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Zifrian
Deep Space Innovations
Posted - 2008.10.19 06:28:00 - [1]
 

Edited by: Zifrian on 20/10/2008 22:07:34
Edited by: Zifrian on 19/10/2008 06:28:34
I set up some spreadsheets then double checked with EVE Meep and Burchov's utility and found that there really is no way to make a profit for T2 frigs.

8.6 mil cost to make a helios, they sell for 9mil. Datacores for invention run about 2mil. So you are losing money.

Is there something I'm missing here? This can't be due to just T2 BPO's.

I can make money with Cruiser invention but it doesn't seem like it's even possible with Frigs. Maybe destroyers?

Lord Fitz
Project Amargosa
Posted - 2008.10.19 06:36:00 - [2]
 

It really depends on how often the ship is lost, as to whether the BPO + inventors that don't take into account their costs, can keep up with the demand. There are plenty of frigates out there you can make a modest profit on, remember to take into account all variations of decryptors etc to find the 'most profitable' way to invent each ship (usually for frigates that would be no decryptor, but you never know for some of the non-Gallente ones).

The bigger ships generally are the ones with the greater profit and risk (that the profit will change by the time you get them out the door).

Also take into account that many people may base their prices off what they paid for the materials when they built their components, possibly weeks ago.

Zifrian
Deep Space Innovations
Posted - 2008.10.19 18:34:00 - [3]
 

Yeah, I thought about the fluctuation in prices from a few weeks ago too but even looking at Cruiser prices, I'm not sure I ever made money on Ishtars I made.

However, I had more money than I started with so I'm wondering if I did something wrong. I get my own datacores from R&D agents, so I'm wondering if I just don't take those costs into account and that's the place for the decrepancy.

But even then, I'm not making much at all on an Ishtar. I don't understand it. I must be missing something but I don't know what. I make my own R.A.M.'s, T2 Components, and my own T1 ships. So it's straight minerals that I'm spending.

Lord Fitz
Project Amargosa
Posted - 2008.10.19 18:38:00 - [4]
 

As long as there are people out there that will build things for not much profit, they will remain not very profitable. As soon as people stop, the profit returns.

Recnac
Shades Corp
Posted - 2008.10.19 19:38:00 - [5]
 

your competing with people that farm their own datacores, they are free to those that do research so its not a cost to them

Horchan
Gallente
Posted - 2008.10.19 20:48:00 - [6]
 

Originally by: Recnac
your competing with people that farm their own datacores, they are free to those that do research so its not a cost to them


I both love and hate people who think like this. And I bet the minerals they mined themselves were also free?

Zifrian
Deep Space Innovations
Posted - 2008.10.19 21:03:00 - [7]
 

Edited by: Zifrian on 19/10/2008 21:03:36
Originally by: Recnac
your competing with people that farm their own datacores, they are free to those that do research so its not a cost to them


It still goes into the price. If I buy datacores to invent a BP or if I get them from R&D agents, there is still a cost involved.

I use R&D agents to get my data cores. I could sell the datacores but I use them to invent. Basically I could make 300k by selling a data core, or I could use it to make a BP. Simply put, I could sell the core to get my 300k or I could build a ship and recoup the cost that way. The issue here is, I don't get that 300k back. In fact, after buying all the materials I need, I can't get an EVEN return on that as a ship. It defies market logic.

So basically what I'm looking at is, just sell datacores to people that want to make T2 ships for whatever reason or figure out where I might be calculating my costs. I can't believe that T2 BPO's are causing a floor on prices, but I'm not really sure.

Zifrian
Deep Space Innovations
Posted - 2008.10.19 21:05:00 - [8]
 

Originally by: Lord Fitz
As long as there are people out there that will build things for not much profit, they will remain not very profitable. As soon as people stop, the profit returns.


Thing is, I haven't seen that much fluctuation in prices for these ships in my region.

Dr Sheepbringer
Gallente
Halinallen veroparatiisi
Inglorious Carebears
Posted - 2008.10.19 21:14:00 - [9]
 

Also don't forget that people can pirate stuff too. It's not the first time a shuttle gets blown up and it has a T2 print inside, but in generally speaking...the market is trashed at the moment.

Kiki Arnolds
Caldari
Allied Caprican Heavy Industries
Posted - 2008.10.19 21:27:00 - [10]
 

Or that production syndicates may get better t2 material prices than are widely available on the market.

Zifrian
Deep Space Innovations
Posted - 2008.10.19 23:54:00 - [11]
 

Even using evecentral you don't get much if any of a profit.

If I leave out datacores, sure but not if they are calculated with the total. Are people really not taking these into account for pricing? Is that the reason for the discrepancy? If so, I'll just sell datacores from now on unless I need to make something myself.

Lo Lightshard
4 wing
-Mostly Harmless-
Posted - 2008.10.20 06:39:00 - [12]
 

Edited by: Lo Lightshard on 20/10/2008 06:46:41
There are so many stages in the production of a T2 ship that you only need to be doing one or two of these to be able to reduce the cost of a T2 frigate below Jita input material prices (e.g. a complex reaction, T2 component building) -- yes, I know that it is popular to argue that this saving should be built into the ship price but a ship is a very convenient way to release these earnings; it is much easier to sell a ship than all it's component parts. Ship suppliers that are fully integrated across the whole supply chain are laughing -- have a think how much they save in sales taxes and broker fees alone.

Your skills (PE, Enc. Methods, Science Skills, Science); the research levels of your T1 input BPO/BPC and the number of lab/factory slots you can run make a big difference to the cost of the output.

Also, prices vary wildly across regions. Why not use some of the profit from that JF full of Mexalon you just paid 11 ISK/unit for in 0.0 to reduce the cost of your empire ships to close to production so that they sell quickly? Or you could haul your ships out to lowsec Solitude or some other marketless hell hole and sell them (slowly) at a nice profit.

In short, you are not making a profit from T2 frigs but that isn't to say one isn't being made at those prices.

Edit: Typo.

Jane Retail
Posted - 2008.10.20 08:45:00 - [13]
 

I must do something wrong.

i buy the datacores, produce the T2 Components and T1 Ships myself and do invention in my own Small POS. Oh and i buy the minerals to produce the T2 Components and T1 Ships in Jita...

I sell my T2-Frigs in Jita.. and i am really making profit..

My T2 cruisers are making even more profit

So whats wrong ? Wink

Rashmika Clavain
Gallente
Posted - 2008.10.20 11:04:00 - [14]
 

Building your own t2 sub components is a very good idea... the **** ME is where it hurts on invention.

Are you factoring in POS running costs too into your profit?

Jane Retail
Posted - 2008.10.20 12:01:00 - [15]
 

Originally by: Rashmika Clavain
Building your own t2 sub components is a very good idea... the **** ME is where it hurts on invention.

Are you factoring in POS running costs too into your profit?


I finance my POS with lvl 4 Missions i grind while waiting for the production- and invention-jobs to finish ;) It's a Caldari Small Tower.. a few fat lvl 4 missions and you got the fuel money for a month :)


Recnac
Shades Corp
Posted - 2008.10.20 12:50:00 - [16]
 

Originally by: Horchan
Originally by: Recnac
your competing with people that farm their own datacores, they are free to those that do research so its not a cost to them


I both love and hate people who think like this. And I bet the minerals they mined themselves were also free?


Not sure what your getting at but for me datacores are free, you dont have to run missons for the agents to get them, you get a base amount everyday just for having the agent, seems free to me. If I plan to sell the datacores then they would have a value, but as i use them for production it helps me undercut those that have to pay for them.

Noonesoski
Posted - 2008.10.20 13:11:00 - [17]
 

Originally by: Recnac
Originally by: Horchan
Originally by: Recnac
your competing with people that farm their own datacores, they are free to those that do research so its not a cost to them


I both love and hate people who think like this. And I bet the minerals they mined themselves were also free?


Not sure what your getting at but for me datacores are free, you dont have to run missons for the agents to get them, you get a base amount everyday just for having the agent, seems free to me. If I plan to sell the datacores then they would have a value, but as i use them for production it helps me undercut those that have to pay for them.


So, why not just sell them? Why bother wasting your time producing something with your free materials? Your losing isk.

Dr Sheepbringer
Gallente
Halinallen veroparatiisi
Inglorious Carebears
Posted - 2008.10.20 13:19:00 - [18]
 

The main thing in ANY production is that the more stuff you need to BUY means someone is selling for profit. Sometimes it can be cheaper to buy it rather than making it, but in general every single item you buy has some profit for the seller.

Lord Fitz
Project Amargosa
Posted - 2008.10.20 13:31:00 - [19]
 

The only thing building with your own materials saves you is the time spent selling/acquiring those materials separately vs the time spent selling the smaller number of finished products. (or time spent hauling the materials to where you need them / sell them etc). There can be a time/convenience cost, but in most cases it's not enough to be significant.

Michael Caldar
DangerZone Inc.
Posted - 2008.10.20 13:39:00 - [20]
 

Originally by: Recnac
Not sure what your getting at but for me datacores are free, you dont have to run missons for the agents to get them, you get a base amount everyday just for having the agent, seems free to me. If I plan to sell the datacores then they would have a value, but as i use them for production it helps me undercut those that have to pay for them.
oh goody...Laughing

If you value the datacores at less than their market value you're losing that very market value (or part of it)... Nothing's free and the fact that you didn't actually have to pay for them and used them in your shipbuilding simply means that you've forgone the opportunity to sell them... That's where you simply sell them. Without the hussle of sourcing T2 building materials, building ships and then trying to sell them in a rather overcrowded and very competitive market.

OTOH - this is Eve, not real life and if you like building T2 ships and sell them at whatever price you see fit - they're yours to sell Cool

Dr Sheepbringer
Gallente
Halinallen veroparatiisi
Inglorious Carebears
Posted - 2008.10.20 14:41:00 - [21]
 

Also remember where to sell :)

Some people pay happily 5mil extra if they don't have to make a 25jumps to get it :) Specially if there's the rest of the stuff closeby too.

Zombiefly
Caldari Provisions
Posted - 2008.10.20 15:54:00 - [22]
 

I make more isk making T2 frigates in Jita than I ever did mining or scamming.

Vladimmire
Posted - 2008.10.20 16:51:00 - [23]
 

Edited by: Vladimmire on 20/10/2008 16:55:28
You’re all wasting your time arguing about why there is not some/more profit in a crafting/production aspect of a MMO. It is impossible to teach opportunity cost to the masses who think that materials they farmed are free. It's like playing whack a mole. As soon as you explain it to one (if you can convince the moron), 2 more pop up to take their place. Why do you think that traders make consistently more money than manufacturers for a fraction of the time expended? If you want to make consistent money, you want to get in the middle of the product lifecycle and exploit time and distance.

No matter what MMO it is, this case always bares out. That said, crafting/production can be an interesting hobby to have and fulfills some aspects of game emmersion/roleplaying. Enjoy it for what it is; just don't bang your head against the wall trying to teach economics to a high school kid/clueless IT nerd.

Roger Douglas
Infinite Improbability Inc
-Mostly Harmless-
Posted - 2008.10.20 16:57:00 - [24]
 

Originally by: Lo Lightshard
Edited by: Lo Lightshard on 20/10/2008 06:46:41
There are so many stages in the production of a T2 ship that you only need to be doing one or two of these to be able to reduce the cost of a T2 frigate below Jita input material prices (e.g. a complex reaction, T2 component building) -- yes, I know that it is popular to argue that this saving should be built into the ship price but a ship is a very convenient way to release these earnings; it is much easier to sell a ship than all it's component parts. Ship suppliers that are fully integrated across the whole supply chain are laughing -- have a think how much they save in sales taxes and broker fees alone.

Your skills (PE, Enc. Methods, Science Skills, Science); the research levels of your T1 input BPO/BPC and the number of lab/factory slots you can run make a big difference to the cost of the output.

Also, prices vary wildly across regions. Why not use some of the profit from that JF full of Mexalon you just paid 11 ISK/unit for in 0.0 to reduce the cost of your empire ships to close to production so that they sell quickly? Or you could haul your ships out to lowsec Solitude or some other marketless hell hole and sell them (slowly) at a nice profit.

In short, you are not making a profit from T2 frigs but that isn't to say one isn't being made at those prices.

Edit: Typo.


Bold is my addition. QFT. Everything here is correct. The profits from selling all the raw inputs are contained within the ship unit. That ship unit can be sold everywhere. Components, datacores, etc. can really only be sold in a few places. If you perform all the steps, you are not paying for others profit margins/pos costs/transport costs and adding them to your own. You are recouping your own costs with each ship sold, and your profit margin, with all costs included, will be quite nice. On average I make 3.5 to 5m per frigate, with all associated costs except depreciation/amortization (RL expensing techniques don't apply in any context in eve). All inputs, datacores and raw mins, moon or otherwise, are at jita prices. Heck, I even add fixed overhead costs for POS fuel.

Is it shocking that you can't make a profit in building t2 frigs when you make profit for everyone else by buying complex, paying empire factory fees, lab costs, transaction fees, plus all the other fees everyone else paid to bring their stuff to market?

If isk could be made by buying jita components, etc. then people would do it. And they have. And now it's no longer profitable. Why is this a problem? Change how/where you produce and sell and you might just make a profit too.

Blake Rathen
Caldari
Yurai-Tenshin Zaibatsu
Ishuk-Raata Enforcement Directive
Posted - 2008.10.20 18:53:00 - [25]
 

Originally by: Vladimmire

Why do you think that traders make consistently more money than manufacturers for a fraction of the time expended? If you want to make consistent money, you want to get in the middle of the product lifecycle and exploit time and distance.

Originally by: Dr Sheepbringer
Also remember where to sell :)

Some people pay happily 5mil extra if they don't have to make a 25jumps to get it :) Specially if there's the rest of the stuff closeby too.


I guess that's the lesson here. If your profit margins aren't justifying the time you put into T2 Frigates, invest in a hauler and ship the products you now compete against to opportunity-markets where consumers place a higher value on convenience (their time is also worth ISK to fly out and back from Jita). Trading is actually a really good idea. Very Happy

Mazzarins Demise
Profit Development and Research Association
Posted - 2008.10.20 18:58:00 - [26]
 

Edited by: Mazzarins Demise on 20/10/2008 18:58:13
Don't sell in over-saturated markets. Avoid the hubs, namely Jita. Move your T2 ships to High Sec-Low Sec border systems or move them out to 0.0. You're guaranteed to make additional profit out there.

Rho Epsilon
Posted - 2008.10.20 19:23:00 - [27]
 

Edited by: Rho Epsilon on 20/10/2008 19:24:23
The argument that selling below the value of the components is losing money is false. If I farm ore and datacores I am essentially getting those items for free, and anything above my real out of pocket costs is profit. If you keep doing that your wallet will continually grow.

What I am not doing is maximizing my profit. I am likely making less money (maybe considerably less) than I could by selling components, but I am NOT losing money.

As stated elsewhere, it comes down to what you like to do. If you enjoy the process of putting together a ship then you go ahead and do it, you will make money.

BTW, it's these folks that let me make a bunch of isk with much less effort (by selling components) than it might otherwise, so please continue to sell below component costs, and I'll continue to sell you the components you aren't farming. Very Happy

Zifrian
Deep Space Innovations
Posted - 2008.10.20 19:38:00 - [28]
 

Originally by: Roger Douglas
Originally by: Lo Lightshard

There are so many stages in the production of a T2 ship that you only need to be doing one or two of these to be able to reduce the cost of a T2 frigate below Jita input material prices (e.g. a complex reaction, T2 component building) -- yes, I know that it is popular to argue that this saving should be built into the ship price but a ship is a very convenient way to release these earnings; it is much easier to sell a ship than all it's component parts. Ship suppliers that are fully integrated across the whole supply chain are laughing -- have a think how much they save in sales taxes and broker fees alone.

Your skills (PE, Enc. Methods, Science Skills, Science); the research levels of your T1 input BPO/BPC and the number of lab/factory slots you can run make a big difference to the cost of the output.


In short, you are not making a profit from T2 frigs but that isn't to say one isn't being made at those prices.

Edit: Typo.


Bold is my addition. QFT. Everything here is correct. The profits from selling all the raw inputs are contained within the ship unit. That ship unit can be sold everywhere. Components, datacores, etc. can really only be sold in a few places. If you perform all the steps, you are not paying for others profit margins/pos costs/transport costs and adding them to your own. You are recouping your own costs with each ship sold, and your profit margin, with all costs included, will be quite nice. On average I make 3.5 to 5m per frigate, with all associated costs except depreciation/amortization (RL expensing techniques don't apply in any context in eve). All inputs, datacores and raw mins, moon or otherwise, are at jita prices. Heck, I even add fixed overhead costs for POS fuel.



Ok, first off. I'm not sure some of you even bother to read what I do. I make all components, I get datacores from R&D Agents, etc. I'm doing everything I can to reduce costs. I also have the skills I need and I understand the issues involved. I'm not sure why everyone seems to assume people asking questions on these boards are idiots or something.

Secondly, moving frigates to another region to sell for more profit isn't really valid because the market should relatively adjust to the region I'm in, not Jita. Why? because people buy components in their region. Jita prices for a Helios are 9mil, I can make sell them for 10 in Dodixie. So, if I buy components in Jita and move them to Dodixie, I can possibly make more profit. But at what cost? How many jumps is Jita from Dodixie? How long will it take to fly an Itty that far? How much profit do I make from that trip? 10mil? I can run a few missions in the time it takes to fly that trip to make the same money. More importantly I get that money instantly, not over a few weeks that are subject to market fluctuation.

Is it shocking that I can't make a profit? Perhaps. However, I'm leaving open the idea that there is something simple I'm leaving out, not that there is something inherently wrong with my calcs. I understand that there are profits being added to components, datacores, etc. But why are those profits not included in the price of a ship? It doesn't make any sense to make the ship when one can make profit just as easily, or better, than selling ships.


But I don't want to argue the fringe issues. I understand where some of you are coming from but I don't think this is the issue.

Tell you what, you put in your costs in your region for a T2 gallente frig, I don't care which one, and I will use my calc to see if I can find out where I'm not putting in the right figures to find my total profit. And no, this isn't 'let me know your secrets' stuff. I just don't think it's possible right now and I want to be proven wrong.

Thanks

Zifrian
Deep Space Innovations
Posted - 2008.10.20 19:46:00 - [29]
 

Originally by: Rho Epsilon
Edited by: Rho Epsilon on 20/10/2008 19:24:23
The argument that selling below the value of the components is losing money is false. If I farm ore and datacores I am essentially getting those items for free, and anything above my real out of pocket costs is profit. If you keep doing that your wallet will continually grow.

What I am not doing is maximizing my profit. I am likely making less money (maybe considerably less) than I could by selling components, but I am NOT losing money.

As stated elsewhere, it comes down to what you like to do. If you enjoy the process of putting together a ship then you go ahead and do it, you will make money.

BTW, it's these folks that let me make a bunch of isk with much less effort (by selling components) than it might otherwise, so please continue to sell below component costs, and I'll continue to sell you the components you aren't farming. Very Happy


Cores are essentially free money. I think most here understand that. What we are saying is that those costs need to be included in the cost of a ship, which I don't think they are.

Farming ore is not free. I'm not sure why people keep saying this and as someone said here, I'm not sure why we bother explaining this idea, but time = money. You can choose to spend your time any way you like. But in EVE it's mostly about making isk. If you mine, that's time that you trade in for something you could be doing otherwise to make isk. It's not free, there is an opportunity cost in the game. Are missions free? Same concept.

So while you might not maximize your profit, I think the idea is that many do. Making isk is the whole point right? At least a major part of it?

Akita T
Caldari Navy Volunteer Task Force
Posted - 2008.10.20 20:15:00 - [30]
 

The reason you're not making a profit on inventing a HELIOS is partially the same reason one has no profit invention a Damnation, partially the reason why Hulks are profitable, and a tiny bit of the "stuff I get myself is worthless" thing.

There's simply not enough demand for the Helios, so most demand can be covered by BPOs. They're not easily lost, and people sell the ones they no longer need rigged almost as cheap as stand-alone anyway.
At the same time, invention profitability for Gallente ships is lower overall because of Hulk and Mackinaw invention (which is still profitable even with the overpriced decryptors).
And last, the guys in the "datacores are free so they're worthless" crowd complicate the matter even further.


So, yeah, there's no profit in inventing a Helios.
Tried inventing some other T2 frigates instead ?


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