We Need More Writers!
Tuesday, December 23, 20140 comments
Written by Murven
In order to make some money from the trading post, it is important to plan ahead of time what your goal is concerning profit.
In most cases the market is really competitive and whenever a new niche shows up it is quickly invaded by competitors trying to make a profit out of the same product.
Instead of hoping for the best and attempting to extract the biggest profit possible out of a transaction, only to be undercut later by another competitor losing momentum and holding your transactions trapped in the trading post indefinitely, you should plan ahead of time how much profit is your goal and pursue that regardless of the actual gap in prices.
So, let's say - for example - that you would like to have a 35% profit in your transaction. Just for clarification, I am making this number up, so do not make it a rule, this percentage may be too high or too low depending on your investment and how competitive the market is, but I will use for illustration purposes.
So in order to get a 35% profit you need to account for the fact that the trading post will charge you 15% in total for your transaction. This means that you will only receive 85% of the price you sell your items for.
This means that you need to sell your times at a price "x" so that 85% of x equals your investment ("y") plus 35%.
Mathematically you can express that this way:
x => x * 0.85 = y * 1.35
x = y * 1.35 / 0.85
x = y * 1.59
And now you have your golden rule of pricing your items:
"When you buy at price 'y' you need to sell at y times 1.59 to have a 35% profit"
This means that if you bought a piece of equipment for 1 silver, which is equivalent to 100 copper, when you apply your golden rule, you get:
x = 100 * 1.59 = 159c = 1s 59c
So, in order to get a 35% profit, you should sell at 1s 59c when buying at 1s.
Even if the gap in the trading post says your item can be sold for 2 or 3 silver, you should not fall for that trap, simply sell it at 1s 59c.
This strategy will guarantee you a quicker sell, will minimize the chance of undercutting by your naive competitors who are only looking for a 200% profit deal and will also make it easy for you to calculate your return of investment rate over time.
It will also make it incredibly easy for you to make your calculations on the fly just by looking at the gap and making a single operation in your calculator.
I hope this is useful for anyone who is starting to plan their strategy for the Guild Wars 2 trading post.