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Advice for my invention business

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Naia Liz
New Eden Exploration and Technologies
#1 - 2015-09-24 10:38:30 UTC
Hello,

I've been running a T2 modules invention+manufacturing business for a while. I buy datacores, decryptors, base materials and T1 items in Jita, invent and manufacture somewhere else and then sell my T2 modules in Amarr.

For some reason I can't get it to be very profitable, and I'm looking for some advice.

Couple of facts to take into account in the questions below :
- My skills are all maxed so this is not an issue.
- I only invent and manufacture T2 sub-capital modules.

1. What's the right way to determine the best decryptor to use for my invention jobs ? I've been using Augmentation Decryptors, thinking getting max runs was the most profitable thing to do with modules.

2. I sometimes end up selling my invented modules at a loss, or with a ridiculously low profit margin, but I'm having a hard time identifying why. I've been assuming that the current selling price of a module on the market would always reflect the price of the base materials I bought a day or two before, and I never check if a module sells indeed for more than its cost. Should I check every time ? Can prices fluctuate fast enough so that my module becomes cheaper than its base materials in the time it takes for me to manufacture it ?

3. Are there any good applications or websites for managing a production chain and its costs ?

4. Any generic advice on how to run such a business ?

Thanks in advance,

N.
Steve Ronuken
Fuzzwork Enterprises
Vote Steve Ronuken for CSM
#2 - 2015-09-24 11:23:20 UTC
determining the 'best' decryptor to use is mostly a case of trying them all in turn, and seeing how all the numbers turn out.

(the calculator on my site makes this pretty simple Blink )

2: Yes, prices can fluctuate very very quickly.

Woo! CSM XI!

Fuzzwork Enterprises

Twitter: @fuzzysteve on Twitter
Zad Murrard
Frozen Dawn Inc
Frozen Dawn Alliance
#3 - 2015-09-24 11:28:06 UTC
1. Profit maximizing.
It's a combination of many things:

- how many items you sell roughly / sales iteration
- length of your sales iteration
- number of manufacturing iterations you have in each sales iteration, it may 1-1 but the relation could be something else
- decryptors affect invention chance, if invention costs are relatively high then it might not be best to take something that lowers the chance a lot
- decryptor price, it is possible that this week the most optimal thing is to use decryptor A, next week decryptor B
- the effect of material efficiency the decryptor will have to your particular product. Depending on product some might offer nice cost savings, some might increase cost and some might not influence at all.

Ideally one would have a spreadsheet where you just enter the used decryptor and it would calculate the things

2. For some items prices usually go in waves. When something is really profitable a lot of people produce it resulting in overproduction which leads to sharp cut in prices. Some people are so horrified that they are willing to sell the items at loss. Then after the extra pressure is gone the profits may skyrocket again and the cycle starts again. Also the same waves affect the materials from which the items are produced. This results in a nice sea of waves.
If you can track all the waves that affect you you may make some predictions what is happening.
Also maybe there is T2 BPO for your item which means that someone can produce those items always with nice profit for them.

3. Gdocs, Excel :P

4. They say that it would be good to produce at least two different categories of items. This because categories in whole are also affected by the waves. The wavelength might be just very long for some categories meaning that for a month it's no use to produce items of that category.
Zifrian
The Frog Pond
Ribbit.
#4 - 2015-09-24 11:39:12 UTC
Try the application in my signature.

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GODS H4ND
Imperial Shipment
Amarr Empire
#5 - 2015-09-24 11:41:53 UTC
Depending on what you produce and at whats prices you can supply I may be interested in purchasing directly from.

This will cut out some of the overheads like transaction tax etx....

Feel free to shoot me over a list. Mostly interested in pvp modules and t2 frigates.
Naia Liz
New Eden Exploration and Technologies
#6 - 2015-09-24 12:35:07 UTC
Thanks for the advice.

It seems that the general idea is to keep a dynamic chain of production and not hesitate to adapt it to the current market. What I might lack is a tool that allows me to do that - I currently use a small application I developped. It's tailored for myself but doesn't allow for a lot of adaptation - I can't change decryptors, for example, and can only add jobs with the Augmentation one and its 19 resulting runs.


Zifrian wrote:
Try the application in my signature.


Aye, I gave it a shot. Couldn't figure out how to tell how many invention runs / successes I was getting, I guess I'll read a tutorial somewhere first :).

GODS H4ND wrote:

Depending on what you produce and at whats prices you can supply I may be interested in purchasing directly from.

This will cut out some of the overheads like transaction tax etx....

Feel free to shoot me over a list. Mostly interested in pvp modules and t2 frigates.


Sure, I'll get in touch with you whenever I restart my business - currently paused until I can optimize it a bit ;)
Zifrian
The Frog Pond
Ribbit.
#7 - 2015-09-24 12:59:24 UTC
Naia Liz wrote:

Zifrian wrote:
Try the application in my signature.


Aye, I gave it a shot. Couldn't figure out how to tell how many invention runs / successes I was getting, I guess I'll read a tutorial somewhere first.

Yeah...I haven't done tutorials heh.

On the BP tab, you can see the invention success rate as well as the runs on the 'Inv' tab (the one with facilities and options). You can select a decryptor there and if you double click the invention costs label (with the price) to see all the materials. All the calculations are included in the numbers you see.

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

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Naia Liz
New Eden Exploration and Technologies
#8 - 2015-09-24 16:52:25 UTC
Zifrian wrote:

On the BP tab, you can see the invention success rate as well as the runs on the 'Inv' tab (the one with facilities and options). You can select a decryptor there and if you double click the invention costs label (with the price) to see all the materials. All the calculations are included in the numbers you see.


Aye, saw that, thanks.

But what I'd like to do, for example, is to say I'm gonna do 10 invention runs with that BPO and that decryptor : give me my shopping list and how much it's gonna cost me in Jita. And after I'm done inventing, I want to come back and say I got X manufacturing runs from these 10 invention runs, tell me what components and items I need to build, what I need to buy and how much it'll cost me. And in the end, I want the app to tell me how much I spent in invention and in manufacturing and compare this to the selling price of my finished item.

I coded an app doing just that, but I did it without using the EVE API so I have to keep my own database updated, which sucks. And right now I don't have time to code a new app ^^. Is your application suited for that kind of use ?
Zad Murrard
Frozen Dawn Inc
Frozen Dawn Alliance
#9 - 2015-09-24 17:19:41 UTC  |  Edited by: Zad Murrard
Naia Liz wrote:

And after I'm done inventing, I want to come back and say I got X manufacturing runs from these 10 invention runs


An easier approach is to use the probability of the invention success and account that to the total costs. (and ignore what really happens)
At least that let's you do some cost analysis before hand. In the long run it should be quite accurate.

Naia Liz wrote:

But what I'd like to do, for example, is to say I'm gonna do 10 invention runs with that BPO and that decryptor : give me my shopping list and how much it's gonna cost me in Jita


Maybe you actually are doing this but
wouldn't you rather want to start by saying:
'I want to have ~X amount of finished products' in time Y. My analysis shows that I can probably sell them in Z days in place A for a likely profit of B'
Now let's figure out all the possible combinations which lead me to that and calculate which is the cheapest?
Zifrian
The Frog Pond
Ribbit.
#10 - 2015-09-24 18:35:59 UTC  |  Edited by: Zifrian
Naia Liz wrote:
Zifrian wrote:

On the BP tab, you can see the invention success rate as well as the runs on the 'Inv' tab (the one with facilities and options). You can select a decryptor there and if you double click the invention costs label (with the price) to see all the materials. All the calculations are included in the numbers you see.


Aye, saw that, thanks.

But what I'd like to do, for example, is to say I'm gonna do 10 invention runs with that BPO and that decryptor : give me my shopping list and how much it's gonna cost me in Jita. And after I'm done inventing, I want to come back and say I got X manufacturing runs from these 10 invention runs, tell me what components and items I need to build, what I need to buy and how much it'll cost me. And in the end, I want the app to tell me how much I spent in invention and in manufacturing and compare this to the selling price of my finished item.

I coded an app doing just that, but I did it without using the EVE API so I have to keep my own database updated, which sucks. And right now I don't have time to code a new app ^^. Is your application suited for that kind of use ?

I think Zad's response is similar to what I'm thinking. I take the approach that you could invent and produce an item for an infinite amount of time, so your success rate approaches the rate shown. If you want to make 100 items, the information shown will be what you need to do make the 100 runs if you get perfect invention returns. Of course this is not how it really works but over time with a lot of runs you will be close to that.

When I did T2 production regularly, I ran continuous invention runs of items and just built constantly. So overall, my invention costs averaged out. Using your method, you could have a good run and make a lot of isk but then you will have a bad run and lose isk but in the end it's closer to the mean cost regardless.

IPH just displays that cost so that no matter your "luck" you will always know the average cost to invent the bpc to make the item. When you pull up one run of something, that's how much you will spend on invention and manufacturing assuming an infinite production chain. For the shopping list, sometimes you will be short, sometimes have extra...but again, that's just the way it works out and over time you have about what you need. If you consider all producers in the game, they are going to approach the mean cost anyway (all other things being equal) so this approach makes sense.

Making isk in the T2 market is probably more about knowing the market and planning out your production to see if you can take advantage of profits when they present themselves. I remember when Huggins were hot as hell and Jita had like 4 on market. I moved quickly and got into the market before it got saturated but I knew what my invention and production time was to see if I could get it done quickly enough, which I did and then was quickly supplied by others with the same idea. After that, I moved on to something else but I had a good few weeks of production and profits. Compare that with jump freighter production and you can see how quickly you can lose out on profits that you saw just a month ago if you don't know the market well.

If you still want to do your method, you would have to record the amount you spent on invention, then when entering the total runs you have of the item, update the Addl Costs field to include the invention costs you recorded and then check the 'Ignore Invention' in the options tab.

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Leila Meurtrier
Why Am I Not Surprised
#11 - 2015-09-24 19:17:16 UTC
One big point is utilizing the buyback. Your neighbors next office might mine/do PI/explorations, why not help them while you are helping yourself? Sure, it won't supply you in full, but this will give you something with a bit of discount. I don't think that you'll be able to workout 10% one, but up to 4% can be arranged with little to no problems.
Naia Liz
New Eden Exploration and Technologies
#12 - 2015-09-24 20:02:58 UTC
Hmm, thanks a lot for your input. I've been trying to keep really detailed numbers on my business, keeping track of every single invention/manufacturing batch - knowing that a good batch would be followed by a bad one. But I guess I just need to see the big picture, find out what's profitable on the long run and just do it, knowing that the stats will even out :)