Over the weekend I picked up an Antimatter L blueprint original (BPO) that has 30 material efficiency and 20 production efficiency for 10 million ISK. The plan is to not only make my own ammo for my Rohk, but to also sell the ammo at various mission hubs around my area, hopefully leading to some steady income for my Industry/Mining pilot.
Long-time reads here know that EVE pretty much has my ideal crafting system. I love that the actual act of crafting is nothing more than a few clicks, rather than some poor version of Tetris or whatever mini-game people are always hoping for. If I wanted mini-games, I’d fire up the Wii. No, the crafting in EVE is all about a long series of interesting decisions, backed by a little research, and topped off with some time/effort put in. And of course it’s PvP, which keeps it interesting.
The contract for the BPO was 17 jumps away, and while flying to get it I was monitoring ammo prices in the various regions. The price per unit ranged from 70 ISK to 115 ISK, and the volume also greatly varied, showing me that there is indeed room to jump in and make ISK if done correctly.
The first thing I did was calculate base production cost, using local mineral prices and also the averages pulled into EVEMon, factoring material waste and adding in station taxes/costs. I also had to consider station taxes for listing the ammo for sale. This was literally done on paper at my desk, using the iPhone calculator for assistance. Excel Offline, yo! Once all of this was complete, I knew that if I sold the ammo above 100 ISK a shot, I’d be in the green, but to really make the whole thing worthwhile the price had to stay around 110 ISK.
I wanted to start with ammo for a few reasons. First the minerals to produce it are basic, reducing the likelihood of price fluctuation. I’m also able to mine what I need myself, which is a nice side-bonus if I have the time (One thing I like to do is take the Hulk out to a belt, and while mining set-up market listings for mission-drop stuff). As mentioned, its ammo I use myself, so that was a factor as well. Finally, it’s fairly quick to produce, easy to move around, and an item that gets consumed frequently, meaning volume is relatively high.
I certainly don’t expect to make instant billions off the BPO, but it should be a nice steady income stream going forward, and a relatively safe way to get into the production/marketing aspect of the game. Once I get some experience with the basics, I’ll likely expand into higher risk, higher reward ventures.
Well, everyone has to start somewhere. Ammo is supposed to be the root upon which one’s economic foundation grows if you’re a industrialist manufacturer. :D
The only thing with ammo, as I noted in my own missile production experiences, is that you have to be aggressive in your local hub buying out people selling mission drops. I always kept a buy order out for a little less than my per-unit production price because people will come back and sell drops for the very misleading “market average,” which includes the guy with the huge buy order at .01 ISK per unit.
The EVE economy is a game in and of itself. It is real-time, space-based version of Taipan!
I don’t play EVE, but question:
Why not buy the ammo at 70? If 100 is your break even to produce, it seems like buying at 70 is a 30isk profit vs making it yourself.
@Scott – That is actually why I got out of the ammo manufacture business. I found I could often buy missiles on the market for less than my cost to make.
I actually made a lot more money buying and reselling than I did in manufacturing.
The other factor is volume. Buying 100 rounds of ammo at 70 is not nearly as profitable as buying 1m rounds, factoring taxes, hauling, etc.
@Scott: You can buy at 70 and resell at 100 but the problem is that just shy of 100 is only his break-even point. An industry maxed pilot with the same BPO has a lower break-even and then you end up buying out a limitless market. Buying out the lower cost producers is a fast way to spend yourself to bankruptcy if you are buying below their cost. That kind of market PVP is a game played by people with isk reserves in the multi-billions. Establishing a lower margin but consistent production line is a solid first step. The only place you can corner or move a market by buying out the lower cost is in very hard to reach null-sec systems and even then most alliances actively monitor who is flipping prices in their space.
The details of the [EvE] game I cannot comment on, however:
Sounds like all the right checks for a budding start in any marketplace:
– Something you would be doing anyway, selling off excess not used.
– A ‘menial’ task those with cash would rather pay someone off to do. The need for the item/service is shared, however.
– Killing multiple birds with a single stone (other activities tied to the time window of mining).
The only thing it lacks is the ability to set up a system that would generate royalties?
Intrigued: does the EvE universe have high ebb and flow to the market, where even basic goods can see considerable mark-up? Or is the going so steady that a 10% RoI is the best you’d expect to see?
EvE is broken up into regions, where each region has it’s own market. The “prime” market (Jita) has very close margins, and the amount of variation tends to increase as you spread out from there. So out on the fringes, there is quite a bit of fluctuation.
For example, in the area I trade in, I use 10% as my minimum return. If I’m not getting more then that, then I don’t bother. That does keep me out of many markets, where the quantity of sales would offset the reduced margin, but those are also the most contested and being undercut is a constant issue.
Oh, and royalties are sort-of implemented by selling BluePrint Copies, which are made from BluePrint Originals – they inherit the efficiency improvements, but have a limited number of runs (BPO’s are infinite).
For common things, the BPO’s are seeded by NPCs so there’s not much market for BPC’s. However, Tech 2 stuff, which isn’t seeded by NPC’s, there is a thriving market for.
It is even more complex than Peter makes it seem. Since there is no instant delivery, you can corner a market in just one system for things like ammo, because when somebody needs that, they want it right away. They will pay a big premium to get it in-system rather than have to jump.
In fact, the fact that Jita has for sale literally every item that can be sold introduces an implicit premium to its prices.
Jita is a great seller’s market, but bargains can be had elsewhere for buyers.
Nice choice, with hybrids about to be fixed in the winter expansion. I’d expect the demand to go up then. And if all else fails, you can always research the blueprint to make Void ammo. Now all you have to do is get your standings up with an NPC corp to reduce your costs.
EVEHQ has a pretty good industry cost calculator (Prism), although I do entirely support building your own spreadsheets so you know what is going on.
I do pure market trading – buy low, sell high at the market hub. I stay out of the higher volume stuff like ammo though – there’s too many people already in those markets.
When I quit Eve, I pretty much had every single T1 ammo and ship BPO (except for battleships).
Why? When you scale up your production to the point where you need a freighter for hauling, you can very easily saturate the market. If you only have one blueprint, that’s the point where you either twiddle your thumbs or go do something else. I wanted to keep manufacturing and trading, so I opted to broaden my product portfolio. I had a spreadsheet with mineral prices, product prices and blueprint efficiencies, and it calculated which products were profitable to build.
However, what it couldn’t tell me was the market velocity; Even if the ROI for a product was great, the demand could be so low that there was no point to manufacture more of that product anytime soon. Eventually I got to the point where I had saturated the region’s market for every profitable product in my portfolio. I was sitting on a pile of cash that was way too much to invest into non-capital goods, and too little for entering into the capital ship market. So I quit.
At that point I’d have suggested reinvesting the cash into market trading/manipulation, or putting up a tower(s) and doing mining, research, invention and/or t2 production. T3 production and planetary interaction are also profitable.
Actually trading was my first and primary profession; No matter whether I was doing T1 manufacturing and PI in highsec or mining, running towers and T2 invention/manufacturing in 0.0. The CEO had a habit of burning bridges so the 0.0 operations got relocated several times and eventually shut down. The only things I haven’t done in the industry side are capital ship manufacturing and T3.