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Finley 18
Posted - 2009.03.21 00:43:00 - [1]
 

I'm just getting into the process of being able to invent and then build Tech II ships. Before I jump in with both feet and start buying all the things that I would need to build said ships I thought I'd price out the individual materials, add them up to get a total cost for a ship, and than check out some of the prices on the market that these ships are selling for. Am I missing something? Some of the prices that I've seen these ships selling for, guys are barely breaking even, and some are even LOSING money on it?!? I thought my math was wrong, but I also confirmed the numbers with a great little BPO calculator that someone linked to me a little while ago. So I ask. What am I missing? Why are there guys out there willing to go to all this hassle to not make isk on these ships? Someone wiser than me please enlighten me as to how or why this is.

Thanks.

Badmin
Posted - 2009.03.21 00:49:00 - [2]
 

Well... For starters, those who have the BPO's for some of these are RI-F*CKING-DICULOUSLY researched. To the point where ME and PE are perfect.

Those that have been playing industry for long enough know that with no waste, its pretty easy to make a profit.

Secondly, some of these characters DO lose money on their makings, for the simple fact that they get some of the mat's from other means (ie: buy orders for ridiculously cheap, say .01 isk for some of the components in systems where noobs give them everything for free).

I'm not saying that this is T2 specific, these lower-than production prices are all over Eve. Just finding the right market for you, generally an inter-regional / sec status one is the place to find your niche.

Good luck!

Finley 18
Posted - 2009.03.21 00:54:00 - [3]
 

Okay so how and when did these people get Tech II BPO's? And how can I get my little mitts on them? And why do I never see on the contract market a copy of any Tech II BPO that's researched to the hilt? All I ever see are obvious inventions from Tech I copies (ME -4).

Tyran Scholus
Posted - 2009.03.21 01:03:00 - [4]
 

Originally by: Finley 18
Okay so how and when did these people get Tech II BPO's? And how can I get my little mitts on them? And why do I never see on the contract market a copy of any Tech II BPO that's researched to the hilt? All I ever see are obvious inventions from Tech I copies (ME -4).


Tech 2 BPOs are no longer obtainable except by buying one of those that already exist from whoever owns them (which would no doubt cost an exorbitant amount of money).

Finley 18
Posted - 2009.03.21 01:07:00 - [5]
 

So basically what you are saying is that the people that have been playing this game a long time have a HUGE advantage over people who haven't. Jeez that doesn't sound like the EVE game at all!!!Confused

Hit DaBooks
Posted - 2009.03.21 02:05:00 - [6]
 

Originally by: Finley 18
So basically what you are saying is that the people that have been playing this game a long time have a HUGE advantage over people who haven't. Jeez that doesn't sound like the EVE game at all!!!Confused


That's just the way it is. Tissue?

Ten Bulls
Minmatar
Posted - 2009.03.21 04:17:00 - [7]
 

There was a moon mining exploit a while back, there was greater supply of ferrogel (which is used to t2 componentes) than there should have been.

The price of ferrogel jumped up when the exploit was fixed, but there wasnt been much of a flow on price increase to t2 ships (afaik).

Also, its low invention skill t2 ships like interceptors that are selling below manufacturing costs, higher skill t2 ships like command ships (need cruiser construction 5) and to a lesser extent hac's are still profitable to make. So it may well be that there is enough competition in t2 proctuction to keep the margins tight and there wont be a t2 ship price correction due to ferrogel.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2009.03.21 05:36:00 - [8]
 

Originally by: Finley 18
So basically what you are saying is that the people that have been playing this game a long time have a HUGE advantage over people who haven't. Jeez that doesn't sound like the EVE game at all!!!Confused

No, that's not it.
You CAN buy a T2 BPO yourself, just like MOST of the current owners have.
Heck, T2 BPOs are cheaper nowadays than they used to be... I have seen a Capacitor Recharger II BPO sell for 120 billion ISK a bit more than two years ago, before invention was announced. Yes, that's 120 billion, with a B, not M.
Sure, nowadays, I doubt you'd even get a fraction of that for it, but that's how much people were paying.

Many ships (jump freighters, black ops, marauders, heavy interdictors, electronic warfare frigates) never had any T2 BPOs to begin with, and for that matter many items never had any T2 BPOs either.
Still, the profit margin for those ships is usually LOWER than the profit margin to be had with other popular ships, like, say, the Nighthawk right now.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2009.03.21 05:40:00 - [9]
 

Originally by: Finley 18
Why are there guys out there willing to go to all this hassle to not make isk on these ships? Someone wiser than me please enlighten me as to how or why this is.

It's called the "blueprint copies, datacores, decryptors and T2 components I get/make myself are not costing me ISK, so everything is pure profit" mentality... a.k.a. "ore is free so it has no value" screwed-up way of thinking.
People don't do the math properly and end up selling below actual opportunity cost, just to move goods.

Clansworth
Good Rock Materials
Posted - 2009.03.21 08:11:00 - [10]
 

If you see ships/modules selling for truly BELOW the material price, there really is nothing stopping you from buying them, reprocessing them, and selling the components and theoretically making a profit. That being said, it might be more efficient to buy those under priced items, and move them to a market where they are selling for higher, and make a profit there.

What I'm saying is, there are ways of taking advantage of the 'stuff i mine is free' crowd. It just takes some market research, and some hauling.

Enthral
Posted - 2009.03.21 09:21:00 - [11]
 

Originally by: Finley 18
So basically what you are saying is that the people that have been playing this game a long time have a HUGE advantage over people who haven't. Jeez that doesn't sound like the EVE game at all!!!Confused


You mean the people who start four or five accounts, grinded standings on all the alts, trained them all up for R&D agents, and waited months or years for a BPO that never came? ugh

As far as "researching them to insane levels," for ships at least, it is a ridiculous thing to do. It takes ages to research T2 BPO's. The Ishtar takes 5d 13h to research a single ME, and 1w 1d 8h for a single PE. Why would you spend months researching a BPO to save 10% material costs? Especially since, unlike T1 items, not everything is affected by waste anyway.

The reality of the T2 BPO is that you can only build one at a time, where inventors can build as many at the same time as they can invent. That means they can completely outproduce a T2 BPO holder, who is now forced to lower his prices to the point that he could be making just as much if not more profit with a T1 BPO.

A T2 BPO holder has the benefit of less waste, so he can make more profit per unit than an inventor. The inventor, however, has the benefit of being able to make considerably more than the BPO holder.

Markets flood, prices drop, and everyone moans and complains.

As far as not being able to get a T2 ship BPO, I see them for sale all the time. Expect to pay in the range of 20-50b isk for one. Ask around. Do a little research. You'll find the one you want.

In the days before invention, T2 BPO holders had a distinct and nasty advantage. They paid for it--the lottery was no cakewalk--but once you had one, you had a license to print isk.

Now, not so much.

Anyway, no reason to get all emo about it. T2 ships--even ones where there are no BPO's at all in the game--is a tough game to get into. The demand is generally lower than the supply, and the competition is cut throat. People are calculating their cost on all sorts of factors, and quite often those costs aren't based on buying the components from sell orders.

If you haven't already, I would start by inventing modules. You can often make an excellent profit inventing ammo, but you won't get rich doing it. The demand usually isn't high enough to move enough product to see the really big gains.

As far as modules go, some can net you fantastic profits. Other modules, you can't make squat. Which you should invent and which you should avoid are generally trade secrets, and you won't find anyone sharing the fruits of their market research. You need to do the research yourself. You also need to be nimble, and prepared to stop invention on one item and switch to another very quickly. The markets can be fickle, and what was earning you 100m isk profit per day this week, might only earn you 10m isk profit per day the next.

OK, I've said enough.

-Enthral

Henry Fredyericus
Gallente
H.F. Enterprises
Interstellar Trade Syndicate
Posted - 2009.03.21 11:02:00 - [12]
 

Originally by: Finley 18
I'm just getting into the process of being able to invent and then build Tech II ships. Before I jump in with both feet and start buying all the things that I would need to build said ships I thought I'd price out the individual materials, add them up to get a total cost for a ship, and than check out some of the prices on the market that these ships are selling for. Am I missing something? Some of the prices that I've seen these ships selling for, guys are barely breaking even, and some are even LOSING money on it?!? I thought my math was wrong, but I also confirmed the numbers with a great little BPO calculator that someone linked to me a little while ago. So I ask. What am I missing? Why are there guys out there willing to go to all this hassle to not make isk on these ships? Someone wiser than me please enlighten me as to how or why this is.

Thanks.


The key is to manufacture your own T2 components. That's one of the ways to make profit in T2 ship production.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2009.03.21 12:16:00 - [13]
 

Originally by: Henry Fredyericus
The key is to manufacture your own T2 components. That's one of the ways to make profit in T2 ship production.

And this is precisely the kind of thinking that is fundamentally wrong.
No, you DON'T make a profit in T2 ship production if you manufacture your own components - you either make a profit manufacturing the components OR you make a profit manufacturing the ship OR you do both.
If the ship construction alone is not profitable, but if you can turn an overall profit manufacturing the components, then DON'T manufacture the ship, just manufacture more components instead.

Anisa Schardl
Posted - 2009.03.21 12:44:00 - [14]
 

Listen to Akita, she's one of the only ones that actually takes everything into account.

The t2 market, more than any other, is plagued by the fact that most manufacturers cannot, or will not, take all costs into account properly. In order to properly analyze profit on something, you have to completely break it down one level, and one level only. Total up the VALUE for the components, bp, ship hull, and random mins/ram/blocks, and see what you get. Then compare it to how much you would be able to sell it for.

Problem is, most just don't do that, or don't keep track of it, or worse yet, break it down too many levels. If you break everything down to, say, the complex reaction level, then that'll just tell you that there's profit SOMEWHERE. Could be when you made the components, could be when you made the ship. Break it down farther and it gets even worse.

Crimsona Endarius
Posted - 2009.03.21 12:59:00 - [15]
 

Originally by: Henry Fredyericus
Originally by: Finley 18
I'm just getting into the process of being able to invent and then build Tech II ships. Before I jump in with both feet and start buying all the things that I would need to build said ships I thought I'd price out the individual materials, add them up to get a total cost for a ship, and than check out some of the prices on the market that these ships are selling for. Am I missing something? Some of the prices that I've seen these ships selling for, guys are barely breaking even, and some are even LOSING money on it?!? I thought my math was wrong, but I also confirmed the numbers with a great little BPO calculator that someone linked to me a little while ago. So I ask. What am I missing? Why are there guys out there willing to go to all this hassle to not make isk on these ships? Someone wiser than me please enlighten me as to how or why this is.

Thanks.


The key is to manufacture your own T2 components. That's one of the ways to make profit in T2 ship production.



Where do these people come from? You have a lot to learn my friend.

Argendta
Posted - 2009.03.21 14:23:00 - [16]
 

Edited by: Argendta on 21/03/2009 14:24:02
Originally by: Akita T

No, you DON'T make a profit in T2 ship production if you manufacture your own components - you either make a profit manufacturing the components OR you make a profit manufacturing the ship OR you do both.
If the ship construction alone is not profitable, but if you can turn an overall profit manufacturing the components, then DON'T manufacture the ship, just manufacture more components instead.



You are right here, but you are not completely right. :) You see, you can't turn a profit manufacturing components because pretty much no one buys components. At least not in quantities to make a serious profit. The prices for components are profitable, but the demand is beyond tiny; without market you can't make a profit. Market for t2 ships is so much larger.

Thus, if the components were selling for the prices they go in market, it would be profitable to sell them; they don't; therefore, it is profitable to turn them into ships which sells, even though the sum of the components in the ship sells below the prices of a component on the market - simply because those prices are "empty", they are artificially inflated and no one buys them.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2009.03.21 14:47:00 - [17]
 

Originally by: Argendta
You are right here, but you are not completely right. :) You see, you can't turn a profit manufacturing components because pretty much no one buys components. At least not in quantities to make a serious profit. The prices for components are profitable, but the demand is beyond tiny; without market you can't make a profit. Market for t2 ships is so much larger.

Eh, I don't know... even if for T2 components it's usually a buyer's market, the sales prices are at best 20% higher, usually not even 10% higher, and they sometimes actually sell... and the moved volume isn't all that negligible, I mean, on reactors alone the daily Jita traded volumes fluctuate from 1 bil to over 10 bil, with an average of somewhere around 4 bil a day or so... that's something, for a single component (granted, the most valuable one per unit, but still).
If you can make a profit manufacturing ships out of your own components, why not do the exact opposite and buy the components and manufacture even more ships instead ?

My point was that you can't take a loss in the later stages of the process all that lightly just because it helps move your inventory faster...

Argendta
Posted - 2009.03.21 17:01:00 - [18]
 

Originally by: Akita T

Eh, I don't know... even if for T2 components it's usually a buyer's market, the sales prices are at best 20% higher, usually not even 10% higher, and they sometimes actually sell... and the moved volume isn't all that negligible, I mean, on reactors alone the daily Jita traded volumes fluctuate from 1 bil to over 10 bil, with an average of somewhere around 4 bil a day or so... that's something, for a single component (granted, the most valuable one per unit, but still).


Actually you have something here. I've checked the market right now, and situation is somewhat different from what I've observed last time I was calculating components' profitability. I'm not sure how well it'll work, because I have no stomach for 0.01 isk games, but it's worth a try.

Quote:
If you can make a profit manufacturing ships out of your own components, why not do the exact opposite and buy the components and manufacture even more ships instead ?


I can't make profit from purchased components for the price they go; probably most people can't too; that's why I think nobody purchases them. :)

Quote:
My point was that you can't take a loss in the later stages of the process all that lightly just because it helps move your inventory faster...



Of course not; no profits or loss can be "taken lightly" in manufacturing; but sometimes they have to be taken, when it makes economical sense. I mean, if, for example, you have a limited capital, it is more profitable to get a 10% profit on a billion every 3 days than 15% profit on a billion every 6 days.

Breaker77
Gallente
Reclamation Industries
Posted - 2009.03.21 17:36:00 - [19]
 

As an example:

I can manufacture 200 components for 50,000 each for a ship that sells instantly

OR

I can sell 200 components for 100,000 each in the course of a month.

I'll gladly take the extra 10 million profit.

While this is an example, there is at least 1 item I can think of off the top of my head where these are the atual prices to make and on the market. The profit margin is so much better when you use several hundred units of this module per ship. Add in the fact that it takes me 2 minutes to produce 1 unit of them and you don't waste much time producing them either.

I can produce 6 of these ships a day when in full production so I'll take my extra 60 million profit a day (1.8 billion/month), at least until the market crashes Very Happy

Kazuo Ishiguro
House of Marbles
Posted - 2009.03.21 18:45:00 - [20]
 

Originally by: Finley 18
...And why do I never see on the contract market a copy of any Tech II BPO that's researched to the hilt?


It generally takes twice as long per copy per run as it does to build 1 run from the BPO, so if you do this you lose half the return on your (considerable) investment.

Kiyirari
All Star Shipyards
Posted - 2009.03.21 22:45:00 - [21]
 

Basically what it boils down to is...

How popular the T2 ship is, the more demand for it the greater the profit.

What i've found is that most popular ships sell for 20% to 30% profit, which is very little considering the time invested in making the damned thing in my own opinion. With the rest selling at cost price or their abouts.
It also reflex's some peoples idea, that the items they produce for end product is free Exclamation which at the end of the day, the smart person knows evrey item has a price and should be considered in the end value of finished product.
Also of note that some T2 ships will have an origanil T2 bpo, which can be difficult to compete with on the open market due to invention cost ec etc...

Finley 18
Posted - 2009.03.21 22:56:00 - [22]
 

Thanks for all the input!! Many of you have given me great insight on the finer workings of the market, and there are as many "theories" on how to make it work for you as there are products on it!Very Happy Someone did comment that I should get into components first, and that's exactly what I've done. My corp (and Alliance) are trying to get away from market dependence for practically everything from Ammo to Shield hardeners and everything in between. I've done my research and for fitting out our Alliance it is cheaper to do it this way (and sell some of the stuff on the market). But some of the boys are capable of flying the Tech II ships and of course before I started building them I wanted to check the cost/profit ratio and was totally floored at what I found! I just figured that if you're at the point skill wise that you are capable of building these ships you're understanding of the cost/profit system would be better.

Lord Fitz
Project Amargosa
Posted - 2009.03.22 04:36:00 - [23]
 

Originally by: Finley 18
before I started building them I wanted to check the cost/profit ratio


It's amazing how many people don't do this, particularly with items that don't have BPOs (because they 'have to' be profitable right?).

The mass of inventors is the most significant market force in T2 save for a few items so pathetically unpopular that even the BPO owners can't make a profit.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2009.03.22 05:14:00 - [24]
 

Originally by: Finley 18
I just figured that if you're at the point skill wise that you are capable of building these ships you're understanding of the cost/profit system would be better.

Getting more SP on your avatar doesn't magically make the player smarter Twisted Evil

Erigal
Posted - 2009.03.22 12:21:00 - [25]
 

I'm more or less where the OP is/was.

I did some T1 module and ship manu a while ago, until my spreadsheets got good enough that I couldn't remain in denial that while making stuff and selling it is cool, if you don't make a profit and you need ISK, you would be better doing something else! I managed to make about 1,000ISK (Theoretical) per unit selling 30 Catalysts that took 3 months to sell and then my next spreadsheet allowed me to put in the 'actual' physical costs from my transaction log for materials etc. and ... Actually I had only made 159 ISK per item. So I gave up. Sure it might have been cool to manufacture T1 drones, but really I could lose 1,000 ISK an hour other ways like ejecting tourists and exotic dancers with witty names at gates.

What if I put some effort into it, hauled materials from where they were cheap and hauled the output to somewhere where it sold high? Well, then I could make a better profit, but how much better wasn't immediately inspiring. I had browsed the markets for various popular T1 modules and ships for hours and discovered how complicated EVE's market is. It occured to me that without a good knowledge of the market you can't expect to make a large profit on Manufacturing or worse you CAN expect to make a loss and not realise it.

So, I think before you can manufacture successfully you should attempt to be successful trading first. Simply because finding trade routes will teach you an important thing. It's not all about the numbers. It's about why the numbers are what they are. Why is that item selling so well here and why is it so expensive there? Read the forums, read the news, talk to lots of people online, check the various sell boards for discussions, you will find reasons why some prices are currently high and rising (Tritanium) and others are low and falling lower (Loot stuffs).

Even while doing missions and the like, look at the market. Burned Logic Circuits a month back where selling to buy orders at 6 figure sums, but today 4 figure somes in places. I don't know why, personally, but it could any number of things... a spike in demand for CPU rigs after the Orca? No idea, but you will find there is a reason. If you had spotted that reason in it's early development you could make money from it. You didn't? Tough.

For starter traders and manu's I suggest your best time to make money is to start after a large update where ships, modules, etc are added. Ananlyse the supply chain for them from top to bottom and watch the stage markets carefully. The new market starts with high demand before any supply can kick in, prices soar! The supply chain markets quickly have rises ramping up, cascading down the chain. Sure the alliance factories will start to pump them out, but at first mostly for themselves, there is a window to make good profit in the high security systems before the supply rises, the price falls and usually, months later, the demand falls too, until the price stabilises slowly and becomes that cut-throat-margin market again.

I'll give this one away, but Wormholes are currently the big thing. What reprocussions does that have on the market do you think? What do these people need? Also, what were these people doing that they will not be doing now cause they are playing with wormholes? What markets will eventual respond as a result of that? What can you make, buy, borrow or steal that can take advantage of this?

If you can't answer that question, give up and go run missions and play with wormholes ;) Which is what I'm doing :) LOL


 

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