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Slanty McGarglefist
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Posted - 2007.01.21 19:38:00 -
[1]
Hey there everyone, I'm a small time proprietor who deals in ammunition. The minerals needed for manufacture have all been "liberated" from the jetcans of macro-miners who inhabit the region which in turn, allows me to set pretty much any price I want. In the beginning, I was the only person selling my particular product in the solar system but as we all know, when you are making a half decent profit with a semi-monopoly (can set any price you want) other competition will come to town.
So as the title suggests, how do you deal with this oncoming competition? I can easily undercut as already explained above but I had another idea. Since he is undercutting me by a nice amount below what I usually sell my products for. Couldn't I simply buy out all of his productand once again become the only seller on the list and re-raise my prices? I wasn't completely adamant about this idea because I felt that my competition would get the idea that this particular area is a worthwhile investment who will continue to manufacture product here. For the experienced traders, does this usually happen? If so, should I consistently purchase all of his and simply resell them?
Thanks in advance.
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Montaire
Lacedaemon.
Sparta Alliance
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Posted - 2007.01.21 20:04:00 -
[2]
Market manipulation on that scale requires a lot of capital. Lots of isk in the bank to play his game.
Here is how I would deal with competition in empire.
1. Work together - contact them, see if they are interested in working together. Instead of 1 region, start doing 2 or 3 with him.
2. Kill Him - Contact Ugluuk (I think thats his name) from Beyond Divinity. I loath them, but they are the best empire killers around. And they are cheap, 40-60m gets you a wardec and him and his boys are bar none the best. Bastards.
3. Work out a deal with the miners direct. Contact them, work out a deal. You'd be surprised at the results.
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mechtech
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Posted - 2007.01.21 20:50:00 -
[3]
Remember, just because you stole the minerals doesn't give them no value.
Make sure that the isk coming in from ammo is greater than the isk you would get by simply selling the minerals in a hub system. You don't want to be fighting for a market where you are losing money.
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Mazzarins Demise
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Posted - 2007.01.21 21:01:00 -
[4]
Edited by: Mazzarins Demise on 21/01/2007 20:58:29
I would buy out his product and see what happens.
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Slanty McGarglefist
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Posted - 2007.01.21 21:02:00 -
[5]
 Originally by: mechtech
Remember, just because you stole the minerals doesn't give them no value.
Make sure that the isk coming in from ammo is greater than the isk you would get by simply selling the minerals in a hub system. You don't want to be fighting for a market where you are losing money.
That's a good point so I went ahead and did some calculations. If I sold all of the minerals required to the highest bidder (even if 13 jumps away, for examples sake; probably won't go that far), I will not be making AS much ISK (it IS a noticeable profit, not like 500 ISK more) as I could be if I used it to manufacture ammo and sold it on the market.
I think I am going to just buy out all of my competitor's product (there is only one anyway) and see what happens. The worst that can happen is I lose out on a few hundred thousand ISK. Where's the fun when there is no risk  .
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Kua Burrow
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Posted - 2007.01.21 22:09:00 -
[6]
Edited by: Kua Burrow on 21/01/2007 22:05:41
I'd be very interested to know how this goes. :)
I certainly don't a whole lot of capital but had considered doing this on a much smaller scale in the mods market. I.e. Buy out the lowest sell orders (as long as there isnt too many), then just undercut the higher ones.
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Shadarle
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Posted - 2007.01.22 06:58:00 -
[7]
I tried to do this when I was selling missiles for 2-3 times the going rate. I sold hundreds of thousands at this price before someone else tried to sell some as well, so I bought them out and sold more. Then someone else put some up and I bought them out, etc... I made a massive profit until one day those same players each posted orders in the millions. I could have bought them out again but at that point it was going to cost close to 100 million to keep cornering the market and I didn't feel I could recoup my profit before they dumped even more items at such cheap prices.
I think the main reason people price cheaply is because they believe that if they mine minerals themselves that those minerals are "free". This idea people have of "free" minerals is the biggest reason so many small time traders undercut so heavily imo.
Tanking Setups Compared
Stacking Penalty / Resists Explained |
Sainsburys
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Posted - 2007.01.22 10:25:00 -
[8]
Savagely, aggressively, utilising fear and surprise.
You will need to employ various strategies depending on the type of trader you're facing.
The Weak Willed will cave in at the slightest hint of a price war. Try a unified product strategy, that allows losses on one item, set against profit from others, provided the return in the market you're fighting in is worth it. This will force most smaller guys out and back to mission running.
The tougher competitor will know more than you. Be careful at bulk buying stock; I like this to happen in markets I compete in because it ties up a bulk purcahsers Isk, whilst releasing mine to put into something else, or indeed to drive the prices down further causing the poor deluded trader to baulk at his (potential) losses and leg it.
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Pirlouit
Forum Moderator
Interstellar Services Department
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Posted - 2007.01.22 19:33:00 -
[9]
ooooh that question bring some fresh memories.... Market PvP can be very very evil.
People don't get the fact that market can be a fun pvp thing to do. On the buy order thing, i love to play the 0.01 isk war it is fun fun fun.
One of the mean thing i did was to compete with someone on the mineral market....
We were playing the 0.01 iskies games and then i decided to help him out and dump a load of minerals in a system ...... known to be a pirates hubb....... He must have loved picking the stuff.
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SencneS
Amarr
Keepers of the Holy Bagel
The SUdden Death Squad
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Posted - 2007.01.22 22:57:00 -
[10]
Edited by: SencneS on 22/01/2007 22:56:18
Here is a MarkPvP idea I executed a few times with success but requires a fair amount of setup and a little capital but not as much as you'd think.
The idea is to make people think there is heavy competition for a product which you are the only supplier. This will often deter anyone else from selling the same item.
Prep work:-
Find a Station close to a hub (Within 2 jumps), and list every system with a station, in 5 jumps of the station.
Find out the absolute rock bottom you will sell the items for. This includes sales tax/fees.
Find out how much it would cost (Tax, Brokers fees) if you placed a buy order for that price.
Add that to your rock bottom price (Per unit)
On the station you listed above, place a buy order for an amount you could buy, make sure you include the range of 5 jumps.
Travel to the main hub, and place the item on for the profit you want to make, put this as your main point of sale. In the same system place another sell order for 1/5th the quantity of your main supply, make it 2 isk less per unit then your main order.
Travel to each system and place half the amount of your second sell order in each system dropping the price anywhere between 1 and 2 isk.
For the last system the sell price should be exactly 0.01 isk above your rock bottom buy order price.
So you'll have it similar to this. I'll use rocket for an example.
Main Station (Manufacture/Distribution) hub
Buy order - Rockets - 1,000,000 units for 9.75 within 5 jumps of current system.
Main Commerce hub system.
Sell order - Rockets - 100,000 units for 15.55
Same station or even system will be ok.
Sell order - Rockets - 20,000 units for 13.75
Lets assume 11 systems within 5 jumps that have stations
Each station you put up random amounts of rockets
Sell order - Rockets - 1402 units at 13.55
Sell order - Rockets - 5682 units at 13.55
Sell order - Rockets - 402 units at 13.54
Sell order - Rockets - 572 units at 13.40
Sell order - Rockets - 592 units at 12.04
Sell order - Rockets - 1034 units at 11.00
Sell order - Rockets - 1509 units at 9.99
Sell order - Rockets - 153 units at 9.80
Sell order - Rockets - 562 units at 9.79
Sell order - Rockets - 3563 units at 9.77
Last station you put
Sell order - Rockets - 20,000 units at 9.76 - Make this station the most remote and least traveled station within those 5 jumps. A dead end system makes a good choice as long as it's population is always low.
The last sell order that is 0.01 isk from your buy order needs to be a decent quantity, otherwise you'll have people buy all your stuff.
What this does (Well did for me) is totally kill everyone off EM Rockets :) (I don't do this any more) It creates the illusion that the Rockets market is heavily contested. At the same time sets up others to at least fail to be price competitive with you.
The buy order is equally important. Since they need to either match your price they end up selling their supplies directly to you at a price you already know you will either make you a very small margin or simply add to you supply which you turn around and sell the majority at 15isk a unit.
This really only works for one product the second you start added more items to your inventory this becomes more complicated. However the above tactic worked well for me in two regions. After I think a month no one else was selling EM rockets anywhere close to the hubs I did it to.
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Ramblin Man
Empyreum
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Posted - 2007.01.23 00:22:00 -
[11]
You can't push him out by buying his orders, because he can produce faster than you can clear his orders. (Public T1 prints, and particularly ammo, are hopeless in this respect)
I'd be a **** and just reprice things right at build cost until he leaves. Sure you'll be hemorrhaging massive amounts of profits, but if you're really stealing your minerals then, unlike him, you can maintain that price point. Give it another week and switch back to normal pricing.
That's if you're staying in the ammo market there.
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Paper Pusher
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Posted - 2007.01.23 03:43:00 -
[12]
you guys work to hard.
my new GM cleared grief/exploit Tactic would shut both of you down.
after he didnt sell anything for a week or 2 he would give up
no matter what he is trying to achieve if you "freeze" his orders he is helpless.
before , I always got them in a bid war and when they got mad enough and made a mistake id clear thier orders. Ive never found anyone that could survive a few of those , they go away or keep making me tons of isk with very little time invested.
Its not market PvP when only 1 side is winning , its a slaughter , welcome to the big leagues
as I tell my competition:
Stupid is as Stupid does
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Ramblin Man
Empyreum
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Posted - 2007.01.23 04:30:00 -
[13]
Originally by: Paper Pusher
you guys work to hard.
my new GM cleared grief/exploit Tactic would shut both of you down.
after he didnt sell anything for a week or 2 he would give up
no matter what he is trying to achieve if you "freeze" his orders he is helpless.
before , I always got them in a bid war and when they got mad enough and made a mistake id clear thier orders. Ive never found anyone that could survive a few of those , they go away or keep making me tons of isk with very little time invested.
Its not market PvP when only 1 side is winning , its a slaughter , welcome to the big leagues
as I tell my competition:
Stupid is as Stupid does
It's "too", you capitalize at the beginning of sentences, you don't capitalize random words, you use apostrophes in contractions, and commas are placed immediately following words. Welcome to English.
Aren't you already pimping your auction enough in another forum?
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Apollo Kreed
Ministry of War
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Posted - 2007.01.23 07:44:00 -
[14]
Originally by: Paper Pusher
you guys work to hard.
my new GM cleared grief/exploit Tactic would shut both of you down.
after he didnt sell anything for a week or 2 he would give up
no matter what he is trying to achieve if you "freeze" his orders he is helpless.
before , I always got them in a bid war and when they got mad enough and made a mistake id clear thier orders. Ive never found anyone that could survive a few of those , they go away or keep making me tons of isk with very little time invested.
Its not market PvP when only 1 side is winning , its a slaughter , welcome to the big leagues
as I tell my competition:
Stupid is as Stupid does
Buying their product up and then selling it for less is a good tactic too.
One of Paper pushers as well as her many alts favorites in fact.
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YunFu Yan
Yan Enterprises
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Posted - 2007.01.23 13:42:00 -
[15]
You can a) try to cooperate with him or b) try to force him to give up business in that particular system/region.
Option a) obviously means that he has to be willing to meet some kind of arrangment like selling only certain ammo types while you cover the rest. This means shared profits.
Option b) is rather agressive and it's success depends on a couple of factors such as your trade and production skills as well as the content of your wallet. Basicly you lower your margins as much as you can without ruining yourself, hoping that he'll go for a more attractive market.
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