Marketing

Nobody can deny EVE has many different ways to MAKE or ACQUIRE the much-coveted ISK.
Keywords being, those are two separate types of moneymaking, one siphons ISK from NPC sources, generating them out of nowhere (so-called "ISK faucets"), the other makes another player part with his hard-earned ISKies for something you have to offer.

The first type of income, "making ISK", is really simple.
Run missions for ISK rewards, kill NPCs for their bounty, sell NPC tags or overseer effects to NPC corps, run NPC tradegood routes, or get your own ship blown up for insurance money (arguably not the smartest thing to do, but nevertheless it's a valid alternative in some cases).
You don't need "bussinessman smarts" to do any of the above. You just make it, and cash in. There's nothing much to talk about here.

The other type of income, "aquiring ISK", requires a bit more mind-work... as it means you have to offer something that ANOTHER player might want.
This section covers miners, moon-miners, salvagers, manufacturers of all kinds, traders and certain subsets of them supplied by NPCers (PvPers, mission runners, belt ratters and complex runners selling loot and salvage, more precisely) on top of service providers (mercenaries and researchers).
Yes, you read right, miners, looters and salvagers too. They don't make ISK out of nowhere, they need to aquire them from other players.

From now on, we will not discuss "making" ISK at all (wih two exceptions, namely "insurance claiming" and a general concept "ISK profit per gameplay hour"), but instead focus on "aquiring" ISK from now on.

2. MARKET PvP

That's what everybody of the "ISK aquiring" people engages in each and every day, no matter what the "source" of their goods or services is.

It's the one thing most players fail to realize.

Are you mining ? Your income doesn't come from MINING itself, it comes from market PvP.
Are you manufacturing (be it T1 or T2) ? Again, income is from market PvP.
No matter how you put it, all of non-ISK-"makers" are traders (i.e. "market PvPers") wether they realize it or not.

So basically, no matter what you do, simply discussing TRADE itself (or EVE's economy in general, same thing really) will discuss everything there is to be discussed that is not NPCing or pew-pew-PvPing.
There are more than enough BASIC trade guides out there, much like there are a lot of manufacturing guides. They are a good starter point for all further discussions.
I'll just assume you know pretty much everything there is to know regarding the basic rules of all above mentioned activities (or for that matter, everything that's basic about everything except direct ship PvP). If you don't, you can read further, but you're encouraged to take a break first and cover the lacking knowledge there before you go on.

3. The competition

Market PvP is a pretty cutthroat area, probably even tougher as actual ship PvP due to the fact you can't always "know" your opponent (a trader alt is easily created nowadays)... and there's a lot of people involved. A LOT.

As everything with a huge number of involved individuals, you will also find a good deal of malice... but be careful, as one says, "never attribute to malice that which is adequately explained by stupidity". Of course, the reverse is also true.
But there's good news... no matter how malicious/benevolent and stupid/smart somebody might be, the market makes sure that only the smart guys "survive" (in other words, "make a profit").
The bad news is that it's usually the malicious ones that survive most.

Also, here's our first corollary:
Everybody will end up doing eventually what brings more ISK per hour played.
Exceptions like "play for fun" exist, but "pew pew" fun needs to be funded too, so eventually you're back at the same common denominator.

So you can easily start with the assumption that the market is DOMINATED by smart, reckless (or downright malicious) individuals... the higher up the food chain you go (volume of ISK involved), the more likely it is to encounter such "opponents".
And as I was saying, it doesn't matter what you are doing, mining, manufacturing or anything else, you're in the same pot. The more ISK you hope to earn, the tougher the competition.

I might not seem to say anything new here, but it's again one of the things most people ignore: in the LOW VOLUME, LOW PRICE market, there's basically no serious competition, and the entry barrier is close to inexistant.

4. Types

There are FOUR types of "markets".
The first market is the mineral market (and mineral-driven market).
The second market is the salvage and rigs market.
The third market is the luxuries market (highend named, officer/faction loot and I even include the T2 market with all its corresponding subtypes in this category).
The fourth (and last) market type is the service market (mercenary contracts, research lab slots renting and even scamming is included here).

Of course, all are eventually influenced by the amount of ISK "per capita" in circulation indirectly (and "per hour" average income directly), but that's a story for a later post.

Suffice to say, all except the first one (the "mineral" market) are fully "free markets".
Explaining why that is the case for the second and third, I believe it's not necessary.

It should be obvious enough why (I assumed before, in my 2nd post, that you know the basics. If you don't understand why, either take my word for it or go study up).
There are no (practically reachable) limits either way in any direction (low price should not be a concern at all, and high price is free to fluctuate completely).
Doesn't mean they are FAIR or EASY markets, it simply means they are entirely in player hands, and prices can go as high/low as players are ready to pay for a "product".
Notable mention, even if they ARE completely player-driven, CCP can still influence the prices with astonishing ease, because they are the only ones that can tweak the "supply" side

So, for now, the only market that needs special attention is the "mineral" market and the corresponding subytpes (other than "general trading", that is): mining/reprocessing, lowend named modules, T1 ammo, T1 ships and capital ship manufacture.
___

LATE EDIT : The T2 market is no longer a "completely free market" since the dawn of invention.

It's a bit too complicated to go into details here, might be a idea for a new post later on.

5. The limitations of the EVE mineral market

Most people say "EVE is a free market economy".
While this is true for ALMOST everything and in most cases, there are two notable exceptions for the "mineral-driven" market.


The first exception is that we DO have a bottom price for minerals. It is derived from ship platinum insurance payout, an "ISK faucet" (i.e. money-making instead of money-trading).

The second exception is that we ALSO have a top price for minerals. It is derived from the reprocessing of NPC-sold items that can be reprocessed (more precisely some T1 frigates, shuttles, civilian modules and ORE-manufactured T1 stripminers).


Of course those two "exceptions" mentioned before are no secret to anybody (or at least, not for anybody with a bit of EVE experience), still most people downplay or just ignore their importance in the end-user price of minerals and all mineral-driven products.

In other words, we CANNOT EASILY predict how exactly any individual mineral will evolve in price, we can only predict how they will evolve in relation to eachother, as the only thing that is a "certainty" is the end-cost of ships... and again, it's CCP the one usually pulling the strings, affecting the supply side by changes like loot makeup or introduction of the "mining with weapons" highend mineral source that is the new drone regions.

6. The fine print

Obviously, NOT ALL minerals are EQUALLY affected by these upper/lower limits, and any precise prediction attempt is made even worse by the following facts: all affected products have a low profit margin for high-volume trades, and only very localized low-volume high profit margin trades exist... while at the same time, most of the products being easily interchangeable through reprocessing and manufacture (so via minerals directly).

For instance, tritanium is the most obvious candidate for the "top limitation" via NPC-sold shuttles.

LATE EDIT: Actually, it was "coupling array" reprocessing prices, now it's back to shuttles unless somebody can find a better reprocessing NPC good, that yields cheaper tritanium.

The bottom limit will most probably never be directly reached (and there is no chance that will happend in the near future, as long as highend supply is plentiful), as there is too much trouble involved in manufacturing and blowing up shuttles (the only ship that uses ONLY/mainly tritanium).


The only reason I posted all of this is because most people seem to get it dead wrong... as they approach the problem from the wrong angle.

Simply put, longer-existing T1 SHIPS will never sell below 70% nor above 120% of the manufacture price, and they'll usually sell for a bit BELOW platinum payout.
This in turn means the "typical basket" of minerals averaged out among T1 ships manufacture "perfect build" requirements will usually gravitate towards 90-100% of platinum insurance payout (or even above for a short while in case of heavy demand like a patch introducing new ship blueprints) or even as low as 70%-80% (in case of huge mineral volume influx and no new ship models).

This again means that whenever a highend mineral drops in price for whatever reason, the lowends rise in price to counterbalance the "typical basket" price.
Also, lowends won't grow past a certain point, and that point is the NPC goods recycling lowend indirect price.

It really doesn't matter where minerals come from.
It only matters WHICH minerals are suddendly more easily available.


We can talk more about this, but you have your "advanced" lesson primer right here already.
I leave all further discussions and analysis for you, the community.
I don't expect many of you to agree with me, as the WRONG basics or the wrong approach to the problem is too heavily engrained already, but I hope there's at least a small number of people that will grasp the problem... and either do something about it, or profit from it.

Either way, my work is done

Copyright Notice & Source Acknowledgement

By Akita T

This article was copied from the EVE Online website at http://www.eveonline.com/ingameboard.asp?a=topic&threadID=489263

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Comments (1)

• 2010-02-19 05:37:55 |Author| administrator  - On your way to your first Billion!

  No one gets very far in EVE without ISK so read this to get you on your way to your first Billion!

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