Trading 204: Cross-Selling

Modular Possibilities

A Tech 3 ship is a great example of an item that has high cross-selling opportunities. A Tech 3 hull by itself it useless; a person must assemble it by combining it with five Subsystem components –defensive, electronic, engineering, offensive, and propulsion. This requirement for flying the ship gives a trader the ability to also stock the necessary Subsystems and increase potential profits.

Tengu Hull Performance

I have found the Tengu hull to have the most volume out of the four racial Tech 3 hulls due to it’s PVP and PVE applications. The Loki hull is a close second, but it out-shined by the demand of the Tengu.

Over 473 days of trading I’ve sold 56 Tengu hulls. Moving 14.7 B ISK, I was able to achieve a 2.29 B total profit with the average profit per hull coming in at 41.65 M.

2013-08-19_tengu

Tengu Subsystem Performance

The real trading power comes from using some intelligence and trending to find the most popular Subsystems. My analysis shows that the Amplification Node was the most profitable and also had the highest average profit. The Fuel Catalyst is also a strong performer as it had the second highest average profit. At the bottom of the list was the Covert Reconfiguration as I accredit the cloakey role to be a very niche role.

2013-08-30_tengu_subsystems

Cross-selling Performance

25 of the Tengu hull sales included the same client buying one or more Subsystems at or around the same time. On average a person bought 2.6 Subsystems with an average total of 52.4 M profit.

Further analysis shows that the best performance comes from also selling a person 3-4 Subsystems when they are also buying the Tengu hull as the average profit per Subsystem for these transactions types comes in at 21.7-22 M.

2013-08-19_subsystem_profit


Item Price Stability

I leave for two weeks and you all accidentally the market. I was not able the participate in the Odyssey speculation, but I am enjoying catching up on it.

2013.05.16.19.26.13-12013.05.16.19.25.40-1

The wild swings that we are seeing in the Moon and Ice markets due to Odyssey adjustments made me reflect on the stability of the items that I trade.

I used my historical database to come up with a report to provide quantitative insight to help give values to the items that I instinctively know are high risk. Here is a snapshot of the lower and upper items listed in my Stability Report that covers three years of trading sorted by standard deviation (σ).

2013-05-15_price_detail

Here are some general observations about the items listed:

  • Basic minerals, ammo, and modules are the most stable.
  • Capital modules weigh in somewhere in the middle.
  • Tech2 ships fill the upper band of the report.
  • Tech3 hulls and associated Subsystems are randomly spread over the middle band.
  • Certain battleships are high on the report because their popularity has changed over time due to shifting fleet doctrines.
  • The Procurer BPO was an item that I speculated on heavily during the last patch, which netted very positive results.
  • Capital ships are subject to large swings due to mineral price changes.

A tenant of becoming a good trader is minimizing your risk while trying to maximize your rewards. My advice for new traders is to work with more stable items as shown in the shaded green area of my report; they are subject to less swing and therefore will help minimize risk. As your ISK resources grow, you can move into riskier items that will [hopefully] yield larger returns.

Update

Thanks for all the feedback in the comments. I actually spent some time recently to figure out how to calculate item volatility here http://k162space.com/2013/08/20/hac-price-volatility/. I’m working out how to pull numbers for all my data for a new post soon.


Wormhole Space in 2009 and 2010

Here are a few pictures that highlight my corporation’s venture into Wormhole space to strike it rich.

2009

2009.09.14.19.18.15

The daily routine was scanning for sites, mining ABCs with Orca boosts, and compressing Ore down for transport to Jita.

2009.10.16.04.13.53

Our capacity to haul large amounts of Ore out of Wormhole to Jita increased significantly when we got a Rorqual into our C6.

2009.12.25.20.37.12

Boosted Hulks mining Arkonor was king at the time. Each full jetcan was worth around 13-16M.

Orca boosted mining operation.

Orca boosted mining operation.

2009.11.01.18.47.07

We once caught a Tengu with a tank that we could not break. After toying around with it for a while, we eventually let the pilot got and gave her the location of a return Wormhole as we destroyed her scanning alt.

2009.12.27.23.11.56

As we build up our PVE arsenal, we needed Carrier support to run the C5/C6 sites. I paid 715M for a Thanatos during this time and I still am in possession of this specific Carrier.

2009.12.24.04.10.05-1

Purchasing skills for the Carrier. Notice that we used the MOTD to communicate on the current Wormhole status.

2009.12.27.22.16.53

1600 plated Typhoon mass collapsing a connecting Wormhole.

2010

2010.01.02.21.55.19

As we became more proficient in Unknown space, we started to train up skills for Tengu, Drake, and other PVE specific ships.

2010.01.30.00.30.05

Our weekly hauls started to get large and larger as our mining capacity increased.

2010.02.13.05.25.52

Thanatos beauty shot after emerging from a connecting Wormhole.

Another Thanatos shot.

Another Thanatos shot.

Carrier assisted site running.

Carrier assisted site running.

2010.03.03.13.08.53

This is a shot of Megacyte, which was king at the time. Due to the large availability of ABC ore in Wormhole space, mining groups like us were driving the price down.

2010.03.13.23.21.17

When you inhabit the highest class of Wormhole space, you are bound to run into some major players. Here is a shot of an Aperture Harmonics’ Dreadnought bring used to mass collapse a connecting Wormhole that was connecting our two systems.

Aperture Harmonics fleet coming into our system to scout for prey.

Aperture Harmonics fleet coming into our system to scout for prey.

You spend a lot of time looking at these in Unknown space.

You spend a lot of time looking at these in Unknown space.

One of the most powerful things in Unknown space is Intel. If you have the knowledge, you can dictate everything. The little Helios was one of the most useful ships for me during my time in Wormhole space.

One of the most powerful things in Unknown space is Intel. If you have the knowledge, you can dictate everything. The little Helios was one of the most useful ships for me during my time in Wormhole space.

Defending Tengu shot.

Defending Tengu shot.

Space potato beauty shot. We had a Remote Repping Dominix doctrine that served us well.

Space potato beauty shot. We had a Remote Repping Dominix doctrine that served us well.

Protecting our home.

Protecting our home.

Every few weeks the rate of respawn for all the sites would dwindle down to almost nothing. Like nomads we would find a new home and setup shop to strip the system.

Every few weeks the rate of respawn for all the sites would dwindle down to almost nothing. Like nomads we would find a new home and setup shop to strip the system.

Industrial might.

Industrial might.

2010.01.19.22.52.25

Extreme hatred for the POS/Reaction UI.

Capital ship shot.

Capital ship shot.


Racial Starship Engineering V

After 133 days of training, I have completed a training plan on one of my production characters that now allows me to construct every Tech 3 Hull and Subsystem.

Amarrian Starship Engineering V (25 D)
Caldari Starship Engineering V (25 D)
Gallentean Starship Engineering V (25 D)
Minmatar Starship Engineering V (25 D)
Cruiser Construction V (25 D)
Jury Rigging V (8 D)

2012.12.10.04.12.13-1

2012.12.10.15.17.50-1

Up next is Advanced Laboratory Operation V and Advanced Mass Production V to polish off the industry skills.

I’ve run the profit potential numbers on both the Hulls and Subsystems and they are both a good time investment. I just need to either wait for a POS rework or grind standings for a highsec POS.

I have little to no interest in setting up a production POS in lowsec due to the ability of any entity coming along and reinforcing the POS. I would rather operate under the umbrella of a 24 hour wardec timer that would allow me to bring up defenses and recover industry items before the war goes live.

2012.12.10.15.28.25-1

2012.12.10.15.28.39-1


July Financial Report

Overview

June and July were periods of rapid growth, both in terms of buying power and activity spread. I’m now able to have my fingers in more markets and more item types, helping to spread the risk.

Graphs!

Out performing the liner projection the past three months.

My purchase sprees have grown in volume over the past few months. They keep topping out at larger amounts.  18.5, 21.1, 25.2, and now 25.5 B purchased in a single day. I love seeing the holding account balance go up, but liquid ISK is idle ISK. Throw is back into the market unless you are accruing a balance for a project.

Major Points

1. New milestone reached as I moved 103.7 B ISK this month.

Subscribing to the Bulk Trade mailing list has fueled buying in large quantities. Why buy two Scimitars off the market when you can buy 20 and get a discount?

2. Speculation on Cobalt

I logged into Jita about 35 minutes after the Devblog was posted citing changes to Alchemy. At this time the majority of Cobalt was off the market, so I was only able to get 26k units @ 1,580 (41.7 M) and then I foolishly bought 15k units @ 7,000 (110.7 M).

As of this writing, Cobalt is sitting at 2,800 in Jita so I highly doubt that I was turn a profit on these speculative trades. I didn’t run the numbers after the announcement so I’ll accept the loss on this.

Despite the loss, it was fun to refresh the markets and watch the speculation drive prices. I hope for more changes to the moon market this fall.

3. Mobile Application

This has proven to be a powerful way to remain connected to the market. I’m currently able to monitor sales and purchases. This lets me keep mental notes of what needs to be restocked or adjusted. In the future we hope to expand it with more Android style touch options.

Some ideas that we have been throwing around is that of a cart. If you are about to sell out of an item, it will shade the row and holding down on the row will bring up an action menu. You can look up history, item trading performance, or add the item to a restock cart.

4. Industrial Partner

Raath, the author of Staticmapper and DRK Industry Tracker, and I are forming an industry and trading partnership. I’m taking my idle stack of blueprints and putting them to use.

We’re polishing off our invention and Tech3 production skills so we can start to mass produce ships and modules. *sigh* do you know that it is going to take 50+ days to be able to produce a Tengu hull and Subsystems?

Idle blueprints

Invention skills

5. Implants

The adjustments to Faction Warfare rewards killed profits on implants for me for over a month. I waited for the price to adjust and am back to trading these in high volumes again. In the past month implants are back in my highest performing group and I’ve moved 2,880 implants in the past 30 days.

6. Wallet Manager

For those of you that have been asking about my Wallet Manager program I have good news. A group of developers is using inspiration from our team and is coding up a public version for everyone. I chat with them daily on irc.coldfront.net and will have a post about this once we have some public-facing content.

The Future

I’m going to get my new partner, Raath, up to speed on the trade operation. He is bringing a large number of production alts so I’m looking forward to putting all our idle blueprints to use.


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