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How to manufacture Tech 1 items with profit

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#1 - 2012-04-19 14:31:08 UTC  |  Edited by: Aluka 7th
GET GOOD SKILLS

Minimum for production
Industry 3
Mass production 4
Production efficiency 4
Supply chain management 3
Minimum to buy materials and sell the product cost/time efficiently
Trade 4
Accounting 3
Broker relations 3
Daytrading 3
Marketing 3
Margin trading 3
Visibility 2
Procurement 3

Recommended for production
Industry 5
Mass production 5
Advanced mass production 4
Production efficiency 5
Supply chain management 4
Recommended to buy materials and sell the product cost/time efficiently
Accounting 4
Broker relations 4
Daytrading 4
Marketing 4
Margin trading 4
Visibility 3
Procurement 4
(for extra buy/sell order slots, stop when you have enough)
Trade 4->5
Retail 1->5
Wholesale 1->5
Tycoon 1->4



CHOOSE YOUR SELLING LOCATION
As you can read in yearly economic report, these are biggest trade hubs of EVE (which means you can sell high volume here):
1.Jita
2.Amarr
3.Hek
4.Dodixie
5.Rens
IMHO Jita is supersaturated, but hub is where you want to be if you manufacture and sell in volume.
For small volume and higher profit per item focus on mission hubs or lesser trade hubs.
Ofc manufacture as near as possible to your sale location and still try to stay in reach of good raw materials supply.



CHOOSING START-UP ITEMS
You should target Tech 1 items that fall in as many of the following categories as possible:
- Items that don't have named version just tech 1 and tech 2
- Items that have high skill requirement for tech 2 version
- Items that are compact enough to be moved around in industrial
- Items that are used a lot in popular fittings
- Items that have cheap BPO (buy BPC to test water if BPO costs more than 10mil).

Some guidelines:
- Biggest problem with any production is actually constant supply of affordable materials so plan around that.
- Buy minerals that are needed in large amounts locally - trit, pyerite, mex, isogen. That means make buy order with range "Station" because you will save money and time. All other materials pay-of to get flown in because they are needed in small quantity and price differences are high even inside same region.
- Diversity of items you can manufacture is the key. Over time some items stop being profitable and some start again.
- When producing large amounts don't oversupply regional market. Check in history tab, in market window, amounts that are sold daily. Try to manufacture batches that will sell with current trade volumes in next 1-2 days until you get feel for demand and competition. Move to another region and supply them with that item in same manner. Soon you will see how often and in how big batches you need to produce that item.
- Use haulers for rent AKA courier contracts and calculate price of hauling in final price.

Very important detail
When calculating profitability, it is not all about profit margin for specific item.
Actually most important thing is production line profitability which is profit margin multiplied by number of items produced per day per production line. Number of production lines and utilization of each line is the choke point of manufacturing empire.
EXAMPLE: If you can produce 200pcs of item A in one day on one production line and earn 50k ISK per piece (sale price - raw mat&manufacturing&transport cost). You will earn 10mil ISK that day.
If you produce item B that can be produced in volume of 4 items per day and you earn 1mil ISK per piece. You will earn only 4mil ISK that day.
You will earn more over same amount of time with item A over B. That is also the reason why your BPO/BPC has to have P.E. researched not only M.E. - to speed production up and free production line for next item you will produce.



EXAMPLES OF PROFITABLE ITEMS:

"Small" stuff
1. Heavy and Medium shield/armor drones
2. Large EWAR drones (900 series)
3. L, M and S Mobile warp dest.
4. Warfare Link modules specially mining ones
5. Command Proc.
6. Bomb Launcher
7. Covert and normal Cynosural Field Gen.
8. Interdiction Sphere Launcher
9. X-Large Shield Booster
...

"Big" stuff
1. Capital Construction Parts (only capital component used to produce lot of other diff. stuff not just capital ships)
2. All Fighters and Fighter bombers (not highly profitable but in constant demand)
3. XL guns (currently XL blasters are good)
4. Capital modules (armor Rep., sh. Booster, remote shield, armor and energy)
5. Infrastructure Hub
6. POS Structures (some of them)
...

"Bad" stuff
Ships are bad items for fresh solo producer. There are few issues/details about ship production.
1.BPO is expensive
For anything bigger then frigate use researched BPCs (10run researched copies for BS cost 10mil or less so that's <1mil extra to count in per battleship). Only when you have production going for some time and specific ship sells well you should invest in BPO and get it researched.
2.It is hard to gather materials
Cheapest BS requires 400000m3 per day per production line AND that climbs to 3x the amount for the best BS.
Imagine how much you would have to move when running 10 production lines which are optimal number per character.
So if you really want to produce ships, pair with mining corporation for good supply.
3.Small volume can be produced per day per production line
That makes overall profitability low even if there is a good profit margin per ship.
Battle ships (BS) - 6 per day.
Cruiser (C) - 9 per day.
Frigates (F) - 18 per day.
(x1.25 with researched P.E.)
4.Manufacturing location <-> sale location problem
Bigger the product, more time and money you will spend moving it around.

Make ISK and enjoy EVE!
#2 - 2012-04-19 16:46:08 UTC
Nice guide.

I struggled to get my indy toon up to making isk, and by the time I was breaking even I still had yet to realize alot of the stuff you said. Its going good now, although I dont do everything you stated, although never the less, all of the suggestions in your guide will increase a nubs production profits.
#3 - 2012-04-19 17:55:53 UTC
So basically you buy low(components) and sell high(end product). This can give you 100 mill/month profit from trading and -20 mill/month for Taxes -10 mill/month for production profit = 70 mill/month profit per slot.

Some T1 items also give a positive production profit. The T1 profits seem to be heavily dependent on the markets prices. Some items are better to be traded than manufactured for profit.

Because of the heavy market influence it is alway good to have more than 1 Blueprint per slot available to adapt to any market turbulence.

Thank you @Aluka 7th for getting all the important details in one post.

BlogTutorials | Youtube "I don’t know everything, I just know what I know."

#4 - 2012-04-19 20:22:12 UTC  |  Edited by: Aluka 7th
Tnx guys, I should add some info regarding trading which is crucial part of manufacturing.

When you buy cheap materials, manufacture and then sell product in some other hub with best (highest sale) price you are basically collecting trade profit because you are in a way moving raw materials from one location two other and you also add manufacturing profit.
Manufacturing and trading are closely tied together.

CASE STUDY
Lets say that I build a XL pulse laser
On location A materials for that laser cost 20mil, and laser itself goes on market for 32mil.
On location B materials cost 30mil, and laser goes on market for around 40mil.

If I buy materials, manufacture and sell at location A, I pocket only 12mil and that is pure manufacturing profit.

If I buy materials, manufacture and sell at location B, I pocket only 10mil and that is pure manufacturing profit.

If I only trade from A to B, I would earn 10mil from material resale (30-20) and 8mil from laser resale (40-32)
Which would net me 18mil of pure trading profit and I had to move 8000+m3.

If from materials bought on location A for 20mil I produce laser worth 40mil in location B, move it from A to B and sell it at location B and also buy finished one for 32mil at location A, move it from A to B and sell it at B. This nets me 28mil (20+8) and again I had to move 8000m3 (laser i made and laser I'm reselling). Here trade profit is again 18mil but I get additional 10mil from manufacturing. So I pocket 28mil using trading AND manufacturing.

Manufacturing is here just to boost your profit and complement the traders lifestyle.
Also in example, note that manufacturing profit was only 10mil not 20 as you would think on first glance. You could think that just because you bought materials for 20mil and sold finished product for 40 that all 20mil is manufacturing profit? NO, only 10mil, rest is traders profit of moving stuff around.
If you can grasp that, then there will be no room for hidden costs and unprofitable production in your spread sheets.
Sometimes its more profitable just to resell materials then manufacture anything.


Every manufacturer is firstly trader and when opportunity present itself his manufacturing lines allow him to acquire additional profit.
#5 - 2012-04-19 20:46:25 UTC
Good post. I really wish we had a good FAQ for industry since a lot of the posts are the same. This one really answers the 'new industry character, what is profitable?'

Maximze your Industry Potential! - Download EVE Isk per Hour!

Import CCP's SDE - EVE SDE Database Builder

#6 - 2012-04-19 21:24:32 UTC
Why is margin trading required for selling items?

Economic PVP

#7 - 2012-04-19 21:26:51 UTC
Margin trading is not skill for sale, you are right, but its awesome skill when you buy raw materials or items for resale.
#8 - 2012-04-20 02:53:57 UTC
Very useful info!

I'm planning to make my mining alt to do some manufacturing/trading too and this provided me with good info to start with.

I was thinking if it would be more profitable to outright mine and sell the minerals, than to engage in manufacturing and trading it? My alt is currently a few weeks away from piloting a Hulk
#9 - 2012-04-20 03:11:28 UTC
All depends on skills and refining. Usually you won't be able to mine all the minerals you need anyway.

I would just use the program in my sig. Find out what you can sell for, enter the prices manually and then use those to compare the items you want to build. If it's not getting profit, sell the minerals. If you get profit, build away.

Maximze your Industry Potential! - Download EVE Isk per Hour!

Import CCP's SDE - EVE SDE Database Builder

Caldari State
#10 - 2012-04-20 09:37:41 UTC
A very good guide! with a bit of (bad) luck you have just increased your own competition Blink

2 minor additions I'd like to make:

1 since this is a guide for new players I think it's worth mentioning that minerals you mine are not free. I know that it's implied in th thread but it can never be said to often.

2 I've found that very good starter items are often consumables such as ammo. These are in constant demand because they constantly get used up
#11 - 2012-04-20 10:07:39 UTC  |  Edited by: Aluka 7th
IMHO missiles, projectile and hybrid ammo are already too cheap because they are outlet for miners + everyone and his grandmother produces ammo. I guess M and L laser crystals are ok and also 400 and 800 booster charges as well.

Problem is in fact that miners convert part of their mining supply to dirty cheap ammo so they can sell more minerals overall. Also mission runners often buy ammo BPO to build their own ammo from their melted loot and they also sell excess supply on local market. There is more money in trading ammo if you buy in trade hub -> sell in mission hub or even better near new incursion site.

P.S. I have added more stuff to the list of first post which is more profitable than ammo to get you started.
Gallente Federation
#12 - 2012-04-20 10:29:57 UTC
Aluka 7th wrote:
IMHO missiles, projectile and hybrid ammo are already too cheap because they are outlet for miners + everyone and his grandmother produces ammo. I guess M and L laser crystals are ok and also 400 and 800 booster charges as well.

Problem is in fact that miners convert part of their mining supply to dirty cheap ammo so they can sell more minerals overall. Also mission runners often buy ammo BPO to build their own ammo from their melted loot and they also sell excess supply on local market. There is more money in trading ammo if you buy in trade hub -> sell in mission hub or even better near new incursion site.

P.S. I have added more stuff to the list of first post which are better than ammo.



part of the problem is I bet (and I have done this as well) when a noob asks what to make most people will say ammo as the BPOs are cheap, low skills, ready market, etc, but yeah I was surprised to see the other night doing some checking most ammo is sold at a loss in a hub

Good Post !




Caldari State
#13 - 2012-04-20 11:23:50 UTC
Aluka 7th wrote:
Minimum for production

Production efficiency 4

NOT SURE IF SRS

get that skill to 5 THEN you can start to build stuff

COME AT ME BRO

I'LL JUST BE DOCKED IN THIS STATION

#14 - 2012-04-20 11:28:43 UTC
Only way to make a profit is sell with profit.

That sounds obvious but just don't lower your price that fast when somebody is undercutting you. If not set at a unrealistic price (say you maintain market average) it WILL sell, probably the next day, perhaps in a few days.

As an added bonus you won't spend extra manhours to watch the market and adjusting orders.

If this method fails for you than the either 1) other players work more efficiently and you should look into adjusting, or 2) the market is saturated and you should move on to another product.
#15 - 2012-04-20 11:38:55 UTC  |  Edited by: Aluka 7th
Skippermonkey wrote:
Aluka 7th wrote:
Minimum for production

Production efficiency 4

NOT SURE IF SRS

get that skill to 5 THEN you can start to build stuff


You can start manufacturing of some items with that skill at level 4.
Having that skill at level 4 means that you will need 7% more minerals when you build comparing to level 5, which in case when you are manufacturing/selling items with >50% margin it is not crucial but it is first skill to get up to lvl. 5 indeed.
Caldari State
#16 - 2012-04-20 11:46:27 UTC
meh, i wouldnt recommend anyone tries to sell on the market without Production Efficiency 5

You'll end up selling your items for less than it cost you to build it

COME AT ME BRO

I'LL JUST BE DOCKED IN THIS STATION

#17 - 2012-04-20 12:09:14 UTC
Skippermonkey wrote:
meh, i wouldnt recommend anyone tries to sell on the market without Production Efficiency 5

You'll end up selling your items for less than it cost you to build it


If the item nets no profit with production efficiency 4 it is not worth the hassle at production efficiency 5. to low margin to make a decent profit even at 5 then.
#18 - 2012-04-22 06:09:05 UTC
Skippermonkey wrote:
meh, i wouldnt recommend anyone tries to sell on the market without Production Efficiency 5

You'll end up selling your items for less than it cost you to build it

If you're a complete beginner and want to get a feel for manufacturing to see if it is fun or not, you can make a profit with Production Efficiency 0 if you avoid the hubs and do business out in the sticks. There's really no need for a beginner to spend a couple of weeks training Production Efficiency 5 only to discover that they don't actually find a manufacturing career enjoyable.
#19 - 2012-04-25 16:22:07 UTC  |  Edited by: Aluka 7th
Additional profitable items ("Small" stuff):
...
11. Remote hull repair system of sub-capital sizes - very profitable, those are used a lot for repairing damaged POS mods.
12. Drone nav. computer
13. Drone link aug.
...
Minmatar Republic
#20 - 2012-04-26 00:25:12 UTC
Aluka 7th wrote:
GET GOOD SKILLS

Minimum for production
Industry 3
Mass production 4
Production efficiency 4
Supply chain management 3
Minimum to buy materials and sell the product cost/time efficiently
Trade 4
Accounting 3
Broker relations 3
Daytrading 3
Marketing 3
Margin trading 3
Visibility 2
Procurement 3



IMO Production efficiency V is an absolute needed skill prior to manufacturing any items other than manufacturing for personal use. That 5% extra waste in minerals is pretty much the base of all your profits ecpecially for T1 items, more so when selling in market hubs. Now if you're planning on making your profit based on selling items at an inflated price in regions / systems where the product is scarce than it shouldn't be much of an issue, but than again you're better off not manufacturing and simply buying low and selling high.

Get production Efficency to level V. Start up all your manufacturing runs. While these are manufacturing all your items use the extra days to train up all the additional skills listed. By the time the jobs are done nearly all your skills listed above would be trained, and than start selling.
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