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Fuel Blocks - Virtually Zero Profit - Need Advice

Author
Urgg Boolean
Center for Advanced Studies
Gallente Federation
#1 - 2013-08-11 15:24:34 UTC
I set up an industrialist character with very good, but not maxed out, skills. I set up PI and production for Gallente fuel blocks. The blueprint is researched nearly to max. My supply chain (from lo sec planets to hisec factories) is quite efficient.

Now that I have manufactured a huge batch of blocks, I find that the profit is nearly ZERO, after all expenses are considered. If I price the blocks where I can make any reasonable profits, I am consistently undercut by the competition. At this point, I may as well sell all the fuel block materials and fore go the manufacturing as a complete waste of time.

I have to seriously ask what could I be doing wrong, or are profits from fuel blocks expected to be rock bottom minimum ?

You know what surprises me? I have no trouble selling my PI matz for excellent profits, which means who ever is buying them is spending too much for their resulting fuel blocks. Based upon my character, buying fuel blocks is cheaper than buying the raw matz + paying job fees.

What other modes of manufacture yield better profits, assuming I spend the time to set up an efficient supply chain and distribution network ?

The way it looks now, I think I wasted huge qty's of training time, when I should have simply focused on selling raw materials like minerals, ice products, gas and PI matz.
Ami Quintero
Royal Trading
#2 - 2013-08-11 16:06:05 UTC
Urgg Boolean wrote:
I set up an industrialist character with very good, but not maxed out, skills.


In honesty, that's likely to be your problem. In particular, do you have Production Efficiency V?
Krixtal Icefluxor
INLAND EMPIRE Galactic
#3 - 2013-08-11 16:12:31 UTC
That's really odd, as my Fuel Block production nets me over 4 Bill ISK a month.

You neglect to tell us if you gather your own Ice or are buying it from the market (something that isn't going to be a good idea for the next couple of months).

"He has mounted his hind-legs, and blown crass vapidities through the bowel of his neck."  - Ambrose Bierce on Oscar Wilde's Lecture in San Francisco 1882

Zoltan Lazar
#4 - 2013-08-11 17:50:02 UTC
You are an amazing person for actually considering the opportunity cost of the materials, and not just saying "I mined this myself so it's all profit!"

Fuel blocks are pretty hard to profit on, since so many miners like to mine ice, and so many of miners like to build with what they mine.
Steve Ronuken
Fuzzwork Enterprises
Vote Steve Ronuken for CSM
#5 - 2013-08-11 18:18:53 UTC
As long as you're selling at sell rates, rather than to buy orders, Caldari fuel blocks can make a pretty easy 400,000 isk/hr/line

And that's buying /everything/ off the market and building it in a POS.

Though if you don't have Production Efficiency 5, you're not going to do well.

https://www.fuzzwork.co.uk/blueprints/0/4051/40/5/10/5

Make it in a tower, and you'll make even more.

Woo! CSM XI!

Fuzzwork Enterprises

Twitter: @fuzzysteve on Twitter

Urgg Boolean
Center for Advanced Studies
Gallente Federation
#6 - 2013-08-11 18:46:35 UTC
Ami Quintero wrote:
Urgg Boolean wrote:
I set up an industrialist character with very good, but not maxed out, skills.


In honesty, that's likely to be your problem. In particular, do you have Production Efficiency V?

Yes, Production Efficiency is at V.

And yes (to the other poster) I mine my own ice. In fact, I still have a stash of ~12K ice cubes from before Odyssey.

I am set up in three different systems - each with different materials. I clone jump as needed and jump freighter my PI stuff out of lo sec ( you may have seen my recent post "The Real Costs of Lighting a Cyno?". It is a very efficient supply chain that has taken quite a while to set up.

Raw materials : I did notice that jump fuel and cyno fuel sells for a lot - again - a raw material with no extra work involved and no hidden costs.

As for the 4 billion profit - I could see that if I blindly sold blocks and looked at only income from those sales. I analyzed costs in terms of :: (income from block sales) - (income from raw materials if sold) - (maufacturing costs) - (jump freighter costs) . Calculated that way, I barely make 1K per block. So I'd have to sell 1 million blocks to make 1 billion ISK real profit, while I make billions in income from raw materials sales with no extra effort : harvest - refine - take little piggies to market.

I'll double check all manufacturing skills and see if there is anything I missed. But I have a hunch that taking any one skill from IV to V will net minimal gains, like many things in this game. SO unless I can find a cumulative gain somewhere, that is time effective, I'll think I'll just sell raw materials.

Hey guys, thanks for your input !!!
Steve Ronuken
Fuzzwork Enterprises
Vote Steve Ronuken for CSM
#7 - 2013-08-11 19:06:52 UTC
that 400k an hour is based off an 500 isk per unit profit. (40 blocks giving you 20k)

There's plenty of isk in it. Just needs a lot invested.

And jump freighter costs? Sounds like you're moving the materials far longer distances than most people would.

Woo! CSM XI!

Fuzzwork Enterprises

Twitter: @fuzzysteve on Twitter

Krixtal Icefluxor
INLAND EMPIRE Galactic
#8 - 2013-08-11 20:16:46 UTC  |  Edited by: Krixtal Icefluxor
Zoltan Lazar wrote:
You are an amazing person for actually considering the opportunity cost of the materials, and not just saying "I mined this myself so it's all profit!"

Fuel blocks are pretty hard to profit on, since so many miners like to mine ice, and so many of miners like to build with what they mine.



Ice mining time per volume yield was cut in half with Odyssey. I spend maybe 7 hours total in 3 sessions per week.

I get at least another billion from leftover isotopes and heavy water, plus everything else I do in the game.

I don't use a Jump Freighter. I don't even use a Freighter.

I sell around 250,000 blocks per month.

If you get 1 K more per block as opposed to selling as raw materials that's a difference of 250,000,000, which is significant ISK.

If you aren't happy making ISK this way, try something else. But your profit margins on T2 ship sales and such are just going to make you madder.

"He has mounted his hind-legs, and blown crass vapidities through the bowel of his neck."  - Ambrose Bierce on Oscar Wilde's Lecture in San Francisco 1882

Mustis Boss
UltrasHool
#9 - 2013-08-11 21:53:46 UTC
Did you guys take in consideration the taxes on buy/sell ?

Because the margin is already small, remove the taxes on what you buy and the fees on what you sell.. not much left!
Sorao Soreen
Profit to burn
Men Of Mayhem.
#10 - 2013-08-11 22:09:04 UTC
What about the me level on bpo
PhatController
Deep Core Mining Inc.
Caldari State
#11 - 2013-08-11 22:49:29 UTC
If what I've been hearing is true, just stop selling those caldari blocks for a little bit and let them stack up :P
Mecherous
The Hamno Corp
#12 - 2013-08-11 23:26:10 UTC
Hauling? Mining? Jump Freighter costs?....Planetary Interaction?

Those are time intensive activities that people do for cheap. Lets say that final building stage where you combine your materials into fuel blocks earns a paltry 5% profit. For you, totally not worth to combine your little collection of materials into fuel blocks.

But lets say, that this week I decide to use the 10 manufacturing slots on this character for Caldari Fuel Blocks.

I go to Jita, I buy 7 days worth of production maters for 10 slots......cost: 26 billion

This is approx 11 freighter loads. I'll be generous, like hell i'm going to haul this myself so I pay 1 million isk per jump for say...3 jumps to a station with manufacturing slots. Cost: 33 million

Log on the next day, shuttle over to my manufacturing station, set jobs, forget for a week.

Log on, courier contract big old pile of fuel back to Jita. I forget the compression ratio so lets say its 11 Freighter loads. Cost: 33 million

Then I use my max trade skilled and high standing trade character to list it in Jita 4-4. Some 0.01 isking but fuel moves relatively quickly.

so on that 26 billion invested, 5% earns me after hauling/manufacturing fees/brokers/sales tax right around 1 billion isk.

So do that for 4 weeks, and 4 billion isk profit! (remember above posters 4 bill profit/month quote, its actually quite reasonable)

Now some weeks you'll flip your mats and earn less...some you'll earn more...some you'll even lose some isk. But overall its a nice profit for so little time invested.
Urgg Boolean
Center for Advanced Studies
Gallente Federation
#13 - 2013-08-12 16:09:27 UTC
Based upon the discussion, I think I'm getting a clue. I need to deal in much greater volumes so the per-item profit adds up to the giant quantities of ISK that I have in mind.

I think I'll do what many have suggested - ramp up for greater volume of production - alhtough I'm not rich enough yet to follow Mecherous' plan - so "ramp up" seems accurate. --> I will look into buying all the materials and just running the jobs but I think I'll continue to haul the stuff myself, at least for now.

So thanks guys! You have given me a lot to think about and try out as a new way of doing business!
Sekhen Oni
Deep Core Mining Inc.
Caldari State
#14 - 2013-08-13 12:54:50 UTC
I can't vouch for the accuracy of the tool on Eve Industrialist ( https://eve-industrialist.com/eve-industrialist/building.eve ) . But this one attempts to answer the question of whether it is profitable to fabricate something, or just sell the materials.

If we assume this is reasonably accurate (or at least gives a sensible indication), you'll see that if you put in "Fuel Block", the profit you'll make over the material value ranges from 2.5% to 4.5%, for the different types and sizes. Increasing the ME/PE increases this, ofcourse, but not by much

So all the manufacturing ultimately increases the value of your commodities by an extremely small margin, and trading in bulk/large quantities won't really change that.

There are many ways to make money...sadly, Fuel Block production does not really seem to be one of them, at the moment.
Steve Ronuken
Fuzzwork Enterprises
Vote Steve Ronuken for CSM
#15 - 2013-08-13 14:17:34 UTC
Sekhen Oni wrote:
I can't vouch for the accuracy of the tool on Eve Industrialist ( https://eve-industrialist.com/eve-industrialist/building.eve ) . But this one attempts to answer the question of whether it is profitable to fabricate something, or just sell the materials.

If we assume this is reasonably accurate (or at least gives a sensible indication), you'll see that if you put in "Fuel Block", the profit you'll make over the material value ranges from 2.5% to 4.5%, for the different types and sizes. Increasing the ME/PE increases this, ofcourse, but not by much

So all the manufacturing ultimately increases the value of your commodities by an extremely small margin, and trading in bulk/large quantities won't really change that.

There are many ways to make money...sadly, Fuel Block production does not really seem to be one of them, at the moment.



The problem with that line of thought it is, many things don't scale.

Take Ammo. You can double the money you invest, on many small ammos.

But the quantity you can invest is /tiny/.

5% isn't a bad return. Because when you go large, you generally don't pay attention to the percentage return. You pay attention to how much you make in concrete terms, per hour.

Woo! CSM XI!

Fuzzwork Enterprises

Twitter: @fuzzysteve on Twitter

Victoria Sin
Doomheim
#16 - 2013-08-13 16:42:44 UTC  |  Edited by: Victoria Sin
Never a waste, but a whole load of people all doing that plus market speculation, the possibility that people are dumping the stocks they bought pre-patch and so on, might mean you aren't going to profit from it right now. People were saying ice was going to go through the roof after the patch, so people all piled in. Things didn't turn out like that though, so I expect there are a lot of people closing their ice positions right now.
Sekhen Oni
Deep Core Mining Inc.
Caldari State
#17 - 2013-08-15 20:20:52 UTC
Steve Ronuken wrote:
Sekhen Oni wrote:
I can't vouch for the accuracy of the tool on Eve Industrialist ( https://eve-industrialist.com/eve-industrialist/building.eve ) . But this one attempts to answer the question of whether it is profitable to fabricate something, or just sell the materials.

If we assume this is reasonably accurate (or at least gives a sensible indication), you'll see that if you put in "Fuel Block", the profit you'll make over the material value ranges from 2.5% to 4.5%, for the different types and sizes. Increasing the ME/PE increases this, ofcourse, but not by much

So all the manufacturing ultimately increases the value of your commodities by an extremely small margin, and trading in bulk/large quantities won't really change that.

There are many ways to make money...sadly, Fuel Block production does not really seem to be one of them, at the moment.



The problem with that line of thought it is, many things don't scale.

Take Ammo. You can double the money you invest, on many small ammos.

But the quantity you can invest is /tiny/.

5% isn't a bad return. Because when you go large, you generally don't pay attention to the percentage return. You pay attention to how much you make in concrete terms, per hour.



Oh, absolutely. But it was my understanding that the original poster based production on materials he mines/produces himself
Alexander Eisenhower
The Scope
Gallente Federation
#18 - 2013-08-16 16:17:56 UTC
Urgg Boolean wrote:
Ami Quintero wrote:
Urgg Boolean wrote:
I set up an industrialist character with very good, but not maxed out, skills.


In honesty, that's likely to be your problem. In particular, do you have Production Efficiency V?

Yes, Production Efficiency is at V.

And yes (to the other poster) I mine my own ice. In fact, I still have a stash of ~12K ice cubes from before Odyssey.

I am set up in three different systems - each with different materials. I clone jump as needed and jump freighter my PI stuff out of lo sec ( you may have seen my recent post "The Real Costs of Lighting a Cyno?". It is a very efficient supply chain that has taken quite a while to set up.

Raw materials : I did notice that jump fuel and cyno fuel sells for a lot - again - a raw material with no extra work involved and no hidden costs.

As for the 4 billion profit - I could see that if I blindly sold blocks and looked at only income from those sales. I analyzed costs in terms of :: (income from block sales) - (income from raw materials if sold) - (maufacturing costs) - (jump freighter costs) . Calculated that way, I barely make 1K per block. So I'd have to sell 1 million blocks to make 1 billion ISK real profit, while I make billions in income from raw materials sales with no extra effort : harvest - refine - take little piggies to market.

I'll double check all manufacturing skills and see if there is anything I missed. But I have a hunch that taking any one skill from IV to V will net minimal gains, like many things in this game. SO unless I can find a cumulative gain somewhere, that is time effective, I'll think I'll just sell raw materials.

Hey guys, thanks for your input !!!



How can you subtract your raw material cost that you got from your own planets? I dont understand your logic. You have increased your profit by 1000isk/ per block. I'm an indy noob 4 sure but it sounds like its subject to market prices and where you got your info. Try actually selling all the materials and see if you actually make more. Than ask yourself which way is more fun? Personally, I enjoy following through with the process. But what do I know, I still struggle to buy a plex, lol

Robert Morningstar
Morningstar Excavations LTD
Business Alliance of Manufacturers and Miners
#19 - 2013-08-16 20:54:12 UTC
be sure that the ME on the bpo is 40 every bit of waist is important in a tight market.
Ireland VonVicious
Vicious Trading Company
#20 - 2013-08-17 01:13:32 UTC
You save time/order slots by selling as blocks instead of raw.

This is a very positive factor on your bottom line that you don't seem to be factoring at all.

Plus volumes you can sell of said items over a given time period v.s. time spent updating.

If you looked at the isk per hour with all that time included you would see the true isk per hour ratio by making the blocks is large. That is why people move it with such a small isk margain.


Time is money.
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