The Price of Production

In which the author builds something slightly smaller than a titan, but still puts numbers in bold text.

I have been interested in the idea of manufacturing items in EVE Online for a while now.  Mining lots of raw materials is just the “harvesting” part of any MMO trade skill.  To really become invested in trade skills you have to make things and maybe even try to sell them.

I am a trade skill sucker from way back.  To paraphrase an old joke,

Q: How do you make a small fortune in MMO trade skills?

A: Start with a large fortune.

That is classic me.  Find a way to make some cash, then find an in-game trade skill mechanism to piss it all away.

So I decided to play it a little more carefully this time around.  Mining has been paying the bills pretty well, but manufacturing is new territory.

One lesson I have learned from trade skills is that consumables are usually the better money makers.  Consumables in EVE mean ammunition.

Being in Caldari space, ammunition means feeding hybrid turrets and missile launchers.  I decided on missiles.  When it comes to small hybrid charges, there are eight choices.  They are:

Antimatter
Indium
Iron
Lead
Plutonium
Thorium
Tungsten
Uranium

For me that was too many choices.  It was too likely that I would choose the wrong one to make or, even if I chose the optimum charge to use against the local Guristas pirates, that the new players buying the charges would not know which was best and would buy based solely on price.

With standard light missiles, there are only four choices:

Bloodclaw
Flameburst
Piranha
Sabretooth

With only four choices, I felt more comfortable with missiles.  I chose to go with flameburst missiles for my first experiment in production.  The four choices only differ in the damage type they inflict, with flameburst, being true to the name, delivering thermal damage.  Thermal happens to be one of the weaknesses of the local Guristas pirates.

The blueprint original for flameburst missiles cost me 144,000 ISK.  Each run with the blueprint produces 100 missiles and requires only tritanium and pyerite, minerals I have in quantity, for materials.

I was a little bit confused at first.  The blueprint shows a “production limit” or 1500 runs.  At first I thought this was the total number of runs the blueprint would support.  But that is merely the number runs a blueprint can support per production session.  Basically it means that with this blueprint I can make, at most, 150,000 missiles per single production session.

Thanks to the tutorial missions, knew how to get a production run started, so I began manufacturing.

I did a couple of short production runs at first, starting with 500 missiles, just to see if they would sell at all.  They did, so I eventually cranked up production to 100,000 missiles a run.

100,000 missiles takes about three days of production to complete, so I did a couple of shorter runs first to keep sales up.  The bigger the production run, the less the run costs per missile, so it is better to keep production levels high if you can.

Now, after 12 days of making and selling flameburst missiles, I have some numbers to analyze.

Actual Missiles:

Total Produced to date: 373,000
Total Sold to date: 55,631

Looking at it from a cash outlay standpoint:

Manufacturing cost per missile produced: 0.23 ISK
Fees (tax, broker, blueprint) per missile sold: 0.36 ISK
Average price per missile sold: 8.05 ISK

With 7.47 ISK per sales coming back to me, that is a 93% profit margin. Not bad at all!

Too bad that isn’t the total cost.

At my skill level, each run of 100 missiles requires me to supply 68 tritanium and 78 pyerite.  While the raw materials do not cost me cash out of hand, there is opportunity cost involved.  I could quite reasonably turn around and sell tritanium for 3 ISK per unit and pyerite for 4.50 ISK per unit.

So I have to add two more line items to the cost:

tritanium cost per unit: 1.86 ISK
pyerite cost per unit: 3.51 ISK

Total cost per flameburst missile: 5.96 ISK

That is a net profit of 2.09 ISK per missile, which still is not bad.  A 25% markup works as long as you turn enough inventory.

Net profit from flameburst missile production and sales: 177,915.50 ISK.

Observations:

I love the market in EVE for giving me the information to make these calculations.  Yes, I could make similar calculations with EverQuest II, but with so many raw materials available at different levels, the prices tend to fluctuate wildly. 

The market is not price elastic when it comes to competing against other stations.  The cost is generally too low, so people will just buy missiles from the station where they are located.  The travel time is not worth the ISK savings.

Buyers will nearly always, if they are paying attention, choose the cheapest missiles in a given station.   I had somebody buy a lot of 200 missiles I had priced at 8.10 ISK each for 16.85 ISK each.  I am not sure how that worked out.  But sales dried up when another player dumped a big lot of missiles in the same station for 8.00 ISK each.

Putting missiles up for sales at multiple stations works well.  I said above that people won’t travel to buy a cheap missile, but it you have them for sale in their station, they will buy from you without thinking.

I am not going to get rich off of flameburst missiles.  Not in the short term, anyway.  This is a long term proposition.  The experiement is paying for itself however, and did so almost immediately.  That makes it unlike any trade skill in any MMO I have ever tried.  I have made money eventually on some of them, but I have never had a trade skill pay for itself so quickly.

Like my mining operation, I am going to keep manufacturing a self-funding prospect.  Now that I am bringing in cash I am starting to look for the next blueprint to purchase.