Month End Update April 2019

At the end of my first month my wealth is 10.3bn isk.  An increase of 7.3bn isk over the month.  Not bad i feel.



Plex

Lets get the Plex matter out of the way at the start - next month i will be using Plex to pay for this account and therefore that 7.3bn rise was without spending a casual 2.2bn isk to pay for the 500 Plex.

Right now, i have 500 Plex sitting in my hanger waiting to be used on the day.  My tactics will be to buy the next 500 Plex in the final two weeks of the period and then, over time, build up some surplus Plex to give me some flexibility.

But, the point here is that it took one full month for me to Plex my account and so play for free.


Strategy

Has remained the same.  45 minutes play time each day and a bit more at the weekends . . . . . though i do have a habit of sitting there logged on whilst i do work at my desk.

I currently operate my business with two characters who don't undock.

There is a buyer in Jita who buys from Sell orders and then contracts couriers to transport these items to a seller in Dodixie who puts the items up for sale.

I focus on small cargo items (blueprints, implants and boosters) that sell once every 2 or 3 days and profit margins of over 20%.

Profit margin.  If something costs 80 and i sell it for 100 then the profit margin is (100-80)/100 = 20%.  I.e. it is the profit divided by the sales price.

I find the competition in Dodixie in these items is low, slow and rational.

Big picture - i am playing on the fact that people at Dodixie do not want to travel 15 jumps to Jita to buy an item for a lower price.


Dodixie Seller

The main constraint to wealth generation is the amount of ISK i have to deploy.  I am now regularly making over 1bn ISK sales per day.

Working backwards, if my wealth has increased by 7.2bn then that indicates daily profits of 240m isk.  Now, here it gets tricky but that would indicate that i am making more than 20% margins.

Looking at my unit costs:

• Broker Fees are 2.68% x sales value
• Sales Tax is 1.40% x sales value
• Courier Fees are 1.00% x cost value +10% (i generally pay 1% of the collateral = cost plus 10%)

If i initially assume my profit margins before costs are 20% then that would suggest that the Courier Fees are 0.88% of the sales value.

So, total costs are 4.96% per sold item.

Now, lets assume daily sales are 1bn isk then to generate daily profits of 240m isk the profit margin before costs would be 29%.  That feels high, so perhaps my daily sales are nearer 1.25bn which would mean my margin before costs would be 24%.

Anyway, looks like i don't have a problem making the 20% target profit margins.

(Obviously, i am aware i have not included the costs of items unsold which will carry the 2.68% broker fee.  So lots of assumptions going into all the above).

Right now, i have 32 items on the market to sell which indicates an average sales value of 313m isk.  The spread is from 3m (i still have items for sale back in the early days) to 1.8bn isk.  Today, i don't put anything up for sale for less than 150m isk.


Manufacturing

The Jita buyer is training manufacturing.  Once the Dodixie seller starts to slow down on isk demand then i can start up manufacturing.  Right now, he is skilling up on tier 2 rig manufacturing.

My strategy in manufacturing is essentially to reducer my cost base such that the equivalent is as if i am buying from Jita Buy orders instead of buying from Jita Sell orders.  In other words, i want to grab some more of that margin rather than give it away to the sellers in Jita.


Second Account

I am cheating a bit and operating a second account now that i can pay for the first.  This one is based in Amarr and will become the Amarr seller once the Dodixie seller is full up.  Right now, this character is training space flight.



Outlook

I am hoping i can do better in May.  I started April with wealth of 3bn (=3.6bn on the market less 20% provision) and the amount of capital i have to deploy into the market remains a constraint on my wealth growth.  This month, in May, i will start with 10bn invested in the market vs the 3.6bn at the start of April.

Aims for May:
1) Continue to expand the Dodixie trader sell orders
2) Plex the account and buy another Plex for June
3) Subject to the above two points, start manufacturing
4) Train the new account in trading skills for Amarr and Ship skills (more on that in another post)


Current wealth is 10.3bn ISK made up from:

• items for sale 10.0bn ISK
• less a 20% provision 2.0bn ISK*
• Plex held (500 Plex) 2.2bn ISK
• items in storage for sale 0.0 ISK
• ISK in wallet 0.1bn 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.  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.  In an ideal world I would value my sell orders at the value which I bought the items for.