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Types of Trading
Inter-regional traders exploit price differences between regions. For example, Amarrian Starship Engineering Datacores are available from R&D agents in the Domain region  but not in The Forge region. If players researching Amarrian Starship Engineering prefer to sell their datacores in the region, a price gap may emerge, allowing the inter-regional trader to profit by moving datacores from Domain to The Forge. Inter-regional trading can often be done without extensive investment in trading skills, as it doesn’t require you to place buy orders or sell orders. In many cases, profit can be made buying from sell orders and selling to buy orders. While this reduces profit per unit, it ensures quick turnover so the trader can invest his ISK in another opportunity.
Intra-regional traders exploit price differences within regions. In any given region, there are numerous outstanding buy and sell orders for individual items. In single stations, one of these buy orders will be the highest available, and one sell order will be the lowest available. The difference between these two is the bid/ask spread.  An Intra-regional trader could place a regional buy order for a Raven at a price higher than all other outstanding buy orders in the region. In this case, any Raven sold anywhere in the region would go to him at that price. He could then put up a sell order which was below the lowest sell price in the region. If someone purchased this Raven, the trader’s profit is the bid/ask spread, less fees. It may not seem obvious that players would buy a Raven at any station, simply because it had the lowest price. However, many players are not familiar with all of the features of the Market and will buy through the groups window, which simply gives them the lowest price. Intra-regional traders can also operate by trading at single stations, such as Jita 4-4.
When a trader bets that an item will rise or fall in price, he is engaging in speculation. Given current mechanics in EVE, it is difficult or perhaps impossible to take a short position on an item. However, one can take a long position simply by accumulating inventory of the item. For example, one could profit from speculation by accumulating stocks of Zydrine before drone region mineral drop rates were reduced.
In some cases, an item’s price will fall below the value of the minerals gained from reprocessing it. If this gap is sufficiently large, there is an opportunity for reprocessing arbitrage . A trader can buy the item, reprocess it, and immediately sell the minerals, or place sell orders, for a profit. This occurred in large quantities when shuttles were still sold by NPCs for 9,000 ISK and could be reprocessed for 2,500 Tritanium. When Tritanium prices rose above 4.0 ISK per unit, there was an opportunity for arbitrage since shuttles’ prices were below the value of their reprocessed minerals.
There are many ways to earn ISK playing EVE, but only one method allows you to increase your wealth whilst wearing a sharp suit. In the first of a two-part guide, the immaculately dressed Kaaii starts us off with the basics of buying low and selling high.
Trading in EVE is probably one of the most lucrative yet dangerous occupations a starship commander can take up. You can make millions of ISK in a few hours then lose it in an instant through recklessness, stupidity, or both. While there are things you can do to offset the inherent risks (like plan your route through safer systems and fit your ship with modules that might allow you to evade player pirates), there are some fundamental principles you must adopt before you start throwing money about the place, or, more often than not, you will fail in the most spectacular way.
While most have a grasp of making ISK, few truthfully understand the concept beyond that of earning a decent wage. Anyone can load up an industrial ship with data sheets, make a few jumps, sell them at a higher price and call themselves a trader.
Time is money
Trading takes time. Real time. A miner can happily sit motionless in an asteroid field with a half-decent novel cradled in their lap, ceaselessly pulling ore from defenceless rocks and occasionally looking up at the screen when the cargo hold fills up. As a trader, however, to compete and get ahead of your rivals you must be aware of any changes to the markets. Lucrative deals can appear in an instant and disappear just as quickly.
How you spend your time in EVE trading directly relates to how much extra you will have in your wallet at the end of your playing session. A trade run that takes 20 jumps, takes an hour to complete and makes you six million ISK is not as profitable as a three-jump route that only makes you two million. Obvious? You'd be surprised. Many people want that long haul and the perceived infusion of large sums of cash that comes as a result, and completely ignore the short-haul payout runs. You can make more than these short-sighted people if you do the math. And, yes, whilst a 20-jump haul will allow immersion in the latest Harry Potter novel, you'd do well to keep at least one eye on the regional markets.
On first inspection, some items appear to be extremely lucrative to trade, but a closer examination reveals this is not always the case. Items in EVE have varying volumes and knowing how 'big' something is can go a long way to deciding if it's profitable to carry. The bottom line is that you are renting your ship's cargo bay and you want to fill it with as many rent-paying tenants as you can. Take, for example, construction blocks. You might see a buy order for 700 ISK per unit somewhere nearby and quickly dash off to buy those blocks in your station for 600 ISK. A 17 per cent mark-up may seem as if you're tapping into a rich seam of profit, but take a closer look at the goods and you'll realize that, with a volume of 4 m3, a single block will take up four times as much space in your hold as most of the other trade goods. Those oh-so-lucrative-looking CBs may earn you 100 ISK per unit, but if you account for volume, that works out at 25 ISK per m3. Conversely, take antibiotics. These only have a 0.5 m3 vol, and usually only make 18-36 ISK per unit. But, with a volume of 0.5 m3, you can carry two per cubic metre, which works out as 36-72 ISK per m3. Much better than those old construction blocks, wouldn't you agree?
Knowledge is power. Knowing what trades and what doesn't and the supply and demand of your chosen area will either make or break you. Take the time to research your local solar system (and surrounding areas) and see what is sold, consistently, in your operating area. Learn the prices, both buying and selling. Take note of both the prices and the volume supplied and bought. There is a big gotcha here: a lot of times you may find a trade good that buys low and sells high between two stations that are reasonably close. This may seem a great trade run, but if the buyer only needs 176 of that item, while the supplier has 157,000 units for sale (or vice-versa), you'll not only be wasting time and effort, you could be lumbered with thousands of items that you can't sell. If you're at the start of your trading career, this may mean that most of your money is tied up in stock. Experience will prove that in such a case, it may be better to make a small loss rather than wait for the right buy order to take all that gear off your hands. If you make a mistake - and you will - learn from it. There is an exception to this particular rule which will be covered in two next issues, but for now, leave this type of trade alone.
Skill to survive
The skill packs required for efficient trading are many and diverse. While not as involved as a combat or mining profession, the time investment in increasing your range and level in specialist trade skills is substantial nonetheless. You begin with very limited access to the higher-tiered skills (as opposed to the other professions), but they can quickly be gained with just a bit of effort. With a modicum of research, you can create a character that has a significant leg-up on those who prefer to follow the basic skills, which gives you room to grow quickly. The skills you'll require can be neatly divided into two kinds; those that affect your ship and your ability to navigate - we'll call them 'logistic skills', and dedicated trade skills, that allow you to deal in larger volumes with lower costs and higher profits.
Trade skills aren't quite as important early on as you might think. Just as any EVE player can mine or fly a basic frigate, so too can any wide-eyed graduate to EVE buy and sell whatever their wallet will allow. As a prerequisite to greater abilities, the Trade skill itself is worth building up. However, we'll go into great detail on these skills next issue.
Expand and learn
Your logistical abilities are important for one single reason. You need to physically haul the items you wish to sell yourself, at least to begin with. Rather obviously, then, starship command and the frigate skill specific to your race are an early priority, as progression to command cruisers and industrial ships rests on these early foundations. Cruisers are far more suited to inter-system trade than frigates, if only because of their larger cargo areas. Industrial ships, however, are what the serious trader should be aiming for, if only because with some investment in the right modules, cargo capacity can be expanded to three or four times that of the base value. The Expanded Cargohold I and II modules will increase cargo space by 15 per cent and 27 per cent respectively, and all industrial vessels can handle two at the very least. Of course you'll need to train up your hull upgrade and mechanic skills to fit them.
Similarly, the Cargohold Optimization I and II rigs increase cargo space by 15 and 20 percent respectively, for a penalty on armor amount. Each T1 ship can fit three rigs, and each T2 ship two. You'll need to train these skills: Mechanic III, Jury Rigging III, and Astronautics Rigging I, or IV for the T2 version.
Fit the best
In the beginning you will be limited both in skill and cash to using the most basic of equipment; a fast frigate, some cargo expanders and maybe an afterburner or microwarpdrive. But fear not, this will change quickly. As cash flows in you can upgrade to more skills, better ships and higher-worth trade goods.
A lot could be said here on the best gear to have, but it's an area I'll to leave to you. Do you favour speed, do you fit your ship to fight back, or to evade, or to accept the inevitable and pop at the first sight of trouble (in which case avoid fitting expensive 'named' modules)? Whatever, the most important factor to consider when training for, buying and outfitting your ships is cargo capacity.
The Amarrian Bestower is a popular choice, for it only requires the Amarrian industrial ship skill to be trained to level 1, and it's base cargo capacity exceeds that of other low-tier 'indys'. All races have capable vessels, however, and none more so than the Gallentean Mark V Iteron. It can't be beaten on cargo space, but its a long skill time to train, somewhere around 29 days, depending on how advanced your learning skills are. Ask around. Most 'indy' pilots love talking about their ships and loadouts, as do most other pilots.
Ah, now, here's the rub: it takes money to make money, but how can you make money with no money? Well you can't. You must either do some mining, agent missions, or, if you're particularly brave, pirating. I'd recommend visiting your agent and running a few missions for them. In a fast ship, you can make several million in just a few days, even at the most basic of agents. If mining is more your style, then strap on some miners and have at it, but the point is you are going to need at least a few million to invest before you are viable as a trader. It can be done with less, but it takes more time. If you have made friends, you might be able to persuade them to part with a few million to back your venture, however if you choose this route, make sure you pay them back, on time and without problems. Not doing so may incur the wrath of some up-and-coming fighter pilots, people you don't need to meet later in your career when you're flying a fully-laden hauler through low-security systems.
The Eve Market is where you'll be doing most of your work buying and selling. Some items cannot be listed on the market and are sold on Contracts. I'm not going to cover contracts here, other then to say it's out there, different and worth playing about with.
The Market Screen allows you to sort commodities by the number of jumps from you an item is, the volume available or required, cost per unit and, from the drop-down box in the top-left corner of the Market Screen, location (region, solar system or station). Pay attention to that. Make sure when you buy (or sell) something, you have not bought region-wide if you didn't intend to.
There is also an often-overlooked but very useful history tab on the Market Screen that will tell you the price and volume of an item over varying amounts of time. Use it. It can tell you if the price you are paying (or selling for) is in line with current trends and, just as importantly, how much of the item is moving. This is very useful in determining if you are in a busy area, with lots of competitors, or have the area to yourself.
All or nothing
It's worth prospecting for trade routes outside of EVE, by which I mean researching the valuable information maintained on the official EVE website. Go to www.eveonline.com/corporations/ and you'll find a wealth of information on each NPC Corp; where their stations are, what they sell and what they buy. NPC Corps aren't as flexible as player-run businesses, and they tend to stick to what they know. Six Kin Developments, for example, buys carbon and produces synthetic oils, so if you can find an NPC organization nearby that wants SythOil and produces carbon, you can shuttle between the two stations. However, whatever you do, don't go on milking one route each and every day. Market supply and demand changes with every buy and sell order processed. When you sell something to an NPC the demand price usually goes down as the orders are filled and the buy price goes up as more is purchased. The temptation is to deliver and sell, deliver and sell until demand is completed, but doing this will leave some profit behind as the price changes with every transaction - most of the time. So get it all there first, and sell it together, buy the same way, all at once. Of course, other traders will be doing the same, so do it fast, or hold onto your stock until the prices start rising again - if you can afford to.
Don't be a deadhead
So, you have a few skills, have missioned or mined your way to your first couple of million, and you have a fast frigate or fat industrial ship - hopefully one of each. Already you have decided to set up somewhere and have found, using your noodle and a bit of common sense, a few low-cost trade runs. Now you're thinking, 'I'll just buy X amount of items, load them up and head over', yes? Well, yes and no. There are some things you must ask yourself first.
Is your cargo full? If not, you should look again and see if there's another, closer, station that requires anything else you can bring en route to your final objective. This must be balanced with the time it takes you both to deliver (and pickup) this 'filler' load. It could be that if directly en route, dropping off a few holoreels will net you a few hundred thousand and add five minutes to your journey, the aggravation may well be worthwhile.
Is there a return trip load? In the late 20th century, fossil-fueled delivery vehicles called 18 wheelers would often carry cargo to one destination only to find nothing to carry on the return trip, costing them both money and time. These were called 'Deadheads'. Avoid this at all costs. Sometimes you can't, but you should try.
Are you using the right equipment? If you have found a run that has somewhat high priced items, it may be better to run that fast frig twice, rather than the big slow indy once. Remember the return trip though. Time is money.
Finally, before you undock, check your route. Are you running into low security systems? In the beginning I'd avoid them, for whilst some juicy runs cross through 0.5 systems, you are not the only person that's going to be taking advantage of the many opportunities there; plenty of pirates know how to use the trade system to find riches too, the riches that sit in your fat juicy slow-moving undefended cargo hold. Be aware of this and use the map; check the ships/pods destroyed in the last hour. If there's been any activity, don't go, it's that simple. Ships can be insured, pilots can be cloned, cargo is lost forever.
Still to come...
This is just the beginning. Heed my words and you will become rich - there are ways and means of amassing fortunes even small corporations can only dream about. Trading in NPC trade goods can be lucrative, but buying and selling modules, minerals, and illegal items can quickly launch you into the big league, especially if you can do it remotely. But to do that you need to look beyond the Market Screen - advanced trading is just as much about whom you know as what you know. But before that you need to train and train hard. Get your industrial skill maxed, then trade, then buy up marketing, broker relations and accounting and make a start on those - not forgetting those learning skills if you have the inclination and plan to be a part of EVE for a while to come. When you're ready we'll meet up again next issue. Until then, fly safe... and don't go stealing my routes, I have friends in high places!
TIP #1 - Don't ask other traders for their routes. Miners keep priceless asteroid spawns to themselves, hunters hold close their favourite killing areas; why should you assume it would be any different with trading? You are their competition, they are yours, remember it!
TIP #2 - Never accept a gang invite from someone you do not trust. Many traders have been ganked by pirates spamming gang invites, warping to them and killing them. Even though they'll be Concorded (in high-sec) and take a standings hit, they could have a friend, or an alt, standing by to loot your wreck.
TIP #3 - Trading is very much suited to the player who wishes to work alone, but that doesn't mean it isn't advantageous to have a few friends scattered about, if only to ask for price checks in regions away from your own.
TIP #4 -There are four ways to increase the cargo capacity of your ship:
- The first and easiest way is to buy a ship that offers a cargo bay increase with every skill level you attain and then train up that skill - all Industrial ships in other words.
- The second is to fit as many high-quality cargo expanders as your ship and wallet will allow. Buy them one at a time, if you must, but get more cargo capability. Remember you are selling your cargo space, and if by expanding your cargo you can shorten the number of trips you make per run, then do it.
- The third is fitting Cargohold Optimization rigs for the same reasons.
- The fourth option is to buy some GSCs (giant secure containers), as many as you can fit in your hold. They're expensive but all cargo containers have the special ability that allows you to put more volume in them than they take up. It isn't a vast amount but every little bit helps. Another bonus is, should you meet an unfortunate demise, a secure GSC (password-protected) can be anchored wherever you died, prohibiting the offending party from scooping the cans, opening them and stealing your cargo. Corporation management and anchoring skill is required for this though, and it doesn't always work as pirates are just as likely to destroy containers rather than have you return to them, but it can save you some money if you are lucky enough.