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What's up with reducing profit?

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apostrophee	Posted - 2009.09.27 03:50:00 - [1] I know there's market PVP and all that, but what is up with the following (seems to happen alot): * Product A is at 1mil buy and 2mil sell * There is some 1 isking going on around both ends * AwesomeMarketDude comes along and places a 1.2mill buy * The 1 isking carries on at the new price of 1.2mill * There is 20% less profit in the item The only thing I can think of (aside from stupidity) is trying to reduce the number of players competing, and hence increase your buy/sell volumes to increase profitability. Does it work? Another reason? BTW I'm looking at reasonably stable high vol items, that in theory should trade with, say, 1mil profit, but instead trade with 700k, seemingly only because someone bumped 300k off the buy or sell; as opposed to general market fluctuations or manipulations.
Brock Nelson Caldari Flux Technologies Inc	Posted - 2009.09.27 03:52:00 - [2] Here's another thought; Seller try to drive the buy price up by setting up fake buy order.
apostrophee	Posted - 2009.09.27 04:27:00 - [3] Originally by: Brock Nelson Here's another thought; Seller try to drive the buy price up by setting up fake buy order. Hmm, hadn't thought of that. Though in the cases I'm looking at, it would make more sense just to put sell orders up half way between than bump the buys by so little.
Sernum the united	Posted - 2009.09.27 06:12:00 - [4] sometimes i do this. I will increase something by a decent amount. One isk it for a little then increase it again. Then dump some mods on the market and have the price go back to normal. I only do it if i have a large amount of items or i see a item dropping in price soon so i try to get rid of it fast. Sig removed, inappropriate content. If you would like further details please mail [email protected] - Saint
rubico1337 Caldari Mnemonic Enterprises	Posted - 2009.09.27 06:15:00 - [5] Edited by: rubico1337 on 27/09/2009 06:15:00 sometimes people do it just to convert the "lost" isk in to tears this thread shows they have a pretty good exchange rate
apostrophee	Posted - 2009.09.27 06:31:00 - [6] Originally by: rubico1337 Edited by: rubico1337 on 27/09/2009 06:15:00 sometimes people do it just to convert the "lost" isk in to tears this thread shows they have a pretty good exchange rate I covered that with "stupidity". Case in point: do you see any tears here? I'm simply curious. In fact I imagine seeing these sort of tears would be pretty rare, in which case you could just imagine some tears without even playing eve to get ur thrills :P @Sernum: makes sense, specially as someone filled a huge buy order for one item just today. lol off to watch the crash
Hamno M. Corp Mostly Harmless	Posted - 2009.09.27 11:36:00 - [7] I have done market orders such as that in the past. So you look at a item that has a 1 mil buy and a 2 mil sell. I am going to buy 500 of that unit to haul somewhere else. Do I want to pay full price? Nah. Do I want to sit there and 0.1 isk each and every trader out there? Nah. Do I want to just throw up an order for 1.5 million, walk away for a day while a few people 0.1 isk me but most dont and then get my items? Sure. Then I take my items elsewhere and leave the "normal" bid-ask spread to stabilize. The NEW M.Corp Data Hub - Check it out!
Reignar Gnalf Amarr	Posted - 2009.09.27 11:54:00 - [8] I sometimes do it myself. The way I see it is a too large margin attracts a lot of buyers so it can be more profitable to reduce the competition a bit by reducing the margin. Also, this I don't know for sure but I imagine there are more people willing to sell to the buy orders if they are reasonably priced instead of going through the pain of 0.01 isk war when selling at the sell order price. I know for sure I wouldn't sell to buy orders at 50% of the price of the sell orders, but I might be more inclined to sell at 80%. Thus you should be able to both reduce teh competition and increase the units sold to the buy orders at the same time, albeit at a lower profit per unit you get to buy.
Rhivre Caldari Built to Last New Eden Retail Federation	Posted - 2009.09.27 12:06:00 - [9] I do this sometimes because, you might be selling it for 2m, but I am shipping it outside to sell for 6m for example, so I cba with messing around with 0.01, sometimes I may even put an order up at 1.5m because I want the item fast, and then everyone trading on the station can get back to their 0.01ing
RAW23	Posted - 2009.09.27 12:25:00 - [10] Edited by: RAW23 on 27/09/2009 12:26:50 The last few replies seem very useful but they address a slightly different question to that posed by the OP. Forgive me if I'm wrong, but I thought the question was specifically aimed at increases that were not sufficient to drive off the competition. So, a jump from 1mil to 1.2 isn't really going to cause many people to say, well, there's only an 800k profit there, it's not worth my time, but a 1mil profit was. Rhivre's example of halfing the profit, I think, falls into a slightly different category as this really would drive off some of the competition. But a 20% fall doesn't seem too ruinous or, indeed, tear inducing, just mildly annoying.
Saartje Sarel	Posted - 2009.09.27 14:13:00 - [11] Most people are idiots? Move along now. Nothing to see here. PS: The anal 0.1 stuff just promotes greater frustration/excess among the non trader player, usually mission runners, who just want to dump their items quick and bank the isk and will drop in 100k increments without beading up and needing an ice bath.
apostrophee	Posted - 2009.09.27 20:41:00 - [12] Thanks for the insight. RAW is right tho, I see the odd order that I recognize as a temp and leave it alone (eg in that example, buying at 1.5+mill). I think I'll put it down to the randomness that is bound to occur with thousands of people trading in a market.
Far Wanderer Gallente Dominium Brotherhood	Posted - 2009.09.28 05:52:00 - [13] I will behave like "AwesomeMarketDude" quite often because it tends to result in faster and more consistent sells to my buy order. A top of the list buy order that's well above the next couple of .1 isk-difference-between-them buy orders stands out and, in my opinion, appears as a better value buy order in the mind of someone looking to offload an item. While the 1-isking does happen from time to time in response to my large raises, it's not always instantaneous, so more often than not I get the units sold to my order. When I do see knee-jerk 1-isking responses I try to use that against my competitor. That is, I re-raise them to somewhere around 20% above Jita (or Rens or whatever is closer to where I'm operating) and then buy out of that market to re-sell to the 1-isker. Sure they get their buy order taken care of, but I get the satisfaction of knowing they paid more than they should have for what they bought, with me pocketing the difference and a temporary obstacle to my own buy order removed.
Tau Cabalander Caldari	Posted - 2009.09.28 07:03:00 - [14] I've unintentionally pushed the price of so many things up, simply because I refuse to play the 0.01 ISK game, and there are so many dumb traders (or bots). * I want to buy an item, but I don't want to pay the current sell order price, so I place a buy order a fair margin above the current buy orders, say 25,000 ISK. Quantity 1 or 2. * Market bot comes along and 0.01 ISK me with quantity 100 or more. He's just lost 2.5 million! * Market bot's buddies do the same! * Suddenly the buy price has jumped quite a bit. My small buy order will never get filled now.
Dariah Stardweller	Posted - 2009.09.28 07:29:00 - [15] All valid reasons. Sometimes I just want items FAST but not at the sell order level price. So I just outbid the highest buy order by a decent amount, and keep doing that every time I get 0.01 isked. There is a good chance they will be put off by the rapidly decreasing profit margin and let me get my order filled.
clixoras	Posted - 2009.09.28 08:33:00 - [16] Originally by: Tau Cabalander * Market bot comes along and 0.01 ISK me with quantity 100 or more. He's just lost 2.5 million! * Market bot's buddies do the same! * Suddenly the buy price has jumped quite a bit. My small buy order will never get filled now. Do you actually have any proof there are bots out there that control market orders? if so. i think CCP should look into this.
Far Wanderer Gallente Dominium Brotherhood	Posted - 2009.09.28 08:54:00 - [17] Originally by: clixoras Do you actually have any proof there are bots out there that control market orders? if so. i think CCP should look into this. For the regions (Essence, Genesis, Sinq Laison) and portions of the market I operate in (T2 modules), I have not seen the sort of .1 ISK insta-raises people are talking about. If there's some sort of proof or pattern, I'd sure like to know about it.
small chimp	Posted - 2009.09.28 11:58:00 - [18] Yes but if the buy is 1m and sell is 2m and the volume is high: everybody would still follow if the buy price goes to 1.3m?
Ambo I've Got Nothing	Posted - 2009.09.28 12:04:00 - [19] Originally by: apostrophee I know there's market PVP and all that, but what is up with the following (seems to happen alot): * Product A is at 1mil buy and 2mil sell * There is some 1 isking going on around both ends * AwesomeMarketDude comes along and places a 1.2mill buy * The 1 isking carries on at the new price of 1.2mill * There is 20% less profit in the item The only thing I can think of (aside from stupidity) is trying to reduce the number of players competing, and hence increase your buy/sell volumes to increase profitability. Does it work? Another reason? BTW I'm looking at reasonably stable high vol items, that in theory should trade with, say, 1mil profit, but instead trade with 700k, seemingly only because someone bumped 300k off the buy or sell; as opposed to general market fluctuations or manipulations. I used to do this when I traded. The primary reason was simply that I couldn't be bothered to update my order very often and if I make a larger change then either I'll have longer with my order at the top of the pile or, when someone does overbid me, they'll be making less profit than they would have been. I always made plenty of money so I carried on doing it. Usually, when I 0.01 isked, I'd get less movement = less profit. I do it now because if I know that I use a lot of item x on my ships for PvP then I'm better off placing a buy order for 40 of that item now @ 1.2 mil than buying then off the market as I need them for 2 mil. --------------------------------------
Ferkimer Burns Perkone	Posted - 2009.09.28 14:08:00 - [20] One time I did this just to see if someone would make a post about it.
Augeas Anvil of Creation	Posted - 2009.09.28 16:29:00 - [21] The Jita market for medium ACR rigs was interesting over the weekend. The price spiked, whether caused by manipulation, demand or supply, it hardly matters. I had a decent stash of these rigs - I'd been waiting for the price to rise. So I set up a sell order up for some of my rigs, just below the inflated sell price. Unsurprisingly, I was instantly undercut. So I hacked my order down by a respectable amount. Again, I was undercut, so I undercut further - clearly giving the message that I was prepared to destroy the market. A minute later my wallet spiked... yes, I'd been bought out. Excellent. So I placed another sell order for another 10, just above my previous price. These got bought out too. A while later I'd sold all my stock for a very favourable price for virtually no effort. That wouldn't have happened if I'd been 0.01ing.
Signore Kaeota Caldari Caelum Incognitum	Posted - 2009.09.28 16:32:00 - [22] Originally by: Augeas The Jita market for medium ACR rigs was interesting over the weekend. The price spiked, whether caused by manipulation, demand or supply, it hardly matters. I had a decent stash of these rigs - I'd been waiting for the price to rise. So I set up a sell order up for some of my rigs, just below the inflated sell price. Unsurprisingly, I was instantly undercut. So I hacked my order down by a respectable amount. Again, I was undercut, so I undercut further - clearly giving the message that I was prepared to destroy the market. A minute later my wallet spiked... yes, I'd been bought out. Excellent. So I placed another sell order for another 10, just above my previous price. These got bought out too. A while later I'd sold all my stock for a very favourable price for virtually no effort. That wouldn't have happened if I'd been 0.01ing. I love you, and all people like you. Can you get together and breed please? Buying out low orders and reselling makes a nice profit -_-_-_- I, Signore Kaeota, hereby apologise for any and all offence caused by the contents of this above post, and all others that I have written, or otherwise been responsible for. -_-_-_
Aelana Anais Gallente Night Walkers Cold Fusion Syndicate	Posted - 2009.09.28 16:34:00 - [23] Ok a couple of thoughts for you... * Profit margin is not profit... stop mixing the two up... if I can reduce the margin and drive folks out of the market thus giving me a potential higher market share, I will, every time. Because that higher market share over time will net me more profit despite the lower profit margin. (just don't be stupid and go negative on your profit margin) People who complain about people reducing profit are either being woefully inprecise or not understanding basic fundamentals. * Not everyone likes to sit around and 1isk. I have found if I bid in 5% profit margin increments (I have a spreadsheet that auto-calculates this after I put in mineral values on the items I trade in) I end up with more of my buy orders filled with a lot less effort, I have even gone a whole week without altering my buy orders or even looking at them and had a good number of them filled. Remember I am going for turnover and volume... I don't rely on one buy order, I have many out there if even 10% of them pay out, I make an acceptable amount.
Scout Ops	Posted - 2009.09.28 17:38:00 - [24] Originally by: small chimp Yes but if the buy is 1m and sell is 2m and the volume is high: everybody would still follow if the buy price goes to 1.3m? Definitely yes. Seen that many times. Originally by: apostrophee I covered that with "stupidity". Case in point: do you see any tears here? I'm simply curious. There you go: Originally by: apostrophee * AwesomeMarketDude comes along and places a 1.2mill buy * The 1 isking carries on at the new price of 1.2mill * There is 20% less profit in the item The only thing I can think of (aside from stupidity)
Tau Cabalander Caldari	Posted - 2009.09.28 19:13:00 - [25] Originally by: clixoras Originally by: Tau Cabalander * Market bot comes along and 0.01 ISK me with quantity 100 or more. He's just lost 2.5 million! * Market bot's buddies do the same! * Suddenly the buy price has jumped quite a bit. My small buy order will never get filled now. Do you actually have any proof there are bots out there that control market orders? if so. i think CCP should look into this. It is very hard to distinguish an acive trader that is an idiot from a bot. I'll give them the benefit of the doubt and assume they are just a poorly written bot, because it's hard for me to comprehend such stupidity.
popnik Traders Buisness Syndicate	Posted - 2009.09.28 20:02:00 - [26] a wise man once said to me..."popnik, if it was easy, everybody would be doing it."
Dramaticus GoonFleet GoonSwarm	Posted - 2009.09.28 21:10:00 - [27] the market is full of idiots who think that not only is their time free, but anything accrued during it and their pricing reflects that. this is one market not driven by rational actors. Please don't use RL pictuers of players in Sig without permission. - WeatherMan
Time Being	Posted - 2009.09.28 21:18:00 - [28] I do this. Mostly for 'building block' items i.e. Salavge If i just want to build say 5 units of RIG A and i need salavage bits A B and C and the sells are 1M a unit and buys are 500k a unit i just throw up some buys at 800K a unit for the 20 units or whatever i need. I save money by not paying sell order prices, i hopefully get my order filled quickly, and then everyone else goes back to there normal 500k But most times someone just 1ISK's me so i just jump up another 100k or whatever As long as im buying BELOW the lowest sell, im saving money, in the mean time im making all the other buyers who follow me up all like i care, i just wanna build my 5 units of RIG and them i am outta there, the lasting impression i make is kinda funny sometimes tho
Dramaticus GoonFleet GoonSwarm	Posted - 2009.09.28 21:26:00 - [29] Originally by: Time Being I do this. Mostly for 'building block' items i.e. Salavge If i just want to build say 5 units of RIG A and i need salavage bits A B and C and the sells are 1M a unit and buys are 500k a unit i just throw up some buys at 800K a unit for the 20 units or whatever i need. I save money by not paying sell order prices, i hopefully get my order filled quickly, and then everyone else goes back to there normal 500k But most times someone just 1ISK's me so i just jump up another 100k or whatever As long as im buying BELOW the lowest sell, im saving money, in the mean time im making all the other buyers who follow me up all like i care, i just wanna build my 5 units of RIG and them i am outta there, the lasting impression i make is kinda funny sometimes tho in all likelyhood you're getting your order filled as quickly as you normally would at the 500k price, except costing yourself more. congrats. Please don't use RL pictuers of players in Sig without permission. - WeatherMan
Time Being	Posted - 2009.09.28 21:30:00 - [30] Not only am i costing my selfmore, but im making other ppl follow me up, oh the lols we have

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