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Supply/Demand/Market Saturation
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ALTxF4
Spectre Fleet Ltd.
Spectre Fleet Alliance
#1 - 2013-01-04 01:59:53 UTC
Ok, I seem to be running into a small problem. I have a ton of spreadsheets all aimed at minerals and manufacturing. It would seem that the market is so over saturated with product ( from people trying to buy/sell everything that they dont actually use ) that they have flooded the market not with items actually needed. There is no supply or demand for actual necessity, it would appear all the supply is buy at low and attempt to resale at high.

However, im not here to argue economics of market transactions or their fundamentals. I am here to ask a simple question:

Is there anything worth building in high sec that is profitable? I have been over 100's of blueprints ( i have invested in quiet a few that now are worthless ). It would seem everything is more expensive to build and resale ( with the exception of 1 or 2 items I have found ). Hell a procurer cost 28m to build, but are selling at 4-6 million!! I understand the fluxuation of mineral prices can effect this, but the prices of minerals are actually dropping!!! So there does not seem any relief in sight!


Am I missing something? It would appear the only thing needed is the high sec minerals that the null sec alliances need or want to fuel their war machines. Everything else is cheaper to buy then to build?


Any enlightenment would be greatly appreciated!
Joshua Vaughn Lampen
Archer Investments Initiative
#2 - 2013-01-04 02:29:25 UTC
ALTxF4 wrote:
Ok, I seem to be running into a small problem. I have a ton of spreadsheets all aimed at minerals and manufacturing. It would seem that the market is so over saturated with product ( from people trying to buy/sell everything that they dont actually use ) that they have flooded the market not with items actually needed. There is no supply or demand for actual necessity, it would appear all the supply is buy at low and attempt to resale at high.

However, im not here to argue economics of market transactions or their fundamentals. I am here to ask a simple question:

Is there anything worth building in high sec that is profitable? I have been over 100's of blueprints ( i have invested in quiet a few that now are worthless ). It would seem everything is more expensive to build and resale ( with the exception of 1 or 2 items I have found ). Hell a procurer cost 28m to build, but are selling at 4-6 million!! I understand the fluxuation of mineral prices can effect this, but the prices of minerals are actually dropping!!! So there does not seem any relief in sight!


Am I missing something? It would appear the only thing needed is the high sec minerals that the null sec alliances need or want to fuel their war machines. Everything else is cheaper to buy then to build?


Any enlightenment would be greatly appreciated!


You have to look at the long-term speculators and people who anticipate patches to get a partial answer to your questions. For example: Retrievers. Originally rather cheap to build in mineral terms people saw the changes to barges coming and build huge amounts of them at pre-patch mineral prices. Now they can sell them at what is a loss under current prices of mineral inputs but is still massively profitable compared to what they previously built them for. Exhausting the supply for many of these ships is going to take a long time and there are many other materials and commodities that is has occured with. Guidance systems in PI is a great case. They are massively undervalued in market terms when you consider the price of the goods needed to produce them. People still have huge stockpiles of them when they were NPC seeded items though and they're still making massive profits from them.
ALTxF4
Spectre Fleet Ltd.
Spectre Fleet Alliance
#3 - 2013-01-04 02:58:26 UTC
Sounds like an inflation bubble just waiting to collapse :( Didnt this happen a few years back and the prices of minerals tanked?
Rengerel en Distel
#4 - 2013-01-04 03:34:37 UTC
Most of the time, when prices are falling, it's not considered inflation. The only time it is, is when people on eve online talk about economics.

With the increase in shiptoasting, the Report timer needs to be shortened.
ALTxF4
Spectre Fleet Ltd.
Spectre Fleet Alliance
#5 - 2013-01-04 03:45:32 UTC
Your right, I did not mean inflation, I actually meant deflation, as the prices of all the goods are going down, and its not cost effective to build them anymore.
Kommandohoran
Viziam
#6 - 2013-01-04 05:02:35 UTC
T1 ships in general are profitable to produce.
RubyPorto
RubysRhymes
#7 - 2013-01-04 05:44:56 UTC
ALTxF4 wrote:
Any enlightenment would be greatly appreciated!



Mining Barges were recently buffed. With that buff came a massive increase in build cost. People put tens of thousands of Mining barges in build in the days leading up to the patch. Since mining barges don't die very often, it'll be years before prices return to build costs.

This has a pretty picture indicating the magnitude of the Barge building spree:
http://cdn1.eveonline.com/www/newssystem/media/63999/1/Mining_Barges_Produced.png

More recently, T1 Cruisers and Frigates received a similar treatment, though since they die pretty often, the market will recover somewhat sooner.
http://cdn1.eveonline.com/www/newssystem/media/64104/1/Retribution_Ship_Production.png


As for what's profitable, with T1 production you just have to catch the price fluctuations at the right time. One day a Naga's going to have a 10m ISK profit, the next it'll be 1m (or even just below build cost). You want to have the capital to ride out those price fluctuations.

Ammo is almost always profitable (if low on the ISK/hr rank), and the BPOs are cheap and research fast.

PS. You are researching your BPOs and you do have Production Efficiency 5 trained, right?

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
ALTxF4
Spectre Fleet Ltd.
Spectre Fleet Alliance
#8 - 2013-01-04 06:11:53 UTC  |  Edited by: ALTxF4
Thank you, that was actually very very very insightful and helpful. I should have taken into consideration what was lost most in eve. I will look into the T1 cruisers, destroyers, and frigates, thank you!



Yes, I have 5. However its hard to find a place to research at. Not sure which to research on it either.
Bob Killan
Dzark Asylum
#9 - 2013-01-04 10:48:45 UTC
ALTxF4 wrote:
Thank you, that was actually very very very insightful and helpful. I should have taken into consideration what was lost most in eve. I will look into the T1 cruisers, destroyers, and frigates, thank you!



Yes, I have 5. However its hard to find a place to research at. Not sure which to research on it either.


Many people make stuff in eve to help fund other activities. Most people dont use spreadsheets and dont take into account mineral cost. the "My minerals are free" types.

Further there are pople that would do this.


Item A takes 100 Trit to make. Trit can be bought in Jita for 5isk (sell orders) and sold for 4isk (Buy Order) Item A is selling for 300. (Sounds familiar!)

Now Johnny is buy trit in Poinen for 2isk and works out if he built Item A it would cost him 200Isk to build each Item but he can sell them for 300isk in Jita.

Johnny is amazed and continues making his 50% profit from Trit.

What Johnny never understands (and sometimes will even argue against) is that he could sell all his trit to make Item A in Jita for 400isk a 100% profit.

Now the real builds come along and go damn it cost 505 isk to make (100 x trit sell order price + taxes, fees and build cost) but are selling for 400isk thats a ~20% hit. Ill just sell my minerals.

As Johnnys Bank balance is always going up he's a happy camper.


On a posative note there are still many ways to make money building stuff but as with everything you need to be well diversified with BP's that way you should always be able to find that golden nugget.
RubyPorto
RubysRhymes
#10 - 2013-01-04 14:37:26 UTC
ALTxF4 wrote:
Thank you, that was actually very very very insightful and helpful. I should have taken into consideration what was lost most in eve. I will look into the T1 cruisers, destroyers, and frigates, thank you!



Yes, I have 5. However its hard to find a place to research at. Not sure which to research on it either.



First, the frigate and cruiser graph is something that should scream "stay away" to you. That graph shows the volume of frigates and cruisers that were built with the old, lower mineral requirements. Only once the market burns through those stockpiles will prices recover to the point where it's possible to make a profit manufacturing them.

ME research is the most important one for most blueprints. Your best bet for an open research slot in a station would be some backwater Lowsec station. Otherwise you need a POS to research at.

Like I said, ammo is usually profitable even with an unresearched BPO.

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
Toku Jiang
Jiang Laboratories and Discovery
#11 - 2013-01-04 16:58:55 UTC
There are a plethra of reasons why the market changes, and you could look at several items and wonder why they sell so cheaply. Between ME/PE, POS manufacturing, mineral compression in items for hauling bulk amounts of mins, and minerals I mine are free crowd, items can quickly change direction of profit and loss. Your best bet is to find things people use/lose a lot of and continually check on profit margines. You will often have to change what it is you are building to adapt to the market conditions.
ALTxF4
Spectre Fleet Ltd.
Spectre Fleet Alliance
#12 - 2013-01-04 18:13:22 UTC  |  Edited by: ALTxF4
First, the frigate and cruiser graph is something that should scream "stay away" to you. That graph shows the volume of frigates and cruisers that were built with the old, lower mineral requirements. Only once the market burns through those stockpiles will prices recover to the point where it's possible to make a profit manufacturing them.





I meant for future reference after the market has cleared itself out of all the extra ships. Those would be blueprints to invest in, for the future for when it becomes profitable to manufacturer again.


I dont suppose you could direct me to links for how much ME research effects the BP?
Vaerah Vahrokha
Vahrokh Consulting
#13 - 2013-01-05 01:17:03 UTC
ALTxF4 wrote:

I dont suppose you could direct me to links for how much ME research effects the BP?


EvE Meep or just fiddle with this website like everybody else Blink

EvE Online portal | EvE markets tutorials
Silly Beetch
School of Applied Knowledge
Caldari State
#14 - 2013-01-05 01:52:22 UTC
Off topic question, isn't evemeep slightly out of date, or the developers just haven't been updating the website?
Vaerah Vahrokha
Vahrokh Consulting
#15 - 2013-01-05 10:15:02 UTC
Silly Beetch wrote:
Off topic question, isn't evemeep slightly out of date, or the developers just haven't been updating the website?


I planned an Algos build, so no, it seems pretty much updated.

EvE Online portal | EvE markets tutorials
poof312
Kenshin Industries.
Kenshin Shogunate.
#16 - 2013-01-07 00:26:49 UTC
Joshua Vaughn Lampen wrote:


You have to look at the long-term speculators and people who anticipate patches to get a partial answer to your questions. For example: Retrievers. Originally rather cheap to build in mineral terms people saw the changes to barges coming and build huge amounts of them at pre-patch mineral prices. Now they can sell them at what is a loss under current prices of mineral inputs but is still massively profitable compared to what they previously built them for. Exhausting the supply for many of these ships is going to take a long time and there are many other materials and commodities that is has occured with. Guidance systems in PI is a great case. They are massively undervalued in market terms when you consider the price of the goods needed to produce them. People still have huge stockpiles of them when they were NPC seeded items though and they're still making massive profits from them.


So I could buy a bunch of retrievers now and just wait for that stockpile to run out and then cash in?
RubyPorto
RubysRhymes
#17 - 2013-01-07 00:54:55 UTC
poof312 wrote:
So I could buy a bunch of retrievers now and just wait for that stockpile to run out and then cash in?


Depends how long you want to wait.

"It's easy to speak for the silent majority. They rarely object to what you put into their mouths." -Abrazzar "the risk of having your day ruined by other people is the cornerstone with which EVE was built" -CCP Solomon
Arronicus
State War Academy
Caldari State
#18 - 2013-01-07 22:45:34 UTC
poof312 wrote:
Joshua Vaughn Lampen wrote:


You have to look at the long-term speculators and people who anticipate patches to get a partial answer to your questions. For example: Retrievers. Originally rather cheap to build in mineral terms people saw the changes to barges coming and build huge amounts of them at pre-patch mineral prices. Now they can sell them at what is a loss under current prices of mineral inputs but is still massively profitable compared to what they previously built them for. Exhausting the supply for many of these ships is going to take a long time and there are many other materials and commodities that is has occured with. Guidance systems in PI is a great case. They are massively undervalued in market terms when you consider the price of the goods needed to produce them. People still have huge stockpiles of them when they were NPC seeded items though and they're still making massive profits from them.


So I could buy a bunch of retrievers now and just wait for that stockpile to run out and then cash in?


Actually, you've missed the boat. Retrievers have recently exhausted the supply of people willing to sell them below cost, and are now selling for about 500k isk over buildcost. Should have bought about a month ago, and you could have made about 16% profit each (5mil)

Procurers are going to remain low (see ~7mil) for probably the next year, then will slowly increase for the next year after that. You could make an absolute killing on them, but you're looking at, reasonably, a 1 1/2 to 2 1/2 year delay before they hit any price worth cashing out at, and in that time, I'm sure there's many better things to do with your isk. However, if you knew you wouldn't be able to play eve for say, 2 years, I venture to say this is THE most worthwhile investment you could make.

If you want something to invest in, and cash out on as the price goes up, look at frigates. Many of them are below, to far below their build cost, and should move in volume decently.
Vaerah Vahrokha
Vahrokh Consulting
#19 - 2013-01-08 10:22:23 UTC
Arronicus wrote:
If you want something to invest in, and cash out on as the price goes up, look at frigates. Many of them are below, to far below their build cost, and should move in volume decently.


During the minerals markets downturn, yes that sounds like the way to go...

EvE Online portal | EvE markets tutorials
Una Achura
School of Applied Knowledge
Caldari State
#20 - 2013-01-08 11:33:05 UTC
When going into T1-production you also pretty much have to know what modules drop from missions and not.
I'd hope that the UI changes that give an estimated value of a module will mean more mission runners reprocess a lot of junk now as it's easier to single out the valuable stuff than it used to be, but most mission loot will probably never be worth producing.

So find the stuff that don't drop from missions and check those. For instance R.A.Ms are a T1 manufactured commodity used in T2-production, but most T2 producers wil buy them from the market as it's not worth it to tie up manufacturing slots for them when you could have used said slot for T2-production. The different R.A.Ms fluctuate in price, but usually most are profitable to produce. I think build costs are around 53k atm (slightly stale prices in my spreadsheet, but shouldn't be too far off), and sell order prices vary between ~45k to 75k usually. (Meaning a patient sell order at 60-70k will usually sell eventually with no 0.01 isking).
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