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Large T2 Ship Profits

Author
Kestral Anneto
Caldari Provisions
Caldari State
#1 - 2014-12-14 21:58:10 UTC
I'm playing about with IPH to find what ships to build as an end goal, i started looking at golems, paladin etc even building the T1 ship to build it from, the profit from it is tiny. That's including buying the stuff to make the componants.
So i started down sizing, BC's, cruisers and destroyers are the same, barely any profit in them.
Why is this? what am i missing? I dont have access to a POS with reacters in it to go further up the production line. Should I just give up on it?
Zedutchman
Aliastra
Gallente Federation
#2 - 2014-12-14 22:20:44 UTC  |  Edited by: Zedutchman
yes.....


Ships are WAY over-produced.

Unless you can corner a local market, and doing something like that is likely to make you some enimes with very large bank accounts.
voetius
Grundrisse
#3 - 2014-12-14 22:26:10 UTC

T1 ships have been very hit and miss for a long time. There are a few reasons for this:

1. Frigates destroyers and haulers (?) handed out in tutorial missions. Undercutting builders.

2. People new to industry seem to think ships are a good place to start. Leading to market stauration.

3. My personal opinion is that miners use ships as a type of mineral compression. Rather than trying to sell ore or minerals to buy orders, compress it (manufacturing) into ship hulls that are easy to move and sell at the equivalent of mineral sell prices so avoiding 0.01 games selling your stuff.

T2 ships are very much subject to FOTM effects. Also, decryptors really really make a difference and a lot of people don't seem to understand this.
Gilbaron
The Scope
Gallente Federation
#4 - 2014-12-14 23:53:48 UTC
so, you already figured out what you should NOT build. now go and figure out what you should.

there are lots of highly profitable items out there
Shelom Severasse
Project Omega Industries
Evictus.
#5 - 2014-12-15 07:39:13 UTC
if you are trying to sell in hubs, like jita, you are going to have razor sharp margins and stiff competition. not to mention that 0.01 isk increase/decrease crap.

if you really want to make money, sell in a system that is frequented by fw entities. these systems sell at much higher volumes and values than other low secs or systems near low sec because, well, fw people need a market that is close to their ao and not 20 jumps into high sec. these systems are also frequented by local pirates corps that will buy your stuff as well.

ofc youll have to do your own research into which systems are a good idea to set up shop in and what to make.

just my two cents
Gilbaron
The Scope
Gallente Federation
#6 - 2014-12-15 10:34:36 UTC  |  Edited by: Gilbaron
tbh, i wouldn't build for a lowsec market, i would just buy in jita and transport it over.

the 5 or so percent extra profit you get from building on your own compared to buying in jita aren't worth the hassle, you can make much more by investing your money in more products that you can offer
Jeann Valjean
The Scope
Gallente Federation
#7 - 2014-12-15 21:08:45 UTC
You seem smart enough to realize there's no profit in large T2 ships, which makes you more intelligent than anyone who's making them.

It's ironic how overproduced they are, considering what a PITA it can be to move the required materials. Ships, especially T2 BS, are one of the LAST things anyone should want to produce even if there were a 10-15% margin.
Paynus Maiassus
Capital Munitions
Capital Interstellar Group
#8 - 2014-12-16 00:10:11 UTC  |  Edited by: Paynus Maiassus
Kestral Anneto wrote:
I'm playing about with IPH to find what ships to build as an end goal, i started looking at golems, paladin etc even building the T1 ship to build it from, the profit from it is tiny. That's including buying the stuff to make the componants.
So i started down sizing, BC's, cruisers and destroyers are the same, barely any profit in them.
Why is this? what am i missing? I dont have access to a POS with reacters in it to go further up the production line. Should I just give up on it?


Most of your ISK calculators are hub based. I use Fuzzwork which let's you do a bit of playing around with different locations for purchase and sales, but even it is limited. So you have to remember that while sales volumes are much smaller, regional hubs can provide better margins.

A lot of building is knowing what to build. Keep looking.

Just don't completely rely on calculators. Come up with your own spreadsheets that tell you what you'll make selling where you think would be a good idea to sell.

Also, when it comes to T2, having connections that can provide you with cheaper moon goo can help. Connections help in a lot of ways. Having a mining corp that will give you cheaper ore as long as you pick it up from their location (they will sell cheap to avoid hauling to hubs and playing the market game) would help your margins. Having a connection that will pay higher prices as long as you bring the stuff to him in Omist will help your margins. Of course you have to get the stuff to Omist......

When it comes to T2, generally, making the subcomponents yourself will help margins. If you're making T2 ships, you'll want to make the T1 ship (for 5% below purchase cost), set up a planet for the Construction blocks and get those for 'free' (a lot of people distain thinking of personally got materials as 'free' because they are a time investment, but since PI is totally passive except for 3 minutes of work a week, I do consider it 'free' stuff), get and research a set of construction component BPOs and make the construction components for another 5% discount - but be careful. Sometimes components sell cheaper than their components, so you have to watch the market to see if it's cheaper to buy components or to build them, as it will change from component to component in accordance with the market. Also, making your tools (the starship tech) used to be a way to increase some profits. The market has been glutted for months now, so they are just cheaper to buy, but at some point making them will save money.

So basically that's what you need to do. When you make T2, look into making components and PI and the T1 and this will increase margins, and then you need to look at selling at places other than Jita.

Oh, and buy your parts with buy orders. Don't just buy on the sell. Certain items are much cheaper on the buy. Some aren't. You have to know the markets.

And make contacts.

These will make you a good builder. Just going to a website to calculate your margins for you will not get you margins.

EDIT: Don't forget volume. I used to be a Jita seller. a 5% margin in a lot of cases was a good margin for me. The way to make that work for you is volume. Make tons and tons of crap and sell it, and you'll eventually see the ISK trickle in more and more.

And another point, be strategic: sell ammo at mission hubs. Sell PvP frigates near faction warfare zones. Get in with a null alliance that has a null hub where stuff sells for 10% above Jita. Sell to them.
Nightingale Actault
Borderland Dynamics
#9 - 2014-12-16 00:57:51 UTC  |  Edited by: Nightingale Actault
Paynus Maiassus wrote:
[quote=Kestral Anneto]set up a planet for the Construction blocks and get those for 'free' (a lot of people distain thinking of personally got materials as 'free' because they are a time investment, but since PI is totally passive except for 3 minutes of work a week, I do consider it 'free' stuff


Time has an intrinsic value. Also, the 'free' items you are receiving do have a market cost that they can be sold at separately. Opportunity cost is real, and you are only devaluing your time by considering these items as such.
Huttan Funaila
Caldari Provisions
Caldari State
#10 - 2014-12-17 01:16:17 UTC
Kestral Anneto wrote:
[T]he profit from it is tiny. That's including buying the stuff to make the components.
So i started down sizing, BC's, cruisers and destroyers are the same, barely any profit in them.
Why is this? what am i missing? I don't have access to a POS with reactors in it to go further up the production line. Should I just give up on it?

A combination of too many manufacturers and not enough demand. I'm still sitting on command ships that were built before the hull changes last year. And I didn't make a large number of hulls (less than 3 dozen). Even making the components it was not profitable. Folks ask me to make them T2 ships and after running my spreadsheet (and doublechecking with fuzzworks), the ships are cheaper to buy in Jita and ship them via Jump Freighter than for me to make them.

I find that the greatest cost is usually the microprocessors. And if I had the reactor farm to make them, I would make more isk selling the moon goo than I would making ships out of the goo.
Tear Jar
New Order Logistics
CODE.
#11 - 2014-12-17 01:16:28 UTC
Jeann Valjean wrote:
You seem smart enough to realize there's no profit in large T2 ships, which makes you more intelligent than anyone who's making them.


My guess is the people who are saying "just sell outside of trade hubs" are in that group.

If you want to sell outside of trade hubs you can just skip the whole manufacturing stage and buy at Jita prices. This has the added benefit of not locking up your capital for the time it would take to build ships(which is a big hidden cost in manufacturing).
Shayla Sh'inlux
Aliastra
Gallente Federation
#12 - 2014-12-17 12:39:24 UTC
Shelom Severasse wrote:
if you are trying to sell in hubs, like jita, you are going to have razor sharp margins and stiff competition. not to mention that 0.01 isk increase/decrease crap.

if you really want to make money, sell in a system that is frequented by fw entities. these systems sell at much higher volumes and values than other low secs or systems near low sec because, well, fw people need a market that is close to their ao and not 20 jumps into high sec. these systems are also frequented by local pirates corps that will buy your stuff as well.

ofc youll have to do your own research into which systems are a good idea to set up shop in and what to make.

just my two cents


This is such a misconception. The value of items is the price they fetch in Jita and not whatever they fetch in lowsec FW area's. Because at that point you trading instead of manufacturing. It's infinitely less work to just buy the stuff in Jita and ship it off to whatever lowsec area you intended to sell in.


Quote:

Set up a planet for the Construction blocks and get those for 'free' (a lot of people distain thinking of personally got materials as 'free' because they are a time investment, but since PI is totally passive except for 3 minutes of work a week, I do consider it 'free' stuff


Again, no. The construction blocks have a market value. That market value is the cost of them and setting them at zero just means you're selling at less profit then you actually think you are. You could make an argument that by avoiding sales tax, you are effectively getting them for slightly under market cost (which is true) but then you have to consider the time factor as well as the initial investment cost of the command centers to determine if it's worth it.

The reason t2 ships, especially the larger hulls are worthless to build is because there are thousands and thousands of blueprints for them from before the industry changes. Today, the highest ME you can get on t2 prints is 5. Blueprints that were created before the changes tend to have significantly higher ME levels. You can quickly check the contracts and find page upon page upon page of ME9 copies for Jump Freighters, even though the best ME level you can get today is 5.

Given how long it takes to actually get a Jump Freighter BPC and how many of these are on the contracts for fairly reasonable prices, it's not hard to deduce there are enough old Marauder and/or Black Ops BPC's around to satisfy the market for months if not years to comes.

Things will eventually settle down. For example, if you look at Mackinaw prices, they have been going steadily up from their old buildcost (~175mil) +reasonable profit towards their current buildcost (~200mil) plus a tiny profit. Give it a few more months and the margins will once again be a steady 10-15%.


Billie Smith
School of Applied Knowledge
Caldari State
#13 - 2014-12-17 14:33:12 UTC  |  Edited by: Billie Smith
My experience with T2 production lies with much of what was previously true but has changed a bit with the indy expansion...but I continue to eye the market and populate spreadsheets...so take this for what it's worth.

I have found that t2 production is a volume endeavor and the manufacture of t2 materials / components can be where the profit lies. The moon goo market fluctuates quite a bit due to supply and demand. The alliances and individuals that mine it watch the market and when prices rise, they tend to flood the market quickly to hit a particular profit goal...prices drop dramatically when this happens and if you time it correctly, can buy your products such that t2 component production is profitable. Oddly enough...this doesn't seem to translate (much) into ship pricing.

When I watched the market closely, I was able to average 15%-20% profit on t2 component production because of the above coupled with fast production times.

Also, using the above as a guide, if you have the ability to mine the moon goo and process it...you can make good isk...the problem with this is that most of the moon mining is done by and protected by larger alliances and is very difficult to successfully pull off as an individual or small group...after all POS bashing is an easy thing for a group of bored people to do to kill time...and with hardly anybody living in null...there are a LOT of bored people there.

I was successfully making a min. of 200m-300m isk profit (after fuel costs, etc.) each week just with moon mining / processing till my neighbors figured out what I was doing and wanted in on the action. This was mining several low level moons and making the processed materials for the t2 components and selling it in Jita.

Again this was before the Indy changes and Jump distance changes...which seems to protect groups in null more than individuals and continues to squeeze out us individual guys (and girls) from much of the successful production strategies.

In the end...I have found far simpler, quicker ways to make (more) isk and have given up on industry for isk making. Not saying people out there aren't successful...just saying as an individual or very small group there are better ways to make isk for the time investment.