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Sell Orders Below Material Value

Author
Saneth Minian
Daily Dose of Salt
#1 - 2017-06-16 12:09:14 UTC
Question for the production guys. I've seen several sell orders in multiple regions which are offered at less than their production cost. Is there a strategy behind this or are there no concerns over the profit loss on input materials/ production fees/ hauling/ player time? I would expect some type of markup.
Sabriz Adoudel
Move along there is nothing here
#2 - 2017-06-16 12:41:33 UTC
Sometimes, the products were obtained through means other than production (theft, looting, regionwide buy orders) and selling at that price is a profit.

For an example, I own almost 20000 Garde II drones (15000 are mortgaged off at the moment in a loan). I only paid 600k per unit for them on the market, despite them costing (IIRC) 1150k to produce now.

Sometimes, you just need to free up capital. You have 5 billion in stock and it's not moving, and there's opportunities you could latch onto if you just dump that 5 billion in stock for 4750m.

Sometimes, an item's price is falling. This one came back to bite me, but earlier this week I sold 30 Fighter Support Unit II at basically build cost because I was expecting them to fall further due to the carrier ratting nerf.

And most often you just get it wrong. You add up wrong, and think an item costs 4600k to build so you sell it for 4850k. Then you eventually realise you've been paying 5400k to build each one.

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Jeronica
Heretic Army
NullSechnaya Sholupen
#3 - 2017-06-16 17:03:47 UTC
As sabriz said, if the seller can make a profit then might as well sell. Keeping it under build cost, while reduces profit margins a bit, also allows them to have a monopoly on the selling. I believe probag does this quite a bit to control markets.

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Saneth Minian
Daily Dose of Salt
#4 - 2017-06-16 18:15:01 UTC
Does anyone mark up for production fees / time or is the overall market too competitive on the majority of items? Obviously some items /markets allow for increased margin.
Skorpynekomimi
#5 - 2017-06-17 22:01:22 UTC
1. The 'MINERALS I MINED MYSELF ARE FREEEE!' lobby.
2. 'I suicide-ganked this miner, so I'm selling his drops cheap' stocking buy orders.
3. Buy orders reliant on quick sales of stuff as loot dropped from missions or ganks.
4. Idiots/bots tracking the sell order alllll the way down.
5. 'I bought these minerals/made these when the price was even lower than this'.
6. 'What's a spreadsheet? I don't even know how to do my own laundry, let alone excellently. I'll just click 'build' and now I'm an industrialist! Yay! I can space!'

Don't like it? Don't make that item until it's viable to, and use your minerals on something else.
Want to make money from it? Get in on the buy/sell margin yourself, or fill a hauler full of cheap stuff in smaller trade hubs and re-list it in Jita for more. I love it when I fill the gaps in my hold with a margin I didn't have to waste an industry slot on.

Economic PVP

Krysenth
Saints Of Havoc
Requiem Eternal
#6 - 2017-06-18 03:28:58 UTC
Saneth Minian wrote:
Does anyone mark up for production fees / time or is the overall market too competitive on the majority of items? Obviously some items /markets allow for increased margin.



#5 on skorpy's list is/was true of the vast majority of t2 hulls (might update the spreadsheet finally to see if there's been a change) after the refinery announcement devblog.
salacious necrosis
Garoun Investment Bank
Gallente Federation
#7 - 2017-06-18 19:59:10 UTC
When these prices go low enough, simple arbitrage becomes possible and I've made a fair amount of ISK this way (shameless plug below). My experience from doing this suggests three dominant causes (at least for the opportunities I've captured):


  1. Assets being dumped either out of desperation (i.e. need for fast cash) or ignorance of their worth. I suspect many of these assets were obtained under dodgy circumstances.

  2. 0.01 ISK games chasing the price down too far.

  3. 0.01 ISK games chasing the price of raw materials up too far.


I started writing up my techniques in an e-book which I posted on this forum a month or two ago. Here's my section on arbitrage which covers what I've found: https://orbitalenterprises.github.io/eve-market-strategies/index.html#arbitrage

sal

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Nick Knocks
The Scope
Gallente Federation
#8 - 2017-06-20 05:10:52 UTC
Some people can make enuff profit off of the components that they sell the end product below market value.
StarterrorPrime
Black Rose Fleet Strategics
#9 - 2017-06-26 02:14:54 UTC
From my understanding, there is a lot of factors that can play into how some things are priced and their sale value:

1. The Manufacturer is located in a resource rich region or has access to greater supplies of it
2. They've specialized into a certain material type processing, like the Arkonor-Bistot-Crokite, or some triage of Low-Null sec ores
3. They've access to the nessecary facilities such as a Reprocessing Raitaru or a manufacturing Azbel
4. Market prices for buying materials may be horrible, which is the case for Rens and Metropolis region because I once made a Bellicose for 5.5mil and that affects profit margins
5. Corporation structuring, ultimately this can affect majorly how everything is priced because some corps on how they are structured can get crazy on how things are priced
Mision Realizado
PAX LAGEND
#10 - 2017-06-27 16:49:36 UTC
When looking at the material inputs, how are you estimating cost? The key distinction here is Jita ask on the mineral inputs, which is a big no, plus the system cost index and the default 10% refining or manufacturing taxes in station.

Take the same BPO or BPC to an engineering complex or similarly upgraded citadel in a quiet enough system, and you'll see reduced build time, practically no job cost to speak of. A hull that shows up on a Jita MultiBuy costing 190MM of inputs, cost me concurrently 140MM to make just recently.