How to get rich
If you came here to get some concrete tips on how to get rich with Industry, please leave again. It’s not going to happen. What i will tell you is what kind of things you need to keep in mind when building on a bigger and bigger scale.
An awfull lot of this chapter overlaps with Trading. Sometimes it’s really hard or simply impossible to draw the line between the two fields.
There is one thing that you always have to understand if you want to be a successfull industrialist:
How, when and why is value added in the process of turning materials into a final product.
This is best explained with an example:
Say you are building Vexors. Assuming prices in the nearest major trading hub, they cost about 9m to make (materials + fee + transport + various) and sell for about 10m. That’s 1.000.000 ISK profit from industry. Quite decent actually for a ship that takes 2 hours to build.
Now let’s modify things a bit. You are still buying materials at the major Tradehub. But you found out that you can sell Vexors for 13 Millions a few jumps away. That means you now make about 4 million from industry on each Vexor, right? WRONG. You still make 1m from industry and another 3m from Trading and Hauling. That’s still a totally viable business model. In fact, it’s quite a good idea as long as you don’t mind the Hauling time (or the increased time it takes to sell your product). It’s called a Vertically Integrated Production.
After selling a couple Vexors at the new place you realize you could also try selling Drones for Vexors. Makes perfect sense, you customers can now find everything they need in one place!
A Warden II costs about 1.4m ISK to make. And people in that small hub are buying them for 2m. That’s an awesome 600k profit for only 40 minutes of building time. Awesome!
Oh, wait. It’s not. Warden II sell for 1.3m ISK in the nearest large Tradehub. (This is because people are sitting on large stockpiles they were able to buy under production price after Carriers couldn’t use Sentry Drones anymore)
In that case you would actually loose ISK when producing Warden II. I’m not saying you shouldn’t sell them in the small hub. I’m just saying it would be dumb to produce your own.
After a while, that small markethub you’ve been selling Vexors at has been growing. Some clever industrialist (you!) has made sure that everything a mission runner needs is always available at a fair price. Now mission runners are starting to sell the stuff they don’t really need for themselves. Salvage for example. And apparently, they are selling it super cheap so you decide to grab some to use for your production.
At this point you should be clever enough to realize that being able to buy materials cheaper than at the main hub doesn’t increase your margin on industry. It’s just trading profit. And you should grab it whenever possible. The same is obviously true for any kind of materials that you have farmed yourself. Always value your stuff correctly, the prices at the large markethubs in the galaxie are a very good indicator, but don’t forget about transport costs.
There are a couple other things you need to keep in mind:
- What’s happening in EVE?
Are there any major changes coming? Will these changes shake up the markets? More demand usually means you can make a bit of money in the first days. Less demand means falling prices.
- Customers
Who are you actually selling to? A trader that has set up buyorders in Jita? Or directly to customers in a small and mostly irrelevant minor tradehub? You can make a lot of money in both cases, but you need to understand why you make that money. Maybe the trader in Jita doesn’t know the production price of a certain item and his buyorder is clearly higher. Do you actually think this buyorder will stay up for a long time? Or are there other industrialists that are pumping their lines as fast as they can?
In a local trading place, the daily volume in jita might be what is sold in a year. In that case, you need a vast collection of blueprints and quite a big margin between material and end product to actually get rich.