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Astorothe
Aperture Science Industries
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Posted - 2007.11.21 06:24:00 -
[31]
Ok, well a few more days have passed and a few more lessons learned. I am constantly surprised by just how immersive trading in an online virtual world can become!
Undercutting
Inevitable and sometimes, downright frustrating, undercutting in price is almost annoying as adding some more stock to an existing order.
I have been thinking about this for a while now, and I'm basically looking at the undercutting actions in two ways:
1) An opportunity to make ISK - the idea is that if you are undercut by a substantial amount - you simply buy the items yourself and then put them onto your order. This only works though if a series of conditions are met. The price you are being undercut has to be substantial - keep in mind taxes and any fee's for modifying your own orders (or putting new ones up).
2) Price cutting war - I have noted that some price cutters will go to extra ordinary lengths to undercut you. Yes, you can reduce the price of your own goods to match, but this is risky and needs care and thought. It's possible that if you get into a price war, you will soon eat away all your profits (and remember TIME is money too) and the other person could actually just be doing this to GET you to reduce your prices. He could then buy all your stock, and put all of the stock (and his) back on the market at the original price you had listed (see point 1) :)
I have also found that with bulk volume sell orders, sometimes it's smart to place them on the market in different batches. This way you can use one batch to do the price cutting with (to test the waters and see what your opponent does). Having all your stock on the single order can be costly, especially when you start reducing the price of your items and there is a lot of quantity.
I do not know what the best way to handle this is yet - I need more experience and more time to figure it out. Perhaps it's not such a big deal - and is just an inevitable part of trading. The problem is, is that if you are undercut, you have to wait until the cheaper products are sold before your items start selling (thats the way the eve market engine works). And if someone puts a large quantity of items for sale - then your order could be stale for some time.
And time is money - I keep telling myself not to undervalue my own time.
Sell order management
Sell orders need constant management. Its not as simple as placing them and forgetting about them. Not the isk printing machine I first thought! Large sell orders seem to attract other sellers - after all, everyone is looking to make ISK and if you have lots of products for sale, perhaps they want a piece of the action too.
Having a lot of sell orders means you need to scan the markets daily, and check what "position" your orders are. Where your order was the cheapest and perhaps the only one available in the system, can quickly become one of many and being undercut by a lot.
I've found that keeping a simple spreadsheet of my own orders - and the prices I paid per unit, and jumps involved - has been very beneficial. It allows me to move my prices per unit up and down easily and quickly, and knowing I am still making a profit.
It's almost like owning a shop - you end up with a dozen or so "hot items" that you find sell well and sell plenty off, and you watch the stocks and prices accordingly. I find also keeping stock on hand in my hanger (as opposed to putting it all on the market) is another good way to manage sales.
It's all time vs ISK - and I'm finding better ways of trading, and better ways of utilising my in game time to make ISK.
Oh - and it's lots of fun too. I once thought 0.0 PvP was ruthless - it's civil compared to market PvP.
Eve Web Design | PerthChat | Learning to Trade
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Mr Horizontal
Gallente
Brotherhood of Wolves
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Posted - 2007.11.21 08:38:00 -
[32]
The reason behind Ricdic's joke post above is about the opportunity cost issues with that.
Undercutting in EVE can be done out blind arrogance. I can't stress this enough, but know your cost basis.
Then you'll be fine 
---
meh. |
Astorothe
Aperture Science Industries
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Posted - 2007.11.21 09:00:00 -
[33]
Sure, I can see his gag now - but it doesn't really apply to me which is why I struggled to see the humour straight away. Maybe he didn't read the whole thread - I don't know. Australian's have very dry sense of humours so I didn't pay it much thought :)
I'm not really producing much at this stage from minerals, it's 95% trade. I buy on the cheap, sell on for a profit. I learned fairly quickly about the value of my time to do the hauling as well.
Those two links you posted are both excellent reads btw.
Regards,
Eve Web Design | PerthChat | Learning to Trade
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Calgorac
The Arrow Project
Morsus Mihi
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Posted - 2007.11.24 03:27:00 -
[34]
ttt
Latest News |
Astorothe
Aperture Science Industries
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Posted - 2007.11.25 02:21:00 -
[35]
Could anyone suggest a couple of good books that I could read on "Investing for newbies" in real life? I'd like to pick up a couple of easy to read titles on investing and trading that I may be able to apply to the game.
Regards,
Eve Web Design | PerthChat | Learning to Trade
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Jalfein
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Posted - 2007.11.27 23:44:00 -
[36]
 Originally by: Astorothe
Could anyone suggest a couple of good books that I could read on "Investing for newbies" in real life?
I think the topic that would be most relevant is not Investment advice but Economics. As a light introduction to economic thinking, I highly recommend the book "Freakonomics". It won't tell you anything about trading in EVE but I found it fascinating and it's what really got me interested in the study of economics (which turns out to be way more interesting than you might think). "Naked Economics" is another good introduction.
J.
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