Greedy Goblin

Friday, April 17, 2015

Trading vs just selling or buying

Everyone trades. People sell drops, mined ore, spare ships and buy ammo, ships, modules. This means that everyone is a trader. Which is a meaningless statement, just like claiming that "everyone is a ratter" as practically everyone shoots NPCs at some point. Or that Goons are PvP-ers because they get on kill reports. However "ratter" specifically means someone who kills NPCs for their loot and bounty for the living. Missioners who kill as few rats as possible to complete the mission or miners who kill belt rats are not considered ratters.

But then what separates traders from those who trade as part of their everyday life. No, not setting sell orders instead of dumping your stuff into buy orders, that just make you non-moron. Any ratter with more than 2 brain cells will set a 4-800M sell order for his deadspace loot, instead of selling it for a 1M ISK buy order. No, not everyone has 2 brain cells, otherwise no one would bother to set those buy orders.

No, the defining step is investing your liquid capital into some item you don't need and will re-sale for profit. Money is called "liquid" for a reason: it can go into practically any item. You can buy ships, modules, materials, implants or even PLEX. Items have much less ways to go: they have one specific use and they can be sold for ISK. You can barter maybe, but good luck finding a partner who trades your Estamel's Modified Adaptive Invulnerability field for Nanoribbons.

By converting your money into an item, you commit to that item. If its price goes down, you'll have loss. Maybe you'll even have trouble liquidating the item. For non-traders, this step is missing. The miner is stuck with ore. The missioner is stuck with LP store items. Anyone who farms any item is stuck with it and forced to sell. They would all prefer if the ore would magically turn into ISK. Many prefer it so much, that he chooses the not so magical way of dumping it into a buy order.

The trader already has ISK, yet he buys items he doesn't need - for the hope of profit. While he holds that item, he has less ISK. Setting a buy order, waiting and setting a sell order aren't particularly hard tasks. Having the capital and the will to use it makes one a trader.


Smokeman said...

True, but a trader's risk is controlled. If you fail to sell an item as expected, you don't lose the item. Your reconversion of it to isk (Hopefully a greater amount than was employed to obtain it.) Is simply delayed.

That's why "trading" isn't really a PvP activity. You don't have nearly the same risk profile.

At the same time, if you grind an item you don't need, with the express intent of then transporting it to a hub for sale, you are also "trading" in that you did not need that item you ground for. The only difference is your profit is higher. However, you spent time getting the item, which dilutes your "isk /hour", as it were.

The risk of all this, the "PvP" part, is in the arbitrage of trasporting the item from where it's worth less (In the case of implants it's where the faction sells it.) to where it's worth more, mainly high traffic hubs like Jita.

By farming the item yourself, you're vertically integrating your supply chain, which is a part of an advanced trading strategy. You're NOT just "selling" the item.

At the same time you're running mining missions, I expect your grabbing all the buy orders that hit for a low price (Simply because others might not want to risk trasporting the items.)

Anonymous said...


First of all, the defining quality of a PVP activity is not risk, but that players are competing. In the case of trading they are competing on the limited pool of profit.

Second of all, there is a risk attached to trading nonetheless. I lost billions when CA-1 and CA-2 implant prices suddenly dropped.

Third of all, they actual risk of transporting an implant from A to B is minimal if done correctly. Just ask Gevlon how many of his tengus he has lost so far.

Anonymous said...

One activity has a binary risk of losing a tiny fraction of your net wealth. The other activity has a wide range of outcomes involving a much greater portion of your wealth.
Are you really arguing negligible impact, binary risk profile makes ship combat more worth of being called PvP?

Anonymous said...

In my opinion it's not only black and white.

Time: Not everyone wants to invest time to get the most ISK out of some random drops or a cargo full of ore. It's okay for them to get an acceptable deal.

Market Regulation: Mostly the market regulates itself. The high-frequent items are often bought and sold with a small profit marge (like 2 to 5 percent).

Location: Sometimes one doesn't want to hang around in a trading hub and check his order every so often instead of ratting/mining/whatever.

Live and let live: Maybe with a non-trading alt you just accept to make less profit while someone else does, because with your trading alt it's exactly the other way.

Anonymous said...

It is not about the 2 gray cells. It is about value for time spent. I can put every item on sell order or fast sell. Hmmm. The difference is not that big (with items i am getting from LP store) it is 15% more than fast sell. Now, the time spent to create xxx orders, sit in Jita and move them one isk up or down is a waste of time because i can earn much more by just running more missions in that time. Having a trading alt might do it but with my 1 bill of items per week income 15% more income in having such alt is not even paying for his plex.

Trading is for ppl that can have a client running while they do other things. I just want to run my 2 missions of a day and go and kill some cfc.

Anonymous said...

Everyone trades but not everyone is a trader. One is an action, the other is more of a job or a habit.

Zaxin said...

and then you get traders who do not use buy orders at all.

They act as a clearing house of sorts, taking bulk lots of everything from minerals, moon goo, through to clothing, and even entire hangar clearances.

This is an extremely relaxed sort of trading, as you get to be provided quite often with a regular supply at a pre-arranged price. Initially you pay for the goods up front, but, over time, you end up having people give you a date by which to give them the agreed amount.
An example:
Player A has 30bn of processed material X.
Player B agrees to pay player A 35bn for the product in 30 days.
Player B then has 1 month to resell the product, and hopefully make a profit.

This requires trust, and risk on both sides. Paying up front leaves player B with the risk of their market forecast being wrong, and 0 risk for player A.

Another form of "lazy trading" is again skipping the buy orders effort, and building a relationship with an industrialist who builds to order, using contracts.
Player A sends a contract for player B for 500m isk with the "You will pay" set as X amount of Y ships.
(the value of the ships is agreed by a pre-determined formula, and based on todays prices)
Player B then has X days to deliver the ships to player A, who resells them (hopefully at a profit)

This is a way for player A to have a steady stream of product coming in, at a level that they feel they can shift for a profit. Player B gets to make profit on their building, skipping the sell orders & taxes, and to have guaranteed work.
The two difficulties here are for player A in calculating the volume they can move, and the market direction for each ship, and for agreeing a satisfactory formula for pricing with player B.

Trading is much more than simply buy & sell orders.

Smokeman said...

Anonymous at 17 April, 2015 08:41 says:
"First of all, the defining quality of a PVP activity is not risk, but that players are competing. In the case of trading they are competing on the limited pool of profit"

By casting such a wide net, you remove all meaning from the phrase "PvP." Even the guy farming ore out in the middle of nowhere where no one else ever goes is competing at some point, either in time (He chose to spend time going to the middle of nowhere, thus costing him "mining time") or when he sells his ore. (competing with mass producers who drive the price down.)

It's like saying "Well, it's an online game, so you're competing for SOMETHING, hence, you're PvPing."

It's like the difference between a pig and a chicken in a ham and eggs breakfast, the chicken is involved, but the pig is committed.

"PvP" should be reserved for combat, the visceral, immediate competition of two or more players. Putting up a buy order and waiting for a sale may be an "interaction", but it's not in the same league.

Put another way, we could say there's "consensual PvP" where both players agree to fight, "non consensual PvP" where one player ganks another, and "bot to bot PvP" where one player's bot beats up the other player's bot while one or the other isn't even looking. The "PvP" in trading is the third kind.

Anonymous said...

Maybe look up something called wholesaling. There's a reason people sell to buy orders, rather than waiting months for those 200 drops/items to sell one-by-one.