Draw Down of Production

I am closing down most of the first part of my production experiment.  I have managed to go in and prove that money can be made with some basic blueprints in EVE Online.  I ended up producing the following items:

Flameburst Missile
Production Cost Per Unit 6.33 ISK
Average Sale Price 8.84 ISK
Comment:  The first item I decided to produce.  Because I use a lot of these missiles, it made sense.  While I ended up with a net profit after all costs, including materials, I did face a lot of price pressure in some systems, so I did not exactly get rich making these missiles.

Sabertooth Missile
Production Cost Per Unit 10.91 ISK
Average Sale Price 17.89 ISK
Comment:  A slow seller, but there was also not much competition, so I made back my investment over the course of my run.

Widowmaker Missile
Production Cost Per Unit 29.10 ISK
Average Sale Price 31.01 ISK
Comment:  Chosen more for the fact that I couldn’t find any close by one night when I needed some heavy missiles.  Depending on what system I was selling in, I either faced a huge amount of price pressure or I was able to charge freely.  I did not make my money back on this blueprint directly, but that does not take into account the fact that I fired a good chunk of the missiles I made out of my own launchers.

Antimatter Charge S
Production Cost Per Unit 10.45 ISK
Average Sale Price 12.10 ISK
Comment:  I picked this up on the suggestion of Debes and it turned out to be a good deal.  I made my money back and, because I have gone all missiles with my Drake, I did not even fire off any of the inventory.  Money made back on my investment.

Iron Charge S
Production Cost Per Unit 8.02 ISK
Average Sale Price 5.17 ISK
Comment:  Simply the worst thing I produced.  I bought the blueprint way back in January when I was starting to think about production.  I found the blueprint when I was moving stuff to our corp HQ and decided to produce a run.  A full run of 150K charges.  I had the materials handy, but I should have checked the market first.  The price point is horrible.  And even priced way below costs I have only sold 1/3 of the lot.  Anybody want some iron charges, cheap?

Expanded Cargohold I
Production Cost Per Unit 959.92 ISK
Average Sale Price 4824.80 ISK
Comment:  The best item I chose to produce.  I don’t sell huge lots of these, like I do with missiles or hybrid charges, but they sell consistently and at a decent margin.  I will continue to produce these as time goes on.

But why would I stop producing any of these (except for the iron charges) you might ask.

I finally woke up to why the price competition was so fierce and why some people seemed to be selling below the cost of producing these items.

The thing with EVE is that it does have some of the same problems that other MMOs face.  One of those problems is often misunderstood mudflation.  The term implies that all prices rise as a MUD or MMO ages.  But, in reality, some items fall in price because they become too commonplace.  And one reason they become common because easy mobs drop them all the time.

And what do easy mobs… say NPC pirates… drop all the time in EVE Online?

Light missiles, small hybrid charges, and frigate modules.

So I found that I could buy things like Flameburst missiles, antimatter charges, and even Widowmaker missiles, for as much as 35-65% less than the cost of production. 

Why spend 29 ISK making a Widowmaker missile when you can put out a buy order and pick them up for 15 ISK?

So my economic empire has shifted priorities.  It will be arbitrage rather than production for most things now.  I have buy orders out now for my area to purchase millions of missiles and charges at prices well below my cost to produce, even with material effeciency research.  And the missiles and charges are coming in, so I have begun replenishing my sales channel with these lower cost items.

Still, some things are better to make.

Expanded Cargoholds, for example, do not drop very often and have buy orders all over for pretty close to the cost of production.  So I am better off making those, as they sell for a large mark-up and move at a steady rate.

So for my next round of production, I am looking for things that are in demand that do not drop, or do not drop very often, from NPCs.  Mining crystals might be something to look at.  And rigs, though the parts are hard to come by.  And then there is always blueprint copying and invention to look into.

7 thoughts on “Draw Down of Production

  1. Kirith Kodachi

    Be warned: invention can be lucrative but requires a large initial investment. … I think I posted that comment here before. If I did, I apologize for repeating myself. :)

    If you are looking for something to make good easy money, consider cruise missile production. Serious mission runners use cruise missiles by the hundreds, more than heavy or light missiles. And the profit margin is higher if you get a researched BPO/BPC to produce from.
    Cheers!

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  2. *vlad*

    Ok, I don’t play EVE, so I have no real clue about how production works, but does ‘time of production’ figure in your calculations?

    For example, the margin on your cargo hold is abviously greater than on your misslies, but if you produce (and sell) missiles in far greater numbers, then the overall profit made over a period of time may be worth analysing as opposed to simply cost of raw materials vs selling price.
    Just a thought.

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  3. Wilhelm2451 Post author

    When I look at the spreadsheet I was using to track the numbers, I made more money (net) on 300 expanded cargohold modules (the maximum amount you can do in a production run) than 300,000 Flameburst missiles (two full production runs) and in less time. At the above margins, I have to sell 1540 missiles to net the same as a single cargohold. I tend to sell a few thousand missiles a night, while I sell 10-25 cargoholds a night.

    As for production time, a lot of 150,000 missiles takes about 4 days to manufacture, while 300 cargoholds take less than 2.

    Besides which, I am still in the missile selling business. Rather than producing, I am just buying them for 4 ISK each from people selling their NPC drops (all automated in EVE) and reselling them. It involves a little more work, rounding up the missiles into lots big enough to be worth listing (say 25K missiles), but I get to keep more than 2 ISK more for each missile sold.

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  4. Scott

    Wilhelm,

    I’ve been doing heavy production for about 4 month in Eve as well, but I actually started out doing pure trading with arbitrage to aquire goods to sell.

    What I found out however, was that many of the goods that I wanted to sell didn’t have a high enough volume in the used market for me to buy reliably, plus you have to fight other buyers by increasing your buy orders for the product constantly.

    So it got to the point that in order to maximize my profits and guarantee a steady supply of goods, I had to go into production to make my own products. Just because you’re a producer doesn’t mean you can’t arbitrage at the same time either in order to reduce your net overall cost per unit by mixing in bought goods at a lower cost (plus you cut out some competition trying to undercut you that resell).

    I definately recommend sticking with it, you just need to determine what product lines you focus on, and when to sell (sell when the profit is at a fair market, let the other fools sell when its at or near cost).

    You’re also on track with determining what the average profit to sell through a production run divided by the production time in order to compare to other products that may actually bring higher profits.

    Due to market fluctuations not all products are profitable at all times, Ships in a Eve market such as Jita 4-4 taking a Myrmadon as an example will swing from selling at near cost to as much as 4mil profit per unit. The funny thing is to watch over 20 sellers scramble over each other reducing their selling price down all the way to cost or a few hundred thousand isk above the 28 or 29 million it cost to produce. A smart seller will hold their inventory and wait till the price normalizes again.

    Anyhow, keep at it! If you want feel free to mail my trader ‘Seira Black’ an eve-mail with questions.

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  5. alaph

    I’m curious to know how you calculated your production cost?
    It always kills me when people claim that minerals are free if you mine them :) …I can tell by your numbers you don’t do this but I’m still curious as to how many variables you include to come to your total.

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  6. Wilhelm2451 Post author

    My spreadsheet includes the current market price for the minerals, the cost of the blueprint, the cost of material research, the cost of the actual production time, broker’s fees, and tax.

    I basically put all of that together and divide by the number of missiles created to get the per unit cost.

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