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Saturday, February 26, 2011

The easy way to realize a 50% gross profit margin.

Carebears make money the old fashioned way: we toil and sweat and fly all over EVE mining, manufacturing and making deals in the hope that with all said and done we realize a profit. Mining is a relatively straight forward way to make money. I think everyone gets how to do it. Manufacturing is a little less straight forward but is not much more difficult than mining.

Then there is trading or, in the parlance of big money, the art of making the deal. The economy in EVE is very robust. You can trade in commodities: buy ore low and sell it high. You can be a distributor, the much maligned middleman, and buy ship and station parts cheap in High-Sec and sell them for a tidy profit in Low-Sec or even Null-Sec if you have access.

Then there is the garbage business. Picking up other people's trash and removing it from their sight. Now, EVE is a very progressive place. There are few junk yards and no land fills that I know about. So what does this have to do with making a 50% margin you ask? The name of the game is recycling!

Just as every circuit board has a treasure in rare metals encased within, every component in EVE has a wealth of ore. The trick is to decide what is more valuable recycled than not. The first task is to decide on an item to test. It is not so hard to do. Think of an item that is extremely common. It should be Tech I. It should be rat loot. It should be everywhere. Hmmmm, microwarp drives and afterburners come to mind!

Now you just have to decide which one to use. You may need to buy one of each for this next step (or use an offline tool, perhaps I'll cover those in another post.) Once you have one of each, right click on it and select "Reprocess." That will tell you how much of each type of ore you will get from the item when recycled. Lookup the going price for the ore types listed and do the math (again, an offline tool is most helpful in this.) That will tell you approximately how much you can get from recycling the item and selling the ore. Don't forget there will be tax deducted on the sell and ore taken by the reprocessing plant!

Next, look at the market for that device. Compare the highest "buy" price to the recycle value you just determined. If the highest buy price is a lot less than the recycle price you have a winner! Setup a buy order (there will be a broker's fee involved which adds to your overhead!) and do a test. I typically run a test for 24 hours. This will give you a real market test for your projected recycle endeavor. Sometimes the item isn't as common as you think. Sometimes sellers aren't interested because someone undercut your price. Be savvy, take all those things into account and set a high enough buy price to attract sellers. Remember, the sweetest honey attracts the most bears.

Once you have your items, reprocess them. Make sure you do it in a station where you have high standing so as to minimize how much they take. Also, having good refining skill will reduce the amount you lose. Every single cubic meter matters so minimize it all the best extent you can.

You'll be surprised how easy it is to make money and you don't even have to sit there minding your barge to do it. The market is automatic. The most work you'll need to do is perhaps hauling your recycle stock to another station for a better reprocessing deal. Here is the result of an MWD test I conducted to illustrate my point. Oh yeah, being at a market hub ensures large enough volumes that it won't take forever to realize a profit.


Fly careful!

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