open All Channels
seplocked Market Discussions
blankseplocked Business plan for an industrial operation: Input needed
 
This thread is older than 90 days and has been locked due to inactivity.


 
Author Topic

Aeneidae
Caldari
Quallity Assurance Business Unit
Posted - 2010.02.03 11:00:00 - [1]
 

Greetings,

I made this thread to explain how I entered (or plan to enter) the production business. I appreciate all kind of comments, especially the criticism and how can I plan my operation better. Apologies if the thread seems boring, noobish or simply shaite.

Step by step:

a) Checked the nearby hub for ships that sell in volume of 50-100 daily

b) Found 3 ships that meet the criteria (actually more, but I didn’t want to jump in big immediately)

c) Found a researched BPO for each of the 3 ships on contract and gained insight on how much money I need to invest for those 3 BPO’s.

d) Calculated the mineral consumption for a 24h line producing each ship, taking ME10 and PE0 as base

e) Calculated the overall mineral consumption of all 3 lines producing for 24h

f) Calculated money needed to supply these 3 lines for a period of 24h

g) Calculated the profit yielded for these 3 lines for a period of 24h (realized tritanium and pyerite acquisition price is the biggest factor in the profit I would be making)

I did also realize that moving these ships from the location of manufacture to the nearby hub would require a freighter (as I would need around 350.000 cubic meters of space). I can also praise all the people who say: “If you don’t know why you need a freighter, you don’t need it!” I am living testimony that I realized I need a freighter before I thought about buying one.

Then I also thought about supply. There’s no point in me going all over the place to gather minerals each day. Once every few days (5-7) would be optimal so I don’t lose too much time hauling, as I want to continue missioning in my Golem in the spare time.

The conclusion was:

a) Daily freighter runs to the hub with the finished product

b) Weekly freighter runs to gather the mins from the BUY orders I put up (don’t buy from SELL orders, no no no, just no)

Which again, meant that I had to have liquid isk for at least a 5 day period of production, preferably 10, so I can always buy 5 days worth of minerals in advance, as the n1 rule I would follow is: Produce 24/7.

I added all this:

a) Freighter

b) Isk to purchase 10 days worth of minerals for a 24h production line for the 3 ships

c) 3 researched BPO’s

And I reached my magic number of liquid isk I would need to start the operation. Skip 2 weeks of missioning and skill training and i am 4 days away from flying a freighter. The BPO’s and the freighter are ready and waiting. The buy orders for the first 5 days of production should be filled by tonight.

Summary:

Freighter: 700M
BPO’s: 210M
5 days worth of minerals: 500M
Return: aprox. 350M per month

I regard my BPO’s and my Freighter as assets and do not really consider them as a lost investment that I need to recoup, so it basically boils down to: 3b isk invested a month for 350M return, which would equate 11.66% return per month.

Now:

a) Is there anything I could do better in my way of thinking or organizing things?

b) Any methods to optimize mineral supply? Maybe make a deal with a mining corporation for a guaranteed delivery each 5 days? Maybe start buying modules underpriced for reprocessing?

c) How to expand on this? Wait to learn and get used to this operation before stepping up for something bigger or the principles remain the same regardless of the isk investment increase?

d) Maybe contact an alliance and offer my full production at a minor discount compared to the hubs as a permanent contract, so I can have a guaranteed sells each time I finish a batch?

Just hit me with ideas, criticism and, if need be and unavoidable: “lol noob” or “scam”. Thank you for reading.

Aeneidae

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.02.03 11:17:00 - [2]
 


Quote:

as the n1 rule I would follow is: Produce 24/7.



N1 rule for an industrialist to follow is: "maximize revenue per production slot". Expecially true if new to production.

Usually "ships" is not the answer to that question, but you might have hit some honey pot somewhere.
In fact, "ships" is also what is demanding you to get a freigther at all in the first place.


Quote:

d) Maybe contact an alliance and offer my full production at a minor discount compared to the hubs as a permanent contract, so I can have a guaranteed sells each time I finish a batch?



Alliances tend to have their own production officers, mine had.

Aeneidae
Caldari
Quallity Assurance Business Unit
Posted - 2010.02.08 13:07:00 - [3]
 

Edited by: Aeneidae on 08/02/2010 13:10:56
I understand there's no much interest in this topic.
As an update, the business is up and running for 2 days. I've diversified a bit so i can have more options and i have around 8 BPO's that i can rotate in production, if any of the stuff i'm making goes down in profits.

As a question: what is the best way to find a mining corporation for a weekly contract on some minerals? Advertise here on MD (i guess not), go into Science and Industry or Sell Orders?

Thank you again for reading.

Edit: Thank you VV for your input. You are the reason i diversified my production line. And you are also the reason why i studied a bit more regarding the profit/day that an item can bring. Maximizing the profits for a 24/7 production line is indeed a good advice. :)

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2010.02.08 13:18:00 - [4]
 

Thank you for your appreciation Razz

If you need a massive amount of minerals (including delivery) I might know a name who does (or used to, at least) that. But it has really to be worthwhile for him, that is several billions in value per load you order.

Aeneidae
Caldari
Quallity Assurance Business Unit
Posted - 2010.02.08 13:21:00 - [5]
 

Unfortunately my business involves only the number of a hundred million or so in minerals (mainly Pyerite, Tritanium and Mexallon). I'm too small for now. :)

Priue Nvidess
Gallente
Amarr Engineering
Posted - 2010.02.08 13:42:00 - [6]
 

Edited by: Priue Nvidess on 08/02/2010 13:44:08
All I can say is watch mineral prices (and MD/Sci & Industry) closely. The last thing you want is to be taken by surprise by a price jump or drop. Ships tend to be a lot more difficult to make profit on just because there are so many others competing in that market. Setting up buy orders is an excellent move rather than buying from the sell orders but as you have apparently realized, having a link to a mining corp is a good way to ensure a constant stream of low-cost minerals. One way to find out which corp has the best is to just go out and contact them yourself. Check recruitment threads and the Sci & Industry threads to find out which corps are mining. You might also want to throw up a want ad in the forums. If you can develop a friendship with your supplier they may even sell minerals to you for more of a discount.

You definitely seem to have thought this out pretty thoroughly. I wish I had more advice to give, but my own manufacturing career didn't last too long and I ended up reverting to inter-region trade. Other than that, I only have to say that you should ease yourself in and try not to burn yourself out. Manufacturing can be fun and somewhat profitable but you need to pace yourself.

Rasheki
Minmatar
Lost 5ouls
Posted - 2010.02.08 14:14:00 - [7]
 

Aeneidae: I have another ideal for you. The minerals you listed are bulk ores not worth alot per m3. That said, W-Space corps that do mining often leave these strewn throughout K-Space as they are not worth transporting to a trade hub, or sell at wherever their High-Sec exit is that day. You can obtain great discounts on these ores by listing buy orders in places where there is not a market.

From experience:
If I refine several fully fitted full ITTY V's of compressed ore i have millions of Trit, pyr and Mex, which are left wherever they are processed. Only transporting the higher profit per m3 such as mega, zyd, etc.

You might contact some W-Space corps, if you do not mind flying around K-Space they may have plenty on tap, or make a deal they contract all of theirs to you wherever it lays each week for a set price. They benefit from not transporting, you benefit from cheep minerals.

Priue Nvidess
Gallente
Amarr Engineering
Posted - 2010.02.08 14:18:00 - [8]
 

Edited by: Priue Nvidess on 08/02/2010 14:22:50

I just remembered another good idea. You can learn scrap-metal processing and set up low buy orders near mission hubs to reprocess for minerals. I've heard of a few people making profits from that just by selling the minerals.

Edi: Just re-read your post and realized you already had this idea.

Ave Volta
Perkone
Posted - 2010.02.08 17:44:00 - [9]
 

Originally by: Aeneidae

I did also realize that moving these ships from the location of manufacture to the nearby hub would require a freighter (as I would need around 350.000 cubic meters of space). I can also praise all the people who say: “If you don’t know why you need a freighter, you don’t need it!” I am living testimony that I realized I need a freighter before I thought about buying one.



Actually you have another good option: Consider using RF Freight for moving your minerals and products. RF Freight

Many successful large scale industrialists use our service and are very happy with it. Even if you are moving your mins and products a significant amount of jumps, it would take a lot of contracts with us to equal the cash out of pocket required to buy a freighter. That 700m can then be used to ramp up other area's of your operation. Smile

arjun1
Posted - 2010.02.08 18:18:00 - [10]
 

do u have production efficiency 5?

Jadun
Posted - 2010.02.08 18:29:00 - [11]
 

yo ho

i read the post. but i am missing some info on the BPO. what kinda research do they have.

Aeneidae
Caldari
Quallity Assurance Business Unit
Posted - 2010.02.08 18:55:00 - [12]
 

Quote:


Many successful large scale industrialists use our service and are very happy with it. Even if you are moving your mins and products a significant amount of jumps, it would take a lot of contracts with us to equal the cash out of pocket required to buy a freighter. That 700m can then be used to ramp up other area's of your operation.



I do not disagree with you, however i've already purchased my freighter and i am using it since last night. :)

Quote:

do u have production efficiency 5?



I did not dare enter production without this vital skill to V

Quote:

i read the post. but i am missing some info on the BPO. what kinda research do they have.



ME20-40 PE0-10. I found that ME20 is more then enough and PE10 is a nice bonus (if not essential) for another 5-10% earnings per day.

Quote:

One way to find out which corp has the best is to just go out and contact them yourself. Check recruitment threads and the Sci & Industry threads to find out which corps are mining. You might also want to throw up a want ad in the forums. If you can develop a friendship with your supplier they may even sell minerals to you for more of a discount.



That is exactly what i am planning to do, given your reply. Coming forth and actually looking around is much better then just sitting idle and asking: how do i do that? Wink

Quote:

Aeneidae: I have another ideal for you. The minerals you listed are bulk ores not worth alot per m3. That said, W-Space corps that do mining often leave these strewn throughout K-Space as they are not worth transporting to a trade hub, or sell at wherever their High-Sec exit is that day. You can obtain great discounts on these ores by listing buy orders in places where there is not a market.



I really thought about that, however i'm not skilled/experienced enough for that, unfortunately. If opportunity arises, maybe. Until then, high sec only for me.

Quote:

I just remembered another good idea. You can learn scrap-metal processing and set up low buy orders near mission hubs to reprocess for minerals. I've heard of a few people making profits from that just by selling the minerals.



I actually did that a while back. I remember i was pulling out 5-10 million a day on a 100 million investment. But i got tired of going around and collecting all the loot. :(

Priue Nvidess
Gallente
Amarr Engineering
Posted - 2010.02.08 21:51:00 - [13]
 

Originally by: Aeneidae

I actually did that a while back. I remember i was pulling out 5-10 million a day on a 100 million investment. But i got tired of going around and collecting all the loot. :(


You could try contracting it out. Set up courier contracts for all of your loot that you purchased. I'm not sure how quickly they will be picked up, as I haven't done too many myself, but I would imagine low collateral courier contracts would attract newer players with smaller wallets.

Aeneidae
Caldari
Quallity Assurance Business Unit
Posted - 2010.03.04 09:03:00 - [14]
 

Edited by: Aeneidae on 04/03/2010 09:05:52
Update. This is how it actually turned out:

I've specialized in BC's. I have 2 BPO's with ME10 and 40 and PE10 (which basically ads 1 more unit to the daily production).
I bought minerals for 2 days worth of production (800 million isk) and kept another 400 million as a reserve. So now my daily routine is:

Log on. Complete the 2 jobs for 16 BC's.
Queue another batch that completes the next morning.
Haul the ships to the local hub. Put them on sell orders.
Put up buy orders for minerals for another day of production.
Wait till the buy orders get filled. Haul the minerals back to my production place.

Repeat every day.

Dailly investment: 400m isk (800m the first day this cycle starts)
BPO investment: 900m isk (1 time expense)
Freighter: 700m isk (1 time expense)
Dailly profit: 30-40m isk.

It requires me to be passively online for around 2 hours every morning. As that's the time when i read up all my emails at work, i couldn't do anything else anyway during that time so it's not time taken out of missioning.

Next step is probably expanding with another 2 BC BPO's in the near future and having to do 2 trips between the hub and my production place for mineral hauling.


 

This thread is older than 90 days and has been locked due to inactivity.


 


The new forums are live

Please adjust your bookmarks to https://forums.eveonline.com

These forums are archived and read-only