Market Discussions

Last year about this time I tried to launch a bond to finance an industrial expansion of ship hull manufacturing business. I thought I'd do a write up of how that went for any budding industrialist that might care.

I've placed it in the MD forum because the original bond/plan was laid out here.

It's been a while but possibly may recall my failed bond (not enough interest). Without the investors and as mentioned in the bond posting, I decided that I’d just try to go at with the funds I had available if the public investment didn’t pan out.

Once it became clear that the funding wasn’t going to happen I decide to liquidate as many non-critical assets as was possible (vagabonds, etc) and start building what I could afford.

The plan was to run as many manufacturing lines of the most profitable Ship BPOs I could afford 24/7, starting with the BPOs I already owned: Typhoon, Drake, Hurricane, Rupture x2.

The amount of ISK need to keep a larger ship hull operation running is significant; at a minimum three times ones manufacturing capacity. Why so much? You need,

1) Enough ISK in minerals to begin manufacturing them.
2) Enough ISK to cover the minerals being ordered for the next batch of ships
3) And after the first batch, there would be a batch of ships on the market selling tying up more ISK.

That pretty much meant I could only produce in 24 hour runs as that is all I could afford. This would ultimately turn out to be a fortunate constraint.

Initially I would produce a daily (~24 hour) run of 9 Drakes, 9 Hurricanes and 20 Ruptures. Thanks to some advices on the MD, I set up shop two jumps out from Jita and put up mineral buy orders in Jita. I would freighter the minerals to the production location and ships back to Jita daily. As the ships were building, I’d set up the next mineral buy order.

Two things from the start really helped me. First someone started manipulating the hell out of Ruptures so I was pulling over a million ISK off each. Secondly, because my runs were limited by my available ISK, I was running short runs (24 hours) which meant my ISK was turning over much faster. The first week ended with about 45 Million ISK per day.

I quickly started running short runs of the Typhoon BPO when I noticed someone manipulating that price, making my income nearly 10 Million ISK per Typhoon or 70 million per day once I could get my manufacturing up to speed.

After the first week I decided to pick up a Harbinger and then a Myrmidon BPO. The Harbinger was a very moderately profitable item but the Myrmidon proved a disaster. Worse still, I had used all my liquid ISK so I couldn’t even manufacturer either full time. The Myrmidon never turned a profit outside one failed manipulation attempt someone else made. It turned out it would take me months to sell tying up valuable ISK in the mean time..

At this point I realized if I was going to do this long term and seriously I needed to do a few things.

1) Acquire more/better BPOs
2) Acquire more ISK to purchase the minerals
3) Find a regular supplier of minerals
4) Increase my standings.

I managed to combined #1 and #2. I purchased a BS BPO and offered it as collateral for a loan (4.5-5% interest for a 90% collateral loan), with the agreement that lender would research the blueprint while the loan was out.

I then took the ISK from that loan and bought another BS BPO, and sent it to be researched in the form of another loan, etc. until I had four BS BPOs being research and the majority of the ISK I paid for them still in my wallet. Then I panicked and realized I needed to really be making some more ISK for when all 3 billion came due

Next, in order to acquire a more regular supply of minerals I looked through the list of everyone who had sold large volumes of minerals to my buy orders an sent them a message offering to buy all of their minerals at 1% over Jita buy price if they contracted those minerals to me. I would pick up the contracts every 12 hours. A few players agreed and while the cost was higher for me (1%) it was made up for in convenience. I did have a couple people try to scam me by charging over the 1%. Assuming it wasn’t egregious I would accept the first contract and send a note about the percentage (and sometimes it was just a timing fluke), if it happened twice I wouldn’t accept that persons contracts any longer.

I also realized that buying billions of minerals per day was costing me a bit in taxes so I used some of my old learning SP as applied them to social skills. I then ran all of the level 1-3 COSMOS missions, using my main to speed up completion of the missions. It was interesting to do but I’m unsure if it will have ultimately been worth it ISK-wise. I still have all of the COSMOS BPOs to sell.

As I trained, the number of available manufacturing spots grew faster that the ISK need acquire minerals to fill them. I looked at some cheaper BPOs but cruiser hulls weren’t worth it and cost of picking up good BC or BS BPOs could be prohibitive. I decided to pick up batches of random BPCs on the blueprint channel. They were valuable in filling the niche until I could procure BPOs and could occasionally be purchased inexpensively by people going out of the BPC business or just doing hanger clean up, though I still have some BPC that are not profitable and haven’t been for a while.

continued...

Duplicate please delete/lock