Saturday, May 11, 2013

TCS: Sugar's Non-Technical Guide to Her Low Sec Market

Gevlon shocked me by featuring my store in his blog, yesterday. My entire project has been something I mostly scraped together and have bumbled through to the best of my ability and sense. Early on, I started a naming dynamic to my posts so that people could avoid the blogs about the store. These blogs are titled TCS. Also, if you search for TCS those particular blogs are available.

I decided to create a more cohesive naming strategy because someone said, “I don’t know how interested your readers will be in your market posts.” I didn’t either. I wasn't going to not write them because I write about whatever interests me. It seemed that a naming convention would correct the situation. However, I’ve started to receive a trickle of eve-mail and e-mail about what I am doing. Sometimes people ask me for advice on how to approach their own low sec market or what they should pick and choose or just how to pick and choose.

Cheradenine Harper asked me about moving forward into the wider market. I've received comments and a few eve-mails asking opinions, advice, and what I did to start and what I do to keep going. I like Eve mail a lot. I must admit that I am as wordy there as I am here. In chats to. So, fair warning to anyone that messages me. I will message back.

Today, I will try to outline my decision making process for stocking and maintaining my store. It is a perfect time to write one of my non-technical guides. This will be a long post and a summary of what I am learning as well as what I am doing to my market and the results I am getting from it.

Sugar's Rambling Guide to How She Low Sec Markets


Before you start reading, please note that this is a long term adventure in the market. The ISK is not made over night and the orders do not stock themselves. I enjoy making ISK. Internet Spaceship Pixel Money makes me happy. I do not consider myself a station trader in the sense of sitting in a hub and buying low and selling high. I buy stuff and sell it to the people that need it for a reasonable price.


TCS in a Nutshell

The first thing is ISK. The easiest thing about a project like this is sinking all of your ISK into it. Pick a number and start with it. Just like any form of market trading you want to not over extend yourself just because you can. Also, starting with a number lets you see your growth. I’ve kept track of all of my ISK donations to the store and the dates that I made them. This lets me subtract them from the stores complete net worth to see what my profit has been.

Let me share where the store is at the moment I am writing this line. I will be buying items to restock as I write.

  • Liquid ISK:  1.8 billion
  • Market Orders:  6.8 billion
  • Assets Not Listed: 900 million
  • ISK Spent (skill books) 130 million
  • ISK Spent (Implants) 120 million
  • Isk Spent (Red Frog) 36 million (moving items during Fanfest)
  • Active Orders - 415
Once I restock I expect my active Orders to go up around 30. I have that much liquid ISK because I sold about 1.3 billion in stuff over the last 48 hours. Remember, that is not pure profit but the amount of items turned over. I tend to drain my wallet down as much as I can each time expanding and adding.


Some of the not listed items are just because I only have one or two and I've had to prioritize orders. Some are ships. Some are refills of ammunition. Some are stacks of items I haven't worked through because I brought large stacks from Vov's ganking (retail by piracy). I just finished building a run of Stabber Fleet Issues and have not yet moved them to Bosena to list. Now that I've rolling around with all these Wholesale IV accounts a lot of the little stuff will start to get listed.

That is roughly where I am. Good, bad, indifferent, I don't know. In three days it will be two months since I gave my trade alt her first 2 billion ISK and started this entire process. I put about 5.5 Billion in, so I have doubled that ISK in 2 months with my slow roll program to slowly build the store. Sales slowed during Fanfest because I couldn't keep up and explore Iceland. I've had a few people move into the common T2 item market  and that has trimmed my sales a bit here and there. Nothing major. Sure, I'd like the sales but more people putting up stuff allows me to provide a greater amount of stuff in the end and my sales figures will balance back out and up.

You don’t have to start with billions. Bosena had a market at the end of last year that Sard was tending. Because of this, people wanted that market back. I already had a customer base looking to shop. This allowed me to dump a large amount of ISk (four billion is a lot to me) into the foundation of my project. Not everyone has to do this. You can build slow and go from there.

My Market alts are all trained to Retail V, Accounting V, Broker Relations, V, Trade V and Wholesale IV at the minimum.

Know your buyers

Every region is a bit different. Molden Heath is low sec but it is not faction warfare low sec. Faction warfare low sec is going to have a different demand because of different needs. I live in Molden Heath so I understand the ebb and flow of the PvP there. Use the kill boards and look at what is killed and what is doing the killing. That is your market in low sec. Start there.

I cater to both the killers and the killed. There are few things more satisfying then seeing the boys take someone down and watching them reship from TCS. This gets the prey back out in space. It gets my boys back out in space. It gets people coming to the market. Being able to reship is a major draw. Often, out on roams, we die a ways away from home and we’d love to reship but we cannot because low sec has few open markets. If I go to Amamake there are 500 people sitting on the station. If I go to FW hubs there are often 20 people sitting on the station. Bosena may or may not have people sitting on the station. Its a tossup because camps are scattered by other pirates. That is one of the nice parts about non-faction warfare active areas of low sec. We kill each other with as much enjoyment as we do anyone else.

What I learned from the loot that we brought in and looking at the fits from those who died was that there were more people to be reached then I was reaching when I was thinking only of the killers. I do not think that my initial concept of stocking the store to my and my fleets needs was bad. It was just limited. We use T2 modules and high meta T1. Yet, I kept getting and seeing lots of meta modules on hulls that to me you don’t fly into low sec and PvP in. I kept seeing Salvage Drones in my loot. I kept seeing fitting modules that you do not need with ‘proper’ skills.

Everyone is not me. It would be silly to only sell to myself and those that fit the way I have been taught to fit. I went and started to stock two to three things for each common module. The T2 module, the meta 4 module (not guns, guns are too expensive for me and to niche), and the basic meta 0 module. This is a decision making process where I have the ISK and the orders to do it. What I saw was that these items sold in all three variations and steadly. The nicest part about the meta modules is that I can buy an enormous stack for a few million. This means less restocking work for me. It also means that people can always fit a ship properly, even if not optimally.

I must think in terms of both the attacker and the defender.

I stock gank fits for cayalysts because there is a lot of high sec ganking going on.

Location, Location, Location

Play with the system map or dotlan and look at cyno jumps. Is this a common midpoint system? If so, that is also a market option for you. Is it a busy null sec connection? Is it a busy high sec connection?

Bosena is the place to be. Bosena is a low sec system one jump outside of a high sec system. That high sec system happens to be the regional trade hub. The thing about any low sec system with a station one jump from high sec is that it has the potential to draw traffic for things like jump freighters.

Is the high sec area full of mission runners? Is the low sec area full of them?  Look at the systems traffic. A system with high traffic and lots of cynos means a busy system where things may sell.

Don’t base in a kick out station. You will attract people but more will avoid you because they know better. Stupid people will always exist in large numbers but it seems silly to base profit off of them. Base somewhere people can dock at and cyno to/from comfortably. If people think they can make it to dock before someone kills them they will come. If they can undock and redock or get away, they will give it a try.

Molden Heath is also inhabited in all time zones. Some are lighter than others but it has a steady stream of traffic. Because of the null sec entries down down into Great Wildlands to hit the south a lot of null traffic moves through. If you are picking a system look at jump distance calculators. If your system is to far away for people to jump, they won’t. Use JDC IV (Jump Drive Calibration IV). JDC V is a long train so people skip it.

What to sell?

I started with stuff I always run out of and buy regularly. This is mostly ammo and common modules. I expanded that to what other people use and buy regularly. That is how I latched onto the idea of fueling capital ships. What did I need? What did my corp need? I live here.

This is more of a learning game than the obvious. I expected missiles to sell like water because missiles are the most used ammunition per zkillboard. Yet, missiles are my slowest moving ammunition type. Hybrid/Projectile ammo is tied, followed by crystals and trailed by missiles. Low sec is about PvP and that means Faction ammunition is the base line ammunition (as far as I understand) for most people. The edge matters.

Then there is ammo consumption. Medium ammo is the fastest seller. Then small. Then large. I use that to guage the size of a stack. I might have 50k medium, 30k small, 20k large.

Light drones are the most common. However, I discovered when I had more buy orders that the market is drone hungry. Lights, mediums, heavies, sentries, salvage, they all sell. I will be adding bombers in the near future to see how they do.

Fuel is important. Isotopes fuel capital ships and jump freighters.

Some items are bread and butter basics. Damage Control Units for instance. Nanofibers. Overdrives. Warp Core Stabalziers (even if it makes Fried sad), nano membranes, shield extenders, points, scrams, webs, neuts.

How to sell it?

The biggest limitation after ISK is orders. Unlike station trading you are supporting yourself through volume and numerous options. Turn over will make more ISK I believe then fast, high priced injections. No one will know who you are but they will know if you are an asshole with high prices and avoid out of principle  You'll catch randoms wandering through but why not feed those who live there?

Look at your ship. Count every module type, ammo type, rigs, and hull.  My Jaguar equals 15. That is 15 buy orders to fit a Jaguar. Thankfully, modules overlap. If you don’t have a lot of orders available to you you will have to make decisions on what you are going to do. This goes back to know your market. Frigates? Cruisers?

It is crucial to be able to reasonably fit a ship from nose to tail. It is better to be able to shield or armor fit that ship. If you have hulls it will bring people in to fit that hull so that they do not need to leave naked. Start with commonly used PvP frigates. I started with 1 racial cruiser and 1 racial frigate for each type and made sure they could be shield or armor fit. You will need all of the common ammo types. They will need to be T1 and T2 and Faction. I then moved into common refit modules. Shield Extenders vs Invul Fields. Different gun sizes.

Drones, drones, drones. Limits to market orders mean I only stock the commonly sold ones. In general, I avoid special snowflake stuff. Lights, mediums, heavies and sentries (plus salvage)

A cyno needs the cynosural field generator, liquid ozone, cargo expanders I and II at the minimum. A stack of dirt cheap frigates is also useful here for those that do not have well trained cyno skills. The reason is because of liquid ozone. Having cyrno trained to IV allows you to shove 350m3 of liquid ozone into Gallente/Minmatar/Caldari rookie ships with a cargo expander. If you are Amarr, you are screwed and will need more than one expander or a frigate or Cyno V.

But you have to know that about cynos in the first place. Once you cater to them they will come. I have gone through some five hundred cynos I believe. I just listed another 50 last night. And don’t over price them. Cynos are necessary and people expect to lose them. People will pay money for them but if you have them in massive numbers they will come to you. Often, in low sec you see cynos up for a billion ISK waiting to catch people who are in dire straights. If you are running a market, people will come to you in relief to do their normal business of moving capital ships around.

But if you are using a cyno that means you have a capital ship incoming. Capital ships need fuel. There are 4 fuel types, one for each race. That means cyno + frigate + cargo expanders + liquid zone + each racial isotope. Poof, a refueling station has been created. That means you need shuttles as well so that people can scuttle around and scout or move or do whatever they want to do (like buy 33 shuttles...)

Experimenting

I didn't go super deep into things the first time around. I dipped my toes into the water. I still do every time I introduce something. What I often do as a low cost method is just put the various loot I get up to see what happens. That is how I figured that I should start buying sentries.  I had a handful of a few types from breaking up a POS bash and I listed them. They vanished in an hour or two. So I got a few more to see if it would happen again and it did. Each time I added a bit more and once I was sure they were selling I upped my stack size.

From the ground up I started with small stocks of ammunition. First 20k. Then I moved up to 50. Right now I keep around 50-100k units on hand. This is because people are coming to me to restock a fit 90% of the time. In small gang PvP you don’t run around with 10k units of ammo in your cargo hold. I average 1.5k of each ammo type that I use in my PvP ships. More and you are just wasting money. Even when PvEing in low sec people will carry just what they need.

It also gives you wiggle room to learn what will and what will not sell. I made a few decisions that turned out, to my surprise, to be bad. I didn't lose money because the items are still there. They are just not moving or they move very slowly. When I test an item I start with 2-5 modules. If they are snapped up I try 2-5 again because it might be a fluke. If they are snapped up 2 or 3 times I’ll increase to 10 and go from there to see how they sell. Common stuff that sells quickly I'm now keeping in stacks of 20-50 depending on the speed that it sells.

Other things, to my surprise move, quickly. I'm looking at you, Salvage drones. I had to buy a stack of 300 because they were selling so fast I was replacing them every single stocking run with small stacks of 20-50.

I had to learn not to be afraid of big numbers. Small experiments into the market lets me learn things like how popular cloaks and covops are. I sell a lot of covops ships or I should say I sell almost one daily. I carry all three types of cloaks as well because people will buy a covo ops ship and a non-cov ops cloak. I don't know why. I learned not to ask.

My initial urge was to only buy cheap things. CovOps cloaks cost some seven million ISK. However, they sell and I keep restocking them. However, to follow my mantra covops need cloaks, launchers, probes (all types), grav rigs, salvagers, analyzers (now renamed to data and relic). When Odyssey is released I will add the scanning modules.

Little Things

Don’t neglect rigs! Rigs are the hardest thing to find out in low sec I think. I don’t stock a huge selection of them but I stock the basics.

  • Tank rigs (core defense shield extenders and trimarks)
  • Fitting rigs (current routers, over clocking units)
  • Exploration rigs (grav rigs)
  • Ganker Rigs (hybrid collision accelerators) *I live in an area where people gank one jump into high sec. This is an area specific thing but one I over looked for the first few weeks because I don’t gank and didn’t think about it.
  • Tackle rigs (auxiliary thrusters)

Fitting modules are very important. It took me a while to think about them, but I finally did and they are another module that flows like water out the door. Mostly the T1 modules sell but I sell lots of them.

Hauling is another thing to think about. I do my own. Sometimes it sucks. Hauling services and public contracts are a possibility. I have two characters who fly blockade runners. I also have a corporation and a blue corporation that can hold a gate and let me jump in an Orca or Charon. I *do* have one (soon two) jump freighter pilots (Hi, Gevlon) with no jump freighters. I sometimes jump my Orca or Charon in when the system is empty. I am a little bit risky that way.

Tools

I had someone with patience that I trusted not to get mad at me being bad as I learn teach me some spread sheet basics. I used that to compile my initial starting list of 140 items. After that, as I've expanded, I've moved to EveMentat as a tracking method.  I use Eve Central to look around at things like hull prices. Sometimes I will go to another trade hub if the hull prices are significantly lower.

My Profit Margine

I used to spread sheets to help me set my prices. I price at 20% over what I buy at. I buy almost everything in Jita. If that amount is to high compared to local orders and items I will come down. This is especially common in hulls. I will not lose money but I am fine with only making 1% on some items if that is how it has to be.  I'd say that my mark up averages between 10-15% profit after taxes and fees for listing. I'm not 100% sure because I don't keep track of that type of thing. This is why I write non-technical guides.

20% is the max that I will go. To under cut someone I dislike 0% is the lowest I will go. Sometimes I get angry at the prices people put things up for. I know not everyone is doing this for the same social, low sec community building reasons I am. Still. Grr.

I always try to cut under high sec so if high sec is at 19% I will be at 18% unless I lose the ISK war from buying in Jita. This is most commonly seen in hulls and projectile ammunition.

I stay true to my prices. If I can find a Talos hull for 4 million cheaper in Amarr than Jita I will pass on that 4 million ISK savings to the buyer. However, I will not run myself ragged deal hunting. The savings must be significant and not just a few hundred K ISK on an 80 million ISK hull if I have to move a freighter to get it. Freighters warp slowly and 10 jumps is easily an half hour or more. I've had to learn to put value on my time and it is easy to get absorbed in the market.

It's Little by Little

Little by little, Inch by Inch. By the yard its hard by the inch its a cinch... never stare up the stairs just step up the steps! Little by little... inch by inch.

That particular melody is a song from when I was in elementary school forced to do musical plays for the possible entertainment of someone that I assume was my parents. It is a very good lesson and one I follow in life. The store isn't built over night. The orders don't make themselves. The stuff doesn't move itself. The ISK doesn't appear with the chorus of a thousand angels behind it because I am amazing.

It is time consuming. The buying, comparing  not double ordering, checking, valuing, deciding, moving all take time. Building up the stock takes time. Restocking takes time. Some days things just have to wait. But it gets easier, later, as there is more ISK and more buy orders.

I run my orders across 4 market alts. I am condensing that down to three. This is because my personal market alt has held most of the store's sales so far. However, I do other things with her and I like to keep the store and my personal stuff separate  My store is its own entity. Technically, I could pick it up and sell it to someone and not lose any of my personal game. I find that to be a lot of fun. It is a mini game in some ways.

As I write this, I'm at the end of my second month of working on TCS. It has been very, very fulfilling as a project. I remind myself every time I start to fret that I have already been successful at it. Now, it is just maintaining it and reaching my next goal points. Battleships, bombers, and a good selection of T2 ships.

I feel that I've stayed true to my original intent to supply low sec with a reasonably priced store. I'm not always the cheapest but I am often the cheapest. I resist temptation. If I buy it for 10k I might sell it for 20k instead of 12k but I won't sell it for 40k or 80k just because everyone else is. I'm selling to my friends, my allies, my enemies and my prey. I cannot harm one without harming the other so I harm none.

And yes, I'm having a lot of fun even if it is a lot of work.

5 comments:

  1. Great Post!
    Love to read your "emotions" in this text and the fun your little project brings to you.

    keep up the good work!

    Grettings from germany
    Inori

    ReplyDelete
  2. Excellent post!

    What I like about your market posts is they're different. You aren't just doing the same thing everyone else does. You're going against conventional wisdom and creating a market hub in lowsec.

    I find it quite interesting, especially since I've been experimenting with something similar in a remote hisec system just 1 jump away from both low and null.

    BTW, you're on my blog roll now too.

    ReplyDelete
  3. I've been following these TCS posts with interest. It's not just the market making, which is cool in itself, but the cross-over with your mates in clearing gates and the like. I've read some brief posts from others who talk about making a market such as FW fitting stations, but they don't have the personal connection that you do. They're "just" opportunity hunting. Presumably there are massive null-sec market marking operations out there, but unless we're inside one of those alliances we'll never hear such details.

    ReplyDelete
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  5. This is a very good read, indeed. Even though it's quite some time that has passed, I've been doing my research for establishing a low-sec hub and this post is exactly what I was looking for.

    ReplyDelete