In the last week I've received three mails asking me about starting up a market. I get excited when I get these mails and I do my best to share my thoughts and ideas with people. Getting three in a week is a bit more than usual. I decided to handle this by just writing a general update about my market ideas. I have a tendency to think, "I've written about that before," and I worry about rehashing. So, this may be a rehash.
The main question is "What will I stock?" That seems to be a simple question but it is actually pretty complicated. What people will buy outside of high sec is going to differ. I'm not, for instance, going to do a lot of work in selling ore and moon minerals. They will sell. People hunt down bargains and you need the damnedest things. But for a solo person it just won't work.
What I've been doing is giving people my original market list for Bosena. It hasn't been updated since I started running my market but it gives them an idea of what I started out with. It's nothing magical and the prices are over two years old now.
The next question is where should I put it? After running mobile markets for 7-2 and putting TCS in Bosena and then Sujarento, my answer is wherever. Try to avoid a kick-out station. Give people some confidence to dock and undock. Even a hungry pirate corp will not keep them out of the market.
It is better to fit fewer things but complete fits then have a bunch of mismatch items that will not fit a ship. People who live in dangerous space want to undock in a fit ship. People want to die in a properly fit ship. Instead of wondering if that module is 100k more or less then yours offer people the ability to properly fit themselves out. That may be in an exploration frigate. But give them that chance. Head to toe make sure that you can fit out a reasonable ship in all four races. Frigates are fine to start out with.
There is a lot to be sold in utilities. Scanning frigates, scanning modules, covert ops equipment, cyno fuel, isotopes, and T1 haulers. I cannot count the times we've needed to loot the field and needed haulers. Haulers sell and PI haulers sell the most. Like cargo expanders, they are one of those things that people just need and that are never available.
Ammo is actually quite scary to get into. There is a lot of it. Start with PvP ammo and drones. Faction ammo and the common T2 ammo. Missiles will still kick your butt but the other races will be easier to manage on your budget and orders.
Pay attention to killmails and loss mails posted in local and your corp/alliance/militia/social chats. This will keep you in touch with the meta. What is being used? People will share their theory crafting. What is dying? Just absorb the information. Its right there just take note of it. Zkillboard also lets you see the top used things like hulls and ammo and modules.
Meta vs T2 is hard and even harder with the rebalance. Still, there are common uses. T2 is good and then the 'best' or most used meta will be fine to start. Later you will refine that. It used to mean T2 and Meta 4. Now that's a bit difference but there will still be a balance. The area that breaks away from this is Damage Control Units and Prop mods. Stock all of them. People do weird things with their fits and need all of the types of these modules.
Know your space. If you don't know it, learn it. In Molden I barely moved frigates and destroyers. In FW space those sell better than cruisers. T2 hulls not so much. In Molden T2 hulls moved faster. Battleships sit and sit and sit and sit and sit.
Buy small, restock often, figure out your markets pulse. I call them 'stacks' but instead of buying 500 buy 20. See how they sell. Try 30. Eventually, you might stock 50. 50 may last for 2-3 weeks. That's not bad. The area I deviate is guns. Gank guns I have big stacks of. Common cruiser guns I have stakc of 30 or so. The 'flavor' of the month changes a lot. With big guns for attack battlecruisers and battleships I carry enough of the most common guns for the most commonly used ones to fit 2 or 3 ships. So that means 16 or maybe 24 of the big, expensive guns.
With that said, pay attention to buying habits. People are going to buy the ammo they need. 50k of ammo lasts a while because people are buying it at 1k at a time. You can stalk your buyers if you want to. Look at their kill boards and loss boards. Keep what they need around.
You are not selling volume you are selling complete fits. You will sell a large number of things but small numbers of each thing. Have perishables. Ammo, drones, nanite paste, cap charges, scripts.
Avoid exotic things at first. T2 rigs, expensive hulls, faction modules. Eventually, you can see if your market moves them. But most of the time people will go to Jita or a trade hub for these things. Use your buy orders wisely but experiment a little bit.
Transportation is the hardest one to advise about. A jump freighter is some six billion ISK. Black Frog is up to 75m a jump I believe. Do math. See what works for you. Can you build it in station? Can you jump it in? Is it worth having more than cruisers and frigates? Can you use a Deep Space Transport and Blockade Runner? The logistics of it will be the hardest part of the problem. You're going into dangerous space.
Stocking TCS runs me 2-3 jump freighters most days because of hulls. If jump freighters change much more, or cynoing becomes harder, I may stop running a market. That is how serious the logistics are. As is I have to manage both sides of my cyno chain to get in and out. Because the risk of JF in high sec is to high for my blood I freighter my stuff myself or contract red frog. All of that has to be taken into consideration. its a large volume to move and you will be moving it constantly.
Way at the bottom is making ISK. There is 'what does my corp need' and there is 'what do the locals need' and there is 'what sells regularly and makes ISK'.
- The first you will know.
- The second I will help you with my starter market spreadsheet.
- The third is a matter of observation and watching.
Its absorbing and its an interesting snapshot into some of the behind the scenes aspect of the game. You're peeking into the closet by selling them their clothing so to speak.
And that's some of the advice I've been giving.
Having examined a few items at random, it appears your markup is 2% (though the totals at the top of the document yield a 1.8% figure so there must be some variations). If I may ask, how did you arrive at the 2% figure?
Hah! Pardon me while I clean up my keyboard following a Sugar induced spit take.Delete
What I was fishing for was what motivated 2% rather than some other number. I was, of course, setting up a follow up elaboration and now that purpose is unmasked I’ll just proceed directly to that elaboration.
If it’s your desire to drive out all competition and replace it with your benevolent monopoly I imagine 2% does a fine job as I suspect few other marketers show much interest in competing with 2%, especially in such a dangerous environment. That said, I also suspect your customers find the extraordinarily reasonable 2% markup a mixed blessing. Here’s why . . .
Benevolent monopolies, while being benevolent, remain very fragile. There is no redundancy in them. With all competition driven out, your customers rely on you and you alone to stock the one store left standing. Accordingly, should you wander off for a bit (say Iceland or a vacation, maybe a short sanity break or, god forbid, a decision to close your store entirely and move to a friendlier location) your customers will be left high and dry with nary another to turn to. Mind you, I’m not saying there’s anything wrong with such approach. The slightly malevolent possibilities laced into the benevolence at hand feels very Eveish.
If, however, it’s your desire to create a thriving market rather than a monopoly you might want to consider experimenting with that 2%. You could raise it to 4% and see if any competitors move in. If that doesn’t succeed, perhaps 8%, etc . . . In this approach you wouldn’t so much be running a single store as attempting to create a thriving mall where you operate the magnate store. Similar to above, I’m not saying you should be doing this, rather I’m pointing out that it could be attempted and I’m doing that pointing because it gets a what I really intend this elaboration to be about . . .
In your current benevolent monopoly setup don’t be surprised if your customers often seem less than appropriately appreciative. From their point of view you have them over a barrel. A comfortable barrel yes, but a barrel just the same.
You have completely made me want to say, "Then they can go fuck themselves and not buy it."
So, I have.
I have my reasons, egotistical, personal, beneficial, altruistic, whatever they are I have them. If someone doesn't like it they can go do something else.
I also said that that is a very old and original list of stuff. You have dug into it looking for some depth of purpose and reason that doesn't exist. I'm more then sure that I screwed up the math trying to learn how to make excel add numbers together. I didn't enjoy the process and abandoned trying to use spreadsheets soon after and just went with what was comfortable for me which happens to be my memory.
Oh man, I hate it when I find myself in a hole only to discover that all my predicament generated thrashing about is ultimately producing further digging. Being socially inept really sucks. So an apology, some elaborations and a compliment.ReplyDelete
Apology: T’was not my intent to bring up bad memories. I wish I had been more conscientious of that desire in my last comment because as that comment is written it’s well-nigh impossible for such unfortunate result not to occur.
An elaboration: I’ve always been fascinated by your cult of reasonable prices. Not because I enthusiastically want to partake nor because I passionately disagree (I neither want to partake nor particularly disagree) but rather because it strikes me an interesting social experiment. Accordingly, I’ve usually tried to pay close attention to whether results the project were/are producing and whether those results matched what you expected.
Another elaboration: 2%, 4%, 1%, what simply feels about right . . . Whatever your markup actually is/was matters not. Unless things have changed, I already know from the get go that it’s not your intention to gouge your customers. Accordingly, I’m confident your markup was/is a lot lower than the competition. I initially mentioned the 2% only because that’s the first piece of information I’ve ever gleaned about what markup you actually do (or at least one time considered). I’ve always wanted to ask you about this. If you wish to share how you determine markup I’d love to hear about it. That said, you’re under no compulsion to do so.
Another elaboration: I absolutely don’t intend to criticize your reasons for choosing to set up your markets as you see fit. We’re in a sandbox. “Because I wanna” is not only a fully legitimate reason for doing something if you so choose, it’s actually the best possible reason if you ask me. Similar to above, if you ever want to elaborate further on reasons motivating choices you’ve made I’d love to hear about them since that sort of stuff fascinates me but you are under no compulsion to do so.
A compliment: Back it the day (I adore being old enough to deploy statements like that) I too willy-nilly came to set up a market. Nothing nearing your scale and certainly not in the dangerous space you dance. Still as I read through your original post I was stunned how many of your suggestions lined up with what I discovered. Specifically, back in the day (hah! It’s even better if you deploy twice) I ended up setting up a viable market in the noob system of Embod. Embod is only 5 jumps from Rens but being in a different region, the location feels like a remote backwater to the noobs that inhabit it. Accordingly, there was a lot of room to either produce or bring items in and feed the enduringly voracious little puppies. Now noobs aren't exactly wealthy. Accordingly the environment dictated modest markup (something I understand you do!). Initially going with what I knew (I was a young Minmatar at the time) I set about making sure a noob could purchase everything needed to fit a decent PvE Rifter (much like you suggest!). Missiles and rockets sound super cool so pretty soon I was stocking both launchers and Kestrels – sold like hotcakes (serve all races, even in Embod!) A friend suggested I stock stasis webs and warp disruptors then talk up the joys of PvP in local – it worked (a curious mix of know and make your space?). I couldn’t let the missioners go unserved so I added salvagers to the lineup and the poor miners were suffering too so in came mining lasers (my versions of haulers?). I could continue with the similarities I saw but you get the point. Even though our situations were different, every piece of my experience leads me to believe you are delivering good advice. Good advice deserves praise. I praise you.
You keep saying 2% but she used an initial mark up of 20%, which seems to be the norm for most people. Low margins require more volume which isn't possible when starting your own market.Delete
Oh my you are correct Jeff!Delete
Accordingly no obvious math error on Sugar's part but rather an egregious reading error on my part. Sugar's Cult of Reasonable Prices is certainly looking a lot more appealing. That said, presuming 20% isn't seen as gouging in the locations Sugar dances, all my previous mutterings still apply though, importantly, in a much less 'Are you insane?' way.
Thanks for double checking me Jeff.
My prices change depending on what I'm doing. I don't do a 20% markup on hulls. Most of the time it is 1-3% for instance. I may do a 50% markup on cargo expanders. Instead of selling them for 3k I may for 6k instead. But never for 100k.Delete
The entire thing averages to about 10%.
Time spent stocking BNI markets illustrated some things I'd not realized previously. Relying almost solely on JFs for managing imports, I quickly realized that stocking and tracking anything under $xx/m3 wasn't worth the bother, as freighting costs were eating up 10% of the net or more before I got my compensation. Granted, with the high volume demand, 500% profit wasn't untenable in lots of categories. In fact, going below 50% profit often exposed you to the "depradations" of relisters. Extreme profit margins made sense given the difficulty of tracking concluded orders. Programs like Evernus make this a lot easier, so it isn't quite such a headache to keep up with high order turnover. This in turn allows people to embrace higher sales velocity, and also more reasonable margins.ReplyDelete
If it's just a small group of market stockers, I suggest focus on the simplest things, like T2 modules, at least in any categories that aren't already saturated. The main virtue is that there are simply fewer of them.
Rather than stock tedious things like ammo or small hulls, I would simply seed the market with blueprints for these things. This ensured that people would be making them, and that they would be competing with one another.
A disclaimer that I forgot to add is that my stuff is all low sec focused.Delete
With deeper null you are going to have factors that will influence the market.
One thing about my market vs a null sec one for an alliance is that for me, attracting relisters increases the volume of people in space and the things for people to have. In null you already live in your space and the relisting becomes a different situation.
I don't think that my way is the way for everyone and I hope it does not come across as that.
I still get emails from Signaleers saying how helpful the "Building a Market" Q&A you did for us has been to them. It's publicly available and I encourage everyone to listen to it. Lots of good advice there.ReplyDelete