Monday, 24 March 2014

Experimenting with Industry: Helping the newbros!

One of my favourite things about EVE is the ability to come up with an idea or objective, formulate a plan and then execute it. This can range from something simple, such as building your first ship, to extremely grand and long term, like establishing a sovereignty holding alliance. My most recent experiment, currently under execution, is a simply Industry plan. I have gotten my feet wet through some simple T1 small rig manufacturing which has been going nicely on the side making reasonable profits. It has also given me some insight into the planning and logistics required to run a successful manufacturing operation. However, about a week ago I felt that it was time to step my game up a little bit.

So I started manufacturing Atrons! Not exactly rocket science. However, there is more reasoning behind this. In Sendaya, the price of frigate hulls is quite steep. This can make it tough for newbros in the alliance living on a shoestring budget to keep getting out in space and fighting. In Barleguet, fast tackle Atron fits were going for about 1 million ISK. A very basic fit but functional and useful enough that a new player can get in one quickly and start experiencing the game while feeling that they can contribute to a fleet. In Sendaya the price is more volatile and I have seen contracts for 2 million ISK and upwards (though they do often go for 1.2-1.5million/hull when buying packs). I think it is really important to get new players out in space to start enjoying the game so I set myself an objective of getting Atron's contracts up for 1 million per fit ship. I plan to supply ~100 of these per week.

So now with an objective, I had to identify why the price was high and how I could work on reducing it. In Sendaya there are no manufacturing lines. Therefore ships either have to be manufactured outside or simply bought in Jita (or another trade hub) and then shipped in. An alternative would be to build them in a nearby system that does have manufacturing lines, however this adds an extra step which new players can be put off by. Recently our fights have been skirmishes around the Sendaya undock so for fast reshipping it is a bit of a pain to keep jumping back and forth to another system to reship, nevermind the risk of losing a newly bought ship in transit. The main problem with Atron prices is the shipping cost. Realistically, Atrons have to be Jump Freighted in to Sendaya. This means ~15 million ISK in personal jump fuel or 25 million ISK in alliance courier fees. At only 128 Atrons per load (320,000 m3) making this cost efficient is a problem. Also, if shipping from Jita you have to consider the time investment in moving a freighter or an additional courier cost (though this cost is negligible if blended into other market operations). So when you consider that 128 Atrons, at time of writing, would only cost ~53 million ISK, you can see why hull prices in Sendaya are high. It is simply to cover the cost of logistics. I know there are guys out there who run frigate hulls in very low volumes, say 10 at a time, in aid of new players looking for cheaper ships. I greatly appreciate these guys and they have my respect for the hard work they do. However, for me that is just too impractical and time inefficient. It would cut into my PvP time far too much to be worth it.

How do I go about bringing the price down then? Well, the first thing is "local" manufacturing. In this case, I am going to produce them in Mendori, which is a good high staging system for Jump Freighting. My first run of 128 Atron's cost ~310,000 ISK/hull to produce in minerals which will finish tomorrow at time of writing (minerals were sourced from Amarr sell orders). Second, I'm going to do my own jump freighting. I can now fly a Jump Freighter on an alt which this means I only have to worry about the cost of my own fuel (with current skills it is ~15 million per round trip and will drop to ~10 million by next week). Lastly, I'll bring the extra modules needed for the contracts from Jita. At time of writing the cost of these modules is ~280,000 ISK per hull. This set up has several advantages. By manufacturing, I am able to undercut the Jita sell price by ~100,000 ISK per hull. This starts to add up quickly when considering the volume that I intend to move every week. By doing my own freighting I also cut down on courier costs. This also has a secondary advantage of not having to stick to the 320,000m3 rule on contracts. Since I fly an Anshar, I can haul ~350,000m3. Though not calculated completely here, this will allow me to squeeze in more Atrons per load along with the modules for the fit. However, for now I will stick to 128 Atrons per load as this takes ~7 days to manufacture and use the extra space to haul items that would usually be brought via a blockade runner.

Math time:

Hulls: 128 * 310,000 = 39,680,000 ISK
Modules: 128 * 280,000 = 35,850,000 ISK
Fuel: 15,000,000 ISK
Total Cost: 90,530,000

This price will fluctuate a bit depending on mineral and module prices. However. as you can see an individual with a Jump Freighter could, theoretically, make quite a nice profit while providing hulls at a very acceptable margin for new players. At 1 million per contract I would make almost 40 million ISK in profit from a 90 million ISK investment (that's over 40% return on investment). As this is once per week, it also doesn't require much extra effort. Most of the action points can be blended in with other typical market activities. My actual action plan would be the following steps:

  1. Aquire goods in Jita (market alt) - This could be via buy or sell orders
  2. Ship items to Mendori via courier - This would be part of a full 1 billion collateral cargo
  3. Set up Atron manufacturing job (hauling/industry alt)
  4. Ship Atrons to Sendaya (hauling/industry alt)
  5. Fit the ships and set up contracts (main character)
Steps 1-4 would have been part of my routine anyway. The only extra step required for me in this operation will be the fitting part. My plan is to do this during down time between activities on my main character. I'll consider it busy work when not much else is going on. So while extra work it shouldn't conflict with my usual activities as it will fill gaps in my time spent ship spinning when I can't think of anything else to do.

I think the result of this is quite satisfying. I found a pain point within the alliance which I felt required some attention, came up with a solution and executed it (assuming my JF doesn't go bye bye in the next few days, though I've spent a great deal of time figuring out cyno positioning!). It also isn't even 100% efficient in terms of ISK. With some extra planning one could cut costs even further using buy orders on the minerals and modules. There is also room for impovement via use of a better researched Atron BPO. The next thing I need to look at then is what other ships I can start fitting into the rotation. Atron's are fine, though a step up for the new guys is to get them flying other force multiplying ships such as EWAR frigates. Either way, I can definitely see more manufacturing on my horizon!

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