Wednesday, April 24, 2013

More Notes On Stockpiling

I've written about my disdain for stockpiling before, I've even tried to write a guide.  Recently, I've been mulling a problem whose obvious solution is stockpiling, but I'm trying to resist the temptation.  Again, as a nod to Chella at Low Sec Lifestyle, I'll try a little stream of conciseness to illustrate the problem... maybe there will be a solution at the end.

The Problem: Hictors

I have a love-hate relationship with hictors lately.  On the one hand, they are a great T2 ship manufacturing investment because they serve a specific niche that cannot be replicated in any other hull.  On the other hand, they serve such a laser-focused role, they aren't consumed in extreme volumes.  This has made the margin erratic.  The internal conflict is compounded by the fact that hictors cost significantly more than the rest of the cruiser hulls to produce.  

What I imagine is happening is demand is spiky.  When a supercap brawl takes down a bunch of hictors, logistics guys backfill stocks.  This burst in demand drives the price skyward.  The burst in margin triggers builders to fill the market need to milk out that sweet sweet isk.  The problem is it can take 3-5d+ to go from "that's a good investment" to "cash out" regardless of your preparedness.  The higher the margin climbs, the more people rush to cash-in.  This causes, what I imagine to be, a collapsing wave.  Suppliers quickly outstrip demand and the price collapses, eliminating margins.

Usually, I would write off the product volatility as "too much risk" and ignore it, but I've tasted the sweet success of cashing out while the bubble was high multiple times.  This is a problem that can be solved, if I can just find the right method to approach the product with.  It's inherently obvious that my current practice of work-weeks/kits isn't the right tool for the job.

Stockpile, Stupid

The obvious solution here is stockpile the built ships.  The problem I see is you're fighting two market forces there rather than one.  On the one hand, you're betting on material costs, and on the other, you're betting on the price of the item.  Don't get me wrong, there are places this is a good investment, but I don't think ships are.  There are so many people participating in ship production, their prices tend to be tied strongly to a specific margin.  With material prices slowly sliding, and a personal expectation that component prices will take a dive with Odyssey, this is a terrible way to conduct business.  Lastly, velocity on hictors is TERRIBLE.  The whole thing makes me feel like I'm lining everyone's pockets except mine.

There are places to stockpile.  Personally, I stockpile invented T2 BPCs and at least 4x the T1 BPC variants.  This cuts 2-4d from the kit-to-market time, and the T1 BPCs help me back-fill quickly.  I like blueprints because the cost stays rather solid, and market changes only move the final product price single-digit percent.  Unfortunately, this still leaves at least 3d on the kit-to-market time, which means I need to get better at sniffing out bubbles so I can leap in and cash out quickly.

Lastly, there's a throughput issue to produce these hulls in volume.  First, it takes 2-4d to invent enough for a good batch.  This is matched by the time required to build the components, and add another 2 days for the final build.  In a perfectly-organized project, you can overlap invent/intermediate-build, but in that case it will still take you 6 days to go from "I should build that" to finally on market.  This is too slow for effective market milking.

Better Tools

Really, the answer here is get off my lazy ass and finish the tools I've been talking about for over 6mo now.  With a graph watching historical margin + better reporting into when large fleets get whelped, hictors would be a great place to really put my automated tool through its paces.

In the mean time, I will just need to add hictors to an "asynchronous schedule".  Instead of making them a standard part of my build, I should do a better job to watch prices/margins with my existing tools and pounce on opportunity when it arises.  This should be easy to do with my ammo builders in standby, but when I put them back to work, it will be tough to meet the component build to be able to cash out in big enough numbers.  Perhaps it's time to dedicate a character to full-time component building and extend my kit buys an extra week out.