I've been spending a lot of time looking at markets within world, and received the following account of the life of an ardent capitalist in EVE. I thought it too interesting just to sit in my in-box and so I re-print it here with permission. The author wishes to remain anonymous.
I've been playing Eve-Online for a year and half or so. The first 6 months, I believe, were fairly typical to most players. I started out with a couple of corporations, did a stupefying amount of mining ("rock grinding"). I too did some deep-space work. As they say, nothing beats the smell of rockets and incoming... I lost my fair share of ships and gear. Had great times.
I then went bohemian and became a solo trader. I still lose ships while plying my practice, however it is now just a cost of business. The texture of the wilderness has changed. The trader role can be convenient for some players. Traders just do numbers and travel the dark gloom of space.
First a clarification. By a "trader" I mean that I *only trade* player-consumables. Eve Online does have an NPC trading sub-game. But I don't do that sort of thing. I only deal in stuff bought and sold by players. As my grandfather on Sirppala used to say, if it ain't meat it aint worth chewing!
Most players who become serious traders, I think, pull their hair out eventually. But anecdotally there is a significant niche of hard-core types (< 5%?) doing this. Most are considerably more efficient than I have ever been or will be (or want to be).
I started out trading while a member of a corporation. Early on I was asked if I wanted to trade for the corporation. I declined, I thought that would have been more work than I was willing to underake. It is my understanding though, the truly remarkable Eve-Online traders come from such harried and valued seats.
I will outline the next year or so of my Eve-Online life below as a solo trader. I first must apologize to the readers for some deliberate obfuscation in the detail of this account. After all, it is my livelihood we're talking about :)
~~~~Phase 1. of my career:
When I started out trading I was hawking a potpourri of low-tech ship gear. My strategy then was to offer convenient goods for sale at inconvenient places and charge a hell of a lot for them. I'd buy really cheap in the core systems and distribute small parcels out in the isolated reaches w/massive mark-ups (an order of magnitude or two). So, I might buy Fizzle Wogs for 15k and offer them for 500k-1.5million. Believe it or not people did buy them, not many, not often, but they did. Volumes were very low. I surmised that the folks who did this did so because they were willing to pay a large premium for convenience. They could afford to, or in some cases perhaps, had no choice - they couldn't easily purchase items from higher security spaces.
I built up a significant network of stations, say well over 300, I think. It took a while. With those kinds of numbers, even if I only sold several units a day, it was very good cash for a noob. Sure beat rock grinding. Because inventories were minimal/cheap (wasn't going for volume sales) this was an easy gig for poor noobs to bootstrap into.
~~~~Phase 2. of my career:
Once I started to accumulate cash, I evolved my Phase 1. style, opting to go *vertical* and for *more volume* sales. I choose a small basket of mid-range ship gear types, all of it common but essential insuring a dependable demand. Then I created a whole value chain around these items: I'd buy minerals, manufacture the items, and then distribute them. By this time I had nearly 400 stations on my trading itinerary and had capacity to manufacture large lots of my chosen gear. To move this additional volume, I drifted prices down to, say, a factor of 2-5 over core system market rates. So the same 15k Fizzle Wog might now sell for only 59K. Still a good mark-up. Increased sales volume covered the lost margins/unit and then some.
While I did try to manufacture most of my goods, frankly, I'd always occasionally get caught out. Logistics is a tricky thing. So I ended up going to the market with some regularity to spot shortfalls. It is fascinating how some corporations clearly go for the "huge volume, low margin gig" They might have a stack of 1000 Fizzle Wogs on sale at Jita for an epsilon above costs. Maybe they are onto the big numbers game. My racket was different...
When I first started out in this Phase, the cash profits were most impressive. For some reason I thought trade numbers diminished towards the end of the period. I loosely correlated the change (fairly or not) to some apparent adjustments made by CCP to economy (e.g. ISK supply, summer 2004), but I'm not sure.
I don't remember what I earned overall except vaguely, so much of it went and still rests in inventory forgotten-and-to-be-rediscovered. But I will guesstimate that easily *many* billions of real ISKs (beyond replacement inventory) went through my fingers. I had such a large network in play that it was a total numbers racket - something was selling somewhere all the time.
~~~~Phase 3. of my career:
The gig of Phase 2 became unglued when CCP changed the rules last year and on the one hand increased the sophistication of the trading process, but on the other hand made it more restrictive. They introduced a trade technology tree which was interesting in its own right and enhanced one's ability to manage and tune market involvements. Good stuff. But they also nerfed players being able to sell across the same large numbers of stations one could have earlier.
What that meant was that to do the same quality of business one had to some how adopt strategies to optimize returns on a smaller pool of offerings (e.g. I currently run my trades over < 160 stations). For a long time I continued with the same approach as (2.) except over a smaller pool of trading sites - I realized this was suboptimal, but I enjoyed the pipeline I setup for myself and kept myself motivated by trying to min-max my stations to optimize my yield. I did okay, nothing more, just paid the bills. I was playing pretty irregularly too.
~~~~Phase 4. of my career:
Recently, having taken more interest in trying something else - I've jumped into a pure arbitrage strategy (no manufacturing, no research, nothing but...) of a very select basket of high ticket items. I won't name them or name the precise procedure of computing my arbitrage. (Not while I'm playing the game :) But I will say that I rigorously and constantly weed and reseed a small number of core stations where I sell at (drop them, or change inventory) based on market signals. I also have lower-priced goods which I distribute more freely which I believe provide good indicators for higher end items I work with - yes, test marketing is born. The downside for most people with this gig is the huge capitalization required. In my case I had a great deal of cash, so it was an easy transition. To date, the returns are impressive, but ah, the inventory ...sooo much of it, sooo expensive. No more will I say, the experiment goes on.
There is a great deal more to investigate. Much of it is with regards to transportation. A great deal of it is with the markets themselves. Of the latter however I'm mute.
The transportation problem is a challenge in its own right. How to efficiently organize a transportation network and how to run goods more reliably through pirate waters roughly characterize the dimensions of this space. For example, it took me a long time to work out four standard ship configurations which i use and preposition liberally a number of places. The latest addition are souped up BBs to run gate gankers.
Its a rat race. But someone has to do it.
~~~~In the tree-line of the future:
At some point I plan to retire from trading. Once I have my stable of ships (all of 'em, everywhere :) and 10 billion ISKs in cash (and golly knows how much left-over inventory that will be, for my pension :)... that is my goal. I will rejoin my old corporation, join the security wing and become a pure fighter jock with a lot of expensive gadgets to try out in defense of the tribe. Muahahaha.
Oh yea, and hope springs eternal by then I will have more time...
