I’ve given much of thought lately as to why my profits have failed to grow proportionally with my increase in capital. The principal seems sound: what I accomplish with 100 million ISK, I should be able to double with 200 million ISK. Why did this seemingly sound idea fail to translate into into a working theory in EVE? I began to look at exactly what I had been doing to increase my involvement in the market as I grew in wealth. How could I change that to increase my profits going forward? I believe I have finally found the answer to this question.
Previously, the way I had increased my stake in the market was to increase order quantities. Before, I might have invested 10 million ISK an item into 10 items, I was now investing 20 million ISK an item into 10 items. Although I did diversify my orders, I continuously put more ISK into the amount I was investing per item as my wealth increased.
That is the reason my profits were increasing at a snail’s pace: the correct way to grow as a trader is not to increase amount invested per item, but rather amount of items invested in.
Investing 10 million ISK an item into 10 items to 10 million ISK an item into 20 items is the more likely strategy to approach the theoretical double in profit. If it takes an hour to move 10 units of X at a profit of 1 million ISK/unit, and I have invested enough ISK to purchase 10 units of X, I should make 10 million ISK/hour off of X. If I invest enough ISK to purchase 20 units of X, I should still make 10 million ISK/hour, but this time for 2 hours. However, if I invest in 10 units of X and 10 units of a near-identical item Y, I should make 20 million ISK/hour, 10 from X and 10 from Y, mirroring the 100% growth I expect to see.
Though it seems as though investing in double the amount of an item and then going twice as long between updating orders is a sound idea, you have to consider that the real world is not the perfect example I included above, and in reality, there are other people like you, sitting in a station, spinning their ship, and updating their orders to stay on top. When you invest in an item, you are much more likely to be undercut than you are to have your order completely filled.
Each order I place on the market is generally undercut at least 10 times before being fulfilled completely. By investing in more items, in addition to having the chance to make more ISK per time, you also have the opportunity to avoid being undercut; if you are trading in item X and you are undercut, you immediately lose the ability to profit, whereas if you are trading in X, Y, and Z, and X is undercut, you continue to profit off of Y and Z.
I have been practicing this method of expansion very stringently the past few days, but today I kicked it into overdrive, and the results were very satisfying. Today alone, I grew from about 2.65 billion ISK to 2.85 billion ISK, a profit of about 200 million ISK. That’s a return of about 7.5%, which isn’t bad for one day’s investing. However, this practice comes with a price: with my skills, I have a maximum of 113 orders on the market at any given time. For the majority of my trading today, I did not have more than 20 remaining orders available to me. This level of expansion means that in the near future, I may be required to train up my skills in order to be able to make more market orders (or make another market alt to put in a different hub, or both) and grow to control a larger share of the market.
All I know is, since beginning to use this strategy, I’ve noticed definite increases in my profits, so unless something changes in the future or I discover a better method, this is the method I will continue to use as I grow my empire, and it is the method I will recommend to others in their expansion as well. Good luck increasing the size of your empire and fly safe o7