Market Discussions

Before I buy a blueprint, I always check to see if the input materials cost less than the output product(s). I find it strange that my most profitable BPOs are the cheap ones like missiles, ammo, and some modules and rigs... And I can get some pretty big profit margins off these items ( > 30%) if I sell them before the market crash. However, it seems that > 90% of the BPOs for ships (of all types: frigates, cruisers, capitals, industrials, etc) are either huge losses or just barely break even at 10%ME. This makes no sense to me - I'd think that stuff that's harder to manufacture would have larger profit margins. I am mostly referring to T1 ships but the few T2 products I've checked look even worse.

The only theory I have regarding this is that ships are primarily manufactured by large null-sec or WH corps and alliances which build ships for defense rather than for profit. So they would use their manufacturing capabilities to be self-sufficent in remote areas far from hisec markets but occasionally dump excess ships which they got "for free" or at a reduced cost since their ore-buyback programs often buy ore at a markdown. Never been in a nullsec corp though, so I could be completely wrong here.

Any insight here? I'm mostly just curious.

Caesar

--- Edit ---

I looked into some T2 ships (and other items) and found that many of them did indeed have decent profit margins before considering invention costs. But the cost of datacores seems to kill most of the profits...

This is definitely part of it.

I stick to T2 modules. because, well, 1 ship uses up to 8 guns for example, and both T2 and T1 ships use T2 modules.

T1 modules are primarily used in T2 manufacturing, as you either fit meta or T2 modules to your ship, and use faction or T2 ammo.

The number of people who just build T1 ships without checking the profit is far higher than the number who randomly select a T2 item and build it without checking.

T2 in a very few cases (primarily low volume items) is affected by T2 BPO holders, but, this is a very small segment of the market.

T2 prices also lag behind today material prices as people buy anything up to 1 month in advance

Tech 2 ship manufacture can be very profitable, even from invention.

The trick for me seems to be making savings on the raw materials.
Each time you purchase the materials from the market you are paying taxes. You'll then pay taxes again on the finished item when you go to sell it. If you can avoid a few steps worth of taxes that helps. e.g. really simple stuff like manufacture your own construction blocks with PI.

The main cost of a T2 hull seems to be the two racial moongoos e.g. Titanium Carbide and Nonlinear Metamaterials for Caldari.
The racial moongoos tend to vary quite a lot in price on the market. If like me you have to buy them from the market then buying them when they are cheap really helps profits probably more than any other factor. I tend to sink quite large ( for me ) amounts of cash into these when they are cheap. A spreadsheet allows me to see how price variations in raw materials effect the end price of the T2 hull.
I pretty much never buy raw materials near time of manufacture, always in advance at a favourable price.
I will however convert raw materials into components e.g. Quantum Microprocessors straight away. There's not much benefit to holding them as raw materials, and converting them to components means you can respond to the market quickly when you have everything you need ready to go.
Once I have a stash of all components, I then use those to react to the market, what's hot, what's about to be hot, and manufacture end T2 hulls as appropriate.

Non racial moongoos make up the next biggest chuck of build cost so repeat the above.

The downside of this approach is you tend to have a lot of ISK tied up in the production pipleine at any one time.

Don't play the 0.01 ISK game it's pointless, and a waste of time.

I make around 27%-39% margin on this method depending how greedy and how much of a rush I'm in.
It can be slow though, and you have to have a lot of ISK tied up at any one time. There may be others out there who would take my money and make more profit by selling a lot more smaller items more quickly for a smaller margin but turn over many times in the time it takes me to turn over once.

My rule of thumb is, if it's profitable to build on current material sell prices, look at it ... then check what 2nd step production would add the most benefit (most times it's one item, sometimes 2, seldom 3), do that, two steps, that's all. Usually I sell then a mix of T1 and T2 products, to optimize slot utilization on a 2-day-cycle.

I pretty much take salvage from my missions and make my own cheap T1 ammo. Makes me feel productive but going beyond that makes my head hurt.

I mine my own minerals, so everything is free and whatever I sell the ship for is pure profit

You should consider diversifying your assets a little more :)

The answer is obvious. People are selling them at a loss for ISK. Could it be that eve markets have been reduced to essentially 1 region with 3 relevant systems... yes I think so. So quick, let's drive the prices down so MY stuff can sell instead of the other 30 guys in jita doing the same thing.

A centralized economy in a game like eve is doomed for failure because there is NO CHOICE. People will ALWAYS buy the cheapest, and that will be defined by how many are selling in 1 spot.

Support code and anyone else fighting to break up empire.

An additional factor that hasn't been mentioned yet - people often sell unused ships. The ships they sell go to station traders at below-mineral-cost prices. This enables the station trader to undercut the builder.

There is an obvious answer - are you looking at Profit as opposed to ISK per hour?

The Spreadsheet says today:

Inferno Light Missile profit 22%, ISK/hour 5,100
Moa profit 4.86%, ISK/hour 303,000

The ISK per hour program says about the same, I just checked. Spamming out lots of missiles doesn't compensate for the higher price per unit of the cruiser.

So the question really is why does anyone make Light Missiles? The answer is I suppose cash flow, I started out manufacturing cheap stuff because I could only afford to buy cheap blueprints. No matter how profitable a Titan might be, I don't have the wealth to consider building one.

There is also the factory slot limit - each avatar can run a maximum of 11 jobs at the same time. Once you reach that limit as I have, you are going to stop using the lower ISK/hour blueprints.

None of this invalidates the interesting answers others have given! There are many reasons why prices are as they are, the devil is in trying to work out which one applies to a particular item.