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What is mid to long-term play of Production?

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KenFlorian
Jednota Inc
#1 - 2015-04-03 12:49:08 UTC
After my failed (uneducated) attempt to make money buying and researching a T1 BPO it is back to the classroom.

What is the mid to long-term strategy to profitably producing?

Is it, for instance, to gradually accumulate a set of BPOs of items whose demand will rise and fall over time, watch market, and produce/sell when profitable?

Is it, for instance, to buy BPCs that produce stuff that is profitable, now?

I am willing and able to convert some real-world cash to ISK to acquire BPOs and wait for perhaps many months to become profitable.


Thus far I've spent hours to find a few T1 BPCs on which I could make a small profit producing but this doesn't seem like how the billionaires of Eve operate.

Any guidance appreciated.

Ken
Elena Thiesant
The Scope
Gallente Federation
#2 - 2015-04-03 13:39:54 UTC  |  Edited by: Elena Thiesant
Early stage, where you are, is BPCs. Buy them for items you can build for a profit, sell items, increase portfolio of items that you work with repeat. BPOs are longer term, for when you're making a profit and can afford them researched or afford the time to research them, and same kind of thing, keep diversifying, keep expanding your BPO/BPC collection so that when something you make goes unprofitable, you can make something else.

p.s. A massive part of manufacturing is market research.

p.p.s. You probably want to start with smaller stuff so that you don't have too much capital tied up in one set of items on the market. Diversify, don't throw everything into one item that may not sell. You want to avoid high-cost, low-demand stuff at first.
Raphael Celestine
Celestine Inc.
#3 - 2015-04-03 14:29:13 UTC
Elena Thiesant wrote:
p.s. A massive part of manufacturing is market research.

This.

The potential profit varies hugely between different products: some are theoretically high-profit but sell too slowly to be worthwhile; some are low profit-per-unit but you can sell thousands per day if your production lines are running flat out; some have 1000% profit on the materials cost, but are so cheap that your total profit is still mediocre (these can be excellent for bootstrapping a manufacturing business); some sell steadily with a good profit-per-unit and can also be built fast enough to make a good overall profit; some swing between hugely profitable and barely breaking even as people jump on and off the bandwagon; and some are just plain unprofitable.

BPCs are definitely an option, although there's nothing stopping you from using BPOs from day one. Short term, you want to find something that sells well, and gives you a solid profit, then just start using the profits to scale up. Long-term, if you're serious about industry, you'll definitely want to start building up your BPO collection. Watching the market is certainly important, but don't be fooled into thinking that there aren't safe products that will stay profitable more-or-less permanantly - even if they're usually not the really high profit ones. (T2 points and scrams are probably never going to go out of fashion...)

There are three separate figures you need to pay attention to: ISK per hour of production time, how fast the product sells, and percentage return on your investment in materials. Most of the time the first two are the important ones, but keep the third in the back of your mind anyway - sales taxes eat a bigger chunk of your potential income on low-percentage items, and you're far more vulnerable to price swings.

I will offer two useful rules-of-thumb that might help you get started: A) look for things that get destroyed or used up regularly (in PvP especially, but also on PvE fits or by other industrialists) and B) often the best profits are not in ordinary T1 equipment (which is really a corollary to point one, but worth making separately).
Eric Raeder
No Fee Too High
#4 - 2015-04-03 20:27:55 UTC  |  Edited by: Eric Raeder
I'm fond of T2 production, but that requires lengthy skill training. Once trained, though, T2 is pretty low risk, you can find lots of items making 30% profit margins or more. Minor market fluctuations can cut your profits some, but they won't turn a profit into a loss. In T1 margins are much thinner. If you are making T1 stuff with 5% profit margins, a sudden market shift may suddenly leave you selling your product for less than it cost you to make. Too risky for my taste. T2 also means low blueprint investment, unless you are building bigger ships (which I don't, profit margins are too low). Researching blueprints for T2 is pointless since the invention process results in fixed ME/PE T2 blueprints regardless of how well researched the T1 blueprints you start with are.

It cannot be overemphasized how important market research is. You simply cannot pick up a random blueprint and expect to make a profit building that item. There are lots of third party tools out there for helping with market research.

As a starting point for T2 I usually point newbies to drones. There is huge demand for warrior II and hobgoblin II drones, and they can nearly always be sold at a substantial profit. There are certainly higher profit-over-time items you can make, but this is a good reliable starting point. The demand is so large that if 10 full time industrialists read this and immediately start making all these drones they can they won't significantly affect the market. Note that once you get away from warrior II and hobgoblin II demand and profit fluctuates, there are other moneymaking drones but you'll have to do the market research to find them.

Some people will tell you "you can make tons of profit selling item X at location Y". This is confusing production with trading. If you can only make a profit selling an item at some frontier location but not at a trade hub, you will usually do better to just buy the item at the trade hub and haul it to the high price market, without all the hassle of actually producing it.

And if you fall into the trap of thinking "resources I produce myself are free", be aware that every real industrialist in the game will make fun of you for being an idiot.
KenFlorian
Jednota Inc
#5 - 2015-04-04 20:50:44 UTC  |  Edited by: KenFlorian
Elena, Eric, and Raphael,

This is helpful to me. Thank you for taking the time to respond and your generous spirit in doing so.

Ken
Shakuul
Infinitus Sapientia
#6 - 2015-04-14 08:01:28 UTC
Here's a good item to look into: Core Probe Launchers.

They cost about 10k to make and sell for 15-20k. So by my estimation you can make 5-10k per unit (which represents a 50-100% margin) and they take 30mins to build. This is 500k/slot/day for a well skilled industrial character, or around 250k/day if you are new.

The best part about this is it involves zero effort. Because the margins are so high you can profitably manufacture in jita, and if you are really lazy you can sell directly to buy orders to get instant money to plow back into buying your business.

So to review the best parts of this:
1) Requires no research
2) Can be done in any hub
3) Extremely cheap BPOs (60k NPC price!)

Happy manufacturing!
KenFlorian
Jednota Inc
#7 - 2015-04-15 20:22:42 UTC
Shakuul,

Thank you!
Tau Cabalander
Retirement Retreat
Working Stiffs
#8 - 2015-04-15 23:21:44 UTC  |  Edited by: Tau Cabalander
I still do T1 production and earn billions from it Shocked My earnings are largely limited by my laziness.

My long-term goal is to collect every T1 BPO. So far I think I'm only missing supercarriers, titans, and outpost stuff.

Your goals may differ.

I started with one BPO, after asking myself, "What module would everybody in EVE likely use at some point?" I then moved on to a list of similar items, after checking the markets for pricing, trends, stock, and trade volume of course; no point in building something nobody wants, or that a lot of other people already build.

https://forums.eveonline.com/default.aspx?g=posts&m=5460742#post5460742
KenFlorian
Jednota Inc
#9 - 2015-04-16 15:46:50 UTC
Tau,

Thanks. Over the past week my strategy has been to learn more about the market at-large, then acquire a few BPOs to start moving toward production. It looks like even solid selling items can have pretty high amplitude from high to low, through time.

Ken
Tau Cabalander
Retirement Retreat
Working Stiffs
#10 - 2015-04-16 17:37:54 UTC
KenFlorian wrote:
Tau,

Thanks. Over the past week my strategy has been to learn more about the market at-large, then acquire a few BPOs to start moving toward production. It looks like even solid selling items can have pretty high amplitude from high to low, through time.

Ken

Market instability = larger profits to be made = more risk.

I'm really chicken when it comes to the market. My goal is to sell a complete production run in no more than 3 days. I get nervous if it takes longer.

I'm usually much more patient on filling buy orders. I have had some up for a couple of months (margin trading skill helps), slowly filling at my chosen price.

The market for my favorite T1 item isn't currently doing well, so I switched to another item. This other item's market collapsed before production had completed. I chose to go ahead and start invention for the T2 version (the T1 items I've already produced are a required base item); which will probably take the better part of a month given all the BPC and T2 components I need. If all goes well, I'll end up with at least 10% profit. I typically don't consider manufacturing anything below 5%.

Unlike many, I don't try to maximize ISK per production hour. Instead, I'll produce anything that will sell fast(er) and still generate a profit.

There's less than ten items on the list that I've been manufacturing for years, so I understand those markets really well. I don't try to understand the markets of every item in EVE. I'm sure there are better items than the ones on my list, but I'm satisfied with the performance & demand of the items I've chosen.
KenFlorian
Jednota Inc
#11 - 2015-04-16 17:41:37 UTC
Super helpful. Thanks.

I've only started watching, carefully, the market.

Over the past several day, I think I noticed a huge demand for "Civilian" items but no BPO's on the market.

Did I see that incorrectly? If not, what is/was going on?

Seasonal demand?

The snows in the northern hemisphere has thawed and it's the spring noob raiding season?
Tau Cabalander
Retirement Retreat
Working Stiffs
#12 - 2015-04-16 18:10:56 UTC
KenFlorian wrote:
Super helpful. Thanks.

I've only started watching, carefully, the market.

Over the past several day, I think I noticed a huge demand for "Civilian" items but no BPO's on the market.

Did I see that incorrectly? If not, what is/was going on?

Seasonal demand?

The snows in the northern hemisphere has thawed and it's the spring noob raiding season?

"Civilian" items are not something you should consider. These are rookie items, with a very limited market.

Example: Repackage and re-assemble any rookie ship, and you get an infinite supply of Civilian Miner and a Civilian racial turret.

There are a few BPO for Civilian items, and some are only BPC offered by the tutorials.

Summer is technically here, which traditionally leads to a slump, as people spend more time AFK.
Tengu Grib
Caldari Provisions
Caldari State
#13 - 2015-04-16 19:02:41 UTC
I do T2 invention. I'm not sure if you consider that mid to long term but it works well enough for me.

Rabble Rabble Rabble

Praise James, Supreme Protector of High Sec.

KenFlorian
Jednota Inc
#14 - 2015-04-16 20:50:55 UTC
I should have been less cryptic with my "mid to long-term" phrase.

There seems to be truth in Eve to the old saw "it takes money to make money". By the "mid to long-term" I meant that I am quite content to put some real-world cash (via plex) into my gameplay, and wait a long time (6 months or even longer) before the profits start rolling in. Contrast this to working up, very slowly, with only the ISK one can earn as an entry-level miner, manufacturer, privateer etc...

Selaria Unbertable
Bellator in Capsulam
#15 - 2015-04-16 21:40:01 UTC
Eric Raeder wrote:
I'm fond of T2 production, but that requires lengthy skill training. Once trained, though, T2 is pretty low risk, you can find lots of items making 30% profit margins or more. Minor market fluctuations can cut your profits some, but they won't turn a profit into a loss. In T1 margins are much thinner. If you are making T1 stuff with 5% profit margins, a sudden market shift may suddenly leave you selling your product for less than it cost you to make. Too risky for my taste. T2 also means low blueprint investment, unless you are building bigger ships (which I don't, profit margins are too low). Researching blueprints for T2 is pointless since the invention process results in fixed ME/PE T2 blueprints regardless of how well researched the T1 blueprints you start with are.

It cannot be overemphasized how important market research is. You simply cannot pick up a random blueprint and expect to make a profit building that item. There are lots of third party tools out there for helping with market research.

As a starting point for T2 I usually point newbies to drones. There is huge demand for warrior II and hobgoblin II drones, and they can nearly always be sold at a substantial profit. There are certainly higher profit-over-time items you can make, but this is a good reliable starting point. The demand is so large that if 10 full time industrialists read this and immediately start making all these drones they can they won't significantly affect the market. Note that once you get away from warrior II and hobgoblin II demand and profit fluctuates, there are other moneymaking drones but you'll have to do the market research to find them.

Some people will tell you "you can make tons of profit selling item X at location Y". This is confusing production with trading. If you can only make a profit selling an item at some frontier location but not at a trade hub, you will usually do better to just buy the item at the trade hub and haul it to the high price market, without all the hassle of actually producing it.

And if you fall into the trap of thinking "resources I produce myself are free", be aware that every real industrialist in the game will make fun of you for being an idiot.


Problem with the T2 market at the moment is CCP messed up the production times for most of the modules. I used to do that for quite some time, but due to an overflooded market and laziness, I switched back to mostly T1 items, though I build more irregularly than I used to. Rigs are still ok, some ships, but T2 modules are barely worth the effort, at least in larger quantities...
Sabriz Adoudel
Move along there is nothing here
#16 - 2015-04-16 23:32:13 UTC
Start with high volume, cheap tech 2 modules.

Normally I'd recommend Drone Damage Amplifier IIs, but *right now* they are at a bit of a low price point due to nullsec meta shifts.

At present I'd buy one of each of a few different frigate weapon BPOs (e.g. 'Light Neutron Blaster I') and other cheap modules you think will sell, then immediately copy them (you will use these copies in invention). Then use some slots to research those BPOs to 10/14 while using others to invent from the copies, then start building.


Medium term, tech 2 frigates. Do not do these without serious research and understanding decryptors.

I support the New Order and CODE. alliance. www.minerbumping.com

Noragen Neirfallas
Emotional Net Loss
#17 - 2015-04-17 10:04:40 UTC
I've found the best way to get into this is to crack open someone else's pos and take a look at what they were doing. It's the best kind of research

Member and Judge of the Court of Crime and Punishment

Noragens basically the Chribba of C&P - Zimmy Zeta

Confirming that we all play in Noragen's eve. - BeBopAReBop

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Sabriz Adoudel
Move along there is nothing here
#18 - 2015-04-21 04:41:42 UTC
Noragen Neirfallas wrote:
I've found the best way to get into this is to crack open someone else's pos and take a look at what they were doing. It's the best kind of research


Sometimes you get really, really BAD ideas this way.

/looks at the ME 5 TE 0 Talos BPC I looted from a POS a while back...

But, of course, shooting POSes can be lucrative.


One thing you can do is ask around in the Blueprints channel (a busy player channel, usually has as many people in it as Dodixie) if anyone is selling bulk tech 2 BPCs. I recently purchased 10k runs of Hobgoblin II from someone that had been 24/7 copying their T2 BPO. You can buy in much smaller quantities than that too (I've spent about five billion on blueprints, mostly T2 BPCs, in the last couple months, building alliance stockpiles of things we use a lot of, but some of those purchases have been of a hundred million).

I support the New Order and CODE. alliance. www.minerbumping.com

Vanessa Bonaventure
Sunset of Destruction
#19 - 2015-04-23 21:46:26 UTC
Sabriz Adoudel wrote:
). Then use some slots to research those BPOs to 10/14 while using others to invent from the copies, then start building.

.


Just getting into industry myself so I'm sorry if this is a dumb question. Why wouldn't you just research the BPOs to 10/20? Why settle on 10/14?

Time constraints?
KenFlorian
Jednota Inc
#20 - 2015-04-23 22:46:56 UTC  |  Edited by: KenFlorian
Vanessa,

I don't know enough to suggest at what level one stops but this is why one might consider stopping short of -20%.

http://wiki.eveuniversity.org/File:Research_time.png
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