By far the most profitable activity in EVE is trading. The amount of ISK that changes hands on the market is so big, that even a very small slice of the trade volume can make you space rich.
In this first part of my trading series, I want to give you a brief introduction to regional trading.
The basic idea of regional trading is to buy goods in one region, transport them to another region, and sell there for a higher price. Since the market browser only shows items sold in your current region, players won’t usually know in which region they can find the lowest price for a ship or module and will just buy the cheapest items they can find in the market window. After you setup show in a region you occasionally lower your prices to be the cheapest seller. If you run out of stock for an item, you ship in fresh goods from a different region.
I will try to explain this only by using in game tools. There are a lot of out of game tools that can aid you finding good items to trade or to update prices. Even homemade spreadsheet using the Eve API are not uncommon to be used by traders. However, these tools are not strictly necessary to start a trading business and mostly make your life easier or the process of trading faster.
How to Compare Prices?
How do you know where to find cheap goods and where to sell them? This is when multiple characters come in handy. By placing your chars in different regions, you can check the local regions prices and compare them to prices in other regions you have characters in.
It is easy to see that a big number of characters is very nice to cover multiple regions to trade in. There are even some traders who cover all high-sec regions that way. If you don’t have multiple account available, you can still use jump clones to cover different regions with one character. The drawback of jump clones is, that you can only jump once a day. I would suggest to use at least two characters for your trading business to always cover two regions at the same time. If possible these should be on two separate accounts to compare prices in two regions in two client windows.
It is also a good idea to only use these characters for trading and leave them in their respective stations. By this, your main character can do different activities elsewhere without interrupting your trading activities.
Where to Trade?
The easiest way to trade is definitely between high-sec regions. Most players in Eve live in high-sec and mostly use the five major high-sec trade hubs for their daily shopping, which are in order of significance: Jita, Amarr, Dodixie, Hek, Rens. Usually the cheapest prices in New Eden can be found in Jita 4-4 station, Eve’s most important trade hub.
There is also a number of smaller high-sec systems that have minor trade hubs that might be worth trading in, which are mostly close to low-sec. These is quite convenient for low-sec and null-sec residents who don’t want fly all the way out to the major hubs and prices there are usually higher than at the major hubs.
The market volume in the major hubs is quite big compared to the ISK a normal player can invest, so you don’t have to worry too much about not selling your goods if you pick the items you trade wisely.
There are also big trade hubs in null-sec, mainly in the staging systems of big alliances like The Imperium, Test Alliance or Pandemic Horde. To cover these hubs you will need a character in the respective alliance and some form of logistics network to transport your goods to the hubs.
What Items to Trade?
This is actually the most crucial part of any trade operation. How do I identify items that are worth trading? This is a question that is not easy to answer and highly depends on the amount of isk you have available to invest, how long you want invest it and how much time you want to spend updating and comparing prices for your trading operation.
I will next go through three different scenarios and compare the items, time and ISK needed. These were the three stages my personal trading business went through, but there are of course other combinations that work great.
Scenario 1: 500 million ISK, high turnover, lots of time
This is a scenario that fits most people that are relatively new to Eve and want to get into trading. I think the smallest amount of ISK you need to start trading is 500 million ISK for this scenario. You can start with less, but in that case there are other sources of income that are more profitable than trading.
One key factor for success is to not only trade with one item but in a large number to minimise the risk of losing your ISK by price fluctuations. If you only trade in one item and the price of that item moves below your buy price, you might make a big loss. The probability of this to happen to 100 different items is next to zero, so you will never lose all your invested capital. With 500 million isk you can invest 20 million in 25 different items, which is a good number to start with.
The items that work best for this scenario are in the 0.5 to 5 million ISK range which are commonly used for PVP or PVE activities, like mining equipment, small and medium sized weapons, ewar modules, shield and armour tank modules, T1 small ships and exploration equipment. These modules have usually a high trade volume per day, which you can check in the market history window. I try to stick to items that have a volume of 25-100 items sold per day depending on the competition for that item. If the competition is small, a lower volume is ok.
The items should also have a profit margin ( sell price – buy price) of at least 10% of the price after taxes, which you need to check with your two trading chars between the two regions you want to trade in.
Since there is such a low entry barrier to trade these items, competition on the market is usually big und prices can change a lot over a couple of days . This is why you need to update your sell orders as often as possible to be the cheapest seller. By this, you hopefully will sell all your items before the price hits your buy price. If that happens you can either continue to sell at a loss or stop updating your price and wait for the price to go up again. This depends on the amount of liquid ISK your have. If you have to stop trading because all your ISK is stuck in unprofitable items, it might be better to sell at a small loss and then start to trade with other items, than to not trade at all.
Scenario 2: 2-10 billion ISK, medium turnover, not that much time
This is the scenario for more experienced traders. You should start to trade with more expensive items in the 5-30 million ISK range. This adds bigger T1 ships, small T2 ships, mining barges, faction frigates, BPOs and cheap faction modules to you trading portfolio. These items have less competition and hence you don’t need to update your order that frequently. However the turnover is also much lower and it takes more time to sell your goods. The profit margin should be higher than in scenario one, since you will need longer to sell your stock and want to protect your investment against price changes. I would suggest a margin of at least 15%-20% for these items.
It is btw a good idea to still keep trading with the scenario one items that worked out great and only replace the worse items with new more expensive ones.
In this scenario, you should further increase the number of items you trade to 50-100. Since you update your orders a lot less, your total time spent will also decrease significantly.
Scenario 3: 10-50 billion ISK, slow turnover, very little time
This is the scenario for experienced traders with pockets full of ISK. You will start to trade with the most expensive items that are in the game. This adds all faction items, dead space items, T2 ships, expensive pirate implants and expensive BPOs to your list.
These items have very little competition and prices move very, very slowly. The trade volume can only be a couple of modules a month, sometimes even less. Mostly it is only worth to trade these in the major trade hubs, because of the very small trade volume elsewhere.
It is usually more than enough to update orders once a week, even once a month is fine for some items. Sometimes there is so little competition on these markets, that you are the only seller in the region and you don’t need to update pricesat all.
The profit margin on these items should at least be 20%, but since competition is so little, it usually will be a lot more.
You should also further extend the number of items you trade to counter the low turnover. The more orders you have, the more ISK you can make. I usually have around 200-300 sell orders open in different regions. However, if you got to this stage there is no upper limit in orders ISK, items and regions to trade in.
How to Move Your Items?
Finally, I want to cover how to move your good to your newly opened shop in a different region. First thing is: Never transport your items yourself in high-sec!
Hauling stuff around is a huge time sink. Time that you better spend trading and making the real bucks. The best way to move your stuff is creating courier contracts and let other people do the hauling for you. There are two public hauling services, PushX and Red Frog, who can quickly move your goods within high-sec. They both charge around 1-2 million ISK per jump in high-sec depending on the volume and price of your items. Check their website for exact pricing and instructions how to create a contract.
You can also create public courier contracts, that every player can accept. I mostly haul by public contracts and pay around 1 million ISK per jump and billion ISK of value. Contracts are usually picked up and finished within a day. There is also a public chat channel called “Hauler’s channel” where people accept public contract that are posted in chat. Read the instructions in the MOTD for pricing suggestions.
If you want to trade into low-sec or null-sec, you will need either your own jump freighter or use the rather pricey PushX or Black Frog services. Ideally, your alliance has a jump freighter service available for their members that you can use.
One last word about the amount of collateral you should use for your contracts. Always put a collateral of at least 10% more than your purchase price on a contract. By this, you even make a small profit if the hauling player steals your stuff or gets killed by gankers in high-sec.
Evepraisal is a neat website that calculates the value of your items from your assets window for your collateral. Just add 10% to that value and you are fine.
These are the basics of regional trading. In the next post, I will give you a real world examples of a freshly started trading operation in null-sec and some numbers about how much profit you can expect.