30] Well, actually, all you need is a courier mission with huge collateral but equally great rewards to a 0.0 Venal/Tenal NPC station with factory slots. Inside the package, a Raven BPO (or multiple Raven BPCs) and/or maybe even some missile ammo BPOs. Then all you need is a fresh industry/trade alt (under 900k SP total) with PE and mass production skills, and some trade skills even at L0 in their heads, which will keep attempting to go there on noobship autopilot until he gets there eventually... and never ever undock again. Then set up buy orders for minerals, add items to manufacture queue (as long as it takes including line waiting time), sell stuff you made for insane markups, rinse and repeat. last time I asked "friendly residents", mineral prices were usually below Jita prices, but ammo price was easily double or higher, and Ravens sold for up to 150 mil a piece. 1\|2\|3\|4\|5.

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