At the end of my sixth full month, my wealth is 46.62bn ISK after paying 1.3bn to upgrade Omega for another 30 days. My wealth increased by 8.4bn in February.
Disappointing really. the first two weeks of February were like the final two weeks of January - really slow. Things picked up in the next two weeks but not enough to get me over the 10bn mark that i aim for.
In fact, month was worse the November, December and January. Poor show. Tough markets. Not competitive, just quiet.
Review of the February aims
1) Plex the account - done
2) Increase sales in Dodixie - missed
3) Increase sales in Amarr - missed
4) Expand further into Invention - missed
5) Investigate reducing 'costs of sale' - missed
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.
That was achieved in December and again in January. Not done in February. That said, it looks like my inter-regional trading activities from Dodixie and Amarr do generate around 10bn per month after plex costs.
Not bad for 45 minutes a day.
Invention
More posts to come but i have decided to try my hand at invention - i decided in December but to be honest i got nowhere in February.
I need to look into it more to work out where to start. I like the look of it: low click rate; looks like an inefficient market; so if it works out it would really be a low time consumption source of income - not quite passive, but close.
Lets see how it goes.
Reminder of my Current Business.
I operate with one account with three alts.
The main alt is a seller in Dodixie and the other alt is a seller in Amarr, two of the main trade hubs in Eve Online.
The third alt sits in Jita and buys from Sell Orders, has these items couriered to the alts in Dodixie and Amarr who then put them onto these markets for sale.
I focus on slow moving but high margin items.
For this side of my business, lets call it Merchanting or inter-regional trading, i want to generate income of 10bn isk per month after paying to Plex my account.
Analysis of Trading Profits
Explaining the journey of sales of 55.5bn to the increase in wealth of 8.4bn . . . . .
In all, i made sales of 55.5bn isk (vs 70.6bn in January) which created income of 9.7bn (1.3bn was used to buy Plex, 8.4bn was invested back into the market or was sitting as isk in my wallet) vs 11.6bn in January.
Hence, sales fell 21% overall and are right back to November levels. Looks like there was a strong Christmas effect this year. My December sales were 78bn, so the 55bn in February is pretty quiet.
Dodixie sales were 38.3bn (vs 42.4bn in January) whilst Amarr sales were 17.2bn (vs 28.2bn in December).
So, Dodixie sales fell 10% whilst Amarr sales well 39%. I do find Amarr very competitive but so far i believe it is better than Hek or Rens. I am tempted to test that thesis out one day.
Purchases of items from Jita cost 39.8bn isk (vs 50.1bn in January), so my item margin was 28.3% ((55.6-39.8)/55.5) vs 29.0% in January. Respectably above the 25% item margin target but down on the elevated 32.2% in November.
So, no problem on profitability but clearly a problem on sales. Perhaps i am charging too much but i more got a sense that there was no demand at all rather than buyers backing off due to price.
I then need to take a whole series of costs off before i get to my Business profits:
Courier Fees: i aim to pay 2% of sales value to the Courier = 2% x 55.5 = 1.1bn
Sales tax cost me 1.5bn ISk (=2.7% of sales) - this is reducing as i am training both the characters to be level 5 in Accounting
Broker Fees costs me 3.4bn (=6.1% of sales). Now, i can break this down into the initial listing fee of 3.78% (because i am Level 4 Broker Relations on both characters) 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 55.5 = 2.1bn and therefore the price change fee is 1.1bn (3.4 - 2.1). This 2.7bn is 2.4% of sales. This is lower than January and reflects the quieter February for me and all my competitors.
This takes my 'Business Profits' to 9.7bn isk for February vs 11.6bn in January. This is what 45 minutes a day in February gave me.
So, the post-tax margin is 28.0% - 2.0% - 2.7% - 3.8% - 2.4% = 17.5% (=9.7/55.5).
Fees and Taxes take 10.8% off my margins (2.0+2.7+3.8+2.4). That is a big hit. I can take action to reduce this which i may investigate in the medium term (needless to say, i did not get round to investigating this in January or February).
17.5% is respectable, i would normally aim to get a respectable 13 to 15%. i can improve on it if i train Accounting and Broker Relations / Advanced Broker Relations to level 5 . . . . . which i am now doing across the two characters . . . . .and which i have completed for the Dodixie character and am in progress with on the Amarr character.
And then from those 'Business Profits' i buy Plex for 1.3bn isk to extend the Omega by 30 days.
That, therefore, is the roadmap from making 70.6bn of sales and seeing my wealth increase by 8.4bn as a result.
Items i am selling in Dodixie and Amarr
I sell blueprints, skill books, implants and ship equipment. I am starting to ramp up on implants and selling less blueprints.
I am trying to focus on items of higher value to keep the number of items for sale down and so make life easier.
But given the market were slow i still buy from Jita for 10m to sell for 35m. These low items are easy money but don't really move the dials.
For blueprints and skill books i focus on items that are not seeded in Dodixie (or Amarr for the Amarr seller). It is a nice source of sales, varying from 100m to a few billion on a really good day - players will pay up to avoid travelling to Jita to save isk to buy that blueprint or skillbook. This has slowed down more recently with competitors willing to take very slim margins.
Implants are a new focus, and i am making good sales where especially with the ones costing over 300m isk. The competition is lower.
Ship equipment makes up the rest, typically it is the same items each time though i find i make a few sales then need to let that item rest and the price reset upwards before i revisit.
Rigidly sticking to the 25% margin target. I have to given courier fees and taxes take a whopping 12% of that to leave me with 13%. This is the one line i can't really cross. If i took the margin down to 20% then after costs i am looking at 8% profits which leaves no room to change prices too often!
The items i sell in Dodixie and Amarr are often very similar but not always. They remain two distinct markets with Amarr being the most competitive.
Dodixie Seller character
This remains my main character and is the biggest seller.
I have now trained all the relevant skills to Level 5.
The skills relevant to Trading that i have are:
Accounting: Level 5; means i am charged 2.25% of the sales price on completed sale vs the normal 5%
Broker Relations: Level 5; means i am charged 3.49% to list an item for sale
Advanced Broker Relations: Level 5; 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 5 has brought this down to 0.94%.
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
Wholesale: Level 5 (increased by two levels in January); increases the number of items i can list by 16 per level
Marketing: Level 3 (increased by one level in January); this allows me to set up Sell Orders in stations other than the one i am in; it also allowed me to look to increase my Contracting skills which i will need to sell my BPO copies from invention
Given the level 5 Trade, level 5 Retail and level 5 wholesale, i am able to post 145 items for sale (5 + (5x4) + (5x8) + (5x16)). With no Trading skills you can post up to 5 sell orders
As i write this i am using 126 sales slots up.
I may have to train Tycoon which will give me an additional 32 slots per level.
Amarr Seller character
Started in November and has grown very quickly. I gave my initial views in a prior post.
I am now training the relevant skills to Level 5.
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 5; means i am charged 3.49% to list an item for sale
Advanced Broker Relations: Level 4; means i can reduce the cost of changing the price of items i already have for sale.th no skill i would be charged 1.89% to change every price. Level 4 has brought this down to 1.1%.
Trade: Level 4; 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
Wholesale: Level 2; increases the number of items i can list by 16 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 4 Trade, level 5 Retail and Wholesale Level 2, i am able to post 93 items for sale (5 + (4x4) + (5x8) + (2x16).
As of right now, i have 57 items up for sale.
This market is much more competitive so it is harder to find items to make a good sale.
Courier Contracts
Each night, i get home from work and determine what i need to sell in Dodixie and Amarr. I tend to focus on one location per night unless i need to courier over 1.5bn isk of items to both locations. So Dodixie one night, Amarr the next. Keeps my time on Eve to a manageable 45 minutes once i have added in a bit of looking into Invention.
To look up prices in Eve I am using Eve Tycoon which seems to have more of the latest items in its market browser. I used to use evemarketer but i just got used to Eve Tycoon.
Each night i courier about 2 to 5bn isk of items from Jita. The total cargo volume is 100-250m3 per shipment. So small but valuable items. But this allows the couriers to use small, fast ships with much less chance of being ganked. So there is always someone willing to pick up the contract quickly.
I pay a generous 1.5 to 2.0% of collateral as fees. I am more interested in getting my items onto the market quickly than penny pinching on distribution costs.
In early February, business was slow so i had items couriered once every two nights. Since then business has been brisker and so missed nights is due to real life rather than slow trade.
Nothing, yet, todo with my Eve Business ventures but just noting that in December i set up a website site eveeconomy.com which takes the monthly economic data provided by CCP and visualises it in chart form.
Loads of charts and more i can add.
I need to work out how to render the charts faster - right now they are accessed from a google drive given that is the way i have worked out how to update multiple charts at once quickly.
Let me know what you think and what else i should add.
Outlook
March will have five aims to it.
1) Plex the account - aim number one all the time
2) Increase sales in Dodixie
3) Increase sales in Amarr
4) Undertake further research into Invention
5) Investigate reducing 'costs of sale'.
The daily sales in February averaged 1.98bn.
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.
So far i have achieved this in December and January.
Current wealth is 46.6bn ISK made up from:
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 or are used to generate isk that can be readily resold back onto the market. Any ships or skills or fittings etc i buy are counted as expenses in that month.
- items in hanger for sale 0.6bn ISK
- Buy orders on the market 0.2bn ISK
- items for sale 49.6bn ISK
- less a 20% provision 9.9bn ISK*
- ISK in wallet 6.2bn 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.
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