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Reginald Inkunen
Doomheim
#1 - 2014-12-24 01:58:15 UTC
How can i calculate profit margins? i know at least 10% or more, but how can i calculate and can someone explain to me trade
Cheese Crackers
Malfurion Mining
#2 - 2014-12-24 02:22:54 UTC
simply calculate all the costs involved. then minus it from the end sale and there are your profit margins
Reginald Inkunen
Doomheim
#3 - 2014-12-24 02:27:57 UTC
is their a formula to find the percentage of the item?
Herdo
Radix Financial
#4 - 2014-12-24 06:13:46 UTC  |  Edited by: Herdo
Reginald Inkunen wrote:
is their a formula to find the percentage of the item?


There is a difference between "profit margin" and "ROI" which people in EVE seem to use interchangeably that result in very different numbers.


profit margin = ( revenue - cost ) / revenue

ROI = ( revenue - cost ) / cost

I see people throwing around "profit margin" a lot when describing items they trade in saying "I was trading at a 130% profit margin!" That's incorrect. Profit margins can't exceed 100%.

For instance, you are buying an item at 100K and selling at 220K. Your profit margin is:

(220K - 100K)/220K ---> 120K/220K = 0.54545 repeating, or 55%


Your ROI is:

(220K - 100K)/100K ---> 120K/100K = 1.2 or 120%

Oh one more thing. If you are station trading, you can use Elinor to calculate the profit margin and ROI (often called "Price Markup" which is the case with Elinor). Download the program, open it and either manually enter your Accounting and Broker Relations skills and your standings or import through API. Then at the bottom left of the window click the "pin" button and move it to the side. Open up EVE in a windowed mode (borderless works), and find an item in the market. At the bottom of the market window you will see a button labeled "Export to File". Click that and it should load all of the data into Elinor. You can quickly scan through the market to find profitable items.