Saturday, September 26, 2009

Unclear on the concept

I have taken a short break from my trader main to get my Minmatar alt up to speed. Training a real long skill on Alex so I can concentrate on life in Rens.

I haven't spent much time in the trade hubs, as I find I can make enough money with casual trading in the hinterlands, so some of the ways things work on the market here are puzzling.

I am making use of my 5 orders to put up some buy orders for things I use. There are very few items with a decent buy/sell spread (as you would expect in a hub), but I have found a couple of items that I can melt down (even with very little skills) at a 50-70% profit. Not great profits in total, but it being Rens, I am buying 100s of items a day with about 20 seconds worth of effort.

I am noticing that there are some traders who appear to have lost their minds. Their buy order prices are for exactly (or within 1%) of the sell prices/mineral values on some items. And these are common as dirt items, nothing rare at all.

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I can see only 3 reasons to buy something and why I think this kind of order makes no sense:

1) You are going to use the item.

If you can buy it now from a sell order for (literally) 100 isk more, even at a large volume, I can't see why a buy order that is filled over time can save you enough money to justify the use of an order slot and the broker fees. Maybe these are restocking orders for a lowsec/nullsec corp? Goonfleet?

2) You are going to resell the item.

There is a point where the spread gets so close that reselling doesn't make any sense. Granted, there are some items where the regional arbitrage can still be taken advantage of (like my favorite little item, the Type-D Altered SS Expanded Cargo). But I can't see the advantage in doing this with an item that costs 12k. The sheer volume and cost to move is crazy. which leads us to...

3) You are going to melt down the item and use/resell the minerals.

The big traders all have many tools at their disposal, including their spreadsheets, Eve Central, etc. They can not only see the x-region possibilities, but the exact amount of minerals they can get from an item and what those minerals are worth. Maybe it's a small/new trader who is reading their sheets wrong? Bidding the final sell price?

Maybe there is an opportunity on some items with a high mineral count that are worth buying at "market" because they are easier to move as the item and are then melted down at another site. I mentioned this in an earlier post, but in the context of buy low/sell high, not as buy the item instead of the minerals and have never really seen it in action with the kind of volume I am seeing.

500 trit = 5cm cargo
2000 trit = 20cm cargo

item that melts for 2000 trit = 5cm cargo

2000 trit @ 2.80 = item that melts for 2000 trit buy order at 5600 each

At that point, you can move 4 times as much trit in the same space and as long as the costs are the same, it would make sense. And I guess it is a good way to put up the equivalent of a buy order for trit at 2.80 if someone else already has that price taken.

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The reason I called this post "Unclear on the concept" is that either these folks are not doing it right (tm) or I am just not understanding what they are doing. Are there any good reasons why someone would do this? Is it #3? Is this just my "Welcome to how the big boys/girls do it?" moment?

2 comments:

  1. I suspect that a lot of folks just haven't thought about reprocessing and don't factor it into their calculations.

    Also, they just get caught up in the moment and keep doing market pew pew even when they're hurting themselves.

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  2. I was afraid of the first one. Hadn't considered the second.

    I almost want to send some of these people a message asking about it.

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