Saturday 1 June 2013

The Ichoriya Project

My main has been working on a special project for several months now, developing business in Ichoriya. Ichoriya is a small regional hub in Black Rise region. Ichoriya is a bit of a crossroads between several regions, it's one of the few hisec stations in the area and not far from major gatecamps at EC-P8R and Aunenen. Though there isn't a huge amount of traffic there is a steady stream of players passing through with a wide variety of needs.

Originally I just put up a bunch of low-ball regional buy orders on both Ichoriya and EC-P8R (Pure Blind region) and let them sit. That part was a complete failure, not one single item was purchased in the 3+ months I had those low-ball orders up.

However, while I was at it, I'd occasionally dumped a few loads of excess stock on the Ichoriya market to see how it would sell. It did sell... Slowly but surely and at pretty good prices. There was some competition but not a whole lot and not on everything. For the most part I could just post stuff and let it sit with a reasonable expectation it would sell eventually. On several items I was the only seller.

Then I removed all the low-ball orders and started bringing in more items about once a week. Still mostly just overstocked items that weren't very profitable on Jita at the time, but my stock of items for sale on Ichoriya slowly got bigger and bigger.

I noticed a certain few items tended to sell out quickly, even when priced 50% over Jita prices. So I started bringing in more of those items. I'm talking here about items that go for 50 - 100 million or more each and often sell in bunches.

Generally if there's no competition at all I start the price a little high, say 50% over the Jita price and slowly adjust prices down until I find the sweet spot. The last thing I want is to sell too reasonably at first, have a competitor buy them all out and re-post for more. With that in mind I'd rather start out a little high than too low.

If there is competition, I generally start out around 20-30% over the Jita price even if the competition is priced significantly higher than that.

I always try not to price things too high but sometimes I get a little greedy, price something a bit too high and have to cut the price after a few weeks because it isn't selling.

Sales volume wasn't great but it was ok and profit margins were more than good enough to keep me experimenting with bringing in different items, adjusting prices and slowly building up the business there.

Eventually I decided to experiment with some lower end items I don't normally deal in at all. So I brought in a bunch of +3 implants, 20 or 30 of the most commonly used T2 fittings, a few stacks of ammo, tank rigs of all sizes and some other odds and ends. I posted most of these items for around 20-30% over the Jita price. There was competition on most of these items but in many cases 20-30% over the Jita price was a huge undercut on existing Ichoriya prices.

I noticed the presence of a decent amount of stock at reasonable prices on basic items like +3 implants, certain ship hulls, common T2 fittings, nanite repair paste and ammo seems to attract more business to Ichoriya. They come to Ichoriya to buy the basics at decent prices and once there they might purchase other more expensive items too. IOW, my business in expensive items like faction mods and +5 implants seems to have increased due to reasonably priced lower end items attracting more players to Ichoriya.

There are a few items I stock at very little profit just because of this. Manticores, ammo, nanite repair paste, several T2 mods, etc... When I don't stock them, prices quickly go sky high and my overall business goes down. When I do stock them prices are down to Jita levels in no time (due to competitors trying to dominate sales, which I let them do once prices are low enough) but my overall business goes up. So, while I don't make much on those items, stocking them seems to have a positive impact on sales in other more profitable areas. It's well worth stocking them for that reason alone.

While sales on Ichoriya isn't a huge part of my business (YET!) it's more than enough to keep at it and the growth potential looks promising. I started a new trader to take over in Ichoriya permanently and expand upon the business there. He'll have 125 orders (the same as my main) tomorrow and 305 orders in 2-3 months. He's ready to start taking over right now, but I probably won't get around to it for several days since I have 5 more new traders all going active now too.

Related reading anyone considering starting up a new secondary trade hub or expanding existing hubs might find useful.

Cpt Bunny's Trading Guide
Sugar's Non-Technical Guide to Her Low Sec Market

Cpt Bunny has some good info on trading in general (from a haul trader's perspective) and an excellent list of items to stock trade hubs with.

Sugar has good general information on building a new trade hub from scratch and terrific insight into pricing strategy.

Buy low, Sell reasonable!

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