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Great Example of Market Cycle and Gold Making

Patrick wrote a lengthy email focusing in on his recent finds on the trading post, along with two examples of what he's talking about. I know it's long, but give it a read as well as my answer below.

"Hey Markco,

First off, I'd like to thank you for the work you put in your blog!

I recently got into playing the Trading Post and find it quite a lot of fun, I even made a couple of gold since I started, thanks to your blog for the most part.

At the moment I'm focusing on flipping quickly with a relatively low margin, but for the most part safely. I think I'll be getting into flipping more expensive items including weapons, armor and trinkets as soon as I can spare a couple of gold that can sit on the TP for a couple of days. I feel I'm still lacking the experience to know which items to look into, since supply and demand are generally relatively low compared to consumables and mats, I had more success with high-volume, low-price items so far.

I found that with these low-price items, some fluctuation in the price within one day is pretty normal, I may have even found some regularities regarding price and time of day for some items, but of course that could just be a coincidence aswell. However, one thing I noticed in the last couple of days are some weird fluctuations. Look at Rawhide Leather Straps and Jagged Metal Scraps, for example. The prices for these items rose from about 10c and 20c each, to about 50c and 70c on average, right in the night of February 1st, and dropped back down to their original prices in the night of March 1st. Unfortunately I was unable to find any mention of these items in any change logs about drop rates or some such.

Do you know anything about those weird prices? What did I miss?

Best regards,
Patrick"
Hey Patrick, thanks for the great question. As I told you in my response, the reason these prices fluctuate so much, even in a 24 hour period, is because people will salvage the items any time they get too cheap. For example, if the price of Jagged Metal Scraps gets lower than the average cost of 2 gold, silver, and iron (they salvage into 1-3 of those three categories) then the salvagers will rapidly increase the price until none are left for cheap. As the prices of gold, silver, and iron get too low (from these same salvagers undercutting), then the price of Jagged Metal Scraps will go back down.

And thus the cycle can repeat daily or even hourly when lots of people are online.

5 comments:

  1. John Klee said...:

    No offence, but personlly i thought the guildwars montly had something to do with it. (salvage ... items).

    wasnt this the biggest influence?

    Best regards,

    Johnny

  1. Flenken said...:

    One valid reason for the price change in the items mentioned would be the Monthly requirement for February had "Salvage 500 items" as one of the listed tasks. So, at the very beginning and end of the month, you'll probably see a spike due to impatience and desperation (depending on which day you're looking at), as well as a general rise in price while people are working towards their Monthly. Following that, you'll see a drop back to normal.

    This month one of the requirements is to craft masterwork items, 40 of them, which isn't a lot... but you can find what materials are used in the crafts, and dip into those markets and keep a closer eye on those prices. Also, keep an eye on the selling portion of the masterwork crafts. For example, you'll get credit towards the 40 for crafting insignias, so some people may just do that and dump them. You may be able to pick some up for cheap to flip later on.

    Always keep an eye on what the Monthly/Daily options are, there's a chance for profit there!

    -Flenken

    P.S. Thanks for the many great tips that you've provided to many who are just starting out on the Trading Post.

  1. Markco said...:

    Definitely a contributing factor, and probably a bigger influence in this case.

    Now that it's over, hopefully the normal cycle will start to play itself out.

  1. Patrick said...:

    Thanks for featuring my question on your blog, and thanks for all the helpful feedback!

  1. Anonymous said...:

    I hope they bring it back next month. I miss crafting rares and exotics with buy orders and making 25-50% because of people who dumped high level jewels for 10 silver.

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