Why Flippers Ruin the Economy!

Your observations and experiences are curiously vague and unspecific.

Every time someone does this with a specific, measured, test, we get the opposite results of the ones you claim.

Do I think CAPs will stay high forever? No. Do I think they'd stay high for a while, while supply catches up? Yes. Especially given the amount of inf that people were generating from spiderling farms. We've only had a few days since most people were generating immense amounts of inf and no salvage at all trick-or-treating, and it will take a while before things come back to normal in general.

Here's a possible distinction that might explain the difference:

When the marketeers talk about "flipping", they're talking specifically about buying low and selling high. This does not change the number of things on the market -- except possibly to increase it by making slot usage more efficient.

It sounds like what you're talking about is "cornering", where people buy stuff low and sell only some of it -- the rest being destroyed. This creates artificial scarcity, and of course it would raise prices. And, since prices under a million inf are effectively too small to measure for a level 50 character, it's very easy to (at least temporarily) move prices from 1k to 100k or 500k -- it's not enough money to make a difference, so who cares?

And that does create the possibility of profiting, at least for a while -- the cost of the salvage you delete is so small compared to the markup on the salvage you sell that you can easily make money even deleting 90% of the salvage you buy.

But this works, by definition, only so long as the numbers involved are small enough that most players don't care. I've paid >200k for at least one low-level common salvage within the last few days... and picked up full stacks of the same stuff for 1k. The difference is, quite simply, too small to measure. It's not even a blip in the first three digits of the inf I have on my five or six richest characters. It's comparable to someone earning $100k a year, who owns a house, caring whether something costs $5 or $50. Yeah, sure, it matters emotionally, but it's a total non-issue. The time I spend trying to find something cheaper costs me more than the price difference. I do it 'cuz I'm irrational, not because it's actually a sound economic practice.

Likewise, the time I spend having to go back to the market two or three times to see if Scientific Theory has dropped below 500K is wasted time. The only reason I pay inflated prices is because I want to finish crafting my mid-level crisis stuff and get back to the game.

100k? Alright, that's not so much. 500K is starting to get to be real money and eats any profit from crafting on some I/Os. I love selling my mid-level crisis stuff, but not at a loss.

I could make more money just buying the expensive I/Os with A-Merits and just selling them. My salvage cost would 1/5 what it is. And when you sell a LoTG for 60 million, who cares if Alchemical GOLD is going north of 300K?

But a level 25 Touch of Death? The margins are much tighter. Niches like Crushing Impact and Doctored Wounds are going to become more marginal if the common salvage reliably goes for 200 to 500k.

Once it has been proven that it can be done, it will be done, often. Conventional wisdom said cornering wasn't possible and if you did, you couldn't make money at it. Well that turned out not to be the case and I think we are in for a bumpy ride with common salvage being more volatile then ever and players never having any real idea what things will cost.

Personally, I've never asserted that cornering of common salvage doesn't happen. Of course it happens. I tried it myself. What I have asserted is:

1) It's not a good way to generate profits. The effort to reward ratio is completely out of wack. I can make a lot more money flipping purples recipies with a lot less effort.

2) It's hard to make any money cornering something like common salvage. Under normal circumstances the incoming supply is just coming in too fast for make it practical to corner common salvage for long.

3) People ascribe all kind of normal market activity, price moves and shortages to the action of people playing the market, but in my opinion most of the time it's just the normal action of the market. The market isn't nearly as nefarious as some people make it out to be.

4) Traditional flipping (as opposed to cornering) doesn't do much to change prices one way or another. I've flipped all kinds of stuff, never tried to drive up prices except as an experiment, and never felt any need to drive up prices to make money. I make all my money by buying near the bottom price and listing just below the top price.

Bottom line on the "cornering"

In order to actually "corner" a niche, you will have to place protective bids at around 90% of your sell price to maintain control. It is possible in some circumstances to post protective bids at 100% of your sell price, but those are generally extremely high volume items that you realistically have no hope of "cornering". By placing your cornering bids at 100% (or more) of your sale price, you ensure that you leave no gap for any competition. You are however losing money on every transaction and you rely totally on "luck" that the people buying your stuff will overbid enough for you to make a profit.

So now you're selling at 100%, bidding at 90% and you are good to go! However, this does not mean you have "cornered" the market by any means. This 10% gap you have on the 90/100 is an area that anyone can exploit on you. You list for 100, they list for 99 and theirs sells first. You buy at 90, they buy at 91. Sure, in the end they're losing a bit of money on the deal, but if your intention is to "corner" that niche, then you need to move your prices to 92 and 98. You have effectively lowered the "for sale" and raised the low end.

This is what people are talking about when they say flipping stabilizes prices. This is factual information people, and all of the hand waving you do cannot change it. Destroying salvage is not flipping. It is not cornering. It is simply destroying salvage. It is not even price manipulation. You cause the price to rise, but you have no actual control over it beyond that. Manipulation infers (at least to me) a measure of control.

If you want to talk about actual manipulation of prices, you're talking about a venture that will essentially net you a very small profit, or a net loss, unless you are riding someone else's wake while doing it. If someone else lays out all of the capital to buy up all of the supply of an item then yes, you can potentially come in behind and artificially keep that price high for a while. Not forever, and definitely not a week, but for a while. In that instance you can make a profit. If you intend to drive prices up through a shortage, be prepared to lay out a lot of capital for something that will most likely blow up in your face 2-3 days in.

However, the main points of these discussions as I see them fall along the following assumptions:

"Pro-Flipper" will say this:

Flippers stabilize prices and do not drive them up. The act of flipping in a competitive market ensures that any attempts you make at raising the price, even over a period of time, will not yield the results you hope for.

"Anti-Flippers" will say this:

Flippers come into a niche, drive up the price, and make a huge profit by creating shortages and by controlling all of the supply.

In a game where everything drops everything, you cannot possibly believe that anyone can control a majority share of anything meaningful that will net profits in a magnitude that others have shown through straight crafting. Salvage, common salvage in particular, moves volumes apparently beyond the comprehension of most of the people who play this game.

In the course of 7 days, I sold over 3,000 spirit thorns. I felt that I was able to sell at least half of all of the spirit thorns that sold that week. I would not venture to say that I sold more than 60% total. This means that even spirit thorns, which are a relatively low demand common salvage move around 800 or more a day. I cannot prove that I sold at least 50%, but I feel confident in that conclusion. The only people who could ever actually verify that are NCSoft, and they don't seem inclined to give that info out According to some people, I didn't even control 50%. But for the sake of the following, we will assume I did control 50%.

This means that 800 or more spirit thorns are sold every day, on average.

Let that sink in. Now contemplate how you will "control" the vast majority, 90%, of those to maintain your cornered market?

Now contemplate it on an item that is actually in demand and moves in the neighborhood of 1500-3,000 a day. These tend to be the items that are cited on these boards and in this thread. These salvage are high demand - they have hundreds if not thousands of outstanding bids waiting to fill. You can bet that at least some portion of those bids are a flipper.

What actions will you take to ensure that you will control the vast majority, again - 90%, to maintain your cornered market?

Remember, just because 1,500 move through the market every day does not mean it is a steady supply. More than half (estimated by some) would sell between the hours of 5-10pm EST. That's 50% of the volume in 20% of the time.

Even if we low ball it at 1,500 - in order to "corner" that niche, you're going to have to sell 1,350 of those. You will also need to buy, 1,350 of those. Using 2 separate characters, moving the purchased salvage through base storage (30 at a time per rack.. yay!) you will need to fill 135 orders of 10. Assuming you have 20 slots available on the market on both characters and you do nothing else (marketing) with them, you need to turn over every single slot on both of those characters about 7 times a day.

Again, knowing that anyone else can swoop in and steal your niche with no problem (you've actually done all of the work for them in this case) you must bid extremely high (90% of sell) and pray that you make your better end of profits in what people offer you.

Example:

You pick common salvage X. This salvage does 1,500 a day. You are listing them for 100k and buying everything under 90k.

This leaves you 500 profit after market fees. 500 profit on a 100k transaction! Nice! That's 1/2 of a %! Go you!

Assuming you actually tend to average 125k per sale (a 25% over bid), you will net about 27k per sale when all is said and done. Multiply this across your sales a day (90% of 1,500 is 1,350), and you're raking in 36,450,000 a day. Not too shabby!

Or, conversely, what if you have stiff competition? What if you need to lay down covering bids at 100% instead of 90%? Your profit per item drops to about 17.5k. You're now down to 23,625,000

Now figure out how many hours you will need to spend glued to that market constantly adjusting bids, adjusting sales, moving salvage from one character to a base, to the other character.

And figure out your inf/hour.

And figure out how many days you are willing to devote to your new-found money maker? 2? 10? Every day?

I would estimate that once you get very, very good at this you could probably get away with only spending about 4 hours total per day on this venture. You would need to check your bids regularly, and your sales to ensure that you always have at least 1 of each - figure 12 times a day at least. At 90/100 (or 36,450,000 a day) you are now making about 9 mil inf / hour!

Not a very "good" amount considering all of the work you put into it. Personally, even with being out of the game for all but an hour a day over the past 3 weeks, I've still managed to accumulate over 2 billion. And that's with an entire week of no marketeering and using one of my marketeers to simply clean out a base full of junk that no one wants (off level IOs... yay?!). I don't sit in front of the market the whole time I'm on - I spend maybe 10 minutes there a day per character. 3 marketeers and I'm up to roughly 30 minutes a day. 30 minutes a day... times 21 days... and I'm into the game for 11.5 hours of marketeering (average). This means that for my effort I'm making 174 mil per / hour (or roughly 5x an hour what the "cornering" person is making.

This is why the "Pro-Flippers" are so adamant about their positions. This is why when people come to the forums and provide anecdotal evidence that they ask for proof. This is why when ever someone says that they "cornered" common salvage for a week, or a month, or 2 years, we all call bull. Its possible - its not likely, but its possible. The amount of work you would need to put in to make it functional makes the entire process unrealistic at best.

And since no one seemed to notice, TopDoc didn't corner a niche. He bought out most of the stock. He then left low end bids up to keep the "cheap stuff" off the market. Either he stored them or he deleted them. Odds are, he had to delete at least some of them.

Once he had enough bids in place long enough, people who wanted to "buy it now" needed to dip into the "waaaaaaay overpriced" filler that sits at the top end of all of the salvage.

Once he was confident that people were willing to pay the top end prices, he began introducing his at just under a million. They began to sell. He sold about 500.

No mention about what it cost him to keep those covering bids up - how long they were up - if he continued them. In fact, at no point does he actually show where he "cornered" a niche. He claims he did, but he did not. Yet we are to use this as proof that cornering is possible and profitable and what every flipper does?

So predictable

So predictable it was predicted

Quote:

Originally Posted by Another_Fan Welcome to the boards Alkirin. Here are a few observations to make your stay more pleasant. A)Flipping doesn't affect anything is a matter of faith not a matter to have a discussion about. Like many religious teachings it has moved over time. The original was flippers don't raise prices. The current, I believe is , raising prices on common salvage isn't profitable enough to be fun ? B) The market boards exhibit confirmation bias My belief is sooner or later someone will present the sun rising in the east as proof that flipping doesn't affect the game. C) Examples that run afoul of any of the above are likely to be dismissed. I haven't looked at spirit thorns today, but Alchemical Silver looks to have been driven into the stratosphere, and ceramic armor plates are 100% being manipulated either that or everyone just decided to pay the same amount that is 40 times the old price, and a few people decided to pay 400 times the old price. D) If you are talking about these things and Nethergoat isn't insulting you, you aren't saying anything interesting and are likely wrong.

Let me see Goat being insulting: Check, we even gained the bonus of Misaligned demonstrating a persecution complex and accusing the people who disagreed with him of having an organized party.

Yes Misaligned we do have a party, we meet on Wednesdays. The first half of the meeting we argue over who gets to wear the fez, the rest we spend figuring out how to hate the market.

Market regulars displaying extreme confirmation bias : Check. The irony of the regulars demanding proof when the origin was beyond expectations. +points to this thread for going above and beyond the call.

Counter examples dismissed when presented: Check

Edit: I missed the "Put up or Shut up. You're not right so I am not wrong" digression.

I'm having a little bit of trouble understanding what Another_Fan's point is, beyond disliking what he/she perceives to be the groupthink of the market regulars.

Correct if I'm wrong here, but are you saying that people can and do work common salvage for profit on a regular basis? Or is there some other point I am missing? Besides the anti-"market regulars" content of the posts, which I can very clearly see.

ROFL

Actually the folks who deny that:

- Flippers do artificially increase prices - often by incredible amounts.
- When flippers leave a niche - prices always drop down. The amount of drop and how long it takes to drop depends significantly on what tactics the flippers used. Anytime a player deletes items to lower overall supply that complicates things.
- Other fairly obvious or general facts.

Those folks remind me of a friend who I used to play games with regularly. Long story short as a game progressed and he found himself in disadvantageous situations or sought an advantage over others - he would take a rule and start debating its "true" meaning. He would use things like proper use of the english language, what he saw as "potential inferred meanings", and any rule that did not specifically rule out what he was attempting in detailed print - and twist the meaning of what was CLEARLY PRINTED in the manual / rules in order to try and make it applicable to the situations he needed to occur.

Often he would try so hard to get his way and make you think his way was actually right he would spend an hour or more holding up the game to try and debate his way to success. Even in light of 4 other guys looking at the same rule and all agreeing it meant one thing (usually just what it said it did), he would carry on trying to twist the meaning to his advantage. Sometimes it would go on so long that we'd have to hold a vote and the majority of the players would say - "okay F it, let him do what he wants, so we can at least play the game".

It was extremely sad. It got very old. And you know what ? That guy was wrong 99% of the time. We would often write a letter, send an email, or read a FAQ from the game manufacturer to get the final correct word. But still he just wanted to create situations to help himself, that just didnt exist, or were clearly just WRONG. And sadder yet ? I believe he knew he was wrong - but persisted in that kind of behavior for his own benefit at the expense of everyone else he played with. Sometimes he would admit it later on in time.

When someone rails against common sense, logic, OBVIOUS FACTS EXAMPLES AND OBSERVATIONS, and berates and belittles others - all in order to get their way, to change a truth into a falsehood but still try to make it sound like the truth - all for their benefit ... I think that says it all.

I read that kind of pathetic rhetoric all too often here.

For those who care: We used to play various boardgames, a bunch of strategy, and quite a few others. Eventually the group just broke up because we could no longer even get past the first few turns, much less finish a game. Ah memories, lol.

Some other thoughts:

Oh a final thought ...

Im out Peace. Debate, counter, fictionalize, and rationalize all you want.

But at least take note of basic statements I made. Understand what was said.

If its one lesson I've learned from the forums, theres too many players who will beat load of BS to death. Even when they know they are wrong. They'll debate for hours, days, weeks. Even when they know they are wrong.

I quite simply dont have that kind of time. The input is there, enjoy it Or hate it. But I leave it up to you