Trading Post/Market basics
In guild chat we came to be talking about the trading post and how to make a profit on the TP and my impression is that it is an area that some are still a little uncomfortable with. Unfortunately, this short tips list became fairly long. :( If you are comfortable with the trading post, there is nothing here that is new or revolutionary, just basic info for those that are wanting to better understand how to use it.
I will confess, I am a trader. I consider myself a small fish compared to many out there, but from the chat, it seems that it might be helpful to talk a little more about this lovely feature. I am not an economist, nor an expert, but I thought this might be helpful for some that are thinking about using the market to supplement their in-game income and aren't sure how/where to start. I do not tend to give buy or sell tips because I think you should always be leery of 'snake-oil' salesmen, these are just general tips that might be helpful as you think about using the market. Please bear in mind that it is morning and I haven't slept yet plus I have maybe had a few beverage refreshments, so if it doesn't make any sense, that would be partially to blame.
Rule 1: Be realistic in your expectations and decide what level of risk you are comfortable with.
Most of the time 10% is a good profit, for some 5% is good (heck, any profit is better than none). Yes, there are areas where you can make more - some much more and you will likely make more as you become more comfortable with the market, but as in real life the higher the reward the higher the risk. Usually...
Rule 2: If it seems too good to be true, it probably is.
Do your homework. There are tons of tools that are available. Find the tools that work for you and make sense to you. Here are three common ones that I keep marked and handy.
http://www.gw2spidy.com/
http://www.guildwarstrade.com/
http://tpcalc.com/
Like any market there are opportunities for significant returns, but you have to look and separate the good investments from the bad ones. Also, remember that others are doing the same and so expect that if you found it, someone else will too (or already has).
Rule 3: Its a buyer's market part 1. Always remember transaction fees
Bidding (buying) – you do not pay a fee to place a bid. You can order 250 of anything and until it is filled, you can cancel and get your coin back. In other words, if I order 250 X at 25c a unit and someone outbids me by 1c (26c), I can cancel (getting back my original coin) and rebid at 27c. I do not lose anything. As an order gets filled the amount remaining is reduced in your 'items I'm buying' screen, you can cancel orders for the unfilled portion and get that coin back.
Selling – you pay fees. There are two types of fees that you will have to pay to sell anything on the
trading post.
1. The listing fee – the listing fee is a 5% charge that you pay just to have the item appear on the trading post. This is paid upfront at the time of listing. It is not refundable. If you remove your item from the market the listing fee is not returned.
2. The trading post commission/transaction fee – the transaction fee is 10% and is taken from what is ultimately returned to you after the sale.
The trading post does show you this information on the seller pane. When you go to list an item you will see the listing fee and also an area where it shows 'projected profit' (more aptly projected yield after commission). The listing fee shows you what will be deducted from your current coin on hand when you list the item. The projected profit shows you approximately what will be returned to you after the transaction completes. This is approximate as it depends on the quantity purchased in each part of the buying process. If I list 100 items at 6c the total sell price would be 6s and thus the commission 60c. This isn't necessarily the case. If all 100 sold 1 at a time, the commission would be 1s. The reason for this is the trading post rounds the commission for each transaction. The commission on a single item selling for 6c would be 0.6c, but with rounding this is 1c. Conversely if 2 units were purchased at once, the transaction would be 12c and the commission 1.2c, but with rounding 1c. If you are considering flipping items at low margins this can really trip you up, so keep it in mind in your calculations.
Also, please remember that the projected profit is the total sell price minus the 10% commission, to calculate your return, you will need to subtract the listing fee from the projected profit shown.
Rule 4: Its a buyer's market part 2. You do not make money until it sells.
This one seems straight-forward, but it isn't always. When you list an item you may be the lowest listing at that moment. This does not necessarily mean that someone will not undercut you. Prices tend to fluctuate throughout the day and so until you get a feel for a particular market, it is always a good idea to check the price charts on gw2spidy or elsewhere. If you list too high it could take days or weeks for items to move and in that time market conditions may change. Removing and relisting at lower prices is an enemy to your profit – remember you lose the 5% listing fee each time you list.
Rule 5: Its a buyer's market part 3. Patience is a virtue, except when its not.
This goes hand in hand with Rule 4. Sometimes you do not need to be the lowest seller. Many items are high volume and so low listings sell quickly. Being the second or third lowest listing will still ensure a quick move but increase your profit. Once you know your market you will know what to expect and where you can safely list things and still sell them while maximizing profit. Example: someone has 10 of item x listed for 25c, 2 at 26c, 3 at 27c, and 1097 at 28c. If I list for 24c I would be the lowest and likely sell quickly but I do not maximize my profit. I could list at 28c, but I would have to wait for those other 1097 units to sell before any of mine would sell. For a fast and high return, a good place to list would be 27c. Of course this is a simple example and does not account for all potential market conditions.
Rule 6: Sneaky (insert offense phrase of choice) try to trip you up.
Many sellers will automatically list an item to match (or be below) the current lowest listing that shows when they select to sell an item. Guess what, there are sneaky folks out there that count on this. A good rule of thumb is that anytime you see a listing where the max bid and min sell price have a gap that is not approximate to flippable margins you should check the offerings list (from inventory right click and select buy to view or search from market screen). The most common scenario is sell listings that are 1c or 2c higher than the max buy bid price; often upon inspection you will see a gap of 10 to 20c until the next listing. Do not match their sell price, sell at the appropriate higher price.
Also, this can be an opportunity to make some quick coin at their expense. If their sell listing is low enough that the item is flippable, buy up the low stock and relist at the higher appropriate price. It is quick and easy profit for you that pisses off someone that was trying to take advantage of other players rush/lack of knowledge/etc...
Rule 7: Bots are evil, except when they are nice.
I don't condone or encourage botting, I do want them all banned, but they exist and their existence has impact on the market. This is the item that no one really seems to talk about. People talk about bots depressing the market and driving down prices, but they do not talk about the fact that their dumping also means people profit. Do you really know that it is bots doing the selling, no. But, if thousands of buy orders are filled in 250 increments in the matter of seconds what is the most likely explanation?
I really have distaste for this approach, so I won't list specific items, but if you look at listing volumes on gw2spidy you can find a number of examples where the presence of the bots have caused significant temporary drops in the max bid price (bots dumping stock) before the item quickly returns to its previous range. Over the past few weeks, the pattern has seemed to be fairly consistent and predictable.
Rule 8: Fly below the radar, do not overload markets or over sell/bid
This should probably be several rules, but I am starting to get tired :)
Some of the tools out there look at buy and sell order volumes. If you place a significant order in a low volume market you can trigger a buying spree – thus eliminating your likely profit. The opposite is true for large sell orders, in low volume markets you can trigger a sell-off unintentionally. While the price will likely recover, in a low volume market it can take days or weeks. Market manipulation is real and surprisingly easy to do by accident especially with lower volume items. :( Don't get over-zealous in your efforts to make a huge profit or you may end up killing that markets potential.
Rule 9: The most important rule of all.
It doesn't really take much time to turn a profit on the market. You can make a profit with very little time. If you enjoy playing the market, go for it to your hearts content. But, if you enjoy playing the real game do not let the market rob you of that time.
I use the market to supplement my in-game income. Why, I didn't want to have to think about whether or not I had enough coin to purchase what I wanted and needed. I didn't want to feel like I had to farm for ages to get enough gold to buy gems to get X from the gem store. Basically, it frees me up to actually play the game the way that I want to play it.
If this was helpful to anyone, let me know and I will try to find some time to put together some other resources that might be helpful in using the market to profitable ends.
I will confess, I am a trader. I consider myself a small fish compared to many out there, but from the chat, it seems that it might be helpful to talk a little more about this lovely feature. I am not an economist, nor an expert, but I thought this might be helpful for some that are thinking about using the market to supplement their in-game income and aren't sure how/where to start. I do not tend to give buy or sell tips because I think you should always be leery of 'snake-oil' salesmen, these are just general tips that might be helpful as you think about using the market. Please bear in mind that it is morning and I haven't slept yet plus I have maybe had a few beverage refreshments, so if it doesn't make any sense, that would be partially to blame.
Rule 1: Be realistic in your expectations and decide what level of risk you are comfortable with.
Most of the time 10% is a good profit, for some 5% is good (heck, any profit is better than none). Yes, there are areas where you can make more - some much more and you will likely make more as you become more comfortable with the market, but as in real life the higher the reward the higher the risk. Usually...
Rule 2: If it seems too good to be true, it probably is.
Do your homework. There are tons of tools that are available. Find the tools that work for you and make sense to you. Here are three common ones that I keep marked and handy.
http://www.gw2spidy.com/
http://www.guildwarstrade.com/
http://tpcalc.com/
Like any market there are opportunities for significant returns, but you have to look and separate the good investments from the bad ones. Also, remember that others are doing the same and so expect that if you found it, someone else will too (or already has).
Rule 3: Its a buyer's market part 1. Always remember transaction fees
Bidding (buying) – you do not pay a fee to place a bid. You can order 250 of anything and until it is filled, you can cancel and get your coin back. In other words, if I order 250 X at 25c a unit and someone outbids me by 1c (26c), I can cancel (getting back my original coin) and rebid at 27c. I do not lose anything. As an order gets filled the amount remaining is reduced in your 'items I'm buying' screen, you can cancel orders for the unfilled portion and get that coin back.
Selling – you pay fees. There are two types of fees that you will have to pay to sell anything on the
trading post.
1. The listing fee – the listing fee is a 5% charge that you pay just to have the item appear on the trading post. This is paid upfront at the time of listing. It is not refundable. If you remove your item from the market the listing fee is not returned.
2. The trading post commission/transaction fee – the transaction fee is 10% and is taken from what is ultimately returned to you after the sale.
The trading post does show you this information on the seller pane. When you go to list an item you will see the listing fee and also an area where it shows 'projected profit' (more aptly projected yield after commission). The listing fee shows you what will be deducted from your current coin on hand when you list the item. The projected profit shows you approximately what will be returned to you after the transaction completes. This is approximate as it depends on the quantity purchased in each part of the buying process. If I list 100 items at 6c the total sell price would be 6s and thus the commission 60c. This isn't necessarily the case. If all 100 sold 1 at a time, the commission would be 1s. The reason for this is the trading post rounds the commission for each transaction. The commission on a single item selling for 6c would be 0.6c, but with rounding this is 1c. Conversely if 2 units were purchased at once, the transaction would be 12c and the commission 1.2c, but with rounding 1c. If you are considering flipping items at low margins this can really trip you up, so keep it in mind in your calculations.
Also, please remember that the projected profit is the total sell price minus the 10% commission, to calculate your return, you will need to subtract the listing fee from the projected profit shown.
Rule 4: Its a buyer's market part 2. You do not make money until it sells.
This one seems straight-forward, but it isn't always. When you list an item you may be the lowest listing at that moment. This does not necessarily mean that someone will not undercut you. Prices tend to fluctuate throughout the day and so until you get a feel for a particular market, it is always a good idea to check the price charts on gw2spidy or elsewhere. If you list too high it could take days or weeks for items to move and in that time market conditions may change. Removing and relisting at lower prices is an enemy to your profit – remember you lose the 5% listing fee each time you list.
Rule 5: Its a buyer's market part 3. Patience is a virtue, except when its not.
This goes hand in hand with Rule 4. Sometimes you do not need to be the lowest seller. Many items are high volume and so low listings sell quickly. Being the second or third lowest listing will still ensure a quick move but increase your profit. Once you know your market you will know what to expect and where you can safely list things and still sell them while maximizing profit. Example: someone has 10 of item x listed for 25c, 2 at 26c, 3 at 27c, and 1097 at 28c. If I list for 24c I would be the lowest and likely sell quickly but I do not maximize my profit. I could list at 28c, but I would have to wait for those other 1097 units to sell before any of mine would sell. For a fast and high return, a good place to list would be 27c. Of course this is a simple example and does not account for all potential market conditions.
Rule 6: Sneaky (insert offense phrase of choice) try to trip you up.
Many sellers will automatically list an item to match (or be below) the current lowest listing that shows when they select to sell an item. Guess what, there are sneaky folks out there that count on this. A good rule of thumb is that anytime you see a listing where the max bid and min sell price have a gap that is not approximate to flippable margins you should check the offerings list (from inventory right click and select buy to view or search from market screen). The most common scenario is sell listings that are 1c or 2c higher than the max buy bid price; often upon inspection you will see a gap of 10 to 20c until the next listing. Do not match their sell price, sell at the appropriate higher price.
Also, this can be an opportunity to make some quick coin at their expense. If their sell listing is low enough that the item is flippable, buy up the low stock and relist at the higher appropriate price. It is quick and easy profit for you that pisses off someone that was trying to take advantage of other players rush/lack of knowledge/etc...
Rule 7: Bots are evil, except when they are nice.
I don't condone or encourage botting, I do want them all banned, but they exist and their existence has impact on the market. This is the item that no one really seems to talk about. People talk about bots depressing the market and driving down prices, but they do not talk about the fact that their dumping also means people profit. Do you really know that it is bots doing the selling, no. But, if thousands of buy orders are filled in 250 increments in the matter of seconds what is the most likely explanation?
I really have distaste for this approach, so I won't list specific items, but if you look at listing volumes on gw2spidy you can find a number of examples where the presence of the bots have caused significant temporary drops in the max bid price (bots dumping stock) before the item quickly returns to its previous range. Over the past few weeks, the pattern has seemed to be fairly consistent and predictable.
Rule 8: Fly below the radar, do not overload markets or over sell/bid
This should probably be several rules, but I am starting to get tired :)
Some of the tools out there look at buy and sell order volumes. If you place a significant order in a low volume market you can trigger a buying spree – thus eliminating your likely profit. The opposite is true for large sell orders, in low volume markets you can trigger a sell-off unintentionally. While the price will likely recover, in a low volume market it can take days or weeks. Market manipulation is real and surprisingly easy to do by accident especially with lower volume items. :( Don't get over-zealous in your efforts to make a huge profit or you may end up killing that markets potential.
Rule 9: The most important rule of all.
It doesn't really take much time to turn a profit on the market. You can make a profit with very little time. If you enjoy playing the market, go for it to your hearts content. But, if you enjoy playing the real game do not let the market rob you of that time.
I use the market to supplement my in-game income. Why, I didn't want to have to think about whether or not I had enough coin to purchase what I wanted and needed. I didn't want to feel like I had to farm for ages to get enough gold to buy gems to get X from the gem store. Basically, it frees me up to actually play the game the way that I want to play it.
If this was helpful to anyone, let me know and I will try to find some time to put together some other resources that might be helpful in using the market to profitable ends.
