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Saturday, 3 October 2020

Month end update - September 2020

At the end of my first full month, my wealth is 3.1bn ISK after paying 1.4bn to upgrade Omega for another 30 days.


Plexing the account onwards

One of my key aims was to pay for one month of Omega only and then get trade income to a sufficient level to buy the 500 Plex each month to play this game for free.

I have met that aim and expect to be buying 500 Plex each month to play for game for free.

i will start to buy the Plex 14 days before the end of my Omega time using the daily income from Trading which should easily give me plenty of time to spare.


What is the next aim?

I want to get to a position where my monthly profit from Trading is 10bn isk after paying for Plex.

I was hoping this would be done in 2 or 3 months.  Not so sure anymore but i know it can be done.

Once i get to my target trading income i will then expand into manufacturing.


Analysis of Trading Profits

In all, i made sales of 25.5bn isk which created income of 4.5bn (1.4bn was used to buy Plex, 3.1bn invested back into the market).

Purchases of items from Jita cost 17.7bn, so my pre-tax margin was 30.4% (25.5-17.7)/25.5

so, nicely in excess of my 25% target.  I used to operate on a 20% target but the increase in taxes as forced me to increase my profit target (i.e. pass the costs onto the consumer).

I estimate that Courier Fees cost me 0.4bn ISK (=2.0% of costs, =1.4% of sales).  I used to aim for Courier Fees of 1% of Cost but i am more interested in getting them to me fast, so i raised it to 2%.

Sales tax cost me 0.7bn ISk (=2.8% of sales), as expected given i am Level 4 Accounting Skill

Broker Fees costs me 2.2bn (=8.6% of sales).  Now, i can break this down into the initial listing fee of 3.78% (because i am Level 4 Broker Relations) and therefore the rest is the cost of changing the price which is 1.14% a shot.  Given the balance of Broker Fee costs = 4.8% (8.6-3.78) then i can determine that on average i changed the price of every item for sale just over 4x (4.8/1.14).

The Broker Fee cost to change prices is a killer to my profits and bu far the largest tax.

So, the post-tax margin is 30.4% - 1.4% - 2.8% - 3.8% - 4.8% = 17.6%.

Fees and Taxes take 12.8% off my margins (1.4+2.8+3.8+4.8).

17.6% is respectable.   i can improve on it if i train Accounting and Broker Relations  / Advanced Broker Relations to level 5 . . . . . which is on the "to do" list.


Dodixie Seller character

For now, this is the only seller i have and it is my Main character.

The skills relevant to Trading that i have are:

Accounting: Level 4; means i am charged 2.80% of the sales price on completed sale vs the normal 5%

Broker Relations: Level 4; means i am charged 3.78% to list an item for sale; and for every price change, whether up or down, i am charged 1.14% of the new sales price

Advanced Broker Relations: Level 4; means i can reduce the cost of changing the price of items i already have for sale. I decided by train this rather than go all for Plex.  With no skill i would be charged 1.89% to change every price.  Level 4 has brought this down to 1.14%.

Trade: Level 5; increases the number of items i can list for sale by 4 per level.

Retail: Level 5; increases the number of items i can list for sale by 8 per level

Marketing: Level 2; this allows me to set up Sell Orders in stations other than the one i am in; i don't use this really

Given the level 5 Trade and Retail, i am able to post 65 items for sale (5 + (5x4) + (5x8)).  With no Trading skills you can post up to 5 sell orders

It would take me 38 days to train Accounting, Broker Relations and Advanced Broker Relations to Level 5.  And i still have to train Wholesale and Tycoon to increase the number of Sales Orders i can have up

So, in the mean time i have started to train the basic manufacturing skills on my Jita character and so put on hold the skill training here.


Items i am selling in Dodixie

The days of buying blueprints in Jita for 600k and selling them in Dodixie for 2.5m were good at the start but now dont make a difference.

So, at present, i buy items in Jita for 30m to 150m and sell them in Dodixie for margins of over 25%.  So far, on average of 29% before tax, 18% after tax.

I have moved off Blueprints for now and sell a few Skillbooks and mostly for now tier 2 ship equipment.

i find evemarketer very useful to find new ideas.  Also, i am using Eve Tycoon which seems to have more of the latest items in its market browser.

I stick to high margin products that sell slowly.  Items that sell 1 or 2 per day dont attract the big traders.  They cant benefit from scaling this up.

Currently, i have 37 items for sale in Dodixie worth 3.9bn isk.



Outlook

October will be all about increasing the sales in Dodixie higher.  The daily sales in September averaged 0.85bn.  I am currently making daily sales of 0.5 to 1.0bn isk, so i need to increase this to over 1bn fairly quickly if i am to demonstrate progress.

Ultimately, i need to get to daily sales of 2.2bn isk to make my monthly income target of 10bn + Plexing the account.

Aims for October:

1) Continue to expand the Dodixie trader sell orders and reduce trading costs
2) Plex the account


Current wealth is 3.1bn ISK made up from:
  • items for sale 2.7 ISK
  • less a 20% provision 0.7bn ISK*
  • ISK in wallet 0.1bn ISK

When i add up my wealth, 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.  Any ships or skills or fittings etc i buy are counted as expenses in that month.

* 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.

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