Let's say that 1 tritanium cost 6 ISK on the major hub in your zone. You find an item for mere 1 ISK on the market that you can reprocess for 10000 tritanium. Then you craft an item from that 10000 tritanum and sell it for 40000 ISK.
What is your overall profit? 39999 ISK
Are you a smart businessman making good profit? Absolutely not!
Every operation must be split into parts. A part can be any creation of an item from another (or from farming). The part should be defined in a way that it cannot be split into smaller parts which has a price tag on the market.
The example above has three parts, the first is getting the item below market price. The item has the running price of 40K, so picking it up for 1 ISK has 39999 profit. The second part is reprocessing the ISK item (20000 ISK profit) and the other is crafting the second item (-20000 ISK profit). Now it becomes obvious that the third part must be forgotten and the tritanium must be sold. If the item would have 70K running price, than the profits would be 69999, -10000, -20000, making reselling the item the best choice.
The ship manufacturers forget this now in masses, selling their ships on prices calculated from old material prices, often below current material prices. They should recognize that in the changing market holding materials is an operation itself (investing) and they shall either resell the materials on the new price or craft only if the crafting itself is profitable (calculated from running price).
Don't forget time! Neither your own worktime, nor the profit rate of your capital. For example if you work for 100M/hour, then buying an item for 10M in Rens, flying it there in half an hour, selling for 20M and flying back in another half an hour looks 10M profit, but actually it's -90, assuming you could do your normal 100M/hour activity instead. If you couldn't then your work does not worth 100M/hour. Picking up an item from a buy order and resell it for 10M more takes like 10 seconds and I often do such things, but it doesn't mean I have 1M/sec = 3.6B/hour income. My average must be calculated.
Buying 1B worth of item, saving the transport time by setting up a courier contract for 10M and selling it for 1.1B is not 90M profit if you had to wait a whole day for the courier, even if you could do something else. If your average profit rate is 5%/day, then waiting for the courier cost you 50M. Maybe you should have given a large tip to speed it up or run it yourself.
So, don't let the nice overall profit fool you, analyze every step on its own, probably half of your operation parts are on loss or pitiful profit. Cut these out and enjoy the large profits of the good parts.
EVE Business report: Saturday morning 10.5B (2 PLEX behind for second account, 0.1B spent on Titan project)
Sunday morning 11.3B (2 PLEX behind for second account, 0.1B spent on Titan project)
Monday morning 11.9B (2 PLEX behind for second account, 0.1B spent on Titan project)
Last Monday my report was "9.3B (3 PLEX behind for second account, 0.1B spent on Titan project).", so in the last week I earned 3.1B. Missing a day and locking 1B into slowly selling items taxed my income, but it's still almost a PLEX every day.
Remember that you can participate in our EVE conversations on the "goblinworks" channel (60-80 people on peak time) and your UI suggestions are welcomed.
I also seen a great player initiative: Save Jita! However I have doubts as the griefers are already considering their ships lost, so shooting them down won't make much difference.
What is your overall profit? 39999 ISK
Are you a smart businessman making good profit? Absolutely not!
Every operation must be split into parts. A part can be any creation of an item from another (or from farming). The part should be defined in a way that it cannot be split into smaller parts which has a price tag on the market.
The example above has three parts, the first is getting the item below market price. The item has the running price of 40K, so picking it up for 1 ISK has 39999 profit. The second part is reprocessing the ISK item (20000 ISK profit) and the other is crafting the second item (-20000 ISK profit). Now it becomes obvious that the third part must be forgotten and the tritanium must be sold. If the item would have 70K running price, than the profits would be 69999, -10000, -20000, making reselling the item the best choice.
The ship manufacturers forget this now in masses, selling their ships on prices calculated from old material prices, often below current material prices. They should recognize that in the changing market holding materials is an operation itself (investing) and they shall either resell the materials on the new price or craft only if the crafting itself is profitable (calculated from running price).
Don't forget time! Neither your own worktime, nor the profit rate of your capital. For example if you work for 100M/hour, then buying an item for 10M in Rens, flying it there in half an hour, selling for 20M and flying back in another half an hour looks 10M profit, but actually it's -90, assuming you could do your normal 100M/hour activity instead. If you couldn't then your work does not worth 100M/hour. Picking up an item from a buy order and resell it for 10M more takes like 10 seconds and I often do such things, but it doesn't mean I have 1M/sec = 3.6B/hour income. My average must be calculated.
Buying 1B worth of item, saving the transport time by setting up a courier contract for 10M and selling it for 1.1B is not 90M profit if you had to wait a whole day for the courier, even if you could do something else. If your average profit rate is 5%/day, then waiting for the courier cost you 50M. Maybe you should have given a large tip to speed it up or run it yourself.
So, don't let the nice overall profit fool you, analyze every step on its own, probably half of your operation parts are on loss or pitiful profit. Cut these out and enjoy the large profits of the good parts.
EVE Business report: Saturday morning 10.5B (2 PLEX behind for second account, 0.1B spent on Titan project)
Sunday morning 11.3B (2 PLEX behind for second account, 0.1B spent on Titan project)
Monday morning 11.9B (2 PLEX behind for second account, 0.1B spent on Titan project)
Last Monday my report was "9.3B (3 PLEX behind for second account, 0.1B spent on Titan project).", so in the last week I earned 3.1B. Missing a day and locking 1B into slowly selling items taxed my income, but it's still almost a PLEX every day.
Remember that you can participate in our EVE conversations on the "goblinworks" channel (60-80 people on peak time) and your UI suggestions are welcomed.
I also seen a great player initiative: Save Jita! However I have doubts as the griefers are already considering their ships lost, so shooting them down won't make much difference.
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