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Friday, 6 November 2020

Month end update - October 2020

At the end of my second full month, my wealth is 7.2bn ISK after paying 1.4bn to upgrade Omega for another 30 days.  My wealth increased by 4.1bn in October.

Account Plexed

A key aim of generating sufficient isk to buy plex to play the game for free continues.  500 Plex was bought for 1.4bn isk.  This will continue each month going forwards.  i continue 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.

Accounting for the Income, wealth and isk flows

I put up a post before this one which takes the nerdy journey through accounting.  Worth a read if that is your sort of thing.

Onwards to the next aim

This time in Eve, i don't want to purely focus on trading by having characters in each trading hub.  I want to experience as many of the isk making ventures in Eve that i reasonably can.

So, the aim with trading is to get to 10bn monthly income after buying the Plex to extend the Omega account.

To that end, the increase this month of 4.1bn (5.5bn pre Plex) was disappointing.

I was hoping to see an increase of 5-6bn post plex payment - but that was not to be.  Maybe i will need to set up in another Hub, we will see.  I have an idea for Amarr.

Once i get to my target trading income i will then expand into manufacturing as a first step.  But that may not be for a few months yet.

Analysis of Trading Profits

In all, i made sales of 37.0 bn isk (25.5bn in September) which created income of 5.6bn (1.4bn was used to buy Plex, 4.2bn invested back into the market) vs 4.5bn in September.

Purchases of items from Jita cost 27.1bn, so my pre-tax margin was 26.6% (37.0-27.1)/37.0 vs 30.9% in September.

So, closer this month to my 25% target - that is fine by me.  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).

But then i need to take a whole series of costs off:

Courier Fees: i aim to pay 2% of sales value to the Courier = 2% x 37.0 = 0.7bn

Sales tax cost me 1.0bn ISk (=2.7% of sales), as expected given i am Level 4 Accounting Skill

Broker Fees costs me 2.6bn (=6.9% 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.

So, i know the listing fee = 3.78% x 37.0 = 1.4bn and therefore the price change fee is 1.2bn (2.6 - 1.4). This 1.2bn is 3.1% of sales.

So, the post-tax margin is 26.6% - 2.0% - 2.7% - 3.8% - 3.1% = 15.0%.

Fees and Taxes take 11.6% off my margins (2.0+2.7+3.8+3.1).

15.0% is respectable but at the lower end of what i should get.   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

As i write this i am using 64 sales slots up - so i am days away from buying and training Wholesale which will give me an additional 16 slots per level.

Rightnow, i have stopped training Manufacturing on my Jita character and i am focusing on Accounting, Broker Relations and Advanced Broker Relations to bring my costs down.

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 250m and sell them in Dodixie for margins of over 25%.  So far, on average of 26% before tax, 15% after tax.

The most expensive items i sell cost c400m in Jita and Sell for c600m on Dodixie.

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

Each night i courier about 1-1.5bn isk of items from Jita to Dodixie.  The total cargo volume is 50-160m3.  So small but valuable items.

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 64 items for sale in Dodixie worth 10.1bn isk.


November will be all about increasing the sales in Dodixie higher, so much like October.  The daily sales in October averaged 1.23bn.  If i assume i need to make 10bn + 1.4bn income per month (=11.4bn) and i assume i can achieve 15.0% margin then i need to make monthly sales of 76bn and so daily sales of 2.5bn.

I have a long way to go!

Aims for November:

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

Current wealth is 7.2bn ISK made up from:
  • items for sale 8.9 ISK
  • less a 20% provision 1.8bn 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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