Citadel Tax changes

I am now back from my holiday, and whilst I was away, the "Citadel" patch went live on TQ.

This release was massive, releasing new citadel structures, capital ships, hundreds of capital mods, capital NPCs, changes to wormholes, and amongst a plethora of others, a massive tax hike. From the patch notes:

• Market: markets currently have two taxes, transaction's tax, applied for sold items, and broker's fee for non immediate orders, which are set at 1.5% and 1% respectively. To create an environment more competitive for Citadels, we plan on increasing the transaction tax to 2.5% and the broker's fee to 5-6%. Players trading in citadels will still receive the transaction tax, but the broker's fee will be at the complete discretion of the owner. To avoid confusion for the owner, the broker relations skill will not affect player set broker's fee in Citadels.

Until someone creates a "Jita 4-4 Citadel" which I can't see happening any time soon, or possibly ever due to high sec war mechanics, we can safely ignore the broker fees in citadels, as I won't be using one.

However, this does mean that buying from a sell order (with no skills or standings) and setting up a new sell order in a different hub used to cost a total of 1.5 + 1 + 1.5 = 4% of an items value in taxes. Under the new system this would cost 2.5 + 2.5 + 6 = 11% of an items value in taxes! This is HUGE!

In reality, all of my trading characters have broker relations/accounting of at least 4, which brings the Broker Fee to 3% and transaction tax to 1%. This still leads to 5% cost lost to taxes, much more than before. What this means to me is an immediate loss in profit, as the margins on items have not immediately changed, and it will likely be a while before they do (existing stock sitting around etc.). It also means that a lot of my items I was trading with a profit margin of 10% or sometimes less will no longer be profitable, or will be but not much. I try to stick to items with 20% profit margins, but as prices swing this is not always possible, plus an item that costs 400 million with a 10% profit margin is still 40 million in profit, minus taxes. This will no longer be viable, so I'll likely have to have a wholesale rethink in what I buy and trade.

This will not be the end of regional trading as a few doomsayers on the forums suspect, but it will require a rethink, and may well hit my profits until I do.

Month 5 Review

I have been a bit complacent this month, kind of cruising regarding trading and not really investigating new items too frequently. This is probably why the number look pretty similar to last month:

Last month I finished on 18.1 Billion ISK, which makes my profit for this month just over 4 Billion for a total of 22.2 Billion ISK.

That's a very similar amount of profit to last month. Whilst a billion a week is not bad per se, I really think it can be improved. I am going on holiday tonight, but when I get back I think I need to really evaluate what I'm selling. I was initially aiming for items of at least a 20% profit margin, but a lot of my regularly traded items fall below this threshold now, and have for a while. They continue to make some money, which is why I keep trading them, but I feel my complacency it what is leading to my plateauing profit numbers.

One thing I have done this month is keep my "ISK in wallet" at any given time to 2.5 to 5 Billion at a time. This does not look like that today as I have not made a buying run in the last 24 hours, but that is what's been happening, which is a definite improvement. As I will be away, I decide not to make a buying run last night, and have updated my sell orders and will see where I stand when I return in a week. I am hoping for about a quarter of my sell orders to be filled with zero updates, we will see if that is what pans out.

One thing to consider when I'm looking at possible items for manufacture (which I haven't started yet, but will soonish) is that there is a war on. World War Bee is very widely reported on, and the battle reports and kills posted on Reddit and elsewhere give some insight into the regularly used ships and modules. I would need to buy/research some blueprints to take advantage of the situation (as my own collection is meagre at best) but I certainly think there's some money to be made if you pick the right doctrine items from the various alliances.

Still, for all my moaning it is nice to be in "supercapital money" territory, and I intend to start blogging quite a bit more often. Certainly covering my thoughts beyond these monthly reviews. I intend to look at the upcoming tax changes with the citadel expansion in some detail, as they affect my trading quite heavily, and will cover my move to start T1 manufacturing.