Do I understand the costs of Industry properly?

[Orin_Orakkus]

Hey folks, I’ve REALLY been enjoying industry since getting back into Eve, like, more than any activity I’ve ever done in this game. So I want to make sure I’m understanding the costs of manufacture and selling stuff properly. So here’s a hypothetical situation with some made up numbers, but let me know if my understanding of how these numbers interact is correct.

So let’s say I have a blueprint to build the Orakkus Win Button I.

It’s clearly in demand so I can sell as many as I pump out, so for the purposes of this illustration, sales are guaranteed. I can sell them for 5 Million Isk each (I like easy math, an Orakkus Win Button would certainly sell for much MUCH more, in reality.)

So target sell price: $5M
Materials Cost: $3M
Job Cost: $50k

Broker’s Fees (Alpha account, no reductions): 5%
Sales Tax applied upon Listing: 5%
Sales Tax applied upon someone buying it: 5%

My understanding is that Broker’s fees and the two rounds of sales tax are based off the sale price, so in this case each one of those would be $250k.

So total manufacture and trade costs would be $3.8M.
So if I can sell it for $5M, then that’s a profit of $1.2M on each Win Button sold.

And so that would be making a 31.58% profit on my investment.

Am I correct on my calculations and my understanding of the costs involved? Also, please feel free to correct my terminology, especially the appropriate way to express the “% profit on investment” aspect.

A couple questions:

• I can’t help but notice in some of my practical experiences that the job cost for manufacturing an item is generally far below what I would expect. For instance, I’ll certainly find a lower index cost home, but right now as I sit in Dodixie, the manufacturing index is 4.69%. But the actual job cost of the last manufacturing job was only around 1.5% of the actual material cost required. It does say the actual job cost is based on estimated value of materials which was far below the ACTUAL cost of the materials involved. I’m not going to complain about paying a much lower job cost, but is there a way to consistently know what that cost is going to be if I can’t just multiple the system index against actual material cost?

• Also, as shown in my calculations above, it appears that when you list your items to sell, it immediately deducts the broker costs and a sales tax. For me they’re both 5% (can’t wait to get those down). But then when someone buys my item, I have to pay another “transaction” fee, which is also 5%? So it’s basically a sales tax both when you list and also when it gets bought?

I know there’s 3d party online tools available, but even though I’m not a genius with numbers or anything, I really enjoy setting up my own spreadsheets. It really helps me to get a deep understanding of what is happening. I just need to make sure I’m setting up my spreadsheets correctly.

And yes, I know there would be an initial cost for blueprints and later on there’s all the costs associated with blueprint copying and efficiency research and all, but right now I just want to nail down the manufacturing costs themselves.

So, am I understanding correctly? If not, can you show me where my understanding is off? Thanks!

BTW, being in the Eve client and all of a sudden seeing your market and wallet icons start flashing, notifying you that someone just bought one of your items is sweet every single time it happens!

[Fung_Ku]

Sales tax is only paid upon the sale of an item and is paid by the seller.

Broker fee is paid upon the order being listed.

But remember you have tax to pay on any input materials you purchase via buy order.

[Orin_Orakkus]

Ok, thank you for that clarification. Is everything else looking good?

[Fung_Ku]

I believe you have the understanding correct, other than previously mentioned tax.

[Anderson_Geten]

@Fung_Ku

But remember you have tax to pay on any input materials you purchase via buy order.

nope, that’s broker fee

• broker fee is paid for listing an item on the market (placing an odrer). It is paid partially on placing the order, and partially on order being fulfilled. the skill is “margin trading” to reduce the % of broker fee to be paid on placing the order. Remember that if the order is cancelled, you don’t get a refund - but you don’t have to pay what was still to be paid to margin trading, so better money for you.
  (edit : maybe I’m wrong, check this)
• tax is paid when you effectively sell an item, be it on long-term order or to long-term buy order. the tax is deduced from the money you get from the sale.

So if you place a sell order, you will in the end need to pay both tax and broker. If you purchase an item in sell order, you don’t pay any.

@Orin_Orakkus

especially the appropriate way to express the “% profit on investment” aspect.

if you sell an item for X money, and it cost you Y money to have that item in the exact same state, then you have a margin of (X-Y)/X * 100 %
eg your income on an item is 250 isk and it costs you 200 isk to produce it, and set it ready for sale (eg broker fee price), then you are making 50/250 = 20% margin.

@Orin_Orakkus

But the actual job cost of the last manufacturing job was only around 1.5% of the actual material cost required. It does say the actual job cost is based on estimated value of materials which was far below the ACTUAL cost of the materials involved. I’m not going to complain about paying a much lower job cost, but is there a way to consistently know what that cost is going to be if I can’t just multiple the system index against actual material cost?

yes.
The cost of a job is EIV*system_index
EIV is the total cost of the manufacturing materials for the BPO (which is not the same as your job since the ME reduces the requirements)
The cost of the items is the adjusted cost, which is not in the game but in the ESI .

eg look at large capacitor control circuit I.
the EIV is 65 * adjusted(tripped power circuit)+75 * adjusted(burned logic circuit)+20 * adjusted(melted capacitor console)

The EIV of the T1 bp is used for copy or manufacturing jobs( divided by … 50 on copy job)
The EIV of the T2 bp is used for invention or manufacturing of the T2 item (same, invention is divided by 50)

so if I need to create 20 copys of a BP, that I will invent then with 25% success, and then create the 5 T2 bpcs, each of one uses 1 T1 item, I will then need

• 5 manufacturing runs of T1
• 20 copy fruns of T1
• 20 invention runs of T2
• 5 manufacturing runs of T2

so total 5 + 0.02*20 = 5.4 runs of each EIV (multiplied by the copy/invention/manufacturing index each time)

[Orin_Orakkus]

Ok, so this must be how Industrialists do PvP . . . because I didn’t understand ANY of that after the word “yes.” And I feel a bit dizzy.

Can you put how system index cost works purely in terms of manufacturing a T1 item and leave out the BPO copying stuff, which is well beyond me at this point?

Thanks, if you’re willing!

(And you defined what EIV is… but can you tell me what the letters actually stand for? My guess . . . efficiency index value…? earnest involvement verisimilitude…? eagerly intense vaulting…?)

[Anderson_Geten]

@Orin_Orakkus

Can you put how system index cost works purely in terms of manufacturing a T1 item and leave out the BPO copying stuff, which is well beyond me at this point?

I did it already. cost = EIV * system_index

@Anderson_Geten

The cost of a job is EIV*system_index

EIV is Estimated Item Value and shown in the industry window.
It’s the base cost for a job.
I wrote you how to get the EIV for a bp :

@Anderson_Geten

EIV is the total cost of the manufacturing materials for the BPO (which is not the same as your job since the ME reduces the requirements)
The cost of the items is the adjusted cost, which is not in the game but in the ESI .

Then I tell you this fomula is the same for copying, invention, or manufacturing T2, just the system cost index varies, the bp considered varies, and the cost id divided by 50 for copying and invention jobs.