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Why are ships usually unprofitable in industry?
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Sabriz Adoudel
Move along there is nothing here
#21 - 2016-09-24 00:43:08 UTC
Leida FireEye wrote:
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.


Yep this is a factor.

Especially with alliance-level supplies.

Logisticians may purchase 300 Basilisks for a campaign, then only lose 9 of them.

The effect of buying 300 on the market will be a spike in production which may even overcompensate, pumping more onto the market again, then the alliance dumps 291 back.

I support the New Order and CODE. alliance. www.minerbumping.com
SJ Astralana
Syncore
#22 - 2016-09-26 08:10:02 UTC
Oriella Trikassi wrote:

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


IPH continues to be one of the big fallacies of production. It's completely irrelevant. The driving factors of production are the margin of an item, its volume, and the number of live competitors. A limiting factor is, yes, how many of an item can be produced in a day, but IPH strictly never enters into the equation.

Hyperdrive your production business: Eve Production Manager

Sheeth Athonille
Rabid Dogz Mining
#23 - 2016-09-26 16:18:17 UTC
SJ Astralana wrote:
Oriella Trikassi wrote:

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


IPH continues to be one of the big fallacies of production. It's completely irrelevant. The driving factors of production are the margin of an item, its volume, and the number of live competitors. A limiting factor is, yes, how many of an item can be produced in a day, but IPH strictly never enters into the equation.



So you believe that making 100% profit on an item that makes 100isk/hour is better than making 50% profit on an item that makes 1 million isk/hour? Sorry, it might not be the first limiting factor, but it definitely does come into play.
SJ Astralana
Syncore
#24 - 2016-09-27 06:42:21 UTC  |  Edited by: SJ Astralana
Sheeth Athonille wrote:

So you believe that making 100% profit on an item that makes 100isk/hour is better than making 50% profit on an item that makes 1 million isk/hour? Sorry, it might not be the first limiting factor, but it definitely does come into play.


That's not at all what I said. I might run into a scenario where I have an expectation that I can sell 3 apocs at 8 mil in a day, or I can sell 8 cap rigs at 5 mil. The apoc will have the higher iph, but when making the choice the rigs would come first. At no point do I ever calculate IPH.

Look... my last six months of production, after all costs including freight accounted for, my lowest month was 15bil profit, and my highest was 20, logged in 5 hours per month, using only a single character. I watched another player do 13bil in his third month, but he conceded he spent more time logged in. I watched several players with less capital making billions a month very quickly. I definitely know what I'm talking about.

Hyperdrive your production business: Eve Production Manager

DJ puar
Covert Economics
#25 - 2016-10-06 17:28:48 UTC
2 years ago I could lose a Belicoses and make isk from the insurance
Zanar Skwigelf
HIgh Sec Care Bears
Brothers of Tangra
#26 - 2016-10-06 23:45:49 UTC
Sheeth Athonille wrote:
SJ Astralana wrote:
Oriella Trikassi wrote:

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


IPH continues to be one of the big fallacies of production. It's completely irrelevant. The driving factors of production are the margin of an item, its volume, and the number of live competitors. A limiting factor is, yes, how many of an item can be produced in a day, but IPH strictly never enters into the equation.



So you believe that making 100% profit on an item that makes 100isk/hour is better than making 50% profit on an item that makes 1 million isk/hour? Sorry, it might not be the first limiting factor, but it definitely does come into play.



If the 100% profit is realized right away because it sold into a buy order and the 50% takes a month to materialize at 39% because of price wars, then yes.

IPH does not consider time to sell. The only way IPH makes sense is if you always sell into buy orders.
Sabriz Adoudel
Move along there is nothing here
#27 - 2016-10-07 13:00:49 UTC
Although I do not explicitly calculate all of these metrics, I consider:

Isk per production line per hour
Isk per player input (without this, T2 modules would always be the #1 option)
Isk returns on invested capital
Margin (to see how much competition I can handle and still be profitable)
Gamewide demand (I can build more tech 2 remote sensor dampeners than the entire universe uses, so I need to be aware that I might end up dominating that market)

Ships are bad on all of these except gamewide demand. (Tech 2 ships are sometimes good enough on ISK per production line hour to merit jumping into them quickly - I built a few hundred interceptors recently to take advantage of this).

I support the New Order and CODE. alliance. www.minerbumping.com
Tipa Riot
Federal Navy Academy
Gallente Federation
#28 - 2016-10-07 15:45:53 UTC
Always calculate from the end with the view of a trader, but instead of buying cheap, I produce cheaper. The second metric I use is volume (input, output), the less the better. The last ships I produced in some quantities were the Magus and Raptor. I think Magus is still profitable, but finally too low margin for the required transport volume. Large Transverse Bulkheads II had a nice spike recently, same as the Small Core Defense Fields Extender II rigs two days ago.

I'm my own NPC alt.
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