General Rules of Industry

Much like the rest of EVE has implicit rules ("Don't fly what you can't afford to lose"), EVE's industry has rules of its own

Here is a breakdown of the 10 rules I think any industrialist should follow during its career :

1. Don't undock a ship with a cargo you cannot afford to lose. This rule is quite similar to the "do not undock a ship you cannot afford to lose" If you move a precise type of high value cargo, use the proper ship for the job, otherwise you run the risk ok losing not only the hauling ship, but the assets you carry with you as well.
2. Check the market details in trade hubs and especially in Jita :  the announced value of the sale and the real value of the sale often differ. It's generally not much, a few millions, but a few millions multiplied by fifty or one hundred will quickly start to add up to hundreds of millions.
   Not because the tooltip of the industry window says "31million isk" that you should trust it blindly. Always doublecheck the value
3. Check the volume of sales : if an item shows a 30% margin : it is great, a very solid start indeed. but the next thing to check is the sale volume in the trade hub. Ask yourself the following set of questions :
1. Is there a high amount of the item for sale ? If yes, this is encouraging
2. How does the supply look in relation to demand? Do the following calculation : check the amount sold per day and divide it by the amount offered on the market; The higher that number is, the better your perspectives look for that market.
3. Check if there are "big players" on the market, orders having almost a day worth of sale can alert a prospective industrialist that someone is already mass producing the item. It can be good and bad. good, because it means the margin is definitively here. But this is also bad, because they will fight you for  market shares.
4. Always look at the market's Donchian curve : it represents the variation between the lowest sell order and the highest buy order.
   Mathematically speaking, a Donchian always exist because EVE has taxes on transactions, but it is important to observe its evolution over time.
1. A stable donchian means there will most likely always be a margin. Generally, the higher the base value of the item, the bigger the Donchian is in terms of isks (because taxes are multiplicative of our sale order : 1M * 3% is 30000 isks, 1B * 3% is already 30M isks. but relatively speaking, %ages are more interesting to observe)
2. If the current Donchian peak point is higher compared to the average be wary that it will most likely drop down again, do not get fooled by your apparent margin and take the potential drop into account.
3. Always expect a drop in price when estimating the margin even if the Donchian has not shown any dip by the past, it may never happen, but you never know. If the margin is close to zero, it may be better to avoid risking your isk in it.



A lot of back and forth in the last month in the Hecate Market, representative of points 4.2 and 4.3. Not sure how good the margin will be next week, but for now i'll enjoy what i have. Also note the bar chart representing sales volumes reaches as high as 250/day in the Forge region

5. The lower the SP necessary is to produce an item is, the lower the margin will generally be. Simply because more people can enter that field of production and that will generally lead to be a better optimisation by the masses and reduce your potential margin because of the high supply and competitiveness on the market.
6. But low SP requirement doesn't mean an absence of margin, a common item can yield very good and reliable margin even if it is easy to sell. Rigs are a prime example of such "easy" margins. The thing is, you need to spot the item, produce it, and be proactive on your market orders management, it is not rare to see someone put up to a hundred tech two rigs sell orders at times.
7. Never go full retard scale : always test the market before launching the mass production of the item. You may discover some hindrances not visible with tools such as :
1. Someone always undercuts you every 5 minutes, making an item you thought very easy to sell a pure nightmare to get rid off.
2. It always sells by pieces of one, which means it needs constant attention
3. Market is unstable (which should have been seen in step 4), which means your margin is unreliable over a reasonnable time frame
8. Prepare more isks than the what the  game tells you would need. In the previous blogpost, i offered the general guideline to ready to freeze an isk for every isk announced as necessary. This rule still follows
9. Producing intermediate products that you will use later on can yield results : when producing some items such as tech two or tech three ships or citadels, it is wise to produce your own parts of the item to greatly increase the margins. This concept is known under the vertical integration of production and solves the double margin issue.
   Eve industry (website linked) is a great website as it allows you to tick the "Build your own components"  Here is an imaged example  of the vertical integration benefits :

   

   A sharp rise of 130 million isks of margin, almost doubling the margin in our case

   
   
10. Time is Money : producing takes time, if you pay a fuel bill, remember to induce this cost on your production charts or your calculations will be wrong. and above everything, time is important on prices and this is why learning the market is important. You have no insurance that a price you expect to sell your products at a "T" time will maintain itself over the "T + production time" time.

With these points in mind, it is possible to make a solid market analysis and enjoy doing industry with relative insurance that a margin is waiting at the end of the tunnel to reward your efforts.