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Commander Pan
Posted - 2009.11.15 02:41:00 - [1]
 

So I'm new at manufacturing. I downloaded an Excel profit sheet. After plugging in different numbers (and assuming all LVL 5 and a reasonably high ME / PE), it seems that NOTHING manufactured (T1 or T2) is profitable if all raw materials and blueprints are purchased at market value?

Is that true? Or is the spread sheet wrong?

I must be missing something, because otherwise, it is more profitable to mine and sell raw materials.

Tyranus vonCarstein
Caldari
Trader Bank Market Association
Shadow of xXDEATHXx
Posted - 2009.11.15 03:02:00 - [2]
 

If you purchasing all your blueprint copies from the market, you'll probably find it very difficult to make a profit on nearly any item. You'll need to invest in BPO's and research them (or purchase researched ones) and either make copies of them to use yourself (or sell) or use the BPO directly in manufacturing.

It is possible to make a profit purchasing just the minerals at market prices on some items, but again... Factoring in any blueprint cost will be difficult to turn a major profit.

Consider blueprints an investment, you'll never actually have to sell them below what you paid, and will probably earn more money if you have researched them and find the need to sell them.

Commissar Veldt
Caldari
Progressive State
Posted - 2009.11.15 03:04:00 - [3]
 

You will probably find that most T1 items are not worth the time. Might aswell sell your minerals. The market is saturated, any man and his dog can manufacture T1.
I know a lot of people who make a pretty decent living off T2/Invention. However, this doesnt mean your spreadsheet is incorrect. The item may not be profitable (You can find countless forum debates about this and why 'T2 is just not profitable' because of BPO holders/minerals I mine are free people/introduction of T3 etc... so I wont bother starting another ten page post). If its not profitable then try another item, or try the same item in a different location, or source your raw materials from another location etc...
There are plenty of variables you can play with so just keep doing the numbers. If it doesnt add up then forget it and try another item. If, like me, you find the whole thing is one big pain in the arze then just flog your minerals straight off. All depends how much time your willing to put in.
Hope this helps.

Fly safe

EvilCheez
That's Retarded
FIGHT CLUB INC
Posted - 2009.11.15 04:40:00 - [4]
 

did the numbers for a brutix, buying all your minerals from the sell side you will still make 6+% selling the ships also on the sell side. Those are jita prices.

If you are isk poor, I suggest using bpc's. Your margin won't be as high, but you also won't mess up your cash flow by sinking money into a bpo. Bpc's also allow you to only be building what is most profitable at the time - rather than being locked into what you happen to have a bpo for. I have Billions of isk, and am only now buying battlecruiser and battleship bpo's.

It also depends where you are, what your manufacturing, and where you sell it. Out in the stix, you can generally find trit and pye for dirt cheap, while meg and zyd maybe not available at all.

You should be able to make isk on any tech I ammo, but remember some sell in much higher quantity than others.

Zifrian
Deep Space Innovations
Posted - 2009.11.15 05:39:00 - [5]
 

Originally by: Tyranus vonCarstein

It is possible to make a profit purchasing just the minerals at market prices on some items, but again... Factoring in any blueprint cost will be difficult to turn a major profit.


Don't factor in BPO costs. They are sunk costs and you can recoup any BPO cost by selling it on the market or on contracts if you "went out of business" so to speak.


Fist1
Hostile Alcoholic Commanders
Posted - 2009.11.15 05:43:00 - [6]
 

Edited by: Fist1 on 15/11/2009 05:55:25
Edited by: Fist1 on 15/11/2009 05:50:09
Edited by: Fist1 on 15/11/2009 05:45:01
Edited by: Fist1 on 15/11/2009 05:44:49
1. best bet for stable market pricing is to go to the system called Jita (if you havent been there yet) and use those prices. Its the universe trading hub.

2. some people will put out low-ball buy orders for ore and minerals on the market. This cuts your cost to build but tends to be slow to accumulate and a PITA to go pick up when you want it(I just had to pick up ore from 300 different systems, take my word, don't do REGIONAL buy orders lol)

3. many miners will train for manufacturing after they max their mining skills. They will use their mining to supplement their supply and cut cost.

4. To really make a large profit you will probably have to sell in/near low sec areas. I'm not gonna tell you what sells really well and where because that would cut my profits, but lets just say that I don't do a lot of small scale manufacturing. Instead I find stuff priced really low and use alt toons to find where such items sell really high. I do the same for faction gear on contracts. Find something prices fairly low and buy it up and try to control market prices(term is called market manipulation), but that takes a lot of money to do.

Zifrian
Deep Space Innovations
Posted - 2009.11.15 05:50:00 - [7]
 

Originally by: Fist1

1. best bet for stable market pricing is to go to the system called Jita (if you havent been there yet) and use those prices. Its the universe trading hub.

2. some people will put out low-ball buy orders for ore and minerals on the market. This cuts your cost to build but tends to be slow to accumulate and a PITA to go pick up when you want it(I just had to pick up ore from 300 different systems, take my word, don't do REGIONAL buy orders lol)

3. many miners will train for manufacturing after they max their mining skills. They will use their mining to supplement their supply and cut cost.


No need to go to Jita, just use Eve Central. Plus, regional prices are what dictates prices of manufactured goods most times. Time = money and Hauling = time. The more time you spend hauling the more time you could have got the minerals from local markets or mining.

Vigilant
Gallente
Vigilant's Vigilante's
Posted - 2009.11.15 06:20:00 - [8]
 

BPO's are isk sinks...recoup over time. Dont' factor them in.

Second, use buy orders in less traveled regions to get your minerals a bit cheaper. Also, mine a bit.

Lastly, find a good BPC dealer to hook ya up front with a deal on bulk buy to get you started. Look for packages on Cruisers / BS/ BC usually around 25 mill for a bunch ships copies at 5 to 10 runs.

Yarinor
Capital Construction Research
Pioneer Alliance
Posted - 2009.11.15 09:52:00 - [9]
 

Guys remember:
1) My minerals are cheap because I get them from buy orders
2) I can sell that item there for higher profit
doesn't make an item profitable to make.

In both cases you're just earning a bit on trading and losing some of it on manufacturing. In essence it's exactly the same as "I mined my minerals so they're free".

Sulaxxanna
Posted - 2009.11.15 10:11:00 - [10]
 

Originally by: Yarinor
Guys remember:
1) My minerals are cheap because I get them from buy orders
2) I can sell that item there for higher profit
doesn't make an item profitable to make.

In both cases you're just earning a bit on trading and losing some of it on manufacturing. In essence it's exactly the same as "I mined my minerals so they're free".


http://wiki.eveonline.com/wiki/Economics_101

Baka Lakadaka
Gallente
Agony Unleashed
Agony Empire
Posted - 2009.11.15 13:13:00 - [11]
 

It's not hard to regularly make 100% or more on certain T1 items......but not if you try to sell in trade hubs.

You need to base your mineral buys on being the highest buy order and your sales should be based on being the lowest sell order. If you base everything on the average prices, then the speadsheet will give you the average answer - which is that if you buy and sell at the average, then there is no profit.


Sulaxxanna
Posted - 2009.11.15 14:07:00 - [12]
 

Originally by: Baka Lakadaka
It's not hard to regularly make 100% or more on certain T1 items......but not if you try to sell in trade hubs.

You need to base your mineral buys on being the highest buy order and your sales should be based on being the lowest sell order. If you base everything on the average prices, then the speadsheet will give you the average answer - which is that if you buy and sell at the average, then there is no profit.




If you base minerals on highest buy order so your manufacturing works, wouldn't you better off just selling the minerals at lowest sell order in the same station instead? Rolling Eyes Obviously I'd still buy the minerals at highest buy order, but I'd only manufacture items that make a profit at mineral sell order prices.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2009.11.16 00:48:00 - [13]
 

I am making up to 100% profit on some T1 items and about 200% on few T2 (108 sold today). Don't see this so bad income tbh.

Zifrian
Deep Space Innovations
Posted - 2009.11.16 02:32:00 - [14]
 

Originally by: Vaerah Vahrokha
I am making up to 100% profit on some T1 items and about 200% on few T2 (108 sold today). Don't see this so bad income tbh.


You factor in your datacore costs on T2? My guess is no.

Breaker77
Gallente
Reclamation Industries
Posted - 2009.11.16 02:42:00 - [15]
 

Originally by: Zifrian
Originally by: Vaerah Vahrokha
I am making up to 100% profit on some T1 items and about 200% on few T2 (108 sold today). Don't see this so bad income tbh.


You factor in your datacore costs on T2? My guess is no.


Profits that are are very possible on T2 if you know where to buy and sell at.

Zifrian
Deep Space Innovations
Posted - 2009.11.16 03:56:00 - [16]
 

Originally by: Breaker77
Originally by: Zifrian
Originally by: Vaerah Vahrokha
I am making up to 100% profit on some T1 items and about 200% on few T2 (108 sold today). Don't see this so bad income tbh.


You factor in your datacore costs on T2? My guess is no.


Profits that are are very possible on T2 if you know where to buy and sell at.


200%? Perhaps if you go to 0.0. Maybe other locations.

But then you are making money off of production and hauling. In the end, it all comes down to isk profit per hour. Buying mats in Jita and selling them 20 jumps costs more than the mats you buy.

Yarinor
Capital Construction Research
Pioneer Alliance
Posted - 2009.11.16 16:21:00 - [17]
 

Originally by: Sulaxxanna
Originally by: Yarinor
Guys remember:
1) My minerals are cheap because I get them from buy orders
2) I can sell that item there for higher profit
doesn't make an item profitable to make.

In both cases you're just earning a bit on trading and losing some of it on manufacturing. In essence it's exactly the same as "I mined my minerals so they're free".


http://wiki.eveonline.com/wiki/Economics_101


...

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2009.11.16 17:17:00 - [18]
 

Quote:

You factor in your datacore costs on T2? My guess is no.



Since I perform production and cost analysis from the basic components up for third parties I am pretty sure my Excel files cover datacores pretty well.

mxzf
Minmatar
Shovel Bros
Posted - 2009.11.16 17:25:00 - [19]
 

Originally by: Zifrian
Originally by: Breaker77
Originally by: Zifrian
Originally by: Vaerah Vahrokha
I am making up to 100% profit on some T1 items and about 200% on few T2 (108 sold today). Don't see this so bad income tbh.


You factor in your datacore costs on T2? My guess is no.


Profits that are are very possible on T2 if you know where to buy and sell at.


200%? Perhaps if you go to 0.0. Maybe other locations.

But then you are making money off of production and hauling. In the end, it all comes down to isk profit per hour. Buying mats in Jita and selling them 20 jumps costs more than the mats you buy.


I regularly make 200% profit on certain T2 items in highsec, after inventing and then buying the mats on the market (our corp can't moon mine because we're in highsec) and factoring in success rates on invention I still get around 200% returns (or ~10% for corp-mates since I provide for the corp around at-cost too).

Midnight Dawn
Minmatar
Posted - 2009.11.17 01:36:00 - [20]
 

I'm really not sure if it's more profitable to sell the minerals or manufacture stuff. What I usually do is mine Veld, Scordite, etc., highsec ore as much as is in my system, refine it, and buy whatever I'm missing on the market. Since trit is what is usually needed in the greatest amount, I focus on Veld, but sometimes those rocks are gone by the time I log in.

It's been my limited experience that T1 ships provide the smallest profit margin. Maybe it's just that everyone wants to make ships. I don't know, but since I can't make any T2 stuff yet, I stick with T1 mods, not ships.

Rigs are great if you have a mission runner getting you salvage material. I run L4's on an alt and contract all the salvage material to my manufacturer. However rig prices are falling so I wouldn't buy salvage to make rigs unless you really do your homework.

Tau Cabalander
Posted - 2009.11.17 04:28:00 - [21]
 


Keep in mind that we are 2 weeks from an expansion, which historically means the market crashes as everyone is hoarding.



MightyRhinox
Minmatar
Rhinox Heavy Industries
Twilight Military Industrial Complex Alliance
Posted - 2009.11.17 06:05:00 - [22]
 

Originally by: Sulaxxanna
Originally by: Yarinor
Guys remember:
1) My minerals are cheap because I get them from buy orders
2) I can sell that item there for higher profit
doesn't make an item profitable to make.

In both cases you're just earning a bit on trading and losing some of it on manufacturing. In essence it's exactly the same as "I mined my minerals so they're free".


http://wiki.eveonline.com/wiki/Economics_101


Yeah, that needs a rewrite...

Estel Arador
Posted - 2009.11.17 08:33:00 - [23]
 

Note it's currently profitable to build T1 battleships, insure them, and self-destruct.

It's the best thing that could happen, you don't have to wait for people to buy your stuff!

Chainsaw Plankton
IDLE GUNS
IDLE EMPIRE
Posted - 2009.11.18 02:56:00 - [24]
 

Originally by: Tau Cabalander

Keep in mind that we are 2 weeks from an expansion, which historically means the market crashes as everyone is hoarding.





if everyone is hording right now...... Laughing

Dr BattleSmith
PAX Interstellar Services
Posted - 2009.11.18 05:19:00 - [25]
 

Originally by: Estel Arador
Note it's currently profitable to build T1 battleships, insure them, and self-destruct.

It's the best thing that could happen, you don't have to wait for people to buy your stuff!


A glaring example of just how fake and over-supported the Eve market is.

You know I can go down to the Toyota dealer, buy a car, drive it around to the wreckers, sell it for scrap metal for more then I paid.
lol right....

Borun Tal
Minmatar
Space Pods Inc
Posted - 2009.11.18 06:38:00 - [26]
 

Always keep in mind that you will rarely know what someone else's costs are. Just because it isn't profitable to you don't stupidly assume that the other guys is a "minerals are free" type; he/she may just know more and have access that you don't.

Jacabon Mere
Caldari
Capital Storm.
Reverberation Project
Posted - 2009.11.18 07:55:00 - [27]
 

Originally by: Dr BattleSmith
Originally by: Estel Arador
Note it's currently profitable to build T1 battleships, insure them, and self-destruct.

It's the best thing that could happen, you don't have to wait for people to buy your stuff!


A glaring example of just how fake and over-supported the Eve market is.

You know I can go down to the Toyota dealer, buy a car, drive it around to the wreckers, sell it for scrap metal for more then I paid.
lol right....



Its mroe like buy your new Aurion, insure it and go write it off by dropping it off a cliff and getting more than what you payed for it without the insurance company caring.

Ben Harrigan
Posted - 2009.11.18 12:17:00 - [28]
 

Originally by: Sulaxxanna
Originally by: Baka Lakadaka
It's not hard to regularly make 100% or more on certain T1 items......but not if you try to sell in trade hubs.

You need to base your mineral buys on being the highest buy order and your sales should be based on being the lowest sell order. If you base everything on the average prices, then the speadsheet will give you the average answer - which is that if you buy and sell at the average, then there is no profit.




If you base minerals on highest buy order so your manufacturing works, wouldn't you better off just selling the minerals at lowest sell order in the same station instead? Rolling Eyes Obviously I'd still buy the minerals at highest buy order, but I'd only manufacture items that make a profit at mineral sell order prices.


I generally agree on that. Basing production cost on buy orders and income on sell orders will give a false result, since it might have been better to just resell the original item.

There's a lot of exceptions though. Sometimes buy orders is the price, since some items almost never sell at sell orders. In this case its not possible to resell, but transforming it into something else may make it possible. Whether a profit like this is based on trading or manufacturing is a matter of definition I guess. Both are needed to make it work.

In other cases its possible to buy materials at buy orders, sell some of them, convert some of them and sell the end result. Manufacturing can be a way to add demand in cases where the market is the bottleneck.

While in general its a good idea to isolate different types of business to see if they turn a profit individually, its not always possible. Sometimes its worthwhile to do part of a production chain to open up more demand, or to make logistics easier, even if that production technically is a loss.

A production chain also adds mobility and more choices. A trader limited to buying and selling the same product is more vulnerable to price movements, than someone who can choose to either resell immediately, or to convert the materials before reselling.

Darcon Kylote
Posted - 2009.11.18 13:49:00 - [29]
 

Edited by: Darcon Kylote on 18/11/2009 14:08:03
Edited by: Darcon Kylote on 18/11/2009 13:54:10
Originally by: Borun Tal
Always keep in mind that you will rarely know what someone else's costs are. Just because it isn't profitable to you don't stupidly assume that the other guys is a "minerals are free" type; he/she may just know more and have access that you don't.


No. Even it they aren't considered free, it's still the same error in judgement. Here's an example.

I used to live in NPC 0.0 and there was trit on the local markets at around 1 to 1.5 when it was selling in empire for over 4. This happens because of hauler spawns dropping 100mil trit several times a week in some constellations. On most jump freighter runs I was going back empty anyway, so I'd load up on trit and jump it back.

So now I got a massive load of trit in empire that I paid 1.5 for. I could sell it locally for about 4.0, or I could build a battleship and sell that battleship for market value or just under to move it fast. Let's disregard hauling and say I can sell either the BS or the trit equally quickly in my local highsec.

So, what's my cost of trit on that battleship hull? Is it the 1.5 I paid or the 4.0 I could have gotten? There's no question in my mind, it's the 4.0 I could have gotten. No matter how smart I am or how much access I have to a good deal, my cost is always 4.0 because that's the opportunity cost of my minerals.

It's the guys that think their cost is 1.5 that keep prices low. Not that I'm complaining, I'll take their money.

Zifrian
Deep Space Innovations
Posted - 2009.11.18 19:06:00 - [30]
 

Edited by: Zifrian on 18/11/2009 19:07:13
Originally by: mxzf

I regularly make 200% profit on certain T2 items in highsec, after inventing and then buying the mats on the market (our corp can't moon mine because we're in highsec) and factoring in success rates on invention I still get around 200% returns (or ~10% for corp-mates since I provide for the corp around at-cost too).


I guess I wasn't paying attention to my profits but I guess I make 100% more often than not, sometimes I make more but I don't think I have anything you can make 200% off of. I'd love to see an example but since people don't like to share that information here (not that I blame you) I'll take your word for it.

Thing is though, making isk is all about time spent. It takes a significant amount of time making T2 items. Then the market for those items can be fast or from my experience, mostly slow. There are some items that fly off the shelf, which of course even more people know about adding to more competition, but others that you have to get involved in market wars with other people trying to sell the same stuff. I remember a few weeks ago having issues trying to sell mackinaws because where I built them I had to fight with someone else on the market doing the same thing. I ended up selling them by ferrying them to different systems that I thought they would sell in. Then they sold, probably faster than the guy that I was in market war with but at what cost? I spent a bit of time and some risk moving around those items. Maybe it doesn't matter but it was a few hours of time I could have been doing something else.

Anyway, I think as some of you have already noted well, the EVE market is far more dynamic and complex than I think a lot of people give it. When you can refer to items as "sunk costs" and people say that they had analyzed their "opportunity cost" you are getting into a more realistic market system than any MMO I've seen. Of course it's not perfect but it really is nice.


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