"In the case of invention and these blueprint numbers, it's that third point [changes in per-product pricing having a substantial change on the total money being spent on that product] that I am most concerned about; while a moderate increase in end-to-end production times should allow more producers into the market (a good thing), if the supply changes too much there is a high risk of demand changing in unpredictable ways too. My intuition is that an increase of 20-40% in build times is healthy, but above 50% is probably risky. I'm very open to discussion on these numbers though :)"Normally I wouldn't even know such a thread existed because I hate the EVE Online forums because ... gaming forum. But tracking Steve's posts, I learned an interesting tidbit. He wrote:
"Increasing build times will directly impact on module pricing, as serious manufacturers don't look at profit on a percentage basis, but instead on an isk/hr level, with a baseline of what isk/hr they'll accept as viable."That was interesting, because I'm not a serious manufacturer. I rarely use all 11 manufacturing slots I have on my one industrial character. I'm more a hobbyist who turns to manufacturing as a way to turn loyalty points or planetary interaction products into items that are worth a lot more. Or you can look at my efforts as role play as, except for selling liquid oxygen, I don't want to just pillage low sec of natural resources for profit. I want to take those resources and turn them into something more valuable for sale in low. Even selling liquid oxygen fits in as locally-sourced fuel is a lot better than having to transport the fuel into low. Now if I could just keep it in stock... but I digress.
I've always looked at my efforts on a percentage profit basis. But Steve explained how he decides on whether an item is worth making:
"I take all the material costs (including an average invention material cost) and subtract that from the sale price. I then divide that by the number of hours needed to make the thing. If the total build time is below 24 hours, I normalize the time to 24 hours (As I'm generally logging in once per day.)So if I've done the math correctly, the minimum profit that an industrial character should make in sales per month is 72 million ISK, or 216 million ISK for an account with 3 characters manufacturing. In these days of over 700 million ISK PLEX, that's not enough to PLEX an account, so I expect a lot of manufacturers are looking for items with even higher profit margins.
"If that doesn't beat (in general) 100,000 isk per hour, it's not worth making.
"So, for an Expanded Cargohold II (it's a go-to example for me.) current material cost is around 148,000 at jita sell prices (the only real way to price things, except possibly components.) The invention cost is around 75,000 per unit.
"Current sell price is around 510,000.
"This leaves a profit of around 287,000 per unit. As I can only make 10 per day, per slot, I multiply the profit by 10, then divide it by 24 to get the isk/hr which is around 120,000 isk/hr.
"If the build time went up by a factor of four, the price would have to go up by around 200,000 for it to remain a viable product for me to make."
EDIT - As Gavin pointed out in the comments, I only calculated for a slot, not a character. The actual numbers are 792 million ISK for a character and almost 2.4 billion ISK for an account.
But that leaves a ray of hope for the beginning or casual manufacturer, doesn't it? The big boys are out trying to make major profits, leaving the smaller, less profitable items to us. I don't mind, as I see myself as a small entrepreneur trying to eek out a living in low security space. Besides, I don't PLEX my accounts, so my living requirements are a lot lower. I guess that makes me low maintenance. But I also can deal in items without having to worry about competition from people much more serious than I. Now I just need to make sure I don't upset the traders who can squash me like a bug.