At the end of my first year, my wealth is 100.5bn ISK after paying 1.3bn to upgrade Omega for another 30 days. My wealth increased by 13.6bn in August.
This was therefore one of my best months, second only to March 2021 for both sales and profits.
Moving out of Structure Modifications
The decision at the end of July to move out of selling structure modifications due to fierce competition is paying off though still ongoing.
At the end of June my first step was to reduce all the prices of these items on sale in Dodixie and Amarr back down to Jita prices. That meant writing down this stock by 8bn isk.
I then started to transport them back to Jita for sale. This is ongoing and i suspect will take a few months to get done.
I continue to mark down the value of the remaining items up for sale and i estimate in August i wrote this down by a further 2bn isk.
I have about 27bn isk of these items left to sell.
Activity
I continue to come on once a day to update Sell orders and replace items sold. About 30-45 minutes.
I did nothing to look into Rens and Hek for ideas of what to sell - that is a job for September (i seem to be forever putting this off).
In all, i did an average of 2.8bn sales per day.
The goal for 1bn profits per day which will need c7.5bn sales per day looks quite far off.
Review of the August aims
1) Plex the account - aim number one all the time - done
2) Move out of Structure Modifications market - ongoing
3) Revisit the Sales strategy - ongoing
4) Increase sales in Dodixie - done
5) Increase sales in Amarr - done
6) Review the Trading character in Rens to determine what best to sell - ongoing
7) Review the Trading character in Hekto determine what best to sell - ongoing
Reminder of my Current Business.
I operate with one omega account (paid for with plex) with three alts and now another (alpha) account with two alts. This latter account with two alts is doing not much currently.
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.
The Jita alt also serves to sell items that i can no longer sell in Dodixie or Amarr. For example, the Jita alt is selling the Structural Modification items.
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.
I had evolved to only buying items in Jita for over 100m isk but this restricted the items i could sell so now i am going back to 70m isk.
End of Scarcity
I will talk about this in a coming post but it is clear to me that mineral values will fall and therefore anything manufactured from minerals will also fall in price.
Therefore, i need to be very careful what i try and sell that can be manufactured from minerals today. I run the risk of cheaper items being manufactured and undercutting me.
Change in tax rates - temporary and permanent
Another item i will talk about in a coming post but for now i am not changing my strategy of seeking to make 25% margins on the Purchase cost in Jita. I don't sell items that are price sensitive, if someone wants to buy an item i sell they will likely pay the price i am offering rather than fly over to Jita to get a cheaper price.
Analysis of Trading Profits
In total i made 86.4bn of sales in August which made me item profits of 21.6bn isk.
Overall, sales rose by a massive 83% in August to be the second best level after the 90.8bn done in March. Part of this will be the fire sale of some of the Structural Modification products which i estimate to be c7-8bn.
For these Structural Modification products, i had 42bn of stock on sale which was written down to 34bn in July. As at the end of August i had 27bn.
I had let these items become too much of my sales book and so was exposed to the risk of a competitor coming in. Lesson noted.
Dodixie sales were up 260% to 39bn and Amarr sales were up 1% to 36bn. Rens and Hek only did 100m each - nothing to write home about for now.
Amarr had become my main sales hub but in August Dodixie retook the top slot. Amarr remains the more active hub but also the moe competitive.
From these sales i made item profits of 21.6bn.
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 and elsewhere. So before all fees / taxes etc.
This therefore was an item margin of 25.0% (21.6/86.4) vs my target of 25%. So, my margins remain on track. This is obviously calculated before the 2bn stock write-downs. I am trying to gauge the underlying business here.
Since September 2020 the item margin range had been 28% to 32% with one low outlier of 26.6% in October 2020 but i am now operating nearer the 25% margin target. Nothing to be concerned about and if the tax changes stay permanent i may seek to reduce that margin target down to 20%.
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 86.4= 1.7bn
Sales tax cost me 0.9bn ISk (=1.0% 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. The new temporary reduction in Sales Tax is helping.
Broker Fees costs me 2.1bn (=2.4% of sales). Now, i can break this down into the initial listing fee of 1.0% (because i am Level 5 Broker Relations on both main characters) and therefore the rest is the cost of changing the price which is 0.16% a shot (i may have that 0.16% completely wrong!).
So, Listing Fee = 1.0% x 86.4 = 0.9bn and so the Relisting Fee = 2.1-0.9 = 1.2bn which is 1.43% of sales.
This takes my 'Business Profits' to 16.9bn isk for August vs 7.0bn in July. This is what 20-30 minutes a day in August gave me.
So, the post-tax margin is 19.5% (16.9/86.4) which is the second highest level since November 2020. Very much helped by the tax changes.
Fees and Taxes did take 12.0% off my margins but in August they only too 5.5% off - some of this will reverse at some point.
And then from those 'Business Profits' i buy Plex for 1.3bn isk to extend the Omega by 30 days and the 2bn stock write-down.
That, therefore, is the roadmap from making 86.4bn of sales and seeing my wealth increase by 13.6bn as a result.
Items i am selling in Dodixie and Amarr
I sell blueprints, skill books, implants and ship equipment. Blueprints are making a come back - this may be because of school holidays and / or the end of scarcity coming. That said the market remains slow so there are not many competitors.
Implants are still doing ok - i am still expanding into more types and moving up the isk value curve. I now only focus on implants to sell for at least 150m isk. This is a slow but nice market for me.
Ship Equipment has slowed down recently, supply has really dried up in Jita. Something to re-examine but until i am more certain as to why supply has dried up and therefore why prices in Jita are up so much i intend to tread carefully.
Rigidly sticking to the 25% margin target. Courier fees and taxes used to take a whopping 12% of that but now only 5-6%. If the tax changes stay permanent then i may reduce this 25% margin target
Dodixie Seller character (Tax rates quoted below not adjusted for recent changes)
This remains my main character and has regained its slot as the largest 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%. Currently, with the tax changes this is 1.125%.
Broker Relations: Level 5; means i am charged 3.49% to list an item for sale. Currently, with the tax changes this is 1.0%.
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%. Currently, with the tax changes this is 0.16%.
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 (Tax rates quoted below not adjusted for recent changes)
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%. Currently, with the tax changes this is 1.125%.
Broker Relations: Level 5; means i am charged 3.49% to list an item for sale. Currently, with the tax changes this is 1.0%.
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%. Currently, with the tax changes this is 0.16%.
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.
Rens and Hek characters
I want to see if i can take into some sales in these trade hubs. I don't want to target much but if i could get to post plex profits of say 3bn isk per month for minimal work then that would be ideal.
I have restarted these two characters. My wild ideas of what would sell in Rens and Hek have proved to be just that. Wild.
So i now need to relook at what works and go from there.
I have more cautiously started to stock these markets up again at the beginning of September.
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
September will have seven aims:
1) Plex the account - aim number one all the time
2) Move out of Structure Modifications market
3) Increase sales in Dodixie
4) Increase sales in Amarr
6) Increase sales in Rens
7) Increase sales in Hek
The daily sales in August averaged 2.8bn.
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, April and now August.
Current wealth is 100.5bn ISK made up from:
- items in hanger for sale 0.0bn ISK
- Buy orders on the market 0.0bn ISK
- items for sale 114.8bn ISK
- less a 20% provision 23.30n ISK*
- ISK in wallet 8.7bn 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.
