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Odav Klaskion
Byzantium Rising
0
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Posted - 2015.11.09 14:46:41 -
[1] - Quote
I'm fairly new to market PVP so this may be something super simple that I'm just not aware of. What benefit is there for someone to tank the price of an item?
In this case, I'm selling Item A. Suddenly, someone posts a bunch of them at 20% less than I'm asking. I drop my price to match. They then drop another 20%. At this point, my profit margin just got demolished. I'm not incredibly liquid so I'm counting on the ISK from selling these within a short time frame, which is why I chose this fairly highly traded item. I could sit on them to see if the market bounces back but I'd rather not.
The only reason I can see to tank the sale price is to entice someone to buy his whole group at once to keep the price from falling further, which I can't really afford. What am I missing here? |
Tom Hagen
Aliastra Gallente Federation
159
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Posted - 2015.11.09 15:07:17 -
[2] - Quote
"The only reason I can see to tank the sale price is to entice someone to buy his whole group at once to keep the price from falling further," Lets put that at number 1.
2. This is market PvP, by demolishing your profit and your liquidity he will also slow your progress when it comes to trading, and possibly you ability to branch out and compete on several products. Alternative force someone out of the market who rather go and run mission or such because it isn't lucrative to stay on the market.
3. When you keep following him down the rabbit hole, at one point the price is so low, close to production cost or lower so it makes sense for him to buy up your stock and then raise the price again. Almost free inventory for him.. Of course it isn't "free", but when you buy out high velocity items at production cost you at least don't have to bother with production time or transporting goods.
This was just a quick reply, there are certainly more reasons..
I would recommend to split your inventory in different sell orders and keep pushing him down with just one or two in order to see where his limit are. Maybe he will buy you out, and you will have to consider if it makes sense to push him down again and buy him out before his limit, or just ditch your stock on him and move on. If I wasn't ready to compete at my competitors level, I usually left a stack above his breaking point just to damage his profit margin, see reason 2.. |
Odav Klaskion
Byzantium Rising
0
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Posted - 2015.11.09 16:38:44 -
[3] - Quote
Thanks for the insights! I won't be following him further but I think I will try splitting my stock and running him lower. |
Spruillo
Spruillo Corp
57
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Posted - 2015.11.09 16:48:54 -
[4] - Quote
spread orders out too, 20-60 items each if your in the t2 module market. It also helps if you actually play the game and know what stuff is worth. Quick example, 300k cargo expanders transported to a sub-hub where they sell 4 500k and move quickly
PLAYIN SPACE TRUCKS VROOM VROOM
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Spruillo
Spruillo Corp
57
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Posted - 2015.11.09 16:51:09 -
[5] - Quote
Spruillo wrote:spread orders out too, 20-60 items each if your in the t2 module market. It also helps if you actually play the game and know what stuff is worth. Quick example, 300k cargo expanders transported to a sub-hub where they sell 4 500k and move quickly Guns do well too, the competition is stiffer buying or selling. Peripheral items such as t2 nanofibers etc buy and sell quicker And im sick and tired of hearing this market pvp crap. It's making a buck, no pvp involved. You want pvp, undock.
PLAYIN SPACE TRUCKS VROOM VROOM
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HeXxploiT
Big Diggers Get Off My Lawn
188
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Posted - 2015.11.09 17:17:56 -
[6] - Quote
It looks like the question you are asking is slightly different than what the thread title suggested but I will post this just because it's on the same topic.
Eve's market as realistic as it is tends to be exaggerated. There are a great many items where the bid and the ask have a significant spread.
If i decide a particular T1 item is going to increase in price in the future I begin putting buy orders in to acquire the item at the lowest possible price expecting to accumulate stock over an extended period of time. Let's say I want to acquire 100,000 of an item where the ask is 400,000isk and the bid is 80,000isk. I've comfortably picked up 20,000 of the item and unexpectedly over the course of a week five new buy orders have appeared driving the bid up to 250,000isk.
So the buy orders(bid) look like this;
Quantity---price 500---------250,000 500---------250,000 1000-------200,000 700--------150,000 750---------140,000 1000-------80,000
I have 20,000 of this item. Experience has taught me that if I can wipe out those top five bids I will then be able to begin buying the item back at a lower price and significantly increase my profits in the long run.
This is a commonplace trading tactic. |
Talon Kane
New Eden Independent Traders Association
29
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Posted - 2015.11.09 17:52:46 -
[7] - Quote
You can also study the market graphic and try to speculate wether or not the price will go back up. (if you can afford some of your assets and liquidity to be on hold). Once the sell order price gets very close to the buy orders price, many people will choose to a) cancel their sell order and sell quick for a fast isk injection or b) buyer will buy the low priced sell orders, in both case, it will most probably mean a raise into the sell order price. If you don't have the capital to wait for the price to go back up, I suggest you sell asap, even if you lose a little bit of isks, then you can pick other items to trade (also you need to diversify, to avoid situations like these).
« I must not fear. Fear is the mind-killer ».
GÖúGÖúGÖú I offer a character pricecheck service GÖúGÖúGÖú
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Cista2
Caldari Provisions Caldari State
178
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Posted - 2015.11.09 17:56:18 -
[8] - Quote
Odav Klaskion wrote:I won't be following him further There's the reason :)
My channel: "Signatures"
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Recommended: "The Biomass Bar" (for corpse selling)
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Sabriz Adoudel
Black Hydra Consortium.
5469
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Posted - 2015.11.09 21:12:39 -
[9] - Quote
Sometimes the person believes (rightly or wrongly) that the item is fundamentally overpriced and wants out of the market.
I did this with Rattlesnake hulls when the exploration changes occurred, sold into the initial panic but before the full consequences were understood by others. Avoided big losses by doing so.
Other times, it's not a response to a fundamental change but just an attempt to ruin your profits.
Lastly there's the impact of T2 BPO owners which are very noticeable on some items - BPO owners might run a month worth of production then dump it all on the market with one order and go back to producing - those orders are often lower priced. For those, I wait a week after their monthly dump.
I support the New Order and CODE. alliance. www.minerbumping.com
Sabriz's Rule: "Any time someone argues for a game change claiming it is a quality of life change, the change is actually a game balance change".
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Kaivar Lancer
Placid Peace Corps
704
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Posted - 2015.11.10 11:08:09 -
[10] - Quote
It depends on the quantity of the items in the order that's undercutting you.
If there's a small amount, it's probably market PVP and perhaps the trader is trying to beat you down to production / minerals price and snap up your stock, especially if you're selling a large quantity.
If it's a large amount, then the trader is dumping stock en masse. You can do some "market pvp" yourself, undercut him with a small order, and snap up his stock when he takes the bait. |
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Kitah Ferranti
Tulip Factory
2
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Posted - 2015.11.10 11:16:45 -
[11] - Quote
If someone undercuts my price, I will aggressively undercut them until there is no more profit to be had for anyone. They then have a choice: to go away to other items (great!), buy me out (great!), or tank their price to below cost so that I can buy it from them to resell (great!). On items that are expensive for me, I prefer they do option 2 so that I can free capital; on items that I know well and have a good handle on, I prefer they take option 3. That said anytime I deter another trader from messing in my items is always a good turnout.
The reverse situation is also employed by me. If someone outbids me, I will close the spread such that the item looks much less attractive to trade in. If they follow my bids, I will try to lure them into overbidding, meanwhile I will be scouring the surrounding regions for cheaper instances of the item to dump on them. The item needs to be at a certain price point and volume for me to get involved with in this manner: enough to be worth my time; not enough to wreck me if my plan doesn't work out. |
Sabriz Adoudel
Black Hydra Consortium.
5481
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Posted - 2015.11.10 21:52:14 -
[12] - Quote
Kitah Ferranti wrote:If someone undercuts my price, I will aggressively undercut them until there is no more profit to be had for anyone. They then have a choice: to go away to other items (great!), buy me out (great!), or tank their price to below cost so that I can buy it from them to resell (great!). On items that are expensive for me, I prefer they do option 2 so that I can free capital; on items that I know well and have a good handle on, I prefer they take option 3. That said anytime I deter another trader from messing in my items is always a good turnout.
The reverse situation is also employed by me. If someone outbids me, I will close the spread such that the item looks much less attractive to trade in. If they follow my bids, I will try to lure them into overbidding, meanwhile I will be scouring the surrounding regions for cheaper instances of the item to dump on them. The item needs to be at a certain price point and volume for me to get involved with in this manner: enough to be worth my time; not enough to wreck me if my plan doesn't work out.
I prefer to close the spread by placing a high buy order for 1 item at each of several awkward to reach lowsec stations.
I support the New Order and CODE. alliance. www.minerbumping.com
Sabriz's Rule: "Any time someone argues for a game change claiming it is a quality of life change, the change is actually a game balance change".
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Kitah Ferranti
Tulip Factory
2
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Posted - 2015.11.11 11:05:25 -
[13] - Quote
Sabriz Adoudel wrote: I prefer to close the spread by placing a high buy order for 1 item at each of several awkward to reach lowsec stations.
This is a pretty obnoxious/smart tactic. Will try it out. |
Sabriz Adoudel
Black Hydra Consortium.
5485
|
Posted - 2015.11.12 00:05:39 -
[14] - Quote
Kitah Ferranti wrote:Sabriz Adoudel wrote: I prefer to close the spread by placing a high buy order for 1 item at each of several awkward to reach lowsec stations.
This is a pretty obnoxious/smart tactic. Will try it out.
It is hilarious when a large order then '0.01 ISKs' your order in the hub, and you then proceed to dump your entire stack on that order.
I support the New Order and CODE. alliance. www.minerbumping.com
Sabriz's Rule: "Any time someone argues for a game change claiming it is a quality of life change, the change is actually a game balance change".
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TheSmokingHertog
TALIBAN EXPRESS
355
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Posted - 2015.11.13 02:15:56 -
[15] - Quote
Odav Klaskion wrote:I'm fairly new to market PVP so this may be something super simple that I'm just not aware of. What benefit is there for someone to tank the price of an item?
In this case, I'm selling Item A. Suddenly, someone posts a bunch of them at 20% less than I'm asking. I drop my price to match. They then drop another 20%. At this point, my profit margin just got demolished. I'm not incredibly liquid so I'm counting on the ISK from selling these within a short time frame, which is why I chose this fairly highly traded item. I could sit on them to see if the market bounces back but I'd rather not.
The only reason I can see to tank the sale price is to entice someone to buy his whole group at once to keep the price from falling further, which I can't really afford. What am I missing here?
The other player wants you out of his / her market.
"Dogma is kind of like quantum physics, observing the dogma state will change it." ~ CCP Prism X
"Schrödinger's Missile. I dig it." ~ Makari Aeron
-= "Brain in a Box on Singularity" - April 2015 =-
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Jerry T Pepridge
Meta Game Analysis and Investment INC.
332
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Posted - 2015.11.13 03:19:40 -
[16] - Quote
Since coming back a few weeks ago, i have noticed (at least my TZ) most of my shortlist is dead/asleep market pvp wise.
i still get undercut but not on every item. not a real need to be aggressive - set price point and leave it.
must be worse for yanks & euros, the competition i mean. |
TheSmokingHertog
TALIBAN EXPRESS
355
|
Posted - 2015.11.13 03:44:19 -
[17] - Quote
Jerry T Pepridge wrote:Since coming back a few weeks ago, i have noticed (at least my TZ) most of my shortlist is dead/asleep market pvp wise.
i still get undercut but not on every item. not a real need to be aggressive - set price point and leave it.
must be worse for yanks & euros, the competition i mean.
Just watchlist people making volume in your markets, decide your price when they go offline.
"Dogma is kind of like quantum physics, observing the dogma state will change it." ~ CCP Prism X
"Schrödinger's Missile. I dig it." ~ Makari Aeron
-= "Brain in a Box on Singularity" - April 2015 =-
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Jerry T Pepridge
Meta Game Analysis and Investment INC.
332
|
Posted - 2015.11.13 04:06:42 -
[18] - Quote
TheSmokingHertog wrote:Jerry T Pepridge wrote:Since coming back a few weeks ago, i have noticed (at least my TZ) most of my shortlist is dead/asleep market pvp wise.
i still get undercut but not on every item. not a real need to be aggressive - set price point and leave it.
must be worse for yanks & euros, the competition i mean. Just watchlist people making volume in your markets, decide your price when they go offline.
not just a pretty face are you |
Pookoko
Sigma Sagittarii Inc.
132
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Posted - 2015.11.14 02:02:35 -
[19] - Quote
In the earlier days many years ago when I started trading I had to turn items quickly too in order to keep cash flowing.
There are already good ideas here in your situation, but once you build more capital and can afford to let them sit on market, there are also some items that you can put up on sell orders and forget about, because updating market orders constantly to undercut others can get tiring & very time consuming.
I do this normally when I'm going away for a weekend or on a holiday or something. Just place your sell orders at price point that is somewhat reasonable (obviously this is the tricky part and where you need to have a good 'feel' for the price of an item), and by the time you come back it is quite likely they have all been sold without you babysitting them & 0.01 isking them every day. |
Tear Jar
Glorious Revolutionary Armed Forces of Highsec
348
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Posted - 2015.11.14 02:32:25 -
[20] - Quote
Odav Klaskion wrote:I'm fairly new to market PVP so this may be something super simple that I'm just not aware of. What benefit is there for someone to tank the price of an item?
In this case, I'm selling Item A. Suddenly, someone posts a bunch of them at 20% less than I'm asking. I drop my price to match. They then drop another 20%. At this point, my profit margin just got demolished. I'm not incredibly liquid so I'm counting on the ISK from selling these within a short time frame, which is why I chose this fairly highly traded item. I could sit on them to see if the market bounces back but I'd rather not.
The only reason I can see to tank the sale price is to entice someone to buy his whole group at once to keep the price from falling further, which I can't really afford. What am I missing here?
To free up capital.
You can sit on 10 billion isk in item A while waiting for the price to rise(which may or may not happen). Or you can sell the items quickly and move onto the next venture, hopefully making more money than you would have sitting on item A. |
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Teckos Pech
The Executives Executive Outcomes
3646
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Posted - 2015.11.14 04:28:14 -
[21] - Quote
Kitah Ferranti wrote:If someone undercuts my price, I will aggressively undercut them until there is no more profit to be had for anyone.
Including yourself.
Kitah Ferranti wrote:They then have a choice: to go away to other items (great!), buy me out (great!), or tank their price to below cost so that I can buy it from them to resell (great!).
With a market price that is now very low or even below cost...meaning unless you sit on the inventory you lose money, and even if you sit on the inventory you have money tied up not earning you a return, meaning you lose money.
On a...theoretical note, if there were a barrier to entry to a market then driving the price down could, in theory be used to keep competitors our of the market or drive them out of the market. Problem is there are not many barriers to entry in markets. For example a barrier to entry would be a sunk cost. But there are not too many sunk costs in Eve. Another barrier could be regulatory compliance...but again, not in Eve. Brand loyalty could be a barrier to entry, but in most markets that is not a factor as branding is pointless. Patents and intellectual property laws can be a barrier to entry...but not in EVE as those just don't exist. Another problem is you have to be able to meet the demand at the lower price, all of it, or the price will start to go back up.
Limit pricing can be a possible viable strategy to obtain or retain market power. But in practice it rarely works. Part of the reason is that once a competitor enters the market limit pricing is basically alot like cutting off one's nose to spite one's face.
Upgrading Local to Eliminate All AFK Influence
So Local Chat vanished, now what?
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Paul Pohl
blue media poetry
27
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Posted - 2015.11.16 01:54:56 -
[22] - Quote
a few things
- your competitor may be a speculator, who has bought their goods at rock bottom prices - so has no real interest in the actual selling price - or they may view the cost of the items in a different way, i.e they have already spent the time mining the materials and not care about the cost of the materials - as they have already spent the time, it doesn't matter to them the price as long as there is some recompense - or they they may have no idea what they are doing
as to what you can do
- you can set your price, leave it on a three month sell order and if it sells it sells - this largely depends on whether or not you think the stock of your competitor can be burnt off, and you items sell - continue to chase the price down - take the goods off the market, and relist them somewhere else - often it is useful not to trade in the major hubs, but to pick up trade in stations close to them - say two or three jumps away
but either way it's a question of looking at what you are selling first - some things are just better sent for reprocessing |
Teckos Pech
The Executives Executive Outcomes
3667
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Posted - 2015.11.17 05:31:01 -
[23] - Quote
Paul Pohl wrote:a few things
- your competitor may be a speculator, who has bought their goods at rock bottom prices - so has no real interest in the actual selling price
Why? Doesn't he like to maximize his profits? Also, I don't think you get what speculators do. They take advantage of information about markets and help ensure that such information is reflected in the price. For example, if a speculator learns about some sort of negative supply shock before others in the market he'll go out and start buying driving the price up. If people know he is a speculator and think he might have an inside track on something they might follow him, further pushing up the price. So instead of the price rising once the information is released to the general public it happens sooner sending the correct price signals.
Quote:- or they may view the cost of the items in a different way, i.e they have already spent the time mining the materials and not care about the cost of the materials - as they have already spent the time, it doesn't matter to them the price as long as there is some recompense
If you mine the minerals they are not "free" because of opportunity cost. That is, you could simply sell the minerals directly and pocket that ISK. So technically it becomes a cost if you don't sell them and instead use them to make something.
Quote:- or they they may have no idea what they are doing
I think you need to change the word "they" some something a bit closer to home.
Upgrading Local to Eliminate All AFK Influence
So Local Chat vanished, now what?
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Sheeth Athonille
Rabid Dogz Mining Void..
53
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Posted - 2015.11.17 05:44:56 -
[24] - Quote
Teckos Pech wrote:Quote:- or they may view the cost of the items in a different way, i.e they have already spent the time mining the materials and not care about the cost of the materials - as they have already spent the time, it doesn't matter to them the price as long as there is some recompense If you mine the minerals they are not "free" because of opportunity cost. That is, you could simply sell the minerals directly and pocket that ISK. So technically it becomes a cost if you don't sell them and instead use them to make something.
You're assuming they know what they're doing. Ever talk to many miners? A lot of them dont realize this unless they're told about it. And a hole hell of a lot of them reject the idea even after being told |
Cista2
Caldari Provisions Caldari State
181
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Posted - 2015.11.17 08:09:23 -
[25] - Quote
Teckos Pech wrote:Doesn't he like to maximize his profits? No. Maximising your profits is only smart if maximising your profits is your goal in EVE. If growing your wealth is your goal in EVE, then maximising your profits is secondary.
The two are not the same. Money tied up in stock is money (temporarily) lost. You may therefore often choose to sell with no profit or with a loss, in order to grow your wealth.
Let's say, the item you are looking at is item X. Your opposition has the choice between making 10 bn isk on item X - or he can pull out fast and make 0 bn ISK on item X , but then make 20 bn ISK on item Y. The choice should be easy. He didn't maximise his profits on item X, but his wealth will grow with 20 bn instead of 10 bn.
EVE traders make decisions like these every day. The morale is, don't conclude that your opponent is a moron, simply because you do not understand what he is up to :)
My channel: "Signatures"
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Recommended: "The Biomass Bar" (for corpse selling)
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Teckos Pech
The Executives Executive Outcomes
3668
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Posted - 2015.11.17 20:41:41 -
[26] - Quote
Cista2 wrote:Teckos Pech wrote:Doesn't he like to maximize his profits? Goodness no, you should never try to maximise your profits, that would be silly unless maximising your profits on particular items is your singular goal in EVE. If growing your wealth is your goal in EVE, then maximising your profits becomes a distant second. The two are not the same. Money tied up in stock is money (temporarily) lost. You may therefore often choose to sell with no profit or with a loss, in order to grow your wealth. Let's say, the item you are looking at is item X. Your opposition has the choice between making 10 bn isk on item X - or he can pull out fast and make 0 bn ISK on item X , but then make 20 bn ISK on item Y. The choice should be easy. He didn't maximise his profits on item X, but his wealth will grow with 20 bn instead of 10 bn. EVE traders make decisions like these every day. And in fact the decisions are less clearcut that I made them out to in my example, because the market is a flowing tapestry of prices going up and down, where you decide at which point to buy or sell many different items, in order to have sufficient cash at hand and to maximise the growth of your wealth. (Also: you can never truly maximise your profit on a specific item, because you do not know if the sell price on that item could be higher 2 years or 20 years from now. ) The morale is, don't conclude that your opponent is a moron, simply because you do not understand what he is up to :)
OMG....
Money tied up in stock is not lost, it is merely in an illiquid form. Clearly that stock has value otherwise you would not have bought nor would you be trying to sell it. In fact, you must have thought that price you bought it at was "too low".
And maximizing profits means you maximize your revenues less costs of everything you are selling. So that covers your example with X and Y. Yes, dump your stock of X and recover your investment and switch to Y.
However, re-read the quote I was responding too. The statement was that because he was a speculator he has no interest in the price level because he bought low. There was nothing about getting into another even more profitable market.
Upgrading Local to Eliminate All AFK Influence
So Local Chat vanished, now what?
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Dethmourne Silvermane
Garoun Investment Bank Gallente Federation
75
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Posted - 2015.11.17 23:37:45 -
[27] - Quote
Sabriz Adoudel wrote:Kitah Ferranti wrote:If someone undercuts my price, I will aggressively undercut them until there is no more profit to be had for anyone. They then have a choice: to go away to other items (great!), buy me out (great!), or tank their price to below cost so that I can buy it from them to resell (great!). On items that are expensive for me, I prefer they do option 2 so that I can free capital; on items that I know well and have a good handle on, I prefer they take option 3. That said anytime I deter another trader from messing in my items is always a good turnout.
The reverse situation is also employed by me. If someone outbids me, I will close the spread such that the item looks much less attractive to trade in. If they follow my bids, I will try to lure them into overbidding, meanwhile I will be scouring the surrounding regions for cheaper instances of the item to dump on them. The item needs to be at a certain price point and volume for me to get involved with in this manner: enough to be worth my time; not enough to wreck me if my plan doesn't work out. I prefer to close the spread by placing a high buy order for 1 item at each of several awkward to reach lowsec stations.
When I bother to station trade, I just ignore this sort of tactic by ignoring orders outside station. Not the best option, but it works fine enough when doing, say, Jita 4-4 trading.
Interested Party (TM)
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Paul Pohl
blue media poetry
28
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Posted - 2015.11.17 23:49:10 -
[28] - Quote
Teckos Pech wrote:
I think you need to change the word "they" some something a bit closer to home.
Change it to 'you'?
Ok
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Rhivre
TarNec Invisible Exchequer
810
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Posted - 2015.11.18 12:34:49 -
[29] - Quote
Teckos Pech wrote:
And maximizing profits means you maximize your revenues less costs of everything you are selling. So that covers your example with X and Y. Yes, dump your stock of X and recover your investment and switch to Y.
Maximizing profit is not always better than fast turnover.
Fluffy Bunny Pic!
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TheSmokingHertog
TALIBAN EXPRESS
355
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Posted - 2015.11.19 09:22:30 -
[30] - Quote
Rhivre wrote:Teckos Pech wrote:
And maximizing profits means you maximize your revenues less costs of everything you are selling. So that covers your example with X and Y. Yes, dump your stock of X and recover your investment and switch to Y.
Maximizing profit is not always better than fast turnover.
What this man said. Sometimes its better to focus on turnover.
"Dogma is kind of like quantum physics, observing the dogma state will change it." ~ CCP Prism X
"Schrödinger's Missile. I dig it." ~ Makari Aeron
-= "Brain in a Box on Singularity" - April 2015 =-
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