When to chase the sell price

Anyone who has sold anything in a hub will know the frustration of sellers constantly 0.01isking each other. Its frustrating and drives many traders and manufacturers away from the industry.

However in my experience, while many people mindlessly chase the sell price down desperate to make a sale, being aware of the larger market perspective can help you make better informed choices on how to sell your goods. Having sold a lot of stuff in Jita, I thought I would share some tips on when to join in or avoid the 0.01 isk wars depending on whether you are a trader or a builder.

So to 0.01 ISK or not to?

(1) Know your item 

Sounds obvious but are you clear on what the exact cost was to build your item? Many people sell at build cost or below - why? They are liquidating assets/they got it for free/they don't know better. This is a buying opportunity for traders. For builders, figure out the sell price that you want and stick to it - there are very few reasons to sell at a loss and the market might currently be oversupplied, but the prices will rise again. An example is below - in pink are manufacturers who know what a profitable sell price is. Everything cheaper (ie above the pink) is being sold at a low price and would be a good target for traders to buy up and relist at the same price as the manufacturers. 

(2) Know your sales/brokers tax:

Its incredibly important. For example - I build 50 drakes. They cost 46mill per unit to build. The market is pretty saturated so the current sell price is only 47mill. I think to myself "Ok - not great margins but if I sell the drakes I'll make a tidy 50mill profit".

However, with my brokers and sales tax at 0.61 and 0.75% respectively, I pay almost 34mill in taxes, leaving me with a final profit of 16mill - a terrible return on ~2.3bill invested to build the ships. Unless you are desperate for liquidity, wait for prices to increase. 

(3) Redefine the Sell Price:

Ive discussed it in earlier posts - but if prices are trending slowly down, but the volume on the market is low - traders should buy up stock and redefine the sell price. Below is an example with nagas:

Buy up those lower-priced ships and voila - relist: 

The best part is that the new price point can stick - meaning the resale profits remain good for traders and the margins remain good for manufacturers producing that product:

(4) Know the mineral basket price index:

This is critical. As a trader or builder, you need to know which way the market is moving. If the Mineral Price Index (MPI) is trending down, then you might want to start 0.01isking. With the MPI dropping, the price of produced goods will follow. 

Pay particular attention to the minerals in your product. Nocxium spiking? Wont affect hurricane or tornado prices at all.

If the MPI is trending up, then you can list your products for sale at higher prices, knowing that with patience, the market will move up to meet it. For those interested:

http://www.evemarketeer.com/trade/mineralindex

People can be oblivious to these relationships between primary and secondary goods but being aware of the cost of components in crucial in determining the current and future sell prices of goods. 

That's it for now, but I'll talk about further strategies soon.