What's the next step for an industrialist?

Matt [ Editor ] Mar 16, 2011 (Edited Mar 16, 2011)

Ok, second post unusual I know but as, ammo was mentioned here and thought it could do with a little TLC, and is a different sub answer to my main answer, but thought it could benefit everyone.

Letting a little secret go on ammo here..... As with any item, you need to attend to supply and demand.

Ammo, both Supply and Demand are high, so margins are low, but turnover should be high if you price competitively.

Ammo is never going to make you billions of ISK in profit, but is a nice little side and consistanct income, especially if you can make T2 ammo yourself. The Ammo Market is never going to Crash, it may spike and receed, but it will always be needed and always used in large quantities.

Ammo as a trading item needs a little more thought, as Serpentine Logic comments you need to place the ammo at point of consumption rather than at trade hubs....

Try going to the mindset of the player, Ammo is often left till the last minuete to buy, therefore when they buy it they often need it ASAP, and they won't want to have to travel to get it, the convenience factor on ammo is exceptionally high, be it due to needing to get in a fight fast, not being able to go into high-sec due to war or just being to lazy to go all the way to Jita for 10k rounds of medium EMP rounds for ratting. This means unlike most items you will make more money away from Jita.

So what to buy, basically in missioning hubs it would be ammo to serve the main missioning ships, ie mainly cruise missiles for ravens and a lot of them as cheap as you can bare to sell them for, even if you could only get 50 ISK profit per unit you will still make a mint, on the other side, for 0.0 this means PVP ammo, so it is best, (at least the stuff I would buy!) to go for Faction ammo and certain T2 Strains.... In this instance DPS is king and players are willing to part with much more isk for rounds that could mean the difference between losing a half billion isk ship and saving it.

Ammo Sells best where the demand is highest, no surprise here really, but think about where most of the ammo is consumed? 0.0 best place is somewhere in highsec close to 0.0, the closer the better, and know who you are serving.

For example Torrinos as suggested above is an excellent idea as EC is the next jump, you are serving MH, FCON, Goons, and the rest of the NC. make friends with players from as many big alliances as possible and find out what ship is flavour of the month! A few months ago for the NC anyway it was the Heavy missile Drake, this ship has now sailed but at the time I made a small fortune by stocking up on modules and Faction Varients of Explosive and EM heavy missiles. Just don't get caught with your pants down by holding too much stock in this instance as fleet composition is changing all the time.

NN comments

Great post: +1 :D

Mar 17, 2011

shela white Mar 21, 2011

Options for the Next Level Industrialist:

Investment Corporation - making an investment corporation which facilitates selling share and bonds to EVE investors. ISK will be given to the corporation for you to use in ISK gaining schemes. Weekly or monthly interest will be given to the investors until the end of the Maturity period for the Investment.
HighSec POS Operation - establish a POS for Research or Refining. You can have the advantage of selling BPC or upgrading BPOs and reduced refining losses.
War Financing - ask or pay willing corporations to make war on other corps in the nearby areas of your market of operation. As war progresses, ammo, ships and modules will be a very important commodity. Make sure that you have your goods ready to sell once the war starts.
Event Financing - one example of this player driven event is the Hulkageddon which promotes destruction of industrial ships. The event also makes an opportunity for the industrialist to sell Hulks, indy ships, ganking ship and modules.

NN comments

Real Name [ Editor ] Mar 9, 2011

You ask "where to now" but it's unclear what you mean.

Are you in it for the isk, or do you want to try new and different things? Really, it's a fundamental question that will affect this decision greatly.

If you're in it for the isk, then sites like eve-profits.com will point you in the right direction, so you can discover better returns per day on your precious manufacturing slots.

If you continue down the 'more volume' route, though, then you'll inevitably take a side trek to pick up some trade skills; it's unlikely that you'll be able to pull it off solo.

Maybe build up a corporation of like-minded individuals and supply items to a null-sec alliance - you will lose margin, but gain huge potential volume (for instance, a fleet fight chews up a day's manufaction production of an entire null-sec region every ten minutes just for the ammo, so they obviously can't be self-sufficient)

Another option is to build up a particular system as a low-sec trade hub, since low-sec really needs them. There's already a low-sec hub being kick-started in faction warfare space (see the market Discussion eve forum for details) but there's no reason why there can't be more. It's an epic undertaking, but it's quite an achievement if you can pull it off.

If you're bored of the 'more isk' grind and want to try new things, then by all means check out ship (or capital ship) construction, T2 production, combat boosters, science and research, even T3 production - whateve floats your boat. Corps such as Hell's Librarians specialise in T2 production, and there are bound to be ones that specialise in other types of manufacturing if you wish to join them and try it out.

NN comments

Eventually I am in for the ISK or more exactly the ISK per hour so when I branch out in to PvP I have enough ISK coming in to cover my costs. As my PvP alt is still in training and am taking this time to explore more of the areas of the Eve industrialist to see if I can improve the flow of money. Also, my current income is very much based on a single revenue stream and if something happens to that (ie a patch shafts that market) then I am screwed. So I want to add some diversity to my industry.

Mar 9, 2011

Well, in that case, I suggest you do some research for T2 production, since it allows a single character to produce blueprints as well as manufacture. I suggest starting with Scourge Fury missiles and Cap Recharger IIs but you’ll work out what’s best for you.

As far as manufacturing goes, check out

http://eve-profits.com/list/The_Forge

and see whether it’s worth your while changing what you manufacture.

Mar 9, 2011

Matt [ Editor ] Mar 8, 2011

Man that's a big question.

Trading at the very fundermental level consists of Buying Low and Selling high.

How you do this is incredibly convoluted and relies on:

skill, patients, practice, economic understanding, demand and a certain amount of luck.

Best to start with low value items/high turn over, use EvE Centrals trade route finder, buy a tones of them as cheap as you can.... either move them to somewhere else where demand is greater or supply is lower and therefore price is higher or hold on to them for a month or two till price rises sell high. Look at trend curve on the market, look for items at bottom of the cycle and buy those.

Why the low value items, being as your an indy player I would take something that you know well something like tritanium for example.... You must know that atm price of tritanium is up due to Hulkageddon etc!

It is always in demand, always being used, and no mattter where you go in eve it will always be needed. Demand is constant and high, supply usually raised to meet it where it stabilises around the 2.0 ISK/unit. With hulkageddon miners have been shored up not mining, the supply isn't being met but the demand is still there, so people have to pay more to get there minerals, the prices go up!

Now miners can get out and mine veld again, the prices will start to drop, the market is a living thing and events in eve influence the prices.

Low value items like minerals won't make much margin, but then you are less likley to lose money, and you understand the market from buying them all your career. Trick is to anticipate when the price will jump, buy as much as you can before when it is cheap and then sell when it's high. This is where the skill and luck comes in.

Get comfortable with the cheap stuff before moving up to more costly and higher risk items. It's supply vs demand always.

This isn't really a question that can be answered, not without a series of lectures or being spoon feed trades till it is picked up.

NN comments

Just a suggestion: If you’re planning on buying then holding onto a good for a while before selling you need consider what the oppurtunity cost is of having those funds tied down over a long period of time and the amount of ISK you could have made had that capital been available to you. Personally I don’t feel profit or profit % are the best measures if the turnaround time (between buying and selling) is too long. It’s really all about ISK/ hour in the end…

Mar 9, 2011

Good comment, ISK/Hour is the end goal…. however it is not the be all and end all, there are other reasons to buy up stock like this beyond the obvious. Most business have a working capital of around 60% I suggest working to this sort of liquidity ratio, at any one time I have access to approximately 30 – 40 % of my ISK, the rest is tied on the Market. I find this gives me the best opportunity for opportunity purchases yet keeps me capable of maintining ISK Income.

Mar 10, 2011

I agree with Matt. It has become more profitable for me to purchase long-term in essentially the manner he is describing, put my diversified basket of items on the market, and continue to rat for large bounties in nullsec. This is preferred to hopping back to hs every few days to work the market. (Nullsec markets don’t work like highsec markets, so I’m not bringing them into the equation as a replacement for highsec market trade. Rather, they are another, separate component of income, based off their own rules).

Mar 15, 2011

If its not worth doing it with your main… why not just pop and alt with some minimal trade training into the hub to work the market for you? Then just log in once or twice just to update the prices? If you have a product you are holding for more than a month and the market moves to your prediction sure you are going to make a ton of ISKies but the oppurtunity cost of those funds is huge.

Mar 17, 2011

Eg: I buy 2000 widgets at 200 000 a pop tying up 400 million in ISK, I sell 2 months later at 500 000 a pop and make 600 million profit. But what was my oppurtunity cost? I can usually make (conservatively speaking) 20% return on my capital every 5-7 days therefore in 2 months (or 60 days) I could have made close to 2-3 billion with the same capital. That means that investment essentially cost me 1.4-2.4 billion in ISK due to the fact that I couldn’t use those funds for 2 months. I’m not saying holding and selling isn’t viable, but the reward better be pretty good. Working ISK > Invested ISK

Mar 17, 2011

P.S: Please could you explain how the nullsec and lowsec markets work mymindisglowing… I’m really interested to know since I don’t have much experience in those markets and would be interested in the viability of trading in them…

Mar 17, 2011

Know you asked Mind and I too would be interested in what he has to say on the matter. From my POV, they work in much the same way as hi-sec, but the supply demand curve is different. Value for money isn’t always the primary driver, convenience and security is much more important. Profit margins are much bigger in 0.0, but risk is much greater also. Pricing is finely balanced between ripping off your fellow alliance, being cheapest in the area and making as much as you dare.

Mar 17, 2011

Pose it as a separate question, and I will answer it.

Mar 18, 2011

Flash Hazardous [ Editor ] Mar 9, 2011 (Edited Mar 9, 2011)

Long term trading profit is all about a sharp knowledge of the market and having the flexibility to meet demand. At it's lowest level, trading consists of buying low and selling high in a single station or solar system. More advanced trading includes playing the markets in different regions, hauling to meet demand and keeping an eye on general item trends. Then you get the high end stuff like market manipulation, cornering a market in a particular region and strategic trade hub trading (a station close to a large alliance or corp in nullsec).

Now I'm new so I won't even pretend to know how to do half the stuff I stated above. Though I will tell you whats working for me...

The 10's of billions of ISK profits you are talking about can only be achieved in the long run. How much you make in trading is always limited by the amount of capital you can put up and the turnover time from buying to selling. If the general product line I'm trading in gives me 20-40% profit on invested capital then, the size of my wallet will determine my profit in the end, how quickly I can make that profit depends on how efficient I am at buying, hauling then selling in another region. Higher capital = higher profit.

Use my example: I have set up a trading alt in each of the major trading hubs in EVE (Jita, Rens, Amarr and Dodixie) with skills in Broker Relations and Accounting (for those pesky taxes). In addition I have 2 haulers working towards freighters for hauling and flexibility. In a fairly short amount of time, i've been able to increase my starting ISK five fold, simply by buying from low buy orders in one region and selling to higher buy orders in another (This is a great way to increase turnover time on products when you're aiming to build up your capital reserves quickly as selling through sell orders typically takes longer as you're constantly waiting for buyers and being undercut by others). Once a week I'll scan through a couple of select products for price differences between markets, put my buy orders in for various regions then haul to more profitable regions 2 to 3 times a week to make my profits. Log in 2-3 times a day to update your buy orders (about 30 minutes), hauling 2-3 times a week takes 30-45 minutes a haul and the once a week scanning of markets takes roughly an hour... so the time investment is pretty small in comparison to missioning, mining, etc.

I currently make about 20-30 million a haul... this doesn't seem like much but like I said it all depends the size of your wallet. 2 weeks ago I was only making about 4-6 million a haul... and in about month I hope to make 200-300 million a haul. As your capital grows so does your potential for profit. From what I've seen trading has the potential to make you the most ISK/hour of any profession in EVE (but then again I'm a noob so I can't really confirm that).

The world of trading is far more complex and layered than the simple system I'm running above. The ISK potential is huge and the further you delve into this aspect of EVE the more interesting it gets. I would say give it a shot if your goal is the same as mine: Make enough ISK in 1 week to pay off all my accounts and fund my PVP main or nullsec corp with all the ISK it needs for ships, fittings, POS modules, etc.

EDIT: Just wanted to add a few pointers on increasing overall profit and efficiency:

1) Turnaround time from buying to selling is important, with that in mind try find products that trade in high volumes on markets... theres no use making 20 million ISK on buying and selling an item when it takes you 2 months to do so. Not only are you making painfully slow ISK, your funds are tied up and you'll lose all out on all that ISK you could have made with that chunk of capital

2) Deal in products with stable prices initially until you feel you have gained enough experience to start speculating on the items with wild price fluctuations. If you hit a product on an upswing you can make killing, if you catch it on a downswing you either have to sell at a loss or hold the goods until the next upswing which means tied-up capital and oppurtunity cost

3) When you're buying -> hauling -> selling, the % profit or straight profit figure is not always the best indicator of the profit efficiency of the product. Turnaround time (see point 1 above) is important as you have to factor in the hauling, but so is profit/m3 of your hauler. Sure buying a reselling a frigate for 50% profit but that could take up 25% of your cargohold when hauling meaning you're not making optimal use of your cargohold. eg: 8 000 000 profit @ 2500m3 of cargo space = 3200 profit/m3 vs. 50 000 profit @ 5m3 of cargo space = 10 000 profit/m3

So as a rule of thumb and if we assume there are no capital constraints from your side: 1) Single station trading efficiency is a function of turnaround time and profit so = profit / turnaround time = real profit per hour 2) Buy Haul Sell trading efficiency is a function of turnaround time and profit/m3 so = profit / m3 / turnaround time = real profit per hour

4) I just figured that I have so many more things to say so I'll rather write a guide on this matter given my own experiences in the past couple of weeks LOL

NN comments

slippers_50 Mar 9, 2011 (Edited Mar 18, 2011)

Ammo is generally a good place to start. It sells in huge volumes and is not very capital-intensive. It won't make you huge profits, but it's a place to start. Nobody is going to tell you REALLY profitable markets, since they don't want any more competition.

NN comments

Is it actually spam? :D I think so.

Mar 9, 2011

Interesting… Next up they’ll be jettisoning cargo containers with free vouchers for jeans… redeemable at a station near you. Love how he just slipped it in there slap bang in the middle of his reply. I guess demand for jeans is massive among the capsuleers of EVE XD

Mar 9, 2011

In addition I just wanted to add that I found the ammo market a bit too competitive and yes volumes are huge but turnaround time from buying to selling takes a little too long (considering the sheer number of units you need). Though I can’t say for certain because my “experience” consisted of a weeks worth of effort trading it in 1 tradehub. Since everyone seems to suggest this is a good product to trade I guess I can include it in my next haul.

Mar 9, 2011

try somewhere less competitive, like Agil or Torrinos. (btw Agil doubles as a mini-trade hub as well as a mini-ratting hub for those who don’t mission in Palas)

Mar 10, 2011

what's your question? be descriptive.

What's the next step for an industrialist?