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Capn' Krunch Gallente Life. Universe. Everything. Wrath.	Posted - 2008.05.02 15:09:00 - [1] I have recently started playing again and have been looking at moving into serious manufacturing. I have done a few production runs in the past, but have never really put any time or effort into trying to do things efficiently as I was just producing an odd ship or some ammo for my corp from reprocessed rat loot in 0.0. After taking my break I am now spending all my time in high sec empire. While I was away I was still keeping up on my skills, so I have now trained up some decent mining skills and was considering starting to produce modules with my mined minerals to sell in order to make more profit from my time spent mining. This is where my confusion starts. After doing a little research into some various modules, it appears that there are people who must be producing items at quite a loss, even factoring in efficiency on BP's and production skills. Then I run across this post in the newbie area where there is a raging argument over wether mined ore and salvaged components etc. are 'free' to the person who spent the time to collect the materials. Are there really people out there that are producing and selling their items for less money than they would make simply selling the minerals? This seems rather counter-productive to me... I just wanted to toss this out over here, as it seems you guys who post in this section would probably have a better grasp of what is going on in this situation.
Midas Man Caldari Dzark Asylum	Posted - 2008.05.02 15:21:00 - [2] Yes is the short answer for ship production anyway, and you would be surprised at how wide spread the problem is. Module production is a bit different because the modules drop in vast quantites from Rats so Mission runners will get stocks of them and don't really care about manufacturing cost they just want there Isk as quick as possible and so will either dump items existing buy orders or will put them on the market at a value much below the current going rate.
Capn' Krunch Gallente Life. Universe. Everything. Wrath.	Posted - 2008.05.02 15:52:00 - [3] Ok, the mission runners selling off modules makes sense. Having been in a corp with mission runners for a while now I can understand how some of them would want to be rid of their 'junk loot' quickly so would sell at extremely low prices, so I can see how that would account for a bit of what I am seeing. Regardless, I guess for now I will just stick with mining and selling the minerals right off, as I just cant see how I would be better of manufacturing with the materials. Thanks for the insight, I guess my next logical alternative would be invention, but I am not sure I have the resources to get into invention on my own, and the rest of my corp spends too much time shooting rats, each other, or random other people, to want to assist the carebear of the corp .
Midas Man Caldari Dzark Asylum	Posted - 2008.05.02 15:59:00 - [4] don't mean to be the bearer of bad news but.. Invention is currently over subscribed, you can make nice margins if you do your research and produced the right product at the right time, but most Invention atm yeild little more and sometime less than Tech 1 production. There are ways to make your profits but you need to put in the time. Find an area where you can sell a reasonable amount at higher than Jita prices ie Mission hubs. Be ready to move into other items if your choosen market becomes flooded. Be prepared to export to other areas or sit on stock until prices correct. You can make money you just need to decide if the effort is worth it or if the enjoyment is worth it. I make most of my money through Trading and only produce Tech 2 things i want myself because i find it enjoyable so much so that i waste 80+ mil a month on a medium empire tower.
Lilkor	Posted - 2008.05.02 16:02:00 - [5] There is no money to be made in production. Nobody should try to enter the field. All joking aside, and as much as I loathe competition, there is plenty of money to be made on the right products sold in the right places.
Akita T Caldari Navy Volunteer Task Force	Posted - 2008.05.02 16:28:00 - [6] Originally by: Capn' Krunch Are there really people out there that are producing and selling their items for less money than they would make simply selling the minerals ? Sadly, yes. You wouldn't believe HOW MANY do this. And the even sadder part ? It's not limited to T1 manufacture, it starts to spread into invention and T2 manufacture too.
Spud Gunn	Posted - 2008.05.02 18:08:00 - [7] Originally by: Akita T Originally by: Capn' Krunch Are there really people out there that are producing and selling their items for less money than they would make simply selling the minerals ? Sadly, yes. You wouldn't believe HOW MANY do this. People whine about isk farmers ruining the economy; they never touch on the much greater effect caused by stupid people without any grasp of economics
Lord WarATron Amarr Black Nova Corp Band of Brothers	Posted - 2008.05.02 18:30:00 - [8] Edited by: Lord WarATron on 02/05/2008 18:30:07 I remember someone arguing that minerals are free. I simply said that isk was by that defention free as well, since you can "mine" npc's with guns, and thus more free isk is better than less free isk. He got the message after that.
Lorravan	Posted - 2008.05.02 19:07:00 - [9] For invention there is another aspect to consider. T2 BPO owners are able to produce items at a higher ME than inventors can. This allows them to undercut below invention build costs.
Kazuo Ishiguro House of Marbles Zzz	Posted - 2008.05.02 19:08:00 - [10] With most T1 goods, you can at least try and eliminate people selling at a loss via buying up all their goods and reprocessing them. With invented T2 goods, though, a large part of the costs stem from datacores, which cannot be retrieved in this manner.
Gridwalker Amarr	Posted - 2008.05.02 19:10:00 - [11] Originally by: Capn' Krunch I have recently started playing again and have been looking at moving into serious manufacturing. Welcome back to EVE! I read that thread. Even contributed to it. The poster who is arguing about things being free is simply bad at business, and not doing anyone any favors. If you were curious about fitting a ship for combat, and I told you to put one weapon of each type on your ship--after all, you'll still be doing damage--I wouldn't be helping you become a better combat pilot. You may still have fun, but you're going to suck at combat. This is because while you WOULD be doing damage, the name of the game with combat is doing more damage than your opponent can tank faster than he can do the same to you. That is combat component of EVE. The industrial component of EVE is all about making more isk than you normally would just by filling cheap "buy orders" on the market. It isn't just about converting items into quick isk. It is about maximizing your profits. Getting more isk than the sum of the parts are worth. One can dabble in combat and have fun, without being particularly good at it. You can also dabble in industry and have fun at that, too. But if you want to be serious about it, you need to do a lot of real research and think in terms beyond "my wallet is bigger so I'm doing something right." Someone who is SERIOUS about manufacturing always "runs the numbers" before building anything. How many are on the market? What is the average price? How many were bought in the last month? Try to get an idea of the current supply and demand for what you want to build. If you're smart, and pay attention, you can make a lot more isk manufacturing than you can by just selling your ore. But it takes work, time and patience. If someone is selling for less than you can build for, buy their stock and relist it at a more reasonable price. Let the bad manufacturers do the building FOR you. Or just refine it if you can buy it for less than the minerals are worth. Just remember to always do your homework, and if you're letting others set your price, you're in the wrong market. -Grid
Zifrian Gallente GFB Scientific Interstellar Corporate Alliance	Posted - 2008.05.02 20:04:00 - [12] I dunno, it all depends. I don't think I've sold an item yet that was below cost of mats. Granted I mainly try and make frigs and destroyers but I made a few domi's with a bpc I bought and still made 8mil per ship profit. I haven't seen people selling for below cost, it just doesn't make sense. Perhaps in Jita or something but not where I am.
Kazuo Ishiguro House of Marbles Zzz	Posted - 2008.05.02 21:26:00 - [13] Originally by: Gridwalker The industrial component of EVE is all about making more isk than you normally would just by filling cheap "buy orders" on the market. It isn't just about converting items into quick isk. It is about maximizing your profits. ... Someone who is SERIOUS about manufacturing always "runs the numbers" before building anything. How many are on the market? What is the average price? How many were bought in the last month? Try to get an idea of the current supply and demand for what you want to build. I should add that when you're producing at capacity, and you're selling everything as fast as you're building, it's equally important to consider your profit per hour. POS assembly arrays are a good example of this - they use more materials, but build items in 25% less time (so 33% faster than normal). This can be a more profitable compromise, in return for the increased work and capital costs of operating at a POS. As another example, consider invention of cloaks. You can profit by up to 30m isk per job (on average, including the failures) but it takes almost a week to make the max run T1 BPC required for such a job. Most other other max run module BPCs only take a few hours to produce. This principle applies to pure trade as well as industry - items that trade in high volumes will not only usually realise lower margins, but will also be more heavily tradeded, so you make a much smaller volume of transactions for each time you update your orders. The best thing to do is to find goods that are appropriate for the amount of playing you intend to do. Some of my orders haven't been updated for over 60 days and are still making the occasional sale.
Sim'a Nuk Royal Amarr Institute	Posted - 2008.05.03 08:36:00 - [14] Originally by: Lord WarATron Edited by: Lord WarATron on 02/05/2008 18:30:07 I remember someone arguing that minerals are free. I simply said that isk was by that defention free as well, since you can "mine" npc's with guns, and thus more free isk is better than less free isk. He got the message after that. I love that explanation
umah	Posted - 2008.05.03 14:35:00 - [15] Edited by: umah on 03/05/2008 14:38:38 Originally by: Capn' Krunch Are there really people out there that are producing and selling their items for less money than they would make simply selling the minerals? This seems rather counter-productive to me... "The economic value of something is how much a desired object or condition is worth relative to other objects or conditions. " People who sell (exchange) an item for isk, are simply valuing the isk higher than (in this case) the minerals. Why? Who knows. Sure they can sell it on the market for more, but they have to wait. The difference in price, (the below market sale of the item) represents the cost of their impatience, which is a well known weakness in sellers that a savvy trader can take advantage of. Don't cry about it, its a gift... Enjoy their economic ruin.
Lord Fitz Antares Fleet Yards SMASH Alliance	Posted - 2008.05.03 14:55:00 - [16] Originally by: Lorravan For invention there is another aspect to consider. T2 BPO owners are able to produce items at a higher ME than inventors can. This allows them to undercut below invention build costs. That only works if the market demand is less than the BPO supply, if the BPO supply is less than the market demand, the BPO owners have no bearing on the price at all, since without extra inventors the market price will go up, until such a point where the demand drops or extra supply (inventors) kick in. For some items (the crappy drones, hull repairers, some of the ammo/mining crystals) this is very true, Inventors don't affect those prices as the demand is tiny and they usually sell for < 10% above the BPO build cost. But for popular items (Hulks/HACs etc) the amount produced by inventors is so staggering that the price is determined by inventors only. If a BPO owner puts one up cheaper than the invention cost, someone can just buy it up and reliably get a higher price for it as the BPO owner cannot increase supply enough to stop this behaviour. With T1 products, if people sold stuff too cheap, you could easily refine their stuff, due to the extra wastage in T2 building this is much harder to do with T2 stuff, so it is able to fall further below cost.
umah	Posted - 2008.05.03 15:18:00 - [17] Originally by: Lord Fitz With T1 products, if people sold stuff too cheap, you could easily refine their stuff, due to the extra wastage in T2 building this is much harder to do with T2 stuff, so it is able to fall further below cost. Excellent point, boost your reprocessing skills and reprocess at stations with good standing. Refine their valuable underpriced items (it beats the .01 isk wars for minerals ... Build stuff that's in demand with the refined minerals, you are making a profit on their loss! Can you imagine what their wallets look like? => Wealth: 0.00 isk
Alias Alpha	Posted - 2008.05.03 23:48:00 - [18] Sometimes people sell loot from wrecks for below mineral cost, buy orders the way to go!
Toria Nynys Minmatar	Posted - 2008.05.04 06:13:00 - [19] Many people put in hub mineral sell order prices into meep and come to the conclusion that builders are losing money on every item. Try it with buy order prices instead and you might come to a different conclusion. Other times it's nice to chase competition out of a market you'll be staying in for a while. Put in buy orders over a few weeks, belch forth a few dozen battleships to sell at a smaller profit (yet still over mineral buy order pricing and insurance payout) and watch the competition dry up. In conclusion, not everyone mines minerals for their production pipeline. Not even with guns.
Caleese New Eden Research And Design School	Posted - 2008.05.05 11:49:00 - [20] I enjoy it when I find an idiot like this selling things near me, I tend to either buy the item and relist it to make a profit, or buy it reprocess it and sell the minerals at a profit. I don't know why, but I find profiting from others complete lack of economic knowledge and common sense to be one of the most rewarding things in this game ----------------- Think of someone you consider of average intelligence... now realise this. Half the worlds population is dumber than that person. How does the world survive such stupidity?
Burchov Lyrus Associates	Posted - 2008.05.05 12:50:00 - [21] Originally by: Toria Nynys Many people put in hub mineral sell order prices into meep and come to the conclusion that builders are losing money on every item. Try it with buy order prices instead and you might come to a different conclusion. Other times it's nice to chase competition out of a market you'll be staying in for a while. Put in buy orders over a few weeks, belch forth a few dozen battleships to sell at a smaller profit (yet still over mineral buy order pricing and insurance payout) and watch the competition dry up. In conclusion, not everyone mines minerals for their production pipeline. Not even with guns. So if you use the buy price of minerals, you can't sell them for their sell price any more? If I buy trit at 3 p/u, and the sell price is 3.5, then I can sell my trit at 3.5, so the value of it is 3.5. Not 3, even though I only paid 3 for it. In fact, please tell me where you are selling these items. I will buy them, reprocess them and sell the minerals and still make a profit. ________ Invention profit calculator
Greenbolt Minmatar Un4seen Development	Posted - 2008.05.05 21:01:00 - [22] Originally by: Burchov Originally by: Toria Nynys Many people put in hub mineral sell order prices into meep and come to the conclusion that builders are losing money on every item. Try it with buy order prices instead and you might come to a different conclusion. Other times it's nice to chase competition out of a market you'll be staying in for a while. Put in buy orders over a few weeks, belch forth a few dozen battleships to sell at a smaller profit (yet still over mineral buy order pricing and insurance payout) and watch the competition dry up. In conclusion, not everyone mines minerals for their production pipeline. Not even with guns. So if you use the buy price of minerals, you can't sell them for their sell price any more? If I buy trit at 3 p/u, and the sell price is 3.5, then I can sell my trit at 3.5, so the value of it is 3.5. Not 3, even though I only paid 3 for it. In fact, please tell me where you are selling these items. I will buy them, reprocess them and sell the minerals and still make a profit. But if i can sell something manufactured in some mass for 3.6 per trit unit (simple case assume hypothetical widget that only uses trit) and I paid 3.0 for the trit... Im undercutting competition...selling more widgits..and making profit. Now market transaction may move trit prices to 3.6 or 3.7 briefly and you will buy my items up and reprocess them happily. .. but if Im continually moving volume at those margins...(Then i guess it would be the same as me buying trit at 3.0 and selling at 3.6 wouldnt it??) so then everyone wins then? Opportunity cost is a wonderful thing. But also is the consideration of what kind of margin versus volume are you willing to consider making you happy? --------------------------------------------------- Scordite -Who was it that said that flying minmatar is kinda like going down a flight of stairs on an office chair while firing an uzi?
Toria Nynys Minmatar	Posted - 2008.05.06 03:25:00 - [23] Originally by: Burchov So if you use the buy price of minerals, you can't sell them for their sell price any more? Not always. Getting buy orders filled at way below average prices means you'll have to haul a few hundred million units of crud a bunch of hops to a market where sell orders are acceptable. Whereas people will happily travel a few hops out of their way to save a few M on a battleship hull. Quote: In fact, please tell me where you are selling these items. I will buy them, reprocess them and sell the minerals and still make a profit. Ammold, Rydingjorn, Hulm - for starters. Come on down. I should have another batch ready in a month or so after prices stabilize. I'm happy with around 10M/ship. You're welcome to your profits for the value add of hauling as well.
Pwett Minmatar QUANT Corp. QUANT Hegemony	Posted - 2008.05.06 14:45:00 - [24] If we want to be technical, the worth of a mineral is neither the buy order price or the sell order price; it is the weighted average of all buy and sell orders that show movement, combined - a formula I use in the MMI. _______________ Pwett CEO, Founder, & Executor <Q> QUANT Hegemony
OakRavin	Posted - 2008.05.07 18:18:00 - [25] Their is a slight logic to the arugument. After all if they sold the minerals that would increase the supply of minerals. Bascialy so long as they are selling for more than the combined value of the sell price of any self aquired minerals + ALL production costs,(amortised BPO+ R&D cost= manufacturing and broker costs) then fine When as they are makeing less than that. . . well. . .
Galen Brustar Gallente A-1 Excavations	Posted - 2008.05.07 19:33:00 - [26] Originally by: Burchov So if you use the buy price of minerals, you can't sell them for their sell price any more? If I buy trit at 3 p/u, and the sell price is 3.5, then I can sell my trit at 3.5, so the value of it is 3.5. Not 3, even though I only paid 3 for it. No, people are trying to sell it for 3.5. If the sell price is still above the current market-clearing price, they will just sit there.
Kazzac Elentria	Posted - 2008.05.07 20:54:00 - [27] You all should wander down the market section on the forum for a minute, we have a good discussion going on about what 'time' is worth in eve
Gimpb	Posted - 2008.05.13 21:09:00 - [28] Edited by: Gimpb on 13/05/2008 21:09:04 Originally by: Spud Gunn Originally by: Akita T Originally by: Capn' Krunch Are there really people out there that are producing and selling their items for less money than they would make simply selling the minerals ? Sadly, yes. You wouldn't believe HOW MANY do this. People whine about isk farmers ruining the economy; they never touch on the much greater effect caused by stupid people without any grasp of economics But does a raven sell faster than a pile of trit? I'm not a manufacturer so I don't know the answer, but that might be a reason.
Akita T Caldari Navy Volunteer Task Force	Posted - 2008.05.13 21:38:00 - [29] Originally by: Gimpb But does a raven sell faster than a pile of trit? I'm not a manufacturer so I don't know the answer, but that might be a reason. In a hub ? The tritanium. In a backwater corner of the galaxy ? The Raven. __ CSM candidates - quick reference cards (NEW: spreadsheet) Or just vote for LaVista Vista or Leandro Salazar like I did.
Kazuo Ishiguro House of Marbles Zzz	Posted - 2008.05.13 22:24:00 - [30] Originally by: Pwett If we want to be technical, the worth of a mineral is neither the buy order price or the sell order price; it is the weighted average of all buy and sell orders that show movement, combined - a formula I use in the MMI. Most of the time, people won't be interested in that particular value, though, as you generally only need to know one or the other. It's interesting from a theoretical point of view, perhaps for modelling. My research services Spreadsheets: Top speed calculation - Halo Implant stats

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