Market Economics - Brokers, Prices, Supply, Storage
By
Boogins,
Posted on: 2010-10-04 04:04 in The Market and Inventions
Nice post. You might want to edit all the 9's to 10's. Stacks go to 10.
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They do? Huh. Silly me. |
Originally Posted by Boogins
Nice post. You might want to edit all the 9's to 10's. Stacks go to 10.
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I'll fix that. You learn something every day!Mac
You can buy/earn bigger bags:
Rikti Merits can be traded for more salvage storage
Crafting common IOs at high levels (lots of them) gets you more recipe storage
Certain selling badges get you more market slots
All very true, just as leveling the character up will increase all the storages and slots. Of course this isn't what everyone might call "readily available". I'm guessing there's a lot of people that don't buy extra storage as a first priority.
Good Rikti tip though. I had no clue. That's out in the RWZ I guess? I should get some of them merits.
Mac
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Specifically, each of the level 45-50 crafting badges gives +1 recipe storage. Also, each of the level 25-30 badges gives +2 invention salvage storage.
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Originally Posted by Reptlbrain
Crafting common IOs at high levels (lots of them) gets you more recipe storage
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It seems to me there's a key ingredient that you don't analyze, but take for granted:
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Level 50s set the market prices, because they can afford to [as we say around here] BUY IT NAO. You have to be chatting in Atlas to make less than a million inf per hour on a level 50- and the ones who are serious about money make 20 million an hour or more. Yes, YOU may play for an hour and make 50K in cash, but that has nothing to do with what things cost. | the amount of money that circulates in the game |
Some shiny recipe drops on level 30 you, something that a level 50 might like. So they will buy it for, say, 10 million. (They have the money. It's not like they need it for rent. ) Now you have 9 million [Mr. Wentworth keeps a million for the convenience] and you are instantly in the club of people for whom 100,000 inf is no big deal.
In fact, with one good drop you're able to buy and sell on the scale of the level 50's. And all the other level 30s are on that scale too.
Maybe I'm making an obvious point, but I thought it was worth making.
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Very nice guide. I approve.
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Exactly right. The 50s dictate the prices. I can't help but make a WoW analogy here... Back in the day, when 60 was the level cap, level 15ish things would sell for a few silver coins. Last time I played, the 80s were raking in so much cash that the prices had inflated to 10-50 gold per item of the same level. That's 10,000% inflation. |
Originally Posted by Fulmens
It seems to me there's a key ingredient that you don't analyze, but take for granted:
Level 50s set the market prices, because they can afford to [as we say around here] BUY IT NAO. You have to be chatting in Atlas to make less than a million inf per hour on a level 50- and the ones who are serious about money make 20 million an hour or more. Yes, YOU may play for an hour and make 50K in cash, but that has nothing to do with what things cost. Some shiny recipe drops on level 30 you, something that a level 50 might like. So they will buy it for, say, 10 million. (They have the money. It's not like they need it for rent. ) Now you have 9 million [Mr. Wentworth keeps a million for the convenience] and you are instantly in the club of people for whom 100,000 inf is no big deal. In fact, with one good drop you're able to buy and sell on the scale of the level 50's. And all the other level 30s are on that scale too. Maybe I'm making an obvious point, but I thought it was worth making. |
The old players are quite literally throwing money at anyone who takes the time to visit the market.It's the fact that the 50s dictate the prices that makes life "easy" for the new players - we can flip goods, or sell salvage and recepies we stumble upon in our travels. And we get paid according to the 50s standard. That makes it fairly easy to afford your SOs.
Of course, when my first char hit the mid 20s a few weeks ago - and I suddenly needed 900,000 for SOs, I was like... "Omigosh? How am I supposed to afford that?" Unless someone clues you in to what you can do with AE tickets, or the market... you can feel quite poor for a few weeks!
Mac
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Indeed. If you don't touch the market or AE, you can be quite poor. I was lucky that I subbed during Winter Events and made at least 5 mil on each toon selling candy canes. That gave me enough to get lvl 20+ IOs. I was also lucky enough to get invited to Dark Kingdom whose base had 10 IO tables which I had access to as a member. I returned most of the IOs that I took from the tables when I did a respec.|
Originally Posted by MacOberon
Of course, when my first char hit the mid 20s a few weeks ago - and I suddenly needed 900,000 for SOs, I was like... "Omigosh? How am I supposed to afford that?" Unless someone clues you in to what you can do with AE tickets, or the market... you can feel quite poor for a few weeks!
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From time to time, I stop by Mercy and Port Oakes and give new players some infamy. (IE, those with no vet badges)
Good stuff, Mac!
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Someone setting a bid price and quantity and a sell price and quantity in the real world is called a market maker. They are indispensible in the real world stock market as well (though regulated there unlike here.....muhaha.....ahem)
I agree that most of the issue is related to the feeble storage of salvage (and to a lesser degree recipes) that toons are allowed. Note that there has not been the same type of explotability on halloween salvage which can be stored up to 99 per kind as there is on other forms of salvage and its only available for part of the year.
Good basic guide to marketeering.
For those who are new to the game, especially coming from a place like WoW (I'm one of those) the market can seem a bit odd at first. Here's the low down to make sense of it, and to some degree how to make money from it. It's newbie friendly, but it's not a manual, faq or how-to. This is more of a look underneath the hood, exposing the artificial system and how it affects things. Why are things they way they are? In the long run, it's food for thought for anyone that plans to use the market in any way. In the short term, it'll help you pay for enhancements as a newbie.
The market's quirks:
Cause and Effect:
What do the above points mean? Aside from the fact that we are in an artificial system with severe limitations, and that normal economics do not apply? Well, it means that if you are out of room, you are out of luck. Returning from a mission with bags full of low grade salvage - your primary concern is getting rid of it. Most people will put up a sell order for whatever will sell for over a million - and simply dump the rest at whatever price they can get. Why? Because they need to clean up their inventories, and they can't afford to tie down market slots for hours to sell a "Symbol" for 20,000 instead of 1,000 inf.
This of course works in reverse as well; if you want an enhancement, odds are you want it now. That means buying recipe and salvage at whatever it's listed for on the market (within reason) - and that can be a hundred times higher than what you sold it for just a few minutes ago.
It's interesting to keep in mind that both of these extreme behaviours will often be displayed by one and the same player - in the same day! We are willing to pay a high "fee", to use the market as a storage space as well as an actual market.
Flippers, aka Market Brokers
If you buy goods at dump prices, say 1000 inf, and sell it for 100,000 inf - you become known as a "flipper". They are widely regarded as a menace, but in fact they fill vital functions. I like to call them market brokers.
Very few are willing to spend a market slot on selling ONE low cost item, so they dump it. The flipper buys it all, in stacks of 10. He then puts the stack up for sale again at a much higher price, hoping to make a buck. What the flipper has in fact done (probably without realising it) is increase the market's storage capacity ten-fold for a popular item. He has made sure that goods is available - on demand. If brokers weren't buying all that goods at prices above what a vendor would offer - all that precious salvage would be lost, junked to your nearest quartermaster. Flipping creates a stockpile of common goods, that normal people aren't willing to bother with!
What this all comes down to is time vs money. Is it worth 100,000 inf, to get an item now, instead of in 30 minutes? With the amount of money that circulates in the game, most people will say "yes". If the answer is "no" - then don't buy it at the listed prices! Just put up a buy order, make a cup of coffee while you wait, and you get it dirt cheap. It's ok not to want to pay the broker for his work - but you better be prepared to put in the time and effort yourself.
Maximise your Market
So how do you maximise your market experience, and get the most money for your goods? Well, due to the limitations on your storage and market slots, this is where it the market becomes really, really funky!
Unlike in a game like WoW, selling your goods at a fair price is a bad idea. You heard me. If you put up sell orders for stacks of 1 - you will be able to sell fifteen items at the time. That's not even half your salvage inventory! You are out of room! A flipper / broker selling and buying stacks of ten, can deal in 15*10 = 150 items at the time.
The clever player will be all of the above mentioned people - rolled into one! Got a bag full of junk? Dump it! Need a salvage? Buy it! Got free market slots? Start flipping!
I'll happily sell a salvage item to the highest bidder, for 1000 inf - just to clean up my inventory and slots. I know it's being sold to a flipper, who will sell it for more. I will happily buy the same salvage item the next day -from the same flipper- paying 100,000 inf. Hey, so what? I can afford it, and I want it NOW. And here's the kicker - since I buy and sell immediately, I have my market slots and inventories mostly free - so I can engage in some serious broker activities at the same time.
Requirements to start
None. Well, a few levels would be good, so you get a more market slots and a bigger inventory. At level 10-15 you can easily start playing the market broker. The more people that actively uses the market, as sellers and brokers, the lower the prices will become. Supply will increase, and demand will stay the same.
It's worthy of note as well, that I'm a very new player. I do not have a rich alt as a sugar daddy. I do have a char now that's up to level 37, but she still isn't swimming in money. Believe me when I say I was hard pressed to pay for my first set of SO enhancements!
I have no such troubles any more. I get by more than comfortably by playing the market. Sometimes I'm successful, and sometimes I'm less so. Either way, I easily cover my own expenses now. I build IOs for my char. I even made a few IO sets!
Squishing the Buck
If you are indeed a new player, and you want to build some IOs for your character (And you probably do! They are really neat! Check out the guides!) you may want to squish the buck a little bit, get the most value for your inf. The important thing here is patience.
Buying what you need now, may for example set you back 200k for the recipe and 300k for the salvage. 500k for a simple level 30 IO enhancement. If you put up buy orders over night - you may return in the morning to find that you have purchased everything you need, for less than 100,000, shaving 80% of the market price. Of course this requires patience, and some good guessing. Still, if money is tight... squish the buck! We all have to eat and sleep. Doesn't cost anything to make the market work for you while you do it!
Should I feel bad about ripping people off?
No.
You are making a profit, but you are providing a service. People can take or leave it as they please. Keep in mind that every time you buy something, it's because you offer more than everyone else. Every time you sell something it's because you sell it cheaper than everyone else. On top of that, you are increasing the market's storage capacity (which depends on the characters' number of market slots) making things available.
If everyone sold their own salvage one item at the time (and some people do!), the market would be empty and the prices sky high. Anyone that accuses you of cheating them, doesn't understand the market as it currently functions. This is not nasdaq; things don't work the same way here. This is a very artificial and limited system we work in, and it leads to very artificial behaviour. Just chalk complaints up to ignorance and move on.
Mac