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New to Margin Operations - What kind of ROI/Profit/etc do you go for?
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Ergzay Stargazer
The Scope
Gallente Federation
#1 - 2012-08-28 00:36:03 UTC
I'm new to working on the market and have been looking into when I'm looking at an item how to figure out if I want to enter in on it.
So far I have been doing: Calculate ROI. If it's less than 10% then ignore it. Calculate per-item profit and multiply by daily sales of the item and divide by 10, if that number is under 1 million then ignore it. If it doesn't get ignored then its probably a good place to enter.

So I wanted to ask, is this a good metric and what kind of profit/ROI numbers do most people use when doing market margin selling.

Thanks,
Ergzay
Gingerlord
Center for Advanced Studies
Gallente Federation
#2 - 2012-08-28 16:38:39 UTC
Its different for each player. Some are happy to make 10% daily. Some are happy to make only 4-5% but 0.01ISK so they have a quick turnover of stock.

As you play you'll notice peaks and troughs throughout the week on certain things, so you'll play the swing and make bigger margins.

I think what you're doing may help with choosing a decent item to trade but until you've watched it for a few weeks you won't really know what behavior to expect.

Go for it and enjoy. I can turn 1m into 100m in a week by hardly trying so if you stick at it you'll make way more.


P.S. Speculation is were the money is really at.
Steve Ronuken
Fuzzwork Enterprises
Vote Steve Ronuken for CSM
#3 - 2012-08-28 17:18:19 UTC
As you get more isk, be prepared to accept lower ROIs. sure, your curve will flatten off somewhat, but your actual income per hour will stay the same or rise.

Woo! CSM XI!

Fuzzwork Enterprises

Twitter: @fuzzysteve on Twitter
Barakach
Caldari Provisions
Caldari State
#4 - 2012-08-28 19:24:22 UTC
My main criteria to trade any item:
1) At least 20 units/day
2) Relatively constant volume even if cyclic peaks/troughs
3) At least 500m isk/day in trade volume

I'm not a picky trader. If I can reliably make 3m isk on a 350m item, I'll do it.
Rykker Bow
Center for Advanced Studies
#5 - 2012-08-28 23:36:19 UTC  |  Edited by: Rykker Bow
Barakach wrote:

I'm not a picky trader. If I can reliably make 3m isk on a 350m item, I'll do it.


Pretty much this. My items range from 1% to 200% margins. Orca's are a good example, sometimes margins are 50-60m sometimes 3-4m. When the margins are good there's a lot of competition, when they're bad you can buy and sell six or seven in a day; either way you make some steady income.

I tend to trade as many items that I can comfortably handle in the time I have available to play and closely watch what each item brings in. My only real requirement is that it's not the least performing item in my portfolio in terms of profits generated. I'll trade an item a week minimum and if it's performing poorly I'll toss it out and replace it with another. I'll keep the poor performing item in a holding folder and take a look at it again in a week, a month, a year later to see how it's doing. Some items I've tried a half dozen times; some turn out to be good some I ask myself 'why the hell did I try this item again??'

After a while you settle into a group of core items that fit your trading style and gives good returns.

The Mjolnir Bloc - Lowsec PvP for the sophisticated - The Mjolnir Bloc Killboards
JohnathanGalt
Northern Sky Industries
#6 - 2012-08-29 17:11:38 UTC
Rykker has a ton of good points. The most important thing is to try some items out and see what works for you. I had one item recently where I traded in it for about 2 weeks, making healthy margins (also make sure to do your calculations in margin and not markup making sure to include brokerage fees and taxes). Then for some reason it crashed, I had to sell my last few at a substantial loss. Every week or so I would check in, and then the price began to rise again at the selling location. Just the other day I started stocking the item again, making a good profit again. The key was to notice the trend over time, and be ready to secure the opportunity. I also try not to keep too many of an item on hand for this very reason.