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Production noob wants to hear comments on his concept

Author
Kadir Enaka
Doomheim
#1 - 2012-11-14 22:04:19 UTC
So I am planning on going into the rig production business.
First, I have enough money to invest (at least 30B) so if you have any suggestions how to improve the income by investing some ISK it would be appreciated.

So here is my concept:
I wanted to produce T1 rigs (low skill requirements). To get lots of those I wanted to create multiple chars (they don't need to train too long, maybe a month for 10 production slots) on 1 account.
Lets say I would have 10 characters with 10 production slots and Production Efficiency 5 who are all in the same corp. Also I have another character who can fly anything up to freighter/JF.

Skillset for the producing chars would be like this:
Mass Production 5
Advanced Mass Production 4
Production Efficiency 5
Industry 4, later 5
Mechanics 3
and whatever requirements the rig BPOs have.
Any important skills missing?

I then wanted to place a POS somewhere in highsec (It can only be taken down by a wardec, right?). Defense wouldn't be too important on that POS (hoping that noone wardecs me) so I could place up to 50 Equipment Assembly Arrays in a Large Caldari POS, which equals 300 production slots at 0.75 time multiplier.
The fuel cost would be around 500k/hour which I should be able to make back using 100 production slots running 24/7.
The freighter char moves all necessary materials inside the POS and the products out again.
Depending on the choice of rigs to produce this could get me a few billions per month (from my calculations at least).
If I want to extend the profit I would have to create more chars and get them producing 24/7 aswell.
The cost for keeping 4 accounts (11 chars) running is about 2,4B per month which is less than my profits.

Any mistakes? Improvements? People who want to wardec me?
Minmat Sebtin
House of Sebtin
#2 - 2012-11-14 22:38:02 UTC
I would suggest training Supply chain management to level 3, I think you would need it to do jobs at a POS, and it'll allow you to start jobs a few jumps away. Also I feel that setting up a pos for manufacturing is unneccessary, there are sufficient slots available at stations within a couple of jumps of Jita.

A useful trick I sometimes use to is start the jobs towards the end of subscription, let it lapse and then reactivate when the jobs are finished. You can save a fair chunk in Plex costs if you do this.
Kadir Enaka
Doomheim
#3 - 2012-11-14 22:45:33 UTC
Minmat Sebtin wrote:
I would suggest training Supply chain management to level 3, I think you would need it to do jobs at a POS, and it'll allow you to start jobs a few jumps away. Also I feel that setting up a pos for manufacturing is unneccessary, there are sufficient slots available at stations within a couple of jumps of Jita.

A useful trick I sometimes use to is start the jobs towards the end of subscription, let it lapse and then reactivate when the jobs are finished. You can save a fair chunk in Plex costs if you do this.


The reason why I tought about setting the POS up was because I produce 33% faster which makes up for the fuel costs. As the freighter is moving in and out anyway fuelling shouldn't be a problem. As I plan on using lots of production slots I would need at least 2 completely empty stations to produce, with other people producing I would probably have to spread my characters over a few systems which would increase time needed for logistic.
Supply chain management 3 should not be a problem if its necessary, thanks for pointing that out.
The trick with the Plex costs also seems quite interesting and leads me to another question:

As I have really never ever set up a production: If I use a BPO to produce, will I have to refresh the job after every single run or can I set up a job "Produce 20 of ...." so it runs 20 times in a row (as long as I have enough materials in the assembly array)?
Styth spiting
Brutor Tribe
Minmatar Republic
#4 - 2012-11-14 22:48:34 UTC  |  Edited by: Styth spiting
Kadir Enaka wrote:
So I am planning on going into the rig production business.
First, I have enough money to invest (at least 30B) so if you have any suggestions how to improve the income by investing some ISK it would be appreciated.

So here is my concept:
I wanted to produce T1 rigs (low skill requirements). To get lots of those I wanted to create multiple chars (they don't need to train too long, maybe a month for 10 production slots) on 1 account.
Lets say I would have 10 characters with 10 production slots and Production Efficiency 5 who are all in the same corp. Also I have another character who can fly anything up to freighter/JF.

Skillset for the producing chars would be like this:
Mass Production 5
Advanced Mass Production 4
Production Efficiency 5
Industry 4, later 5
Mechanics 3
and whatever requirements the rig BPOs have.
Any important skills missing?

I then wanted to place a POS somewhere in highsec (It can only be taken down by a wardec, right?). Defense wouldn't be too important on that POS (hoping that noone wardecs me) so I could place up to 50 Equipment Assembly Arrays in a Large Caldari POS, which equals 300 production slots at 0.75 time multiplier.
The fuel cost would be around 500k/hour which I should be able to make back using 100 production slots running 24/7.
The freighter char moves all necessary materials inside the POS and the products out again.
Depending on the choice of rigs to produce this could get me a few billions per month (from my calculations at least).
If I want to extend the profit I would have to create more chars and get them producing 24/7 aswell.
The cost for keeping 4 accounts (11 chars) running is about 2,4B per month which is less than my profits.

Any mistakes? Improvements? People who want to wardec me?


In theory this should work, you've planned out the manufacturing pretty well, but the problem is that because rig materials are so available, and are mostly sold by mission runners / fairly new players there are all ready alot of people buying up these material goods, making the buying of these items very cut throat.

Also since most rig BPO's don't require ME research this means it is the easiest manufacturing to get into for new players. So because of this there are so many rigs being manufactured that the possible profit to be made is very minimal.

Using medium cargohold optimizations I as an example, as they are a very popular rig, and use materials that are common in other rigs:

....item........................amount..jita sell....total cost
Alloyed Tritanium Bar 20 - 104,900 - 2,098,000
Fried Interface Circuit 24 - 3,139 - 75,336
Tripped Power Circuit 14 - 108,200 - 1,514,800
Cost to manufacture: 3,688,136

Jita price: medium cargohold optimization sell: 3,677,929.99

Jita price: medium cargohold optimization buy: 3,650,000.11

Profit matching jita sell order: 10,206isk

So not even counting fuel costs or time involved manufacturing and selling 100 of these would _MAYBE_ net you 1 million isk profit....

Now naturally if you setup buy orders for the material requirements and sell them in other regions that do not have major trade hubs you will increase your profit and decrease the costs per item, but you are now looking at having to train social and market related skills, grinding corp standings to decrease broker/tax fees and much more travel time.

I would suggest that instead of going with a POS for now find a few stations that have low activity and utilize those manufacturing slots and just take over several stations and see how much profit you can make before investing the 300M + per month fuel costs and 1B + cost of a POS setup.
Styth spiting
Brutor Tribe
Minmatar Republic
#5 - 2012-11-14 22:54:16 UTC
Kadir Enaka wrote:

As I have really never ever set up a production: If I use a BPO to produce, will I have to refresh the job after every single run or can I set up a job "Produce 20 of ...." so it runs 20 times in a row (as long as I have enough materials in the assembly array)?


When you setup a job you can specific the number of items to create. So basically when setting up the job you have the BPO, the materials and just set it to 20 runs for example. As long as you have all the materials for 20 items it will just queue up all 20 runs into 1 job. Once all runs have been completed you will have to complete the job and all 20 items will be spit out.

You can end a job early but you lose the isk cost to start the job and materials if I remember correctly, but you get the BPO back.
Salpad
Carebears with Attitude
#6 - 2012-11-15 04:26:16 UTC  |  Edited by: Salpad
Kadir Enaka wrote:
I wanted to produce T1 rigs (low skill requirements). To get lots of those I wanted to create multiple chars (they don't need to train too long, maybe a month for 10 production slots) on 1 account.


If you remap your 2 same-account to maximize INT and spend the rest of the points on MEM, and buy +3 implants for INT and MEM (requires Cybernetics trained to 1), you can get 10 production slots (Advanced Laboratory Operation 4) in 9 or 10 days, plus about half a week for the remaining skillz (Laboratory Operation to 5, Science to 4, Research to 4, Metallurgy to 4).

So about half a month per account, if you're willing to spend about 16M ISK in implants, and make do with Science/Research/Metallurgy at 4. If you want to train them to five, figure half a week more per account, approximately.

edit: Okay, my figures above are for research alts, not production alts. But I presume you'll need research alts too, to improve the BPOs you purchase.
Salpad
Carebears with Attitude
#7 - 2012-11-15 04:29:23 UTC
Styth spiting wrote:
[quote=Kadir Enaka]Now naturally if you setup buy orders for the material requirements and sell them in other regions that do not have major trade hubs you will increase your profit and decrease the costs per item, but you are now looking at having to train social and market related skills, grinding corp standings to decrease broker/tax fees and much more travel time.


Putting stuff up for sale in regions that do not have major trade hubs? Won't those Sell Orders sell very slowly, then?
Styth spiting
Brutor Tribe
Minmatar Republic
#8 - 2012-11-15 05:37:54 UTC
Salpad wrote:
Styth spiting wrote:
[quote=Kadir Enaka]Now naturally if you setup buy orders for the material requirements and sell them in other regions that do not have major trade hubs you will increase your profit and decrease the costs per item, but you are now looking at having to train social and market related skills, grinding corp standings to decrease broker/tax fees and much more travel time.


Putting stuff up for sale in regions that do not have major trade hubs? Won't those Sell Orders sell very slowly, then?


Not at all. A vast majority of people who buy stuff instead of manufacturing it themselves fall into the category of lazy or stupid. Lazy being people who dont want to fly 10+ jumps to save 100K isk on an item at a trade hub, or stupid being people who don't know about external websites to view prices of items in other regions. They simply pay the amount for the lowest priced sell order.

To give you an idea of the lazy/stupid concept I constantly buy for example T2 ships in trade hubs and sell them for 20M +/- mark ups, and I do this with like 10 to 15 ships per week, and I am only limited by my available isk. Also you are not going to be selling massive volume because you are not buying items and re-listing them to make .01 per sale. You don't want massive volume, you want massive profit as a manufacture. If you want to make 1000isk per sale get into station trading. If you want 1M, 10M, etc sales get into manufacturing and seed stations / regions.

Denal Umbra
Coffee Hub
#9 - 2012-11-15 08:50:51 UTC
30b for 100 production slots is by far not enough to sustain it unless you are going to be using staggering 1-2 day runs. A single day run, per production slot (on the profitable medium bpo's) costs roughly 250-400m. Multiply that by 100 and you need 25-40b to keep one job running. Since you want to keep the lines running at full capacity, you are going to need at least 40-50b or stagger the lines by a day. Not to mention the costs of large rig components...

As for profits... Most of the really good rig bpos can churn out 100-600k isk / h per line, you just gotta do some research. They have fairly good sale volumes as well but will not sustain over mass production on the scale you are looking at. 1200 isk / h is roughly 1 bil per month, for comparison. It is quite easy to make 3-6b per month on just rigs, if you have the capital per manufacturing toon.

I would suggest starting off with one toon, using station slots to get into manufacturing, once you are more comfortable and know what you are doing and which bpos you want next, consider getting a pos. Or get the pos now and just use 1 toon there for manufacturing and the rest of the cpu is used up by labs. You will most likely want to diversify and not only focus on rigs later on. There are better profits to be found.
Salpad
Carebears with Attitude
#10 - 2012-11-15 10:15:50 UTC
Another thing is, I think it sounds like a huge workload, having to juggle around 1 main and 11 alts to continously produce stuff.

My plans involve getting my main and my alt fit to research BPOs and produce from them, and creating 2 research alts whose only job is to improve and perhaps copy BPOs. But I don't envision using the research alts for production, simply because it's too much hassle. I may change my mind, of course. But my current plan is that I want to own a huge selection of researched BPOs so that I can choose what to produce, based on what's profitable. And it even includes the possibility of retiring my "primary" alt (not renewing his subscription with PLEX) if I feel like it, since the 2 research alts are on my main's account.
Kadir Enaka
Doomheim
#11 - 2012-11-15 15:40:17 UTC
Denal Umbra wrote:
30b for 100 production slots is by far not enough to sustain it unless you are going to be using staggering 1-2 day runs. A single day run, per production slot (on the profitable medium bpo's) costs roughly 250-400m. Multiply that by 100 and you need 25-40b to keep one job running. Since you want to keep the lines running at full capacity, you are going to need at least 40-50b or stagger the lines by a day. Not to mention the costs of large rig components...

As for profits... Most of the really good rig bpos can churn out 100-600k isk / h per line, you just gotta do some research. They have fairly good sale volumes as well but will not sustain over mass production on the scale you are looking at. 1200 isk / h is roughly 1 bil per month, for comparison. It is quite easy to make 3-6b per month on just rigs, if you have the capital per manufacturing toon.

I would suggest starting off with one toon, using station slots to get into manufacturing, once you are more comfortable and know what you are doing and which bpos you want next, consider getting a pos. Or get the pos now and just use 1 toon there for manufacturing and the rest of the cpu is used up by labs. You will most likely want to diversify and not only focus on rigs later on. There are better profits to be found.


Very good point about the Billions to keep the production running, I didn't take that into account yet. However 30B is roughly enough to cover at least 1 day with 100 slots. As time goes on I will have more than 30B to invest when my alts come out of training so that's ok for me.
For now my biggest problem seems to be to sell the massive amounts I want to produce. I think I could fill 20-30 slots with rig production without a problem and have 200k+ per hour profit (per slot). For the other 70-80 slots I could take some with a lower per hour profit and on some I will indeed have to produce something else apart from rigs. There are lots of possible options to go for at that point. Something a little bit more complex (stuff that needs subcomponents) might be an option so 1 well skilled char does the production of the end product while the others only deliver him the subcomponents. By doing that I could fill lots of slots but would only produce little amounts that I can still sell.

Before creating all those alt accounts and spending money on their PLEXs and the POS I will do a test run for a few days with one of my mains who already has 10 production slots as suggested by a few people. I bought 10 rig BPOs that seem to be profitable and if it works fine I will expand the business.
Denal Umbra
Coffee Hub
#12 - 2012-11-15 18:26:01 UTC
Not sure if they removed it or not yet, buy you used to be able to send out a buddy invite and request for a plex as the reward so you could create infinite amounts of 51 day alts that can be discarded later if they don't turn out to be what you are looking for.

You could start 2-3 alts with the skills in training and 'test out the waters' with 1-2 production characters. If it's not what you wanted, just let their subs expire and later on you can reactivate them if you wish.

Also... instead of trying to aim for 100 slots at the start, why not get a few assembly arrays to provide 20 slots and use the rest of the space for research? If you are starting manufacturing and don't want to buy the bpos off the forums/contracts, you are going to spend half a year at least researching the bpos you want. More if you diversify your manufacturing goals. Rigs on their own... would take a few weeks/months only tho.
Arcosian
Arcosian Heavy Industries Corp Holding
#13 - 2012-11-16 06:03:57 UTC
Your idea looks ok but managing that many chars will be an insane workload. The goal is to enjoy playing eve not make it a 2nd job. Also that many rigs being produced/day would crash the rig market within a week. I crashed quite a few rigs with just 4 chars making rigs in a station.
Ervinia Daisy
Property Industries
#14 - 2012-11-16 13:02:34 UTC
Your major concern will be to obtain all the input components aswell as getting rid of the output in a way that wont be cumbersome for you.

Also handling the whole buying, producing and selling point on a project of this scale will likely be way too much for a single person to handle.

One thought that has been mentioned here is to find markets outside of hubs aswell as putting up cheap buyorders in not-so-busy areas for people to sell at. While this is all fine and good, it also takes alot of hauling and organisation to handle. The production step with POS, handling manufacture jobs aswell as possibly researching bpo's makes it a question if it's not just more easy money by simply re-selling the rig components at a higher (jita) price.

In many cases, on the popular and easy-to-build stuff, it's more efficient isk-income by doing the trade profession than the manufacturing. However, if you have a good network of suppliers and customers that deal in bulk, your life could be quite alright as a manufacturer.

I would definatly recommend you to start low-scale and take small steps at first, before banging the big drum and going fullscale, so you don't end up having all your isk tied up in slow-selling rig parts.

Selling can be a PITA, and something that's easy to forget when stuck in an excel sheet.

Good luck though, and more importantly, have fun :)
Bugsy VanHalen
Society of lost Souls
#15 - 2012-11-16 14:51:18 UTC
Kadir Enaka wrote:
Minmat Sebtin wrote:
I would suggest training Supply chain management to level 3, I think you would need it to do jobs at a POS, and it'll allow you to start jobs a few jumps away. Also I feel that setting up a pos for manufacturing is unneccessary, there are sufficient slots available at stations within a couple of jumps of Jita.

A useful trick I sometimes use to is start the jobs towards the end of subscription, let it lapse and then reactivate when the jobs are finished. You can save a fair chunk in Plex costs if you do this.


The reason why I tought about setting the POS up was because I produce 33% faster which makes up for the fuel costs. As the freighter is moving in and out anyway fuelling shouldn't be a problem. As I plan on using lots of production slots I would need at least 2 completely empty stations to produce, with other people producing I would probably have to spread my characters over a few systems which would increase time needed for logistic.
Supply chain management 3 should not be a problem if its necessary, thanks for pointing that out.
The trick with the Plex costs also seems quite interesting and leads me to another question:

As I have really never ever set up a production: If I use a BPO to produce, will I have to refresh the job after every single run or can I set up a job "Produce 20 of ...." so it runs 20 times in a row (as long as I have enough materials in the assembly array)?

The beauty of manufacturing off BPO's is that they have unlimited runs, although I believe you are still limited by the 30 days per job unless it is a single run that goes longer than 30 days.

Manufacturing off a BPC you are limited to the max runs on the BPC. for example; max run capital ship component BPC's are limited to 5 runs. While the BPO's have unlimited runs. So provided you have enough materials you can set a job with enough runs to take it up to 30 days to complete, but you do not get any of the output products until the entire job is done. You are best off setting up jobs to run 2-3 days and starting a new job when it is done.
Vallista
Aliastra
Gallente Federation
#16 - 2012-11-22 02:00:17 UTC
"Not at all. A vast majority of people who buy stuff instead of manufacturing it themselves fall into the category of lazy or stupid. Lazy being people who dont want to fly 10+ jumps to save 100K isk on an item at a trade hub, or stupid being people who don't know about external websites to view prices of items in other regions. They simply pay the amount for the lowest priced sell order."

A lot of people are neither lazy nor stupid, in the time it takes to fly 10 jumps there and 10 back, I can make millions in rat bounties, and pass that 100k on to you.

Quibbling over 10 isk difference for a missile is pointless unless you are buying in the millions.
Whang'Lo
Cosmically Irrelevant
#17 - 2012-11-22 12:25:57 UTC
The one thing about T1 rigs is the profit margins are utterly craptastic.

In order to mass produce T1 rigs you will need unbelievable amounts of
salvage, and this salvage will have to be had on the cheap.

If you could get this salvage cheap enough where you can actually turn a profit
on it, then it would make more sense to just sell it. As this is where all the profit
is.

If I was going to go into the large scale mass production business as you describe
the first thing I would look for is something that has a respectable profit margin.
Where there is a decent spread between the material costs and the finished product.




[u]A Paranoid is just someone with all the facts - William Burroughs[/u]

Nalha Saldana
Aliastra
Gallente Federation
#18 - 2012-11-22 12:51:56 UTC
Remember that building them is not the end of the line, you need to sell them as well. How good are the markets and can they support selling these massive quantities?
Jack Mayhem
Kaer Industries
#19 - 2012-11-22 13:47:30 UTC
On paper it looks very profitable, but in reality there is a number of problems:

  • To fill 100 rig slots, evenly spread out according to demand and profits, you would need ~16-18bil of materials to buy for 24 hour run. For 48h+ process that's already more than you current capital.
  • Let's assume you stick with 1 day cycles. You will want to maximize your profits, so that means you will run on ~23h cycles installing new cycle as soon as old one ends. That means you already should have new inputs ready, and that's 16bil x2 = more than you currently have.
  • Selling stuff - now here the fun begins. Selling to buy orders 99% of the time is unprofitable, so forget about that. You will need to babysit and 0.01 all your orders, and frankly you have quite large stock here. How long it will take to sell? Maybe 23-48h if you are lucky and spend considerable (5h+) amounts in front of screen. If you won't be able to liquidate stock in less than 23h, that means you will have gaps in your max-efficiency process or will need more capital (to add to before it's 16bilx2.5, though it may as well be x3).
  • Buying the inputs - again, you need a lot of materials. Most of the salvage is sold by mission runners who need instant gratification, so majority of transactions happen to buy orders. Furthermore using sell-orders the rig productions isn't that profitable. So again you will need to spend substantial amount of time 0.01-ing the competition. And there is a lot of competition :) If you won't be able to get required materials in time, again either gaps in process or more capital (so now 16bilx3 in optimistic scenario).
  • In such large scale you should be choosing only most popular rigs that move fast, and the ones that usually are more expensive (e.g. no small projectile burst aerator crap).


TLDR: You don't have enough capital for 100 rig production slots (need at least some 50+bil for 23h cycles), market will not absorb such amount quickly enough and be ready to play a lot of 0.01 games.

I used to produce rigs actively, but not anymore, got burned out of 0.01-ing game and moved to less time-intensive activities.
Kalinea
Wicked Lester
#20 - 2012-11-22 17:35:38 UTC
I was waiting for someone to point out the .01 issue. It goes along with the fact that finding the right market location for your items is more important than having the items up for sale. And when you enter a new market, expect prices to steadily drop, solely for the fact you are one more producer of the item, and that increases competition and lowers profits.

Its all about supply and demand. More supply does not modify level of demand, so your profit decreases. As has been stated, find a less competitive market, it may be slower turnoaver, but id rather make 30% profit on one sale than 1% on 30 sales. Less logistics, less isk tied up in goods, and less slots to handle and turnver, and less of the Jita .01 crap that can result in 0 sales for 18 hours per day.
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