At the end of my eighth full month, my wealth is 75.2bn ISK after paying 1.2bn to upgrade Omega for another 30 days. My wealth increased by 12.7bn in April.
Most of April traded strongly though slow days did occur.
One some days i am making 7.5bn of sales (which comes to about 1.4bn of profit after all costs) and on others i can go with just 500m of sales.
To make my 10bn profits after all costs including Plex target i need to make 10bn or so sales per day.
In April, the average sales per day was 2.6bn and average trading profits per day was 464m. I am making more profit per item sold than i expected.
Review of the March aims
1) Plex the account - aim number one all the time - done
2) Increase sales in Dodixie - missed
3) Increase sales in Amarr - missed
4) Push forward with setting up a trade alpha character in Rens - done
Onwards (deferred) to the next aim
So, my aim this time in Eve was that i did not want to purely focus on trading by having characters in each trading hub. I wanted to experience as many of the isk making ventures in Eve that i reasonably can. I was going to wait until i made 10bn isk per month after buying plex before expanding into other business ventures.
Two things getting in the way for now. 1) real life is proving to be busy; and 2) the coming industrial changes make things a bit more uncertain.
So, i have decided to open an Alpha account and put a character in Rens and see if i can get that up and running as a trading character.
Once real life calms down i will take another look at Industry and Invention.
Anyway, this character in Rens made about 2.5bn of sales. I have messed up a bit in the items i have it trying to sell, so i will revisit and look again.
If this goes well i will likely set up another character in Hek, see how that goes.
If it all goes well, i will omega that account also.
Reminder of my Current Business.
I operate with one omega account (paid for with plex) with three alts and now another (alpha) account with one alt.
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.
My business model evolves over time. As my wealth increases i focus on higher value items. Currently, i only buy items in Jita for over 100m isk. In time that will move up. I don't want to be buying items from Jita for 30m and selling in Dodixie for 45m - that may be great margins but does not move the dials anymore.
Analysis of Trading Profits
In total i made 76.7bn of sales in April which made me item profits of 22.1bn isk. Vs March, Sales fell 16%. March was a roaring month but i am not too disappointed with April.
Dodixie sales were down 20% to 36.5bn vs March and Amarr sales were down 16% to 37.7bn. For the first time, Amarr sales are now greater than Dodixie. That may be a trend that continues.
When i say "item profit" i mean the pure profits of buying from Sell Orders in Jita and putting up for Sale in Dodixie and Amarr. So before all fees / taxes etc.
This therefore was an item margin of 28.8% (22.1/76.7) vs my target of 25%. Since September 2020 the item margin range has been 28% to 32% with one low outlier of 26.6% in October 2020. That is good news, i am comfortably beating the 25% i really need to make this all work (see below).
From this 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 76.7 = 1.5bn
Sales tax cost me 1.7bn ISk (=2.2% of sales) - both main characters are level 5 in Accounting, the Rens character is an alpha account so may start to dilute the sales tax rate upwards if its sales rise.
Broker Fees costs me 4.9bn (=6.4% of sales). Now, i can break this down into the initial listing fee of 3.50% (because i am Level 5 Broker Relations on both main characters) and therefore the rest is the cost of changing the price which is 1.14% a shot.
So, i know the listing fee = 3.50% x 76.7 = 2.7bn and therefore the price change fee is 2.2bn (4.9 - 3.7). This 2.2bn is 2.9% of sales. So, not too a competitive month, broadly similar to March.
This takes my 'Business Profits' to 13.9bn isk for April vs 17.1bn in March. This is what 45 minutes a day in April gave me.
So, the post-tax margin is 28.8% - 2.0% - 2.2% - 3.5% - 2.9% = 18.2% (=13.9/76.7).
Fees and Taxes take 10.6% off my margins (2.0+2.2+3.5+2.9). That is a big hit. I can take action to reduce this which i may investigate in the medium term.
18.2% is very respectable, i would normally aim to get a respectable 13 to 15%. In fact, 18.2% is the third highest i have achieved so far.
And then from those 'Business Profits' i buy Plex for 1.2bn isk to extend the Omega by 30 days.
That, therefore, is the roadmap from making 76.7bn of sales and seeing my wealth increase by 12.7bn as a result.
Items i am selling in Dodixie and Amarr
I sell blueprints, skill books, implants, ship equipment and structure modifications.
The trends from March continue.
Firstly, I am ramping up harder on implants and selling less blueprints and ship equipment. This is an ongoing trend from March. Blue prints are not selling well and ship equipment seems to be in low supply.
Secondly, i am moving into higher valued items. For now, i only sell items that sell for more than 100m in Jita. And i am quite happy to be buying items from Jita Sell orders for 1 or 2 billion Isk.
I am trying to focus on these items of higher value to keep the number of items for sale down and so make life easier.
So, over the three selling characters i have 161 items for sale with a total value of 91.4bn which is an average of 568m per item.
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. Oddly, the sale of Blueprints has slowed right down though Skillbooks are doing ok.
Rigidly sticking to the 25% margin target. Courier fees and taxes can 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 but becoming the most lucrative.
Dodixie Seller character
This remains my main character and was my biggest seller - Amarr just over took Dodixie this month.
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
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 - has just become the biggest seller. I gave my initial views in a prior post.
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 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).
This market is much more competitive so it is harder to find items to make a good sale - but is still very profitable.
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 which includes looking for potential new items to sell.
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 8bn isk of items from Jita. The total cargo volume is 10-250m3 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.
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
April will have four aims to it.
1) Plex the account - aim number one all the time
2) Increase sales in Dodixie
3) Increase sales in Amarr
4) Push forward with setting up a trade alpha character in Rens
The daily sales in April averaged 2.56bn.
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, January, March and April. Lets see how May goes but i am hopeful.
Current wealth is 75.2bn 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 0.0bn ISK
- Buy orders on the market 0.2bn ISK
- items for sale 90.4bn ISK
- less a 20% provision 18.1bn ISK*
- ISK in wallet 2.7bn 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.
