Love your blog, your tips have been very helpful and I'm now a novice TP trader.
have a couple of questions about things I noticed the past few days
while browsing the TP. It'd be great if you could help answer any one
of them if you have the time.
1) Do you think items that have very low supply
and/or demand are worth playing? Sometimes I see items with massive
margins between buy and sell price, like 4x or more, but both supply and
demand are very low so I can't tell if I'll ever get any or if anyone
would buy it if I got one of those items.
2) On a similar note, sometimes I find a relatively
normal item in terms of supply and demand, with a difference greater
than 2x. I get very excited at first, but then I'm not sure how to take
advantage of this to the fullest. If I try to buy too many or sell too
many, I'm afraid it will attract attention and it will collapse. But I
don't want to sit at the margins either (undercutting by only a few
copper) because others might discover it and undercut me or I'll have to
wait a long time. Should I undercut by a lot to get some profit before
the opportunity dies?
3) How do taxes work on transactions that are very
small, such as for mats where sometimes the difference between buy and
sell is only 1c or so? Can you still make a profit from flipping items
like that? It's one of the reasons I've only been flipping items that
are worth at least a few silver, but then I don't get high volumes.
Thank you for your time!"
This is a terrific email. Great questions by someone who claims to be a novice for sure.
1. Yes, items with low supply/low demand are indeed worth playing. But the way you play these is far different from other markets I've shown on this blog. Like the gold guide strategy that has been so popular amongst visitors here.
Basically, in a word: you need to be less greedy. Instead of undercutting by a copper when you go to sell, you need to undercut by like 50%. So let's say you have an exotic pistol that is being bid on for 1 gold and the lowest sell order is 10 gold. Instead of listing at 9 gold, 99 silver, you should be listing at 5 gold. The truth is that demand is not strong enough for someone to spend so much gold on this item, but if you provide the handful of people who want this item with a great deal, then you will sell off quickly.
2. You can't attract attention by trading in that market. If anything, you will reduce the profit margins from your under and over cutting buy and sale orders. The way to attract attention is to buy like crazy at the lowest sale order, which isn't something you're going to do if you want to actually make any gold. So play on! But maybe undercut more than 1 copper in order to ensure faster sales and less competition.
3. It's the same, but I believe that fees per transaction or cancellation are a minimum of 1 copper. So if you sell for 2 copper, or cancel a 2 copper listing, you will always lose 1 copper in either scenario. Not trust me 100% on that but that's what I believe is happening. Maybe someone else can shine light on this question?