Science & Industry

To prevent a free mining situation in my manufacture build cost how should I value minerals and components? At current sell price or at current buy price or the mean?

Just because I bought said minerals at a given value ie I got a really good deal below market I surely should not value the minerals as such. So which is the correct real life value of them that I should take into account when doing manufacture costs?

If you didn't mine, how would you get those minerals?

Would you buy them from standing sell orders? If so - use that price.
Would you buy them at the same price as standing buy orders? If so - use that price.

Would you buy them at higher than standing buy orders (ie: somewhere between buy and sell price)? If so - use that price.

In the situation you have here I would indeed use the price that you actually paid for the minerals. Because then when you have sold the items produced you will have an accurate profit listing.

If you are mining yourself or your corp, then you should come up with an ore price that is fair for you and the miners. I use celestes.de or one of the other sites that monitor the hub prices.

Bob has it perfectly right. It's easy to trick yourself into thinking you're making money getting your inputs from buy orders and putting your outputs on sell orders. The ISK in your wallet might still be going up, but you can even end up losing money compared to just flipping the mats. Make sure your lines are actually adding value to your inputs, not just moving them around.

Do it the other way around, IMO.

If you weren't going to build with those minerals, which method would you use to sell them, and what price would that yield you?

Pretty much nailed it there BOB.

One additional point here is that on long build items the mineral price can change from when you aquired the minerals to when you sell the end product. like for example producing freighters. If watch the market and buy when prices are at or below the average you can maximize your trade profit by buying your mats at the right time. prices seem fairly stable right now compared to the last 6 months but you still need to be careful.

Personally I calculate costs and profit based on mineral sell orders and finished product buy orders in Jita. This is your basic manufacturing profit, if this number is positive it is a good item to make. If not then there is more isk to be made elsewhere. This is basically the minimum profit you can expect as long as the market is stable and gives you a bit of buffer to ride out fluctuations. If I can increase profits by sourcing cheaper minerals or selling the finished product above Jita buy orders than that is just extra profit from playing the market. This is what I would consider trade profit not manufacturing profit as selling those below market minerals would net the same trade profit. Do not fool yourself into thinking that trade profits make an otherwise non-profitable manufacturing job profitable. If there is no profit calculated at mineral buy prices than it is not manufacturing profit. than all the profit is trade profit.

I have very good manufacturing and trading skills, there are very few items on the market that I can not make a profit on with a well researched BPO or BPC. But by using this method I can avoid the lower profit items much easier giving me a much more stable income with market fluctuations giving me surges in my wallet rather than losses.