The current state of the market has fundamentally changed with the advent of citadels and the unseating of old powers. With such changes, mid- to long-term investors are not as […]
The current state of the market has fundamentally changed with the advent of citadels and the unseating of old powers. With such changes, mid- to long-term investors are not as quick as they were in the past to put money on the line to back products that they feel would increase in value. The easy-mode picks of the past simply doesn’t promote the same level of investor motivation they once did.
Because of this, I wanted to share what I have been using as a vehicle for wealth generation over the years. I would like to think of myself as an old-school faction warfare player. The fights, and the ease of finding them, are nice, but I am more interested in the warzone control mechanics and how they greatly affect the larger market as a driver for the value of Navy Faction goods.
What makes Loyalty Points a viable vehicle for wealth storage?
Loyalty Points, on their own, have no direct market value. In order to earn isk, you must exchange them in the Loyalty Point Store of an NPC Corp for faction items or anything else that is offered by that particular NPC Corp. This method gives Loyalty Points incredible versatility, since you can exchange them for whatever is the most attractive option from a profit perspective. Generally, the Loyalty Points you need to exchange make up the bulk of the value of the item that you are trying to gain in return.
What influences the potential market value of a given NPC Corp’s Loyalty Points?
A combination of how efficiently the Loyalty Points can be earned, and the general utility of the exchanged item, are perhaps the simplest price drivers. To better illustrate this, let’s take a look at some historic prices.
Depicted above are one year historical prices for Imperial Navy Slicer and Omen Navy Issue. As you can see, there have been times throughout the last 12 months that would have ideal opportunities to buy and sell these items.
What caused such a marked price gap for these items?
These items can only be found in the Amarr faction loyalty point stores. During the period, the Amarr Militia’s influence over the warzone fluctuated. In the beginning of the period, the militia had great influence over the warzone. During this time, it was easier to farm Amarr LP due to a high multiplier for the LP rewarded for every completed plex or Faction Warfare mission. This saturated the market, which in turn dropped the value of items that can be exchanged across all Amarr NPC faction LP stores. The middle of the period will then be the reverse of the previous scenario.
I chose these examples to show the relationship between LP, item value, and warzone control. Other LP store items display similar behavior, but only through a small window of time, probably due to the general demand for other faction items.
I’m not interested in becoming a faction warfare player. Can I still take advantage of these opportunities?
Absolutely. Make yourself aware of the current state of the militias, and that should clue you in on potential movements in the market. You can see a general overview of militia stats by going to NEOCOM => BUSINESS => FACTION WARFARE. This window will give you information such as numbers of systems controlled and kill stats.
Another way you can profit from these activities is by finding friendly and active faction warfare corps or alliances that would be willing to sell you loyalty point items at a discount. In return for the discount, maybe you can save them the task of taking the items to market hubs, selling them directly to you instead. Convenience can almost always be sold at a premium.
Let’s take a look at how we did this trade week.
This was a pretty hectic trade week. I was able to simultaneously seed 4 market hubs, much to my surprise. The corp wallet was in no position to make added buy orders due to this. With that, I focused on several T2 and T3 production cycles.
Currently, I’m selling T3 cruisers and destroyers in Jita. Fortunately, they seem to sell within a week at most. The T2 modules that I produce end up being seeded in Ichoriya at the moment. Although it does take time for all of them to sell, they do yield about 5% more profit compared to selling in Jita.
Later in the week, we received a war declaration from PIRAT. Unfortunately, this will greatly reduce my ability to efficiently haul goods to multiple market hubs. The following week’s trade activity will mostly be focused on citadel-market hub trading. This is a blessing in disguise since I will have an opportunity to really experience the power of the market citadels and see if it is worth changing my strategy in the future.
Thank you very much for reading. Good luck and happy trading.