Tuesday, June 25, 2013

TCS: Diversifying

In television, an often seen plot is to some how have the cast interact with a dimension or world where everything is the reverse of what it is in the real world. The good guys are evil and the evil guys good. Governments that are free are oppressed. Sometimes the landscape and scenery are different. Sometimes the technology. It is a well used and ancient plot line. And one that I found myself in. Or at least, it felt that way when I realize that I was in a discussion about how my TCS alts had swamped the market with cheap goods. Goods so cheap in comparison to the area that the person I was speaking with thought that my TCS employee was making all of the items herself.

I explained that they were just a bit over Jita prices. I often comment that this is well under regional prices and that is still true, a lot of the time. Although, it is more and more common for me to see lower prices on more and more items these days. Slowly but steadily, TCS is pushing the region's general price down across many areas. While that means less ISK in my pocket as people can shop at more places it means better health for the region. Plus, TCS sales are picking up for the most part so something must be going right.

I spend very little time debating my profit margins with TCS. When I say very little I mean, for the most part, none. My goal of bringing reasonably priced items to low sec is the primary motivator for what I do. I'm still standing fast on not losing ISK but I have no problem with earning less ISK when the time comes for it. That is why my profits are so low on items like hulls.

However, I make my ISK by volume. It is the greatest strength that I have. My base profit on a stack of items will sometimes be only a hundred thousand ISK for a stack of low end modules such as T1 probes and cargo expanders.

The other area that I make my ISK off of is creative diversity.

My latest venture is T1 haulers. I listed a few Iteron a month or so ago because I had them in Chella's hangar from when she started and I never use them. They sold quickly. Very quickly. With T1 haulers being so cheap I decided to invest in a few of each type and see if they sold.

Haulers are one of those things you sometimes randomly need to have and don't tend to have hanging around. After all, when a carrier is tackled and killed the modules are really, really big and one needs a hauler of some sort to get them out. Or so I think.

In general, sales are going well and turn over is pretty steady with a solid increase of late. Things are fleshed out well enough that people are buying full fits + ammo the bulk of the time. I've added some pirate frigates into the mix and the occasional Cynabal as well a Sisters Probe Launchers sometimes. I don't actually make more off of the more expensive things. I'm just trying to have that variety out there.



3 comments:

  1. price rises in jita force me to produce my own products as of late. one point being cynos. it was cheaper to make my own and sell them. the money saved for the customer is appreciated by them expressed in them buying from me. i have one guy underbidding me now two jumps away. i dont care. some items i sold for 20% over jita say at 15k isk for instance would be the lowest price in region with average being 200k or more being next lowest price. sales arent extravagant but they are steady. it has been an interesting experiment.

    thanks for the post.

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  2. May I ask what sort of Return you make on the Capital Employed in your business. For example, the capital I have tied up (= to my wealth = 4.5bn ISK, I am just starting) generates profits of about 4% per day, I.e. about 180m ISK per day though I suspect that % return will fall as my wealth rises).

    I do this by buying in Jita and selling in Dodixie, so in the big scheme of things a lower risk venture than yours.

    Therefore, I would guess that in time your Returns should be higher than the 4% per day to account for the higher risk you take in operating a business outside of highsec?

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    Replies
    1. I don't mind sharing I just don't have an answer for you because I don't know. I don't run things in a nice, neat spread sheet that gives me a running total of how much I make at any given time. I'm probe to under cutting everyone and cutting into my own profit for no other reason than my pride.

      Its gross value is around 14 billion ISK right now for items in hangar + listed items + liquid ISK. I have not had to invest anything into it since its initial investments back in March and I've paid myself back 250m of that. I keep rolling TCSs profits into more items and larger stocks for TCS.

      I don't factor in the risk of operating outside of high sec. I was gifted the loan of a jump freighter. With that, most of my risk is inside of high sec when I transport goods.

      TCS turns over around 500m to 1bil in items a day. However, I do not make a flat % profit off of each item to give you a daily profit. Just because TCS rolls 500m in items does not mean I make X% profit. If I sell a lot of hulls in that 500m roll over I make next to nothing because my per hull profits are around 50-100k for cheap hulls, 500-1m for cruisers 1-2m for most battlecruisers/T2 frigates and 2-3m for more expensive hulls. This is due to the fact that if I marked up hulls by 10% or 15% or 20% it'd be worth peoples time to jump into high sec and buy a hull and TCS is about not leaving low sec more than it is profit.

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