Playing EVE itself is a constant lesson in market capitalism.
I started a strip miner manufacturing business with the help of some capital donation. Since I have no compunction to generate a return right away, I squandered a few million ISKs just shopping around, buying a few frigates and fitting them to my fancy. By the time I started manufacturing, the business is under tremendous financial pressure from daily operating activities.
Another mistake was inadequate research: I got into the strip miner manufacturing business because EVE's economy is based on mining; strip miners, along with their tech 2 cousins, Strip Miner II, are the most powerful mining lasers in EVE. My logic was to tap into this constant demand and go for a steady stream of income... but a variety of factors proved that the initial optimism is simply nativity.
One, I chose to manufacture and sell in the most competitive solar system in the game: Jita. It is the biggest market exchange in the universe with 500 players buying and selling on average and 700 on peak time. The pricing arbitrage that takes place is a killer. Not only are input prices high due to the fact a lot of rich players shop here, but the margins for end-user products are extremely low because of the price competition.
Two, the capital involved for strip miner manufacturing is tremendous. Aside from the blueprint, the materials involved in making a strip miner costs more than 1 million ISKs. As an upstart industrialist researcher, my character's low manufacturing skills means that the production process is very wasteful. Around 25% of the input materials are discarded as waste. This puts the manufacturing cost of one unit of strip miner around 1.5 million ISKs. At one time, the prices for strip miners in Jita are little more than 1.5 million ISKs, recouping the initial capital will take weeks at this rate.
Three, time and distance is a big factor in buying and selling. Since all the public manufacturing facilities are already in use in the region, I had to establish my base of operations in a system one jump away from Jita. The difference in this one jump is between night and day. Because the new system is not in The Forge region as Jita, the products do not show on the Jita market. Here the demand for mining tools is really erratic and unpredictable. Sometimes it takes weeks to sell one product. In addition, materials are just as difficult to procure as for end-user goods to sell. Transporting the finished good is not the problem, but getting the raw material input to the location is a huge headache. By myself, I had to spend hours in my destroyer hauling the materials purchased in Jita. Later I was to mitigate this factor by learning the skills and purchasing an industrial for the hauling. One problem is apparent: the operation is going to face big scaling challenges.
