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A Discussion on Trading.

Discussion in 'Trading' started by Bradley Killer Kell, May 21, 2015.

  1. Bradley Killer Kell

    Bradley Killer Kell Member

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    There is a real problem in EU where Traders are concerned. Some scammers that take severe advantage of New Plays specifically have given pretty much all Traders, especially the Re-Sell Trader, a bad name.

    Today I would like to explain the Reason Traders Exist and the precise Problem that leads to a Need of Traders. I would like to explain clearly what the Re-Seller does, and why it is vital to Small Players and/or Non-Depositors.

    I will also point out the obvious scams, which I despise by the way.

    I will also point out the 'Golden Rule of Trading'... which while economically true is the exact Economic Rule that many Scammers use to take advantage of New Players. I will follow that by giving an example of what a 'Good Trade Chain' looks like, from Small Hunter to Re-Seller to Big Crafter (the usual buyer of Large Quantity Stacks).

    I will hope that this post may educate and enlighten, and may help us forge forward into a brighter future of Trade in all of EU, if not just Arkadia.

    I am going to do these Point by Point. This is a general discussion, but to help people quickly reference what you may be responding to, I would greatly appreciate if you would do your commentary via the same Point System (if responding to Section 2, you could say 'Section 2', etc). Since this bit is already a bit long and windy, and the rest will be more so, I am going to put the actual Points in the following Post in this Thread.

    Thank you for your time and consideration when going through this.
     
  2. Bradley Killer Kell

    Bradley Killer Kell Member

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    1. Why Traders Exist.

    Traders exist for one major reason. That reason is that most Big Crafters will not deal will 'Small Stack Sellers', as they don't have the time to run around gathering 100,000 of something 1 and 2 at a time. Their time is better spent doing what they are good at... Crafting.

    Since New Miner/Hunter usually doesn't know Big Crafter (New Miner is in Mining Areas, while Big Crafter is laboring away at his Crafting) and generally doesn't have enough Quantity to interest Big Crafter, New Miner/Hunter will usually head to the TT to 'cycle PED' so he can get back to doing what he does... Mine or Hunt.

    The Auction House has a Fee which makes Small Stacks of MOST items impossible to sell without a loss. So this option is unavailable to the Small Stack New Player. For Sellers, there is a great risk that their Product does not move (at least the first time) on the Auction House, and each failure looses the Auction Post Fee cutting into the overall Profit (and sometimes becoming a Loss) on an eventual Sell. So while the Auction House IS a very good tool for Large Quantity/High Value Items there is also an element of Risk that CAN lead to less than optimal results (on the flip side, with No Buy Out, you may find some one in GREAT need and with Great PED who will pay much higher for the Item they desire, which is of course their choice to do so).

    So the New Player usually can not Trade Consistently with the Big Crafter, and can not afford to Trade on the Auction House. This is the Problem. Business is the Function of an Entrepreneur using Economics to Solve Problems (Woohoo! Economics 101 coming in handy)!

    So the Solution to the current problem of New Players not having Buyers at MU% for their wares is... the Re-Seller. There are Legitimate Re-Sellers, some who only focus in specific fields and some who operate in all fields. There are also Scammers, who prey on new players. Scammers are to be avoided (more on the reason Scammers exist in another point).

    Thank you for your time in reading Point #1. I hope this clearly explains WHY Traders exist in EU (and in the Real World as well). It is one part of the function that allows people to continue to do what their time is best used for (Hunters Hunt, Miners Mine, Crafters Craft) and one part of the function of helping bridge the gap between Small Stack Sellers and Big Stack Buyers.

    On to Point 2!
     
  3. Bradley Killer Kell

    Bradley Killer Kell Member

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    2. Scammers.

    In general terms, Scammers the the leeches that will only give 101%-102% MU on items, regardless of their Value, while then moving this product to a Big Crafter at or just under MU for amazingly huge profits. This is the generally accepted term for these kinds of Traders, and there are Scammers in fields OTHER than Trading as well.

    While most Scammers are Traders (some other areas, but not nearly as much as in Trade), NOT all Traders are Scammers. Get to KNOW YOUR BUYERS. Understand how much PED they can usually invest, understand how long it takes them to get a large enough Stack to move to a Big Buyer (usually Crafters, but there are other Tools, Weapons and Armors as well), and understand the General Profit Range they operate in.

    Well, that one wasn't so bad! I'm going to move on to Point 3.
     
  4. Bradley Killer Kell

    Bradley Killer Kell Member

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    3. What IS MU?

    MU% is Mark Up Percentage. Sometimes this is a PED, like a Pistol that is 2.70 PED TT +1.75 MU (4.45 Total). Sometimes it is a literal Percentage, like 10.00 of Animal Hide at 103% for 10.30. (Looking at this the Daily MU is 78.74% which means a Seller of 2.54 PED worth on the AH screwed up their Sell and took a loss, likely hoping for a 2nd Bid to push them past Profit... which likely still wouldn't have covered the Fee... just an interesting point to show how things work.)

    MU% is the function of a few things.

    A. Auction House Fee.

    First, you must understand that MU% is only calculated from the AUCTION HOUSE. The Auction House includes a Fee to Post, which is ONE component of why MU% exists.

    For instance, let us say I have 10.00 worth of... hey, why not... Animal Hide (which you SHOULD be Refining). As we saw, that's 10.30 at the 103%! WOOHOO!!!!! 00.30 Profit, and we all like a little profit sometime. Except, it cost me 00.54 to place the Sell. Oh no! 9.76 PED, I'd have made more money selling to the TT!!!

    So you can see that MU% is part of the function Auction House Traders use to 'Beat the Fee'.

    B. Rarity/Scarcity.

    Some Loot simply drops more than others. The less of something there is, the more valuable it becomes... and this is not always expressed in the TT Value (take Halix Tails or Blazar Fragments, for instance).

    MU% is also a function of how Rare or Valuable something is.

    C. Risk/Cost to Acquire.

    There is a Risk involved with some things. One risk we have discussed, the AH Fee. However, Crafters take HUGE Risks when creating Items. Take the F-101 for instance. A Crafter may fail 90% of the time on a Run of 10, make ONE Finder, then have to Repair it (or use Residue in the Process) to Full TT. So now he spent 30.00 PED or so... and has ONE F-101 Finder for 5.50. That's a huge loss, so the 2.50 MU is there to help him get a little more of that loss back... and for Crafters with a higher skill that play much closer to the 90% Return that MA designs into the game it can lead to Actual Profit.

    Well, Miners and Hunters have the same risk... the game is DESIGNED to give you a 90% Return (You use 10.00 PED of Ammo, the DESIGN is on average you get 9.00 PED of Loot, with variance due to Skills, Eco, etc.)

    These are the 3 Main Components to Mark Up. Also included is Need, but that varies from buyer to buyer. I hope this gives a better understanding of Mark Up, and why Player to Player Trades should use the MU loosely, as it takes out the AH Fee portion of MU.
     
  5. Lizzy

    Lizzy Deactivated User

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    Nop, I trade because even if I depo 5k peds in a week, I will lose it all hunting medium sized mobs 1k-1,5k hp. In days.
     
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  6. Bradley Killer Kell

    Bradley Killer Kell Member

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    4. The Golden Rule.

    Now, this is Economically TRUE... however, it's bad business and it is EXACTLY what the Scam Trader uses to justify his actions.

    Easy math here. 101%>100%.

    101% is Greater than 100%, which means that if no other options exist (i.e., you can't find a better buyer) then giving your High MU Item to the Scammer, while not helping you much and helping him out a lot, is STILL better than getting 0% MU from the TT.

    Now some items, this isn't an issue... like Animal Hide, just not a lot of MU% to spread around. But the guy that gives 0.01 PEC over the TT cost of the (L) Weapon you just got that has a 4.25 MU, THAT is a scammer.

    Some Items have a large Grey Area... like Halix Tail and Blazar Fragments, where the MU% is so huge, but you need a good amount of them to move (However there is an excellent Halix Tail Buyer out there that buys at any Quantity, and I buy and move to him for a cut of course).

    Remember, overall a Good Deal benefits everyone... the Seller, the Buyer, and eventually the End Source (Big Crafter).
     
  7. Bradley Killer Kell

    Bradley Killer Kell Member

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    5. The Good Chain.

    Here, for me, is an example of a Good Trade Chain.

    New Player sells Small Stack to Trader. New Player should get a range between 25%-75% of the MU. (This leaves 75% to 25% of the MU for Trader Profit).

    Trade does this until he has a Usable Stack for Big Crafter. Here he will Sell for At MU, or hopefully a bit lower (after all, he has a 25% to 75% Range to work with).

    Big Crafter buys for Slightly Under MU, reducing Cost and some small Risk from his Crafting. Now HE in turn can (in theory) sell his Items for slightly less... benefiting those that buy his End Products.
     
  8. San

    San Well-Known Member

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    I have only one question: Will I ever find a trader who takes all the odds and ends from me to accumulate them into auctionable stacks? Because it is endless fragmentation there until you just can't stand it anymore and tt some. Markup shown is theoretical for many items, because the display includes only successful sales, not all the futile auction listings. For one stack of Tier I Components sold at their nominal 110% expire how many with the listing fee lost? I stopped collecting them unless I need them for myself. Worst are extractors. Most have nice markup -- in theory. It just doesn't work out more often than it does. The trader who can finally manage this situation will get happy, returning customers for sure. Maybe it is unmanageable, otherwise they would be there and we wouldn't be so clueless even after years in this game.
     
  9. Bradley Killer Kell

    Bradley Killer Kell Member

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    This is exactly why most Traders will Specialize in a specific Market... it just takes to much PED to work Multiple Markets, and you likely don't have enough Big Crafter Buyers pulling from all the Markets, so a Trader protects against Losses by only Buying what he KNOWS he can Sell.

    Traders have the same issue as Small Stack Players as well, as we start out NOT KNOWING the Big Crafter Buyers and have to find them, then arrange a fair and suitable deal between us, which can take time (and sometimes never happens for certain markets).

    So are their guys who will buy EVERYTHING then hope to AH it? Yes, but those are some Big Fish Depositor Traders, and they likely give the Lowest MU% (outside of Pure Scammers) because of the high level of Risk.
     
  10. Bradley Killer Kell

    Bradley Killer Kell Member

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    Why the Role of Trader exists... without this Role it wouldn't be possible to be a Trader. :D

    Now, why each Individual Trader takes up the Profession is completely up to them. I'm merely explaining the Function and why the Role exists in the Current EU. :D
     
  11. SallyBridges

    SallyBridges Adviser Arkadia Adviser

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    Maybe not even days on bad run periods this could be hours and if you dont hit a large one then your down and you learn not to push and push to try and make it happen.

    most people have a list on Friends Lists that they know they can get rid of resources to or get messages when they know what your hunting can you save me x y z .

    you etleast then know your going to get something back and its worth collecting stacks of x x x for ;)
     
  12. KikkiJikki

    KikkiJikki Well-Known Member Pro Users

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    Point 2. That's not really scamming.
     
  13. Bradley Killer Kell

    Bradley Killer Kell Member

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    Intentionally with-holding or misrepresenting the Actual Value is that part that is scamming, and is what much of the Community gets upset about.

    Some also hold a personal idea of what 'Fair Pricing' is (not that their idea is reasonable or even workable) and anything not in that range they consider Scamming.

    I'm hoping some of the other points will explain why the shift in MU as the Quantity gets lower, so those people may revisit their 'Fair Pricing' idea and adjust accordingly.

    However, there are some that feel if the Trader doesn't lose money on every deal, he's scamming. That's not the case at all, but it is a notion some in EU have.
     
  14. KikkiJikki

    KikkiJikki Well-Known Member Pro Users

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    Value is subjective, depending on where you are standing. Recorded MU is just the historical record of auction sales which in itself is not an accurate picture of actual sales, nor does it take into account planetary supply and demand or the dynamic nature of the economy.

    That said, it's uncool to take advantage of the ignorance of newer players. Being deceitful to advance your own interests at the expense of someone else is unethical regardless of how it is labeled.
     
  15. Bradley Killer Kell

    Bradley Killer Kell Member

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    Absolutely, which is what I was trying to say in my 2nd Point. You nailed it. Which is the perception of Buying at 101% to sell at 200%, etc., being 'Scamming'.

    Targeting New Players to Exploit hurts the over all game, Community and Economy.
     
  16. sostoned

    sostoned Member

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    we really need a noob auction with low fees. the markup/auction/trader shit makes new players quit.

    not changing the auction we have now, thats fine, but a subsection or so where for example the sales fee is 1/10th or so for stacks up to 10 ped
     
  17. WhiningSkeptic

    WhiningSkeptic Active Member

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    Unfortunately MA helps people do that by not letting us stack bps and showing an average for sales of estates.
     
  18. Grizgal

    Grizgal Active Member

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    The whole auction thing needs a massive overhaul, however, I doubt this will happen. Entropia has to have the worse auction set up of any game Ive played, very high entry level fees preventing small volumes or small value items being sold etc and the order section is difficult to use.
     
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  19. Bradley Killer Kell

    Bradley Killer Kell Member

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    And the entire idea that each new Bid has to be a Full PED.

    Let people PEC Bump one at a time if they are trying to be precise on getting a great deal, while the next guy gain raise a PED or Buy Out if he has a strong need.

    THIS is what causes the most fluctuation in MU% on the Market.

    Now, smart Sellers will hate that change, they live on the proper Starting Value so that 'one more click' gets them Max Profits, and I get that. I absolutely do. This is how the System CURRENTLY is, and they adapt to make the most of it. As they should, I have no problem with that.

    But it happens because of HOW the System is set up.

    You put up 10.00 PED of something at 11.00 PED Start, because it's 110% MU. Fine and well, AH fee eats 0.52 or what ever, so you really get 105% if some one buys at that. But the next guy has to pay 120% and the next 130%... instead of 111%, 112%.

    It's very difficult for Buyer and Seller to meet on a reasonable value.

    Sellers have to risk a 1st Posting of 98.7%, hoping to catch a 2nd Bid... but that 2nd Bid puts the buyer 10% over what the Market Value suggests. Some one is going to get screwed.

    Give Entropians more control in the AH, so we can craft better deals, more fair deals.
     
    • Agree Agree x 2
  20. Gotabecoolman

    Gotabecoolman Member

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    Just realized I was reading your post. Good work it's neatly done and puts traders in a better light, as I'm not trying to scam people.