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Why Can't I Make Money Manufacturing??

Author
Scanghis Khan
Unicorn Tea Party
#1 - 2013-04-01 04:50:56 UTC
Every way I calculate it, I'm not going to make any money manufacturing.

I screenshotted my calculation for making drakes. Why would anyone manufacture? Is there something significant I'm not taking into account?

http://img541.imageshack.us/img541/5384/whyv.png
Lord Battlestar
CALIMA COLLABORATIVE
Atrox Urbanis Respublique Abundatia
#2 - 2013-04-01 04:55:15 UTC
Well first you are assuming a blueprint with absolutely no research, which automatically has 10% waste.

Also just because one ship isn't profitable doesn't mean another one isn't, it just depends on the market.

I once podded myself by blowing a huge fart.

Emma Royd
Maddled Gommerils
#3 - 2013-04-01 07:55:08 UTC
Don't start with ships, they're a difficult market to get into, start with smaller cheaper items like ammo, missiles etc.

Make sure you research your BPO's, how high is up to you, my ammo, missiles are all at MAX ME - sure people say it's pointless going passed a certain figure, but I get the satisfaction that they can't be built any more efficiently mineral wise, it might take a long time to recover the difference in cost / lost profit between an arbitrary ME60 and ME330 but hey, eve isn't a quick game.
Acid Kanshi
AIFAM
#4 - 2013-04-01 08:02:55 UTC
Drakes have never been good profit.

My current setup with up to date prices; http://i.imgur.com/zeYUyWH.png

EVE-Cost is a manufacturing tool for EVE players. http://www.eve-cost.eu

Gerhard Wunderlich
Evola Deliveries
#5 - 2013-04-01 09:08:06 UTC
what software/website are you using there?
Steve Ronuken
Fuzzwork Enterprises
Vote Steve Ronuken for CSM
#6 - 2013-04-01 09:11:56 UTC
And then you get:
http://www.fuzzwork.co.uk/blueprints/0/1998/0/5/0/5

There are things where there's a profit margin without research (though how elastic the market is, that you'll need to research yourself)

Woo! CSM XI!

Fuzzwork Enterprises

Twitter: @fuzzysteve on Twitter

Acid Kanshi
AIFAM
#7 - 2013-04-01 09:28:12 UTC
Gerhard Wunderlich wrote:
what software/website are you using there?


http://www.eve-cost.eu/calculator

EVE-Cost is a manufacturing tool for EVE players. http://www.eve-cost.eu

Elena Thiesant
The Scope
Gallente Federation
#8 - 2013-04-01 09:54:17 UTC
Scanghis Khan wrote:
I screenshotted my calculation for making drakes. Why would anyone manufacture? Is there something significant I'm not taking into account?

http://img541.imageshack.us/img541/5384/whyv.png


I suspect you're not taking into account that the BCs changed mineral requirements about a month ago, the drake gained about 5% more minerals. As a result, and because the changes were on Sisi well before they went live, people made large numbers of Drakes and other battlecruisers before the change and are selling them off now, hence they'll be selling cheap for some time.

Ships are a bad place to start. Partially because all of the mineral changes recently have increased the price of making the ships and people made huge stockpiles before the changes. Many ships are still selling below their manufacturing cost and will do so until the stockpiles are sold out.Partially a bad place because they're high cost, low margin, low demand items and because everyone and their dog thinks that making ships is cool and hence does so.

As for your Drake, with an ME 20 blueprint I can make around 2 million profit per ship in my local trade hub. Too low to be worth making for the time being. Maybe once the prices stabilise.
Krixtal Icefluxor
INLAND EMPIRE Galactic
#9 - 2013-04-01 10:02:14 UTC
1. Market Bots.

2. Some T2 BPO's.

3. The "OTEC" lock on Moon Goo.


End of story.

"He has mounted his hind-legs, and blown crass vapidities through the bowel of his neck."  - Ambrose Bierce on Oscar Wilde's Lecture in San Francisco 1882

Beckie DeLey
Garoun Investment Bank
Gallente Federation
#10 - 2013-04-01 10:44:02 UTC
Krixtal Icefluxor wrote:
1. Market Bots.

2. Some T2 BPO's.

3. The "OTEC" lock on Moon Goo.


End of story.



Oh c'mon.
Now you are not even trying to hide it :D

My siren's name is Brick and she is the prettiest.

DarkFidelity
Sebiestor Tribe
Minmatar Republic
#11 - 2013-04-01 11:16:57 UTC
Drake's haven't been profitable for months. After tiercide it's become even worse. I feel bad for all the noobers that come into the blueprints channel and buy BC BPO's because they haven't bothered to do the math.

If you really want to make T1 ships look into making frigates. You will need to make them in large volume to get any reasonable amount of profit out of them. Not all of them are worth making though.
Kodama Ikari
Thragon
#12 - 2013-04-01 13:42:28 UTC
the problem is that you're trying to make ships. This is normally a bad idea for a new industrialist in any situation, but even moreso now because the supply is up from speculation regarding the recent battlecruiser rebalance.
Bugsy VanHalen
Society of lost Souls
#13 - 2013-04-01 14:38:11 UTC
forget what everyone is saying about not building ships. Starting with ammo and modules IS the best way to learn without losing to much isk, but you do not have to learn this way.

You need a few basic things to turn a profit.

- As already mentioned, you must have researched BPO's. A Drake BPO with 0 research will cost millions more to build than a BPO researched to ME 10. this is your bigest loss.

- Do not buy minerals from sell orders, place your own buy orders. many will argue that this creates trade profit not manufacturing profit, which is true, but what difference does it make, as long as you sell the ship for more than it cost you to make you have profit. Profit will allow you to keep building, no matter what amounts of that profit come from what activities.

- Never sell the finished ships to buy orders, but set up your own sell orders. Again this is trade profit, but it still goes into your pocket. Whether it is trade profit or manufacturing profit it is still profit from selling that ship.

These three points alone can make the difference between making millions or losing millions of each ship you sell. You need to really watch the market though as you can often get stuck selling a ship built with minerals purchased before a price drop in the mineral market. When prices are down stock up, when prices are high build from you stockpiles.

Many traders make really good isk just buying thru buy orders and relisting sell orders at 3-5% markup. A good manufacturer will increase these profits through manufacturing goods, not rely on this profits to keep numbers up.

This is why starting small is better. It allows you to learn how these elements relate to each other without going broke along the way. Also the BPO's are cheaper. Building from unresearched BPO's or purchased BPC's will often eat up the profits.

personally I jumped right into T2 manufacturing. The profit margins were much bigger giving me room to grow, but the cost getting started was much much higher. This is possibly the most difficult and risky way to learn, but I did it for the challenge more than the profits, so it worked out well for me, and was fun along the way.
Steve Ronuken
Fuzzwork Enterprises
Vote Steve Ronuken for CSM
#14 - 2013-04-01 14:42:31 UTC
Bugsy VanHalen wrote:
- Do not buy minerals from sell orders, place your own buy orders. many will argue that this creates trade profit not manufacturing profit, which is true, but what difference does it make, as long as you sell the ship for more than it cost you to make you have profit.


Getting minerals from buy orders is a great idea.

Selling a ship made from those minerals, for less than you could sell the minerals for isn't. That's what we'd argue against.



You get 3 apples from a wholesaler, for 1 dollar each, rather than out of a shop for 2 dollars each.

You make an apple pie with them, which you sell for 4 dollars.

You've made 1 dollar.

But you could have sold the apples for 2 dollars each, and made 3 dollars.

Yes, it's a simplification, but it's the core of the argument.

Woo! CSM XI!

Fuzzwork Enterprises

Twitter: @fuzzysteve on Twitter

Haulie Berry
#15 - 2013-04-01 16:00:25 UTC  |  Edited by: Haulie Berry
Steve Ronuken wrote:
Bugsy VanHalen wrote:
- Do not buy minerals from sell orders, place your own buy orders. many will argue that this creates trade profit not manufacturing profit, which is true, but what difference does it make, as long as you sell the ship for more than it cost you to make you have profit.


Getting minerals from buy orders is a great idea.

Selling a ship made from those minerals, for less than you could sell the minerals for isn't. That's what we'd argue against.



You get 3 apples from a wholesaler, for 1 dollar each, rather than out of a shop for 2 dollars each.

You make an apple pie with them, which you sell for 4 dollars.

You've made 1 dollar.

But you could have sold the apples for 2 dollars each, and made 3 dollars.

Yes, it's a simplification, but it's the core of the argument.


This. It's amazing how many people will cheerfully buy minerals from buy orders, spend a couple of hours turning them into a ship, and then sell their now less-liquid final product on a sell order for less than they could have flipped the much-more-liquid minerals.


I am personally pretty disinclined to bother manufacturing anything if I can't buy my raw materials from sell orders and sell my final product to buy orders for pure manufacture profit. Depending on my mood, I may augment that with trade, but manufacturing is such a thin slice of my revenue these days that it's generally not worth the hassle.


Quote:
...which is true, but what difference does it make, as long as you sell the ship for more than it cost you to make you have profit.


No. No. No. No. NO.

All else being equal, as long as you sell the ship for more than you could have gotten for the minerals, you have a manufacturing profit.

If you can't sell the ship for more than you could have sold the minerals, you merely have a trading profit that survived a manufacturing loss.

If plugging a chunk of minerals into a manu-slot doesn't increase your NAV, you should skip it.
Zifrian
Federal Defense Union
Gallente Federation
#16 - 2013-04-01 17:19:45 UTC
Elena Thiesant wrote:
Scanghis Khan wrote:
I screenshotted my calculation for making drakes. Why would anyone manufacture? Is there something significant I'm not taking into account?

http://img541.imageshack.us/img541/5384/whyv.png


I suspect you're not taking into account that the BCs changed mineral requirements about a month ago, the drake gained about 5% more minerals. As a result, and because the changes were on Sisi well before they went live, people made large numbers of Drakes and other battlecruisers before the change and are selling them off now, hence they'll be selling cheap for some time.


This is your largest issue. Second would be no ME research. Third, which I couldn't tell if you have it or not, is PE 5 skill trained.

So you are really trying to get started with three big things going against you.

Another issue though is that the Drake was essentially nerfed by losing a high slot and missiles were changed a bit back that makes them not as powerful as they once were. Still a good ship, but the demand is lower and combined with a crap ton of supply based on what Elena said plus the popularity of the ship up until then, you are going to have a hard market to break in to.

As far as making 2 mil per ship, that's pretty good but it all comes down to how much time it takes you to make it (Isk/hour) and how fast you can sell it. I used to sell a bunch of ravens each day in Jita for a few million profit but they were so fast to make and sell that it was easy money.

In any case, making isk through manufacturing is easy once you learn all the variables that go into it. Learning those variables is the hard part. Best advice is to start small and move up from there.

Maximze your Industry Potential! - Download EVE Isk per Hour!

Import CCP's SDE - EVE SDE Database Builder

Steve Ronuken
Fuzzwork Enterprises
Vote Steve Ronuken for CSM
#17 - 2013-04-01 17:58:58 UTC
Zifrian wrote:
As far as making 2 mil per ship, that's pretty good but it all comes down to how much time it takes you to make it (Isk/hour) and how fast you can sell it.



This.

Too many people get tied up in profit margins. At first, they're important. Because you don't have that much capital to play with. But they don't scale. You can only inject so much isk into the items with high margins.

The far more important number is how much isk you earn per hour.



For example (examples are right at the time I make them. Depends on the market if they stay right):

Phased Plasma S
http://www.fuzzwork.co.uk/blueprints/0/184/29/5/0/5

You're getting around 100% profit on what you're injecting. For every 1500 you put in, you get 3000 back.

Not bad to start with, when you're low on ISK.

However, this works out as (without any research): 18,000 isk per hour, per slot you're running it on.

Compare that to:
Armour Explosive Hardener:
http://www.fuzzwork.co.uk/blueprints/0/11303/17/5/0/5

For every 160k you put in, you get 260k back. a 62% margin. If all you pay attention to is the margin, you'd ignore this. But it, at the figures here, you're making 600,000 isk per hour, per slot.


That's a no-brainer. Assuming the market will absorb the volume you're going to try to pump into it (Which is why it's worth looking at the market history).

Woo! CSM XI!

Fuzzwork Enterprises

Twitter: @fuzzysteve on Twitter

Beckie DeLey
Garoun Investment Bank
Gallente Federation
#18 - 2013-04-01 18:19:38 UTC  |  Edited by: Beckie DeLey
Steve Ronuken wrote:

The far more important number is how much isk you earn per hour.


Not entirely true. People don't necessarily start out with big wallets when they get into industry.
ISK/hour gets more and more important as you progress as an industrialist, as you scale up your operations. But in the beginning, profit margin is everything.

Thing is, the items that get most ISK/hour with low profit margins obviously require large investments. Look at what supporting a manufacturing line building Phased Plasma costs per day and compare it to what the Explosive hardener ties up. Investing that kind of money only make sense when you can support it 24/7. Many people are way better off looking at margins and getting a more steady increase to their wallet. It's less risky as well.

All in all, i'd say that ISK/hour (the term, not the tool - well, that as well, but that's not a topic i want to argue) is massively overrated.

My siren's name is Brick and she is the prettiest.

Steve Ronuken
Fuzzwork Enterprises
Vote Steve Ronuken for CSM
#19 - 2013-04-01 19:15:09 UTC
Beckie DeLey wrote:
Steve Ronuken wrote:

The far more important number is how much isk you earn per hour.


Not entirely true. People don't necessarily start out with big wallets when they get into industry.
ISK/hour gets more and more important as you progress as an industrialist, as you scale up your operations. But in the beginning, profit margin is everything.

Thing is, the items that get most ISK/hour with low profit margins obviously require large investments. Look at what supporting a manufacturing line building Phased Plasma costs per day and compare it to what the Explosive hardener ties up. Investing that kind of money only make sense when you can support it 24/7. Many people are way better off looking at margins and getting a more steady increase to their wallet. It's less risky as well.

All in all, i'd say that ISK/hour (the term, not the tool - well, that as well, but that's not a topic i want to argue) is massively overrated.



I did say:
Quote:
Too many people get tied up in profit margins. At first, they're important. Because you don't have that much capital to play with. But they don't scale. You can only inject so much isk into the items with high margins.


I remember when I only had 10 million to inject into my manufacturing of ammo to sell (The Blood Stained Stars Epic Arc is handy for starting capital)

It's just that after you pass a certain point, the absolute margin becomes less important.

Woo! CSM XI!

Fuzzwork Enterprises

Twitter: @fuzzysteve on Twitter

Beckie DeLey
Garoun Investment Bank
Gallente Federation
#20 - 2013-04-01 19:58:01 UTC  |  Edited by: Beckie DeLey
Fair enough. Where would you say this threshold lies where you start giving priority to Isk/h instead of margin? Because i would put that line somewhere in the vicinity of 3 to 5 billion ISK capital and i somehow dont think you would agree with that.

My siren's name is Brick and she is the prettiest.

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