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Not Seeing PI Profit

Author
Laura Wombara
Hudahel
#1 - 2014-08-10 06:29:36 UTC
(I'm posting with an alt from my newest account) Ok I wanted set up a production factory in HiSec. All the connected skills are at 4 or better. Three factories on a planet, turning imported T1s into T2s to export out, total of six kinds of T1s in, 3 kinds of T2s out.

My calcs tell me it will take 55 days to get a full spaceport load of 10 k units of T2s to export.

Calcs also are telling me that after paying for the T1s at market, and paying the import/export taxes, and the taxes for putting the T2s up for sale, I'd actually be losing more than a million isk when I sell all the T2s at market ( my trade skills are all 4 or better).

I'm pretty bad at maths, maybe I should not be an industrialist, and get a job at the local SpaceBurger joint.... hey somebody has to flip the burgers, eh... -- You want fries with that?
Najenna
Caldari Deep Space Ventures
Brothers of Tangra
#2 - 2014-08-10 09:09:39 UTC
You wont make much of a profit if any profit at all buying T1 off the market. The profit comes in when you are milking the planet yourself for the T1. Unless your putting up buy orders for your T1 components you aren't going to make any type of real profit. Hope that helps.
Linus Gorp
Ministry of Propaganda and Morale
#3 - 2014-08-10 09:17:52 UTC
Laura Wombara wrote:
in HiSec.


There's your problem.

When you don't know the difference between there, their, and they're, you come across as being so uneducated that your viewpoint can be safely dismissed. The literate is unlikely to learn much from the illiterate.

Najenna
Caldari Deep Space Ventures
Brothers of Tangra
#4 - 2014-08-10 09:28:07 UTC
Linus Gorp wrote:
Laura Wombara wrote:
in HiSec.


There's your problem.


^^ This also is your problem.
Drago Shouna
Royal Amarr Institute
Amarr Empire
#5 - 2014-08-10 12:20:55 UTC
You can make a profit in HS with PI, ok according to the naysayers on here it's better in LS/NULL. But you really need to start looking at http://wiki.eveuniversity.org/Planetary_Commodities, and start making your own T1 to turn into T2. If you do any manufacturing you can also make products you need for that as well.

Solecist Project...." They refuse to play by the rules and laws of the game and use it as excuse ..." " They don't care about how you play as long as they get to play how they want."

Welcome to EVE.

Laura Wombara
Hudahel
#6 - 2014-08-10 12:55:57 UTC
Drago Shouna wrote:
You can make a profit in HS with PI, ok according to the naysayers on here it's better in LS/NULL. But you really need to start looking at http://wiki.eveuniversity.org/Planetary_Commodities, and start making your own T1 to turn into T2. If you do any manufacturing you can also make products you need for that as well.


I was going to extract my own and refine it but isn't extracting PI stuff the same as mining for minerals? What I mean is, you still need to calculate in the market price of the materials as part of overhead.
Extracted mats aren't "free", Is what I've been taught.

Unless mining ores is different somehow..... I dunno.....

Thanks you all for your insight so far Big smile


Nalha Saldana
The Vomit Comets
#7 - 2014-08-10 12:57:37 UTC
https://docs.google.com/spreadsheet/ccc?key=0Av6bUJhtOy5qdFpUempHRXFKOFVhZGpPdHMxc3g0bmc#gid=1

My old spreadsheet says that you can make some profit even with silly taxes. Lower end products do make more isk but also more m3/hour so hauling will be annoying as hell.
Blue Harrier
#8 - 2014-08-10 13:11:39 UTC
I have to agree with most of the comments above regarding PI but there are some things you can do to improve your prospects a little.

As others have said exploit the planets for resources where possible this decreases your import taxes by producing your own P1s.

Always check the info on each Customs Office and determine if it is an InterBus station or a POCO, if a POCO (and most are) check the tax rate, sometimes you can find a lower taxable Customs Office on a nearby Planet. Otherwise find out the owner and see if they will negotiate a lower rate for you.

Have you also trained ‘Customs Code Expertise’ to help lower your taxes at a POCO, at L5 this should reduce the base rate tax to 5% + 'whatever the owner has set', but only for POCO’s not InterBus.

"You wait - time passes, Thorin sits down and starts singing about gold." from The Hobbit on ZX Spectrum 1982.

Drago Shouna
Royal Amarr Institute
Amarr Empire
#9 - 2014-08-10 13:32:52 UTC
Laura Wombara wrote:
Drago Shouna wrote:
You can make a profit in HS with PI, ok according to the naysayers on here it's better in LS/NULL. But you really need to start looking at http://wiki.eveuniversity.org/Planetary_Commodities, and start making your own T1 to turn into T2. If you do any manufacturing you can also make products you need for that as well.


I was going to extract my own and refine it but isn't extracting PI stuff the same as mining for minerals? What I mean is, you still need to calculate in the market price of the materials as part of overhead.
Extracted mats aren't "free", Is what I've been taught.

Unless mining ores is different somehow..... I dunno.....

Thanks you all for your insight so far Big smile




There are no refining costs, ok you pay for the initial setup but thats it. Extraction costs nothing, converting them to P1 costs nothing, converting them to P2 costs nothing apart from the initial setup.

There are P1 products which convert to P2 which you can set up on a barren planet and then use it as an Advanced set up as well by importing another P2 you make on another planet then convert them to P3.

But then again you could just calculate how many items you need for a P1 product and work out if you could sell the base materials for more, it's up to you.

When you have recovered the initial set up fees it's all profit, but I would never buy P1 to convert to P2 and try and profit from it.

Solecist Project...." They refuse to play by the rules and laws of the game and use it as excuse ..." " They don't care about how you play as long as they get to play how they want."

Welcome to EVE.

Cyniac
Twilight Star Rangers
#10 - 2014-08-10 16:31:06 UTC
Laura Wombara wrote:

Unless mining ores is different somehow..... I dunno.....


The difference is in the tax you pay vs the tax I pay.

Three examples to get to P2

Case 1)

P0 -> Export -> Import -> P1 -> Export -> Import -> P2 -> Export to market

Case 2) (Your case)

P0 -> P1 (on the same planet) -> Export -> Import -> P2 -> Export to market

Case 3 (what I actually do)

P0 -> P1 -> P2 -> Export.


Case 1 - you pay taxes five times (which is why people generally do not export P0, unless of course they control the taxes)

Case 2 - you pay taxes three times. Better than 1 but not as good as:

Case 3 - you pay taxes only once.

If you want to capture more value (esp. in highsec) make sure you have a higher value chain consider setups where you go from P1 to P3 or even P4 (could be a bit tight) on a single planet.

Also make sure you train up that skill to reduce the tax rate you pay or you will always be in trouble in highsec.


Finally consider this - you will be in competition with people who operate in low/null/WH space and control their own infrastructure therefore pay no tax at all. That does reduce margins significantly for high sec manufacturing.

Best of luck.

Capsups
Elyrian Dream
#11 - 2014-08-12 10:58:30 UTC  |  Edited by: Capsups
Here's a guy that has actually understood the idea of opportunity cost and everyone is trying to teach him otherwise? Shame on you guys.
Laura Wombara wrote:


I was going to extract my own and refine it but isn't extracting PI stuff the same as mining for minerals? What I mean is, you still need to calculate in the market price of the materials as part of overhead.
Extracted mats aren't "free", Is what I've been taught.

Unless mining ores is different somehow..... I dunno.....

Thanks you all for your insight so far Big smile




You're completely right here. The point here is that if refining T1 -> T2 isn't profitable without 'assuming' that extracted materials are 'free', what is the point of doing the conversion in the first place? Just extract, turn into T1 and sell that and you'll be profiting more than refining into T2.
If the cost of all of your components combined, bought from the market, are higher than the total sell price for your final components, you're better off just selling your raw materials. This is the reason mining ore isn't 'free' and it's the reason extracting PI isn't 'free', atleast if you're in it for maximum ISK anyways.

You'll see plenty of people producing battleships and other t1 ships at a loss because they consider their mined minerals 'free'. In reality, if these people had just sold their minerals, they'd be profiting more AND not having to go through the hassle of actually getting a BPO and building from it. Alas, those are the people that the rest of us can get rich by exploiting. Twisted

However, there's the problem that T0 / T1 are in general rather bulky, but that's another discussion.

As for OP, take a look at this site: https://www.fuzzwork.co.uk/pi/ - it shows the prices of buying the components of a T3 / T4 on the market and how much you'd be making per factory if you converted them into T3 / T4 based on the tax rate you're getting. THIS is how you get rich in high-sec doing PI, not by extracting stuff yourself. With my CCU 5 I can run about 16 high-tech factories on a single barren planet. If we take the highest T4 on the list, which would be something like Sterile Conduits, each factory will net me 54k per cycle with a tax rate of 5%. Having 16 factories on a planet with a cycle timer of 1 hour each, I'll be making 56k * 16 = 900k ISK per hour per planet, buying all T3 on the market, converting and then selling the T4, I'm netting 129 million across 6 planets per day. This figure is pretty hard to beat even in a perfect PI wormhole, and I'm doing all this in the safety of high-sec.
So don't listen to the nay-sayers of high-sec PI, it's alot more profitable than you'd think. It does have it problems though (mainly that the top-profiting T4 commodity changes regularly and you need Customs Code Expertise at 5 + preferably own the POCO to profit optimally )
Lady Zarrina
New Eden Browncoats
#12 - 2014-08-12 14:35:55 UTC  |  Edited by: Lady Zarrina
With PI, the easy profit comes from the creation of the raw goods. You basically get something from nothing after an initial cost and an export tax. And most people will at least upgrade it once.

To make the best money upgrading PI goods (especially purchased PI), you need to have free taxes which will most like require you to be in WH since it is easier to get control of the POCO. You might get decent tax rates in other places, but that might change if you are not in control of the rates.

EVE: All about Flying Frisky and Making Iskie

Ms Forum Alt
Doomheim
#13 - 2014-08-12 14:49:03 UTC
Capsups wrote:

You'll see plenty of people producing battleships and other t1 ships at a loss because they consider their mined minerals 'free'.


Sure and PI is TOTALLY different to mining because it's entirely passive, except a few minutes you spend hauling or moving heads around. The resources you pull really are FREE as in beer, except the tax you might pay on the customs office. On the other hand with mining you have an opportunity cost - sometimes there's something more profitable those characters could be doing, like sites or ratting or something. So they're not really free in the same way PI is.
Aerie Evingod
Midwest Miners LLC
#14 - 2014-08-12 14:53:10 UTC
Laura Wombara wrote:
Drago Shouna wrote:
You can make a profit in HS with PI, ok according to the naysayers on here it's better in LS/NULL. But you really need to start looking at http://wiki.eveuniversity.org/Planetary_Commodities, and start making your own T1 to turn into T2. If you do any manufacturing you can also make products you need for that as well.


I was going to extract my own and refine it but isn't extracting PI stuff the same as mining for minerals? What I mean is, you still need to calculate in the market price of the materials as part of overhead.
Extracted mats aren't "free", Is what I've been taught.

Unless mining ores is different somehow..... I dunno.....

Thanks you all for your insight so far Big smile




Yes, but what you are doing isn't analogous to mining. The mining version of what you are doing is buying the asteroids to mine.
De'Veldrin
Native Freshfood
Minmatar Republic
#15 - 2014-08-12 15:29:21 UTC  |  Edited by: De'Veldrin
General note: I'm using PI to fund most of my activities for my main (this character) running 31 (soon to be close to 40) factory only planets in highsec. At present I'm turning over about 2.5 billion ISK per month in profit. I expect by the end of this month that figure will be over 3 billion.

You've gotten some good general advice in this thread. I'm going to do a tl;dr kind of summary here and add in some of my own tips.

1. Use buy orders.
This will help you get your costs under control. Make sure you shop around for the best prices. Also, buy them in bulk when the prices are low (most PI materials seem to have a cyclic price history - buy them when they're on the down swing). Keep track of how much you actually paid for your materials, not what the market value is now - other people will talk to you about opportunity cost, but real businesses do not view their raw materials in this fashion, and neither should you.

2. Make sure you're not paying exorbitant taxes.
If the POCO you're on has a higher tax rate than 11-12% with Custom Cose Expertise at level 5, you're paying too much.

3. Make sure your calculations include fees and taxes.
Broker's fees for buy orders, sales tax on your sales, and POCO taxes need to be figured into your profit and loss calculations.

4. Diversify your product line.
Remember when said that PI goods seem to have a cyclical price history? That goes for the things you're trying to sell too. Most of them rise and fall as the cost of their raw materials rise and fall. Trying to produce the flavor of the month will cost you a lot of time in rejiggering your factories, so if you have the planets for it, I suggest making a bunch of different products. You'll probably earn less instant profit, but as with big box stores in the real world, if you balance it properly, you can make up small losses in one area with profits in another and still make an overall profit.

5. Diversify your sales base.
Selling everything in Jita is really convenient, but it's also a nightmare for anyone who isn't a dedicated trader. Spreading things out may make it take longer to sell things, but you may get a better price, and you probably won't have to babysit your orders as much. The same can be said for buy orders - I can, for instance, get a juch better price on some raw materials in Hek than in Jita, but it takes twice as long for the buy order to finish, so it's not as good for items I need today.

5. Expand
Making more of an inherently profitable item will, logically, net you more profit by volume sales. When you can, add more planets, or up the number of factories on a given planet (by upping your Command Center Upgrades skill to 5, if you haven't already).

De'Veldrin's Corollary (to Malcanis' Law): Any idea that seeks to limit the ability of a large nullsec bloc to do something in the name of allowing more small groups into sov null will inevitably make it that much harder for small groups to enter sov null.

Ms Forum Alt
Doomheim
#16 - 2014-08-12 16:23:03 UTC  |  Edited by: Ms Forum Alt
De'Veldrin wrote:
with Custom Cose Expertise at level 5, you're paying too much.


Oh *****! I knew there was a skill I'd forgotten to train on any of my PI characters and this one is it.

Edit: Ah, that's high sec only. My PI is mostly in null, with a sprinkling of low.
Ginger Barbarella
#17 - 2014-08-12 16:38:46 UTC
Laura Wombara wrote:
(I'm posting with an alt from my newest account) Ok I wanted set up a production factory in HiSec. All the connected skills are at 4 or better. Three factories on a planet, turning imported T1s into T2s to export out, total of six kinds of T1s in, 3 kinds of T2s out.

My calcs tell me it will take 55 days to get a full spaceport load of 10 k units of T2s to export.

Calcs also are telling me that after paying for the T1s at market, and paying the import/export taxes, and the taxes for putting the T2s up for sale, I'd actually be losing more than a million isk when I sell all the T2s at market ( my trade skills are all 4 or better).

I'm pretty bad at maths, maybe I should not be an industrialist, and get a job at the local SpaceBurger joint.... hey somebody has to flip the burgers, eh... -- You want fries with that?


I'm sure this has been commented on already, but there are a couple routes you can take:
1) Get your Customs Code Expertise up to L5 if you'll be doing PI in high sec. That'll take 50% off the Customs tax for operating in high sec. It won't help for the POCO owner's tax, but every little bit helps.
2) Take some time to scout out lower tax POCOs. They're getting more rare in high sec by the day (a couple 8% POCOs I was using recently jumped to 10% after CCE 5), but there are a few out there. I've since moved my PI production entirely to low sec.
3) See #2: move your ops to low sec. Low sec isn't the Big Bad everyone makes it out to be; just get out of the high traffic corridors and don't frequent the Low Sec Wanna-Be Crime Lord "My-D!ck-Is-Bigger-Than-Yours" systems, and you'll be fine.
4) Buy cheap P0 from Jita or other low markets, and ship that stuff off to low sec for your factor planets. Obviously that cuts into overall profits, but you might be able to make it work.

If you're someone that needs the presence of others to play the game (ie, corpies), try to find an Indy corp where they let you do your own thing and help with production in low sec, or try to get into a WH corp as their PI guy.

"Blow it all on Quafe and strippers." --- Sorlac

Xuixien
Perkone
Caldari State
#18 - 2014-08-12 20:10:25 UTC
You can make profit buying the P1 or P2 off the market, but this is subject to change and won't be true for any given item at any given time.

That said, your problem is HiSec.

Put a scanning alt inside of a C1 or C2 Wormhole, set up PI with your PI toons.

Epic Space Cat, Horsegirl, Philanthropist

Gor Yo
Taxes Shmuckses
#19 - 2014-08-14 14:22:42 UTC  |  Edited by: Gor Yo
Najenna wrote:
You wont make much of a profit if any profit at all buying T1 off the market. The profit comes in when you are milking the planet yourself for the T1. Unless your putting up buy orders for your T1 components you aren't going to make any type of real profit. Hope that helps.



wrong! I buy all p1 from the market and make stuff from it and 9 planets bring in about 700-800mil per month. just need to do some research. for the OP:
1) get your trading skills, accounting and broker relations specifically, as high as you can bother to get. since your profit is the margin, taxes become very important, more so if you just produce stuff.
2) get faction and npc corp (which owns the trade hub where you buy/sell stuff) as high as you can. they affect broker fee, which you will pay twice if you get stuff from buy orders and sell from sell orders.
3) buy p1 from buy order and sell from your own sell orders. it takes a little longer, but it is worth it.
4) check POCO tax rate and train customs code expertise. customs taxes will eat up the majority, if not all, of your profits.
5) research the market. at some times, producing certain goods is indeed at a loss to your wallet, even with taking care of all of the above.
Christopher Mabata
Sentinel Incorporium
#20 - 2014-08-14 20:13:58 UTC
Agreed with poster 2, if you use a middle man you cut your profits down to nothing most of the time, like buying faction Ship BP's on contracts. Take the time to set up the proper infrastructure and your profits will explode.

1 alt with perfect PI skills and half decent hauler can make hundreds of millions per month with a good set up and location ( depends on market too ) so with multiple alts it just gets better

♣ Small Gang PVP, Large Fleet PVP, Black Ops, Incursions, Trade, and Industry ♣ 70% Lethal / 30% Super-Snuggly / 110% No idea what im doing ♣

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