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Friday, 31 May 2013

Update and looking ahead

It will be a slow weekend for me making ISK given i will be away.  Indeed, next week will be slow given i am away on business for much of it.  It will be interesting to see what sells during the period that i do not update my sell orders.

I am keeping my minimum item gross margin requirement to 20%.  i.e.  if i sell an item for 90m having purchased it for 72m then i make a gross profit of 18m and a gross operating margin of 20% (=18/90).  In other words, a 25% mark-up.

And then of course come the other costs of doing business: a broker fee for posting the sell order = 0.80% of the sell order; a sales tax on sale = 1.05%; and the hauling fee to PushX Industries which is so far 5.8m a contract.

I am now starting to contract to PushX Industries haul over 300m ISK of cargo value at a time.  If i achieve the 20% gross profit margin then i should sell 300m ISK of cargo for 375m and make 75m profits.  Therefore the hauling fee of 5.8m ISK represents 1.55% on the sale.

Hence, in all my cost of doing business is 3.4% of the sales value which therefore leaves me making a minimum profit margin of 16.6%.

As my wealth rises and the amount if ISK i wake up to increases the pressure remains on how to reinvest that ISK to earn a suitable return.

To that end i am now buying items for up to 150m ISK.  At this level i am finding that i am mainly buying Implants.  Blueprints at this price tend to sell once every few days instead of at least once a day which is what i am looking for.

Indeed, whilst i am learning Retail 5 i am restricted to posting only 53 active sell orders and therefore i am actively having to make a decision not to sell some Blueprint items in favour of selling some higher profit Implants.

The month of June is going to see me doing a lot of travelling and therefore my time on Eve will be less leading to a lower profit progression.  I suspect i will continue to move up the price of items to reinvest my ISK in until i find myself with a Plex worth of ISK + a little bit more to allow me to start a new account in another Trade Hub.  So, say about 570m ISK that i find i can not readily reinvest with my current Main character.


Current wealth is  1,285,359,793 ISK made up from:
  • Items for sale 1,367,397,412 ISK
  • less a 20% provision 273,479,482 ISK*
  • items in storage for sale 63,600,000 ISK
  • items in transit 0 ISK
  • ISK in wallet 127,841,863 ISK

I don't count assets I use in the course of my business such as ships, fittings etc nor do I add back any expenses such as skills purchased etc.  The wealth I disclose is made up of items that are ISK or are in the process of being converted to ISK.
 
 
* I take a 20% provision against the items I am selling.  Eve calculates wealth by adding up the value of the sell orders hence it is possible to increase your wealth by buying an item for 100m ISK and putting a sell order for 120m ISK (in this case your wealth would increase by 20m ISK).  For me, I want my wealth to be calculated at cost until i finally hold it as ISK.  I know that the value of my sell orders will likely fall over time as I update my orders downwards as competition reduces their prices before my items are sold.  Hence the 20% provision is my best guess as to what the maximum reduction I would need to make to my sell orders as a whole before they are sold.

2 comments:

  1. I just wanted to thank you for this blog and how clear you've been about the process. Obviously you can't detail exact items without creating unwanted competition but the procedure is key and you've made it crystal clear.

    I've just started working this method of region trading. I started last night with 4.8 mil in my wallet, spent 4.1 mil on items to trade. So far all but four have sold. wallet is up to 13.8 mil. In the morning I'll be buying 13 mil of stuff after I spend some time researching eve-central

    ReplyDelete
    Replies
    1. good to hear :)

      Personally, i would be repeating that trade that took 4.1m ISK to 13.8m ISK until i got to at least 100m ISK.

      I found that the same trade could work for a long time before the amount it made was small compared to my wealth.

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