I know people in my alliance that run buyback programs for Ores for 95-100% Jita buy values , from there, they use T2 Rigged Refineries and perfect skilled Refining characters for maximum reprocessing rate of those Ores. Then they build ship hulls using T2 Rigged production structures using max researched 10% ME blueprints.
The TL:DR is that most of the major industrial operations are making profit. They’re just doing it because the margins they are making add up throughout the production chain in small chunks at each step.
The picture you get when you compare straight Mineral prices to ship hull prices is only a small part of the picture. You’re missing a lot of steps along the way where there lies potential margins to be made.
While buying at Below Jita buy price does drive some of the profit down. I am talking about players selling items/ships at 65% the mineral cost to make them. I am talking about -25%+ below Jita buy prices. I have bought items and ships so cheaply in Derelik that I can reporcess them, sell the minerals while turning more profit then the seller of the items/ships.
I am not talking about reprocessing rates as it has nothing or very little to to do with the mineral price of items or ships. Yes a well fitted station can save you about 5-10% at most, that is not enought to justify these prices.
As a miner, I have no need to buy minerals. Although I obviously do need to buy materials for T2 mods or ships. That means the minerals are free for me. (Ignoring relatively minor system index and refinery fuel charges, etc.)
Yes, there is an opportunity for me to sell the minerals but I don’t have to use it. It is a legitimate question to then ask why I would make things from these minerals and sell them at under the mineral sell price. Answer is, because I can. Or, because it is more fun. Or, because it is a lot easier to ship (some) fabricated things to a hub compared with bulk minerals. (That latter is a complete pain.) Or, it is also because I fabricate things for myself and just stick excess through my BPOs and dump to the markets if I need liquidity.
Yes it is easier to ship an item or ship but it is even easier to move compressed ore. This bring the question why not just compress the ore to sell and make more profit then making items or ships while losing isk?
I can also see where some of the items/ships on the market are overflow from personal use but I am talking about 600+ ships of one type that are just barely above reprocessed worth of the ship.
People often dump stuff they no longer want or need to buy orders well below cost, simply to get rid of it. The buyers can then resell profitably below replacement cost.
CCP periodically adjusts the bill of material for items - most recently pirate hulls. If you stockpiled hulls before the patch, you can profitably sell below current build cost.
Tritanium is currently selling in Poidon for 3.45 - 25% below average. Pyerite is 2.34 - 40% below average. I didn’t check other minerals but I suspect builders in Derelik are doing OK!
Some people actually treat Eve as a game - not a business. They do what they enjoy and really don’t care if it’s profitable.
Factoring that you have all other varibles such as station rigs at optimal set up then the answer will either be over supply or T2BPO.
T2bpo’s were gifted to pet players in the early days of eve. They allow users to remove the complete invention costs and sell cheaper than non pet players cost to build.
I am not talking about tech II items or tech II ships. These players are losing so much isk it is unreal. I believe that the industrial players down there just don’t care or they don’t know what they are doing on a very large scale. What is confusing even more is that largest High Sec alliance in all of New Eden is down there.
Fact of the matter is that there’s a huge amount of people who believe that …
“Minerals I mine are free.”
This is valid in the minds of those who consider the time spent mining as “fun”, for those who exclusively mine AFK and for those who don’t value their life-time at all. Of course, purely economically speaking it’s ■■■■■■■■, but HEY … vOv
But you are losing isk. You have to pay for the reprocessing, then you have to pay the system index tax to build the items/ships, the station tax for building it and then you have to pay the listing tax too. Sooner or later it will put you in the Eve poor house.
No. I’m not. I mine the minerals. Costs me nothing but time. (With exception of when I use mining crystals or optimization charges.)
Yes, I have other charges, although I do process in my own solo-corporation refinery. Everything I sell after that is always for far more than my ongoing and/or material costs, combined. I don’t always sell for as much as the opportunity of selling minerals directly might gain me. So, I don’t make as much. But I am still not making a loss.
I am thinking that maybe it’s because there are a lot of people doing a lot of things and already having a lot of ISK and treating EVE as a game so they don’t really care enough to set up spreadsheets to process every ISK that flows through their hands to ensure they are squeezing maximum profit from it?
Back in the days of working in the financial markets, when people would point out that this situation or that situation was not logical and would need to be resolved soon, a few of the guys had a saying that sort of applies here:
“The market can stay irrational a lot longer than you can stay solvent.”
There is your answer OP.
It’s silly. It makes zero sense and you will NEVER convince the people whom practice the idea to give it up.
However there is opportunity in all things.
Buy up their stock and relist it at a profit.
In a world with no demand, items sell for little/no profit margins.
What a surprise.
People wanted a safer eve, this is just one consequence of that. While asset destruction might not feel nice, if someone have developed feelings for ones ship, it still is a crucial aspect in order to have a healthy economy.
There are a ton of people like Lily who sell at non-optimal prices. They’re not going to go negative doing what they do, as Lily has said they sell high enough to cover their costs and they do it usually because they find building items fun. If it costs them 100K ISK to build an item they’re fine selling it for 110K ISK even if the item was made with 150K ISK worth of minerals. Lily points out that she knows she could have just sold the minerals for 150K ISK and made more but that’s not why she logs in.
I took a game theory course in university which taught that people often chose to make unoptimal moves even if its clearly explained to them that it’s not optimal. This confused mathematicians for a while before it was decided people are illogical and emphasize feelings over facts.
Whilst the first point is obviously true in my case, it is also a fact that this is a game and my feeling therefore is that I do not need to maximise profit.
That said …
If anyone was looking for bulk minerals and/or small goods like ammo (“bulk” being relative for a solo operator) then I would be open to setting up supply contracts. Long term contracts ie guaranteed sales, would promote my cash flow. And I am much more interested in that than absolute profit.
In that context, there is also the possibility that any truly bulk producer might be playing the volume game; shifting multiple units at under “retail” but above cost, to preserve cash flow, dominate market, and make very large sums. Just at smaller profit margins. And then the market lemmings jump in because they think they have to compete on price and have no other business models.
The way for @Ash_Beldrulf to compete might be to do as suggested; buy low and sell high but in niche (remote) markets and hubs. Although that is low volume, and slow. Otherwise, stick to mining (Emolgranlan or wherever I saw you last?) and just don’t worry about it.
Are any of these areas near where null sec destruction of citadels spits out their asset safeties?
Cuz if so you can imagine the acquired wealth in null trickling to these low sec stations and then back out from there to fire sell stuff from there back into the economy of New Eden.
Building hundreds of T1 ships cheaply with rorqual fleets in null and then watching the citadels get blown up and spilling them into these areas and then back out into the world is a huge mechanism of the game now.
As is camping these regions for juicy null sec kills.
Until they have to pay for PLEX and come back making new forum threads about that…
By this I don’t mean the OP personally, but the general person who have expressed similar stances through the years.