Market Discussions

Hello Eve,

My primary source of income for the past 4 years has been in production, operating out of Amarr. It's made me independently wealthy, and my business model has been solid enough that I've felt no need to be secretive about how to let time and capital work for you while you enjoy the more active and fun aspects of Eve.

In RL, I've worked extensively the past half dozen years in the technology side of the retail sector, and concepts such as FIFO/LIFO, KPI, GPROI, etc proved valuable in expanding my online businesses.

And in all my time in Eve, nothing has been more stressful and challenging as the last three months lol.

For starters, retailers love certainty. When conditions remain constant, FIFO, LIFO or averaging are all and the same. You concentrate on delivering best value, and you value turnover above all else. You make an honest buck, and your customers get the best value.

And then, once in a while, all hell breaks loose. Recall the fuel shortages of the 70s for instance. The consumer is pissed off because the retailer is 'price gouging'. The retailer is stressed out because every price increase throws his business plan farther out the window, due to cost/capital ratios going completely out of whack. There are severe challenges when inflation/deflation kicks in, due to varying lag factors, which leads to entrepreneurs running their businesses by the seats of their collective pants.

Those of you who are aspiring or accomplished speculators, kudos to you and your efforts. In reality, you actually act to smooth out the effects of announced changes, which is to the advantage of all. When I log in and find commodities on the move, it prompts me to research the underlying reasons, and gives me time to assess my hedging strategies in advance of the actual final repercussions of CCP's mechanics changes.

Ultimately, if your business is built around delivering produced goods, I feel your best protection is to set yourself up somewhat like a bank, with a large capital reserve consisting of a proper amount of commodities and liquidity. Those of you who have sidelined your businesses due to occasional product-flipping, you're actually making a mistake. A purely LIFO approach to business only makes sense in hindsight, and falls on its ass on the flip side when volatile commodity prices retreat. You need to think more like a petrol station owner.

Anyway it's been bloody fun, and my 2 cents is that the worst is over. Or if it's not, oh well :)

Funny that you would bring up the fuel shortages of the 70's here. What's been going on in the markets as of late kinda reminds me of stagflation. The mineral issues that we are facing now, to me, don't seem that dissimilar from the fuel problems in the 70's.

And I don't think the worst of it is over. Not by a long shot.

It's not exactly like Stagflation, but there are some similarities from what I can tell. Inflation of prices is obviously extremely rampant at the moment, as well as the commodity shortage. It does miss the mark when it comes to unemployment (can you really be "unemployed" in Eve?) and slow growth, which isn't something that can be easily figured out. Then again, when you think about it, inflation is doing quite a number on the real worth of mission running, incursions, or anything else with a "fixed" income of sorts.

In the end, it doesn't matter what we call it. We both know that things are kinda rocky at the moment, and much of it can be traced to the concerns about minerals, much like how fuel influenced the stagflation of the 1970's.

Futures or forwards would be what the OP needs in these times of change.
He could pre-plan his production chain because he would know today the price he will pay at a given time in the future.

Several posts in here a pure gold. My perception has changed slightly.

He's talking from the perspective of maximizing profits.

High revenue has the bonus of being much more stable and less risky.

The factory slots obviously are the bottleneck, and profit per hour prioritises my builds of course. But once the item is built, clearing it out as the next batch arrives is optimal. Sold items aren't vulnerable to being reprocessed, and are money in the bank when commodity prices retreat.

Market was much cheaper when 0utlaw. had all those bots farming and selling minerals...

I think CCP will monitor price levels after new expansion. If the buble collapse we will see lot of fun. Incurions and changes to exploration brought massive inflation impulse and allowed big alliances to increase they wealth.

They have many controling mechanisms at hand. They can boost retrievers/barges mining yeld >>>> faster mining >>>> more people minging for quick profit >>>> more resoueces on market. However all these changes kinda making big risk of collapsing whole economy on other fronts. So at the end I would expect hammer hitting incursions incomes ;)

I am quite inerested if they will really bring something interesting to low sec.

Rather than comparing the situation to stagflation, I see it more comparable to what happens when an economy looses a cheep suply of slave labor, i.e. you now need to pay someone a living wage to do what used to be done nearly for free.
Bots had the economy of Eve running far too hot by suppying isk, minerals, and LPs, all while keeping market buy/sell spreads tight. Net effect was too much money (incursions added to this, but bounties were the big fountain), while inflation was being held in check by the artificial supply of minerals and LPs.