Wednesday, 9 June 2010

Trading Places...

So, I've been a citizen of New Eden; the world within this world that is Eve-Online's back drop; for over six years. I've seen the good days and the bad, I've seen the highs and lows of alliances, deep dark null sec space and the bright lights of the big cities 'Empire' space. I'm a double graduate of the venerable Eve University corporation. I've fought in Privateer wars. I've mined. I've run seemingly never ending cycles of Research. Basically I've tried my hand at everything.

One deep dark looming gravity well which thus far as eluded me however is trading...

Yes, I know, saying that in Eve is akin to flopping your nuts into the mouth of a crocodile and hoping it doesn't bite. My trouble this week is... Yep, that old croc has bit down, and bit down hard.

I'm worth quite a lot of ISK in the game, so I've portioned out an amount of my cash, and started to trade. I put aside 10,000,000 ISK for this experiment. Basically pocket change [sorry to all your folks out there who dabble, or have dabbled with Eve and you think that's a lot, but when, like me, you've made over 3 billion in cash alone you don't think of 10 mill as anything but shrapnel in your pocket].

Anyway, I was careful with this money, I went out in the world from my general HQ and I had a read of the market details of a few different kinds of things. I soon realised a fair few things. The first thing that struck me was you have to choose to trade in items which are going to cost less than the amount of Escrow you're willing to fork out. Skills help with this, but initially with absolutely no skills you have to stump out 100% of the escrow for the items you're going to try to buy.

Let me just take a moment to explain, if you want to buy in Eve, say you are after 10 armour repair units, and they are being sold for 9,000 ISK each, and you decide you're going to offer people more to sell them to you, then you put up your buy order for 10 x 10,000 ISK, this means 100,000 ISK is going to go into escrow, this money leaves your account immediately, and sits in the ether of the game. And as people buy off of you, that escrow is released to them and you receive the items.

Skills and standings help you lower the amount of cash you have to fork out for escrow, but basically when you put up a buy order, until it is complete, ends or you cancel it, the cash is out of your hands.

Now, this price, offering more than the other people buying is the basic premise of the acquisitions side of Trading. But you also have to take three other important things into account. First of all, how much profit are you going to make from your items when you try to sell them back to the population? Well, lets continue the item above, you've finally got all 10 of your armour repair units, you paid 100,000 ISK for them. But your wallet is actually a little bit further into the red!!!!

ZOMG THIEVES!.... No, not thieves, but another kind of low-life. Brokers. Whenever you work with the markets in the game, you are going to meet, and grind against “Brokers”, these virtual entities are behind every transaction in New Eden. They initially take a flat 1% fee for listing your buy orders. So for your order of 100,000 ISK, it actually cost you 101,000 ISK. This % they tack on top of buy order costs can be reduced with standing & skills. However, you need to take it into account.

So, each of your items you have now cost 10,100 ISK. You need to sell that for more than that amount to make a profit.. right? Wrong. Whenever you sell an item, you pay an amount of “Sales Tax”. Again, skills and standing with the station you are selling in, can reduce this taxation. However, it never goes away.

The best way to see what % sales tax you're going to get, it to sell something to one of your own alt characters (your account has three character slots, so sell it to Joe Bloggs you create on one of your spare slots).

Once you've done that you know what % broker fee to add onto your units, and you know what over head of % sales tax you're going to have.

Don't do the rookie mistake here of simply doing COST + FEE + TAX + AMOUNT I WANT = SALE PRICE. I see so many traders jumping in and doing this and then being confused by their not making a lot of profit.

The Sales Tax is a %, it scales up as you raise your Sale Price... so raising it to take the Sales Tax into account is not the way to go. The best ways to fix it up are to hit the Trade Skills section and train them up some.

Anyway, together the Brokers Fee and the Sales Tax we'll consider to be your overheads. As you grow more bold in your trades you might start to add other over heads, but those I'll go over in a future post. So, right now, you might be looking at your market screen wondering what to buy...

What you need to do is have planned is a lot of patience, a pen and paper also help, because you need to go through the myriad of items on the market to find something with a large enough margin between the buy cost and the potential sale price. You need to pick something with a large margin, but also something which will turn over, something people will sell, and something people will buy.

To find the right item might take sometime. You might need to get to know the items a lot better than you already do. CCP include a lovely item comparer tool, to let you see the differences between the different names versions of items and the vanilla Tech 1 etc. Use this tool, it will let you find out what the better items are.

As an example, we'll think about 200mm Rail Guns. Why? No reason really, I'm just picking a name. The Tech 1 version of these I can see sell in my local mission hub for about 85,500 ISK each. But they can be bought for just shy of 34,000 ISK. That's a pretty good margin for a Tech 1 item. Clearly the potential margin of 51,500 ISK per item, is big enough to make this worth while, and a buy order for some of these can go up, but lets right click and “Show Info” on this item... It has a set of special named versions, using the compare tool list and turning on range and damage modifiers (which are the most important things for guns like these) and I can see that the named version “scout” class are the best named version... Checking the market price I can see a market opening.

In this station they sell for 1.2 million ISK, but just 5 jumps away they are selling for 30,000 ISK. That's a 1,170,000 ISK margin... for a bit of flying around, I can handle that! So I fly off to these slightly separated stations and place more buy orders for 30,001 ISK.... yes, WOW Auction hose style I slap down one extra silver.

Soon my wallet transactions tab is flashing away merrily as people sell their mission loot in bulk, I have vanilla Tech 1 200mm rail guns arrive in my central hub of trade. And I have the odd distant 'scout' gun appearing.

Spin forward two days, and I have 22 'scout' rail guns and 75 vanilla Tech 1... I gather these all up in one of my little cargo ships, and I head to my trade hub. There I throw the stacks of items up.

The price for sale of the vanilla Tech 1 has gone down a little, it's now 84,000 ISK. I start to sell mine for... drum roll please.... 83,999.99 ISK. Yes, not even a silver this time, it's a WOW bronze difference. I call this the “Mangy Wolf Pelt” margin.

The 'scout' guns however, I want to off load them quickly, and with their huge margin the potential sale price I can list can be attractively lower than the other items there. So, I undercut the nearest rival by 10,000 ISK.

The next morning dawns and I check my wallet, it's leaps up 35,000,000 ISK. From 10,000,000 it now reads over 45,000,000 ISK. All for a little paper trawling, a but of flying back and forth and a little careful statistic comparison.

This really appeals to me, it has all-sorts of cogs whirring in my head. I check what's left to sell, and I see that all the 'scout class are gone' but over 45 of the vanilla Tech 1 remain in my stock. The reason for this? Yep, you guessed it, someone undercut my Sale Price by 0.01 ISK. Modifying the sale order is a simple case of right clicking and setting a new value.

So, take this experience of mine at whatever value you can attribute to it, I'm now going to definitely put training time into my trade skills, and invest more of my cash into the market (there is in fact an amount of my ISK in escrow which would make Bill Gates think twice) lets see where this roller coaster might go.

No comments:

Post a Comment