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Why Post Less Auctions?

Phil had a great comment yesterday, so let's bring it up as a discussion point for today's post.

"Hi Markco!

I have been reading you blog and learning a lot from it for about two weeks now. I have read most past entries and all the new ones that have come out since. I am having fun with the TP and also earned about 80 Gold so far from the 3 Gold I started with two weeks ago.
I am posting this because I am stuck in the exact same spot as the guy who mailed you and I do not quite understand your answer, I think.

How does selling things at a slower pace, bit by bit, accomplish faster profit? If I buy thousands of Grape pie fillings and relist them for a higher selling price they will get sold once all stacks posted before for the same price me are sold. Is it just because I will get undercut more often if I list bigger stacks? I am probably just missing something here.

Keep up the good work!
Cheers
Phil"

My response:

Let's say you get undercut by 10 people.

If you posted 10 auctions and they didn't sell, then you have to cancel 10 auctions to repost, right?

Well what happens when you list 250 auctions and 10 people undercut you?

You lose 5% of the cost to list ALL 250 auctions, instead of just 10.


Have any of you found the happy medium where you don't have to cancel a lot of auctions? I've found it to be mostly random, so it's best to avoid over-posting in all categories. Except for crafting materials, which sell so quickly it often doesn't matter.  But even then, 1000 of an item have far less chance to be undercut over the course of a day than 10,000.

6 comments:

  1. Steve White said...:

    If you want to make a lot of gold flipping, you should treat your investments as a small amount of peanut butter on a very large piece of bread. Spread them out as widely and as thinly as possible.

    When I first stated flipping, I was always tempted to invest tons of gold into a one or a few high-margin markets. I would end up with 150 Bloodsaw Leather Boots, which would eventually sell for a lot of profit, but my gold would be tied up for two weeks while I waited for them to move.

    As I matured as a flipper, I learned to place my buy orders much smaller, but spread out over 50+ markets. I would only buy enough of one item to sell completely in 24-36 hours (which varies by individual demand), but I would place them in as many markets as were profitable that day.

    For example, I would buy 5 of every profitable mid-level green armor, 50 each of every low-level blue armor, and then continue to spread my investment THINLY over as many other markets like these as possible until my budget was exhausted.

    While these examples are two very profitable markets, it is VERY IMPORTANT to learn to discover your own in addition to these, as you will need to spread your investment as thinly as possible once you start getting in some serious capital. I use a personal list of nearly 50 markets, including the two mentioned above, and I invest very lightly in every item with a justifiable margin.

    The benefits to spreading investments this thinly are that:

    -Your customer base (the number of people willing to give you their gold) increases dramatically.

    -Money comes in much faster, and you don't spend days waiting for large stacks of an item to sell, tying up gold that could be used to make you more gold.

    -Competition becomes meaningless when you've invested very little into hundreds of separate items.

    -There are no worries if an item does not sell quickly, as your investment in any single thing is minimal.


    This, in my opinion, is the fastest and the best way to become wealthy through flipping. That being said, making gold requires "tortoise and hare" logic. Fast and easy will usually fail, and slow and steady will always win. That doesn't mean you can't optimize your tortoise.

  1. Anonymous said...:

    One problem I encounter following the gold guide here is bag space. Markco you said to buy 3-5 of each low level armor. I did that and the next day my bags are full. Then I try to figure out why and do the calculation. If I buy 4 units of 4 pages of items, that equals 160 items. That is huge amount of bag space consider the maximum space I can have is 160. Also if each item I earn 1s then I only earn 1g60s each day. That doesn't seem very efficient.

    Also it's better to unload 1-2 items each time out of the 3-5 items I bought, but that would means even more bag spaces in use and the next day I can't buy as much.

    Did I do anything wrong here?

  1. Phil said...:

    A lot of bag space definately helps with all trading post activities. At least it helped me because it saves time when taking and (re)listing items.

    Also after this post I now started to look at roughly how many of each item I usually sell before I get undercut and made a column for it on my sheet. I will always try to list only a few more than that number and adjust it accordingly. This should help with losing profit to relisting etc. as before. This applies to "medium stock items" as I call them. Not armors and also not huge supply items like iron ore.

    So thanks again :D

  1. Valkyrie-Afya said...:

    ^
    I think I'll better buy only 1-3 armors so that I can completely list them back as soon as I get them. Any more is only waste of space to me. And also avoid armor that's too low level so the profit is better per piece.

  1. Anonymous said...:

    I fully believe in the posting of relatively small quantities of any single item for a couple reasons. The first of which was touched upon in an earlier comment that a quick turn on your investment gives you cash now to reinvest in something else. The other, more important reason, is value preservation of the market for that item.

    There will always be competition in any market with a profit available and someone will invariably undercut you or overbid. If you post a larger quantity of an item than is normal, the number that will undercut you increases. Sellers are afraid of that roadblock in the way of their items selling so will avoid it or cut their losses with a lower post. I have seen items lose 20% of their market value overnight by overposting high volume at a single pricepoint. This artificial glut on supply can take a month or more to correct on the market.

    This could be avoided by posting smaller quantities at a time and even at different price points. I will often purchase a stack of an item and relist in batches of 20 or 30. I will also put 3 listings up a copper apart. This avoids the kneejerk reaction from other sellers as they see this as normal and let the items sell through. My stack of that item now sells in days instead of taking a month or more at or close to my target sale price.

  1. George Smith said...:

    I just started reading your stuff today, good stuff, very interesting. Random thing you may or may not care about that I am going to share anyway is I am imagining you with a british voice

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