Tuesday, June 30, 2009

Critical Break: Volume Selling

Critical Break is our crafting and economics column written by Qtipus. Q is an experienced crafter and also well versed in using the Auction House to turn a decent profit. Enough so that he was able to fund his own relic, Gungnir. Every Tuesday you will find Q's rants, raves and good crafting practices here. This week, Qtipus is the guy that goes to Sam's Club and buys 6 pallets of generic spaghetti sauce and 100 rolls of toilet paper.

I've alluded to this in previous posts, but haven't really gone into a lot of detail about what you'll need and what timings to look for.

Volume selling applies to the low profit, consumable synths that are generally necessary for anyone who is serious about making a lot of money. Items like sneak and inviz tools. Popular foods. Reraise items. Shihei. These things all tend to move fast, but the biggest problem is that they're generally over saturated by people with no idea how to relate money to time. They generally aren't dumb enough to sell things below their cost, but they are dumb enough to sell things for 1 gil above their cost and not realize they're losing money anyway behaving like this.

So with that said and hopefully with that understood, here is what you'll need.

  • A second account. If you expect to keep up with the pace of the sales through one account and you're hoping to be doing other things in game (like crafting more...), you'll be sore to find out that you'll be left behind almost as soon as you post your items. There are a lot of people out there set up this way who likely have less of a life than you do and will constantly screw up profit margins in the name of having their names up there in the sale history as much as possible.

  • A second way to utilize this second account. You don't need anything super powered since this second account is going to be parked at the AH. An old beat up laptop with a celeron processor or better should be fine as long as you don't mind 3 fps running from the AH to the MH.

  • Access to Tavnazian Safehold or Nashmau. Jeuno and Whitegate are super high traffic areas. This generally will cause AH items to be updated slower in terms of quantity and sales history. You can guess how much fun it will be trying to compete for synthesis materials that are generally sold the second they reach the AH.

  • This isn't required, but it helps a ton. The second account needs to have your most common sub-craft leveled to 70+. Why? A lot of the volume selling items have sub items that are part of the synth which require you to either level it on a mule, find someone with it leveled, or just buy off the AH at super inflated prices. In the case of RR items for example, the ability to synth animas comes into play.

Now that you're set up, here are some guidelines to follow:

  • Never list more than 3-4 of your volume items at a time. Why? AH fees will eat you alive if you're constantly having to list and relist your items. Once you get to know your competition and how they tend to list things, you can build your strat around that. Find the low point and keep cycling your items through the sales.

  • Likewise, if you're not going to be around your computer for a long period of time, flood the AH with as many mules as you can. You can elect to put your stuff up at a higher price and hope it sells or you can put it up at a much lower price to ensure it sells and to cap your competition's ability to make money (since they love to return that favor in kind).

  • Spend some time to get to know your competition. This doesn't mean sending "Hi2u" tells to them. You can generally get to know them by looking at the sales history of the various parts of your item. Pay close attention to the times they generally buy things.

  • Likewise, spend some time getting to know your suppliers. You can sometimes work up deals with them that eliminates the AH for them altogether. This can be beneficial to everyone involved as it takes supplies out of your competition's hand and saves your suppliers a little gil through avoiding the AH fees.

  • Do not be afraid of listing at ####1 gil. Your competition is likely stupid. You can't change that. This isn't an "I can't beat 'em so might as well join 'em" train of thought so much as it is "I'll sit on my damn inventory for a long time if I don't" train of thought. Part of the process of getting to know your competition is getting to know how they list things.

    • Competition for RR pins had one person habitually listing their pins at ##,##1 (X) and had another that habitually listed them between ##,150-##,200 (Y). X pretty much only used their main character for selling while Y had an entire clusterfuck of mules to spam any consumable item they could (wrecking most markets in the process because they're obviously the only one trying to make money in this game). Y could be beaten by watching where they were logged in and anticipating some form of relisting if they saw they weren't selling. This is why you don't list more than 3-4 at once, so that you have those extra slots to play with when (not if) you do get undercut. X could be beaten obviously by just listing at ##,000.

  • Find the busy times for your item. You can generally put a time frame of "prime time" on most of the busy runs, but there are windows there that are busier than others. If it's a necessary item like an RR pin/gorget, you can often times talk to LS leaders who are planning large events (like AV) and potentially sell your stuff to them at a bit of a discount to them. NA prime time will generally see consumable sales spike between 5-7PM est. There will also be runs on consumables around the beginning of EU prime time and around JP prime time (5-6AM est). Again the sales history is key here. Generally try to ignore one buyer buying up 4-5 of a consumable unless they have a pattern of doing so and try to focus on when most of the sales actually happen.

  • Try to avoid buying materials at jacked up prices. This just sets you up for losses. Unless you're 100% sure that your competition is out of mats (can generally keep track by watching buying and selling history), you'll only set yourself up for far less wiggle room if you buy your mats off people trying to jack up the prices. Patience is key here. Wait for more mats to show up on the AH if some are listed jacked up or wait for someone else to buy the inflated prices, then cause them to lose money. Even buying things less than 5k above the last sale prices will only encourage more inflation.

  • Lastly, make absolutely sure that everyone you know in your various linkshells knows you are selling this particular consumable and sell it to them at a discounted rate. This alone will help you clear your stock relatively fast when the AH is in it's slow periods. Keeping your stock rotating is a very important key to gaining significant control of a market. Especially since material costs fluctuate quite a bit on a near daily basis.

In closing, the volume sales market is a vicious, yet necessary way for people to make money if you're wanting to make it in large volumes. I've said it repeatedly in this post and elsewhere that most of the time, you'll be dealing with some really stupid people when it comes to making money. Do not put all your eggs in this basket though. Find other items you can sell as well as these to supplement your income. After a rough starting period and once you get to know your competition, you should be able to cycle volume items pretty consistently and see a nice flow coming in.

1 comment:

Qtipus said...

I hate Sam's Club btw...I won't even go there when they have Transformer exclusives.