Grand Exchange: Your thoughts?

[RU_Insane]

Please use this link to go directly to page 16 from which point the discussion is resumed. Now that GE has been out for a while it would be intresting to see what people think compared to what they thought prior to release.

 

 

 

Once again, please proceed directly to page 16 in order to resume the discussion and disregard 16 pages of spam in between, thanks :)

 

 

 

http://forum.tip.it/viewtopic.php?t=716 ... &start=300

 

 

 

 

 

 

 

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The first thread I made about grand exchange turned into a flame war unfortunately. Please, try to keep this thread civilized, nobody cares about your opinion of my 24 burger king hats. What I earn and what I do with it should not concern you in the slightest eh?

 

 

 

Anyways, here is my projected outcome of what will happen when the grand exchange is released. Once again, I will do this post in parts.

 

 

 

#1: The flood

 

 

 

As stated by jagex, this update will link all the servers and all the players into one grand exchange. Now, imagine, all those hard working gatherers suddenly have the ability to freely sell at their own prices. Not only that, but their target buying audience is 140x bigger now - all the servers combined.

 

 

 

All these happy gatherers all rush to exchange at the same time, to put up all the goods they have collected at their own prices and sell them directly to skillers. Seems all good right? Wrong.

 

 

 

As the first wave of goods hits the exchange at those high prices the human nature will take over. Anybody with any hint of intelligence will quickly realise that if they put it up at the same or higher price as everybody else they have virtualy 0 chance of selling their supplys, considering 1000's of other players are in there doing the same thing.

 

 

 

#2: The collapsing stage

 

 

 

The next logical step in trying to sell your goods just a bit cheaper than everybody else. But once again, lets not forget that all this is happening on the very large scale. Assuming that there is more than one intelligent person in this game most of the people will want to sell their supplys quick and thus will all try to undercut each other.

 

 

 

I anticipate same thing happening with armor, weapons, treassure trail items, and just about everything. When the market is flooded the only logical outcome is the collapse of prices.

 

 

 

#3: The broken backbone

 

 

 

The last stage of the collapse is the collapse of the rare market, the backbone of the economy. All those merchants holding on to their hats, when they see how low the prices on everything are dropping will anturaly want to buy it all out and anticipate the prices to go up. Or simply buy it out and save it for skilling. However, where does one get the cash necessary for such purchases? Thats where rares come in. In hopes of buying things out and reselling for extreme profit later on or simply to use people will begin unloading their rares, which ofcourse will suffer from the very same price flood and in turn collapse.

 

 

 

#4: The conclusion

 

I honestly cant say how it will turn out and this is just my guess of what will happen. But if things do come to this you can expect very large price decrease on everything. Eventualy, it will even out, but the way I see it the best thing one can do is go into this update with lots of cash in order to prepare to buy out all those tradegoods and rares for low prices as drooling masses undercut each other.

 

 

 

#5: The monopoly

 

Lastly, I see people talking about monopolizing certain aspects of the grand exchange. Let me give you a good example.

 

 

 

Lets say 10 wealthiest players int his game all get together and dicide to take control of the grand exchange. With coordinate effort, these said 10 people can all begin buying out a particular item, for arguments sake lets say a santa hat, with x-mas around the corner.

 

 

 

Now, over the period of next months all these merchants can publically buy out all the santa hats that go up for sale and just setting them aside. As people catch on and notice this they will start charging higher prices. Less and less people will sell and more and more people will want them. Prices go up.

 

 

 

Now, as chrismas approaches they will begin putting up those santa hats back for sale. Having bout out all the hats that have gone up for sale for quite some time they have created a big "ARTIFICIAL" demand for them.

 

 

 

As they put up these santa hats for the prices double of what they paid for, all those people who have no idea will foolishly begin buying them, expecting to make a profit since the prices are going up at quite high rate.

 

 

 

By the time merchants unload their hats and everybody catches on the only thing that will happen is the prices will collapse and become lower than what they were prior to this monopolization.

 

 

 

This has been done in the past with the use of forums and coordinated efforts of many merchants, grand exchange will simply make it much easier to do. A lot of people will end up losing all their $ over this.

 

 

 

Oh well, just my thoughts, please refrain from flaming in this thread.

 

 

 

I am going to rip this article to shreds.

 

 

 

Number one, you say hard working skillers or gatherers will be able to sell at their own prices. No. The prices are implemented by Jagex, and if Jagex implemented them, there would be a price control, or the Grand Exchange would just be a more convenient way of trading but an altered form of the free-flow market, like we already have, but not without its backdrops.

 

 

 

As Jagex stated upon the release of the GE, people are selling and buying items for prices implemented by Jagex, and no one can "freely" sell/buy those particular items because of the +/-5% trading range. Let's say a rune battle-axe is 30,000 coins on the market. You want to sell it at the most expensive price. 5% of 30,000 is 6,000, so you'll possibly get no more than 36,000 for that battleaxe, and because it is such an expensive price, merchants, who are looking to make a profit will take advantage of the 5% trading range and actually sell at the market price, because the GE always changes current market prices, so in essence GE acts like a sort of stock market with it's studs and duds.

 

 

 

The reason the GE always shifts is to accommodate free-flowing market agreed-upon prices. Now, don't get confused by my use of 'agreed-upon'. Market prices are always settled upon supply and demand, always. An example,if a merchant is buying, oh, 100 rune battle-axes at a current lowest GE price of 24,000 coins, they'll possibly spend 2.4 mill, assuming a seller is selling for that price, which is likely, because of the supply-and-demand principle. Because of the way the GE works, the supply-and-demand principle applied here will have to be modified. Merchants pre-GE typically buy for low and sell for high, making a profit. But merchants have to look for people who are willing to sell that low to them first. With the GE in effect, merchanting will be easier in some ways. Skillers like to provide end goods for other people, especially merchants. Because they'll usually have a large supply of a good in stock, it makes sense for the skiller to sell at a low,agreed upon price. Merchants will take advantage of this and buy at the lowest current GE price, which skillers are also selling for that same price, 2.4 mill for 100 rune battle-axes at 24k/ea, or (2.4M/100=24,000/1). Assuming merchants have 2.4 mill to spend at the lowest spending prices for a rune battle-axe, they will successfully spend all of their 2.4 Mill.

 

 

 

The Merchant then sells at the current max price for a rune battle-axe, or 36k, giving them a projected 1.2 mill profit, or (3.6M/100=36,000/1)-(2.4M/100=24,000/1)=1.2 Mill. But the GE shifts. So the next day comes and the current market price for rune battle-axes is 24,000, so no-one buys his rune-battle axes because it is 12k off the market price, so the projection fails. But this is so because the merchant bought too many quantities of the rune battle-axe. If someone has a lot of a certain good and is willing to sell at a low price, chances are that person will continue selling at that price, and so will other people because they don't want competition.

 

 

 

So now the market price is 24,000 GP for a rune battle-axe, not 30,000. This isn't necessarily normal market deflation, but prices go up and down all the time. Because Jagex has implemented a price control, people are not free to go beyond or below 5% of the current market price. Because 24k is low enough, people will sell at the market price for rune battle-axes, 24k, because they can still merchant with 2.4 mill if they are selling 100 battle-axes. Because this is a current market price that people are all selling at, there will be more buyers. A low current market price will attract more buyers because it is not too low and not too high, so buyers won't waste a good deal of their money. A buyer buys 100 battle-axes at the current market price. Because the buyer has just bought 100 battle-axes for 2.4 Mill, merchants can now buy low and sell high without any disruptions, so merchanting is easier now, in this scenario.

 

 

 

And because now it is easy to buy and sell a battle-axe, the price of the battle-axe will go up, because you are losing profit if you are a merchant and are deciding to buy a battle-axe for 24k (market-price) and then sell for 5% lower, at 20k or whatever. So this factor enables merchants to sell for higher prices, at 27k/1, (27k for a rune-battle-axe), and it's not the maximum price, so buyers who are looking for market priced deals won't mind paying 3k extra, as long as it is not maximum price. So the next day comes. Rune battle-axe prices have increased because rune battle-axe sellers are making a profit and pushing the prices of battle axes forward. 26.5k is market price, and 31k is maximum price. Because merchants want to continue selling at 27k, even taking a risk of not selling at a profit drain of half a 1000gp per battle-axe, the prices will increase.

 

 

 

The next day battle axes are 27.1k. Maximum price 32k. So you see, market prices are going up, returning to their "normal" market price of 30,000gp. You see? It will keep going in a circle like this until there aren't enough buyers because prices are too expensive, so merchants buy low, skillers will supply at a low price, then merchants will sell at the market price, the next day the market price becomes higher, then higher, then lower, and all over again.

 

 

 

Let me clear up a few points here:

 

 

 

Q:You must be thinking, why would skillers sell at a low price?

 

A: To compete with other skillers. Skillers enjoy providing for an economy, so when one skiller puts it up at a price, another skiller would put the same good at a lower price. This is usually mandated by merchants, since they buy low and sell high. Skillers will agree to sell at a low price because they have a large quantity of a good, and they want to get it off their hands.

 

 

 

I had this same experience when I was fishing trout. The market price (not GE) was around 60 each. I sold at 100 each. Because I was unsuccessful at selling, I decided to drop the price. A merchant comes along and buys it from me. Because I have alarge amount of the good, I'll make a nice profit next day because the market price will increase, so I fish some more trout, and I sell at the market price. Then I wait until the market price drops because prices are too high. So they drop, I buy them at a market price that is low, and then the prices start to increase. I sell the fish that I bought at a low price. I get a profit.

 

 

 

Q: Are some merchants skillers?

 

 

 

A: A majority of them are. Skillers sell to merchants and those merchants are mostly skillers themselves. Now, don't get confused. This is a separate basis. Merchants buy low, sell high. Skillers sell low, and when the market price is higher, sell high. This is almost like merchanting in a way. Merchants will always push the price up when selling because they want to make a profit.

 

 

 

Q: How do you know what you explained about setting market prices actually works?

 

 

 

A: Let's take an example. Full rune was once 250k. The few pure smiths pre-GE could set full rune at this price to sell and they did. But there were merchants who wanted to make a profit, so they began to buy low. Because full rune took a long time to make, with all the processing, this didn't work out initially, so some of the merchants became skillers themselves in order to make the price come down for their merchanting to work.

 

 

 

The skiller-merchants sold at low prices to other merchants, at say, 230k, and merchants pushed the price up to 250k. This would come as natural increase until merchants couldn't afford to buy at low prices, so the skillers had less buyers, which were mainly merchants and people eager for combat who had limited ways of making money. So this forced them to push the price down.

 

 

 

It gradually went down to 240k, then 230k, 220k, so on. I witnessed this myself and at first didn't comprehend why this was happening, but now I know. Now the current market price for full rune is around 180k, slowly going up, but certainly not to 250k. :) In the event that this does happen, however, it will just start in a circle again.

[TheAncient]

What really ticks me off is that Jagex actually has implemented some behind-the-scenes price controls even aside from the 5% bounds. Here are just a few examples:

 

 

 

- Pot average prices are calculated based on per-dose bases, not per-pot bases. Thus (4) dose and (3) dose pots have the same price, even though (4) dose require more time to make (due to having to mix them). However, (1) dose, (3) dose, and (4) dose pots all have different inherent values. (1) dose pots are useful for potting at the bank, and should have a higher price per dose. (3) dose pots are the direct byproducts of herblore, and should be a lower price per dose. (4) dose pots should be worth more due to their mixing time.

 

- Many materials prices are fixed a few gp below their alch values.

 

- Gold amulet prices are fixed. Had they been at their true value (around the price of gold bars, which are 100 ea), they would have been an incredible source of magic xp (string amulet @ Lunar spellbook). I think, however, Jagex forsaw this and made a price minimum that makes string amulet horridly expensive. Note: this applies to unstrung symbols and unstrung emblems as well.

[ego_scorpion]

Oh no, being torn to shreds, somebody save me!

 

 

 

Dear Geekguy, please get ranked prior to making such threads, thank you.

 

 

 

Also, please before writing a huge response which I dont intened to read because of your oepning statement (intelligence much for the win) read the date of the original post and see that this article was written PRIOR to release of GE as a theory as to what will happen. The reason for my bumping it now is because I want to show that I Was absolutely right about the price decrease without falsely calling my artcile a preview.

 

 

 

Seing how you are NOT a skiller and I highly dobut that you are a merchant, although feel free to prove me wrong, please give me some credentials prior to writing up something this big which attempts to "shred" my article a part.

 

 

 

I look forward to your response (I really do lol)

 

 

 

edit:

 

There is only one person who could write such a huge response aruging his false points trying to prove he is god of economics, wonder if he has second account that you are it.

[TheAncient]

Oh no, being torn to shreds, somebody save me!

 

 

 

Dear Geekguy, please get ranked prior to making such threads, thank you.

 

 

 

Also, please before writing a huge response which I dont intened to read because of your oepning statement (intelligence much for the win) read the date of the original post and see that this article was written PRIOR to release of GE as a theory as to what will happen. The reason for my bumping it now is because I want to show that I Was absolutely right about the price decrease without falsely calling my artcile a preview.

 

 

 

Seing how you are NOT a skiller and I highly dobut that you are a merchant, although feel free to prove me wrong, please give me some credentials prior to writing up something this big which attempts to "shred" my article a part.

 

 

 

I look forward to your response (I really do lol)

 

 

 

edit:

 

There is only one person who could write such a huge response aruging his false points trying to prove he is god of economics, wonder if he has second account that you are it.

 

 

 

By the way, can you please use spell check? It's hard to carry on an intelligent conversation with the other party making egregious spelling errors.

 

 

 

Sorry, just had to put that out.

 

 

 

Anyway, you were not completely accurate about the GE. Yes, prices did decrease, but for MANY different reasons that you didn't address (such as the inherent structure of the GE, the 5% bounds, etc. etc.). Obviously you could not have known about these before the update, but at the same token, don't pretend that your predicitions on the GE were completely right.

 

 

 

Also, did you address the items that went UP as a result of the GE? I'm talking here about mid-level rares, such as GWD items and DFS. These crashed before the GE in anticipation (again, NOT exactly reflecting your predictions), but shot back up. Yes, to an extent they are price-correcting and returning back to their unpanicked values. However, they are STILL overvalued - why? The GE became a source of income for those many players who stocked 5M+ net worth in their bank of useless items. Having sold these items, those players now have enough to buy those mid-level rares, thus increasing demand.

[ego_scorpion]

sseli, the responses people get are the ones they deserve in my opinion. Opening your response with a threat of tearing it to shreads is not how an intellgient conversations tarts.

 

 

 

Also, being able to spell in a langauge that is not native to you has absolutely nothing with being an intelligent person, thank youf or trying however.

 

 

 

And bottom line is I was right that prices will go down ebcuase of oversupply and people trying to udnercut, which are 2 of the main reasons, not counting the mass histeria and botters unloading.

 

 

 

True, some items go up after the histeria is over, rares for example, but hey, we cant know everything.

[runnybabbit]

I've made 6m since it last came out, and I've only logged in maybe 10 times? I don't see whats so bad about it. Its easy and conveniant

[qeltar]

Well well.. seems ego_scorpion is back to tell us all about how wonderful he is... and toss in his usual smug insults and innuendo.

 

 

 

Hate to break this to you, sport... but your main prediction was that prices would "collapse", including rares. That most certainly did NOT happen -- just as I and many others said it would not. You're patting yourself on the back for saying that prices would initially go down? Whoopie.. everyone knew that would happen.

 

 

 

And no, I didn't get you suspended from Tip.It -- YOU did, probably from acting like an obnoxious jackass (and you apparently haven't learned anything from it). And no, I don't have any other accounts here, so you can stop with the BS on that front as well.

 

 

 

Finally, if you want to find someone to blame for the price restrictions on the GE that are hampering its usefulness for everyone, look in the mirror. It was done in large part because of price manipulators like you.

[ego_scorpion]

qeltar, I made a thread on RSOF you should go flame me there some more and then copy all my ideas to post here as your own.

[quitthegame]

qeltar, I made a thread on RSOF you should go flame me there some more and then copy all my ideas to post here as your own.

 

 

 

I was going to laugh at you for saying that in qeltar's thread, but then I realized that this is your thread, but it lists qeltar as the author. At least it does for me, maybe it's a browser error on my computer. Quite strange...

 

 

 

Anyway, just because you made a bunch of threads right after the GE was announced doesn't mean you "own" every idea you put in them. There are no prizes for being merely first, the point of discussion is accurate and insightful analysis. If you say something obvious quickly, no one cares. If you say something amazing first, then you have something. As to your performance in that regard, the obvious things you mentioned came true, and the ideas you mentioned that weren't obvious, like rares collapsing, didn't. Why are you proud of that?

 

 

 

To be honest though, I thought items like TT and herbs would collapse, but I didn't expect flax and maples and ores to collapse as much as they have so I'll give you credit for superior understanding of the average RS player's psychology there -- and there are still a couple of weeks left on your prediction about rares, so you could possibly still be proved right. Of course I have been predicting a collapse in the price of rares also, so my major disagreement with you was whether rares are the backbone of the economy, and unless you make that statement in a testable form it will never be settled. You up for that challenge?

[Cha0sx]

This is a good time to collect cheap resources that have a chance of raising in price later. My friend is buying the following items cheap: Sharks, potions, farming seeds, etc. Lots of resources are good to collect and use your money on now. Do it now before they go up :)

[TheAncient]

This is a good time to collect cheap resources that have a chance of raising in price later. My friend is buying the following items cheap: Sharks, potions, farming seeds, etc. Lots of resources are good to collect and use your money on now. Do it now before they go up :)

 

 

 

Pots and herb/farm related materials will probably stay pretty cheap. I doubt they will ever go back to their old value.

[QueenValerie]

Ego & Geltar if you want to dispute then do it in P.M. but keep it off these boards. Consider this a warning to you both. :shame:

[Cha0sx]

This is a good time to collect cheap resources that have a chance of raising in price later. My friend is buying the following items cheap: Sharks, potions, farming seeds, etc. Lots of resources are good to collect and use your money on now. Do it now before they go up :)

 

 

 

Pots and herb/farm related materials will probably stay pretty cheap. I doubt they will ever go back to their old value.

 

 

 

Potions and supplies are used faster than new herbs/seeds come into the game, most likely, so I think while it may not be quick, eventually prices will rise back up.

[Dire_Wolf]

I hate it, it took spined set from 300k to this:

 

 

 

 

 

 

 

 

Ive tried forum, and GE seems not for a place for me to get my sets sold..

 

 

 

Will try old fashion selling later, but i doubt it's any diffrent from forum. Quite frankly im pissed off.

 

 

 

If you think that Spined sets are easy to get and the price should be lower..

 

 

 

then hers my reply back:

 

 

 

In order to make spined set you need combat over 85

 

 

 

Either cannon, guthan or high defensive range armor

 

 

 

Now tell me? How do you get that. The answar is simple, hard work of course.

 

 

 

So if a noob tells me "They cost X" then i get pissed off. I hope this dont happend when i sell old fashion.

[kevinyang222]

As a poor noob, i absolutely love the GE.

 

 

 

It absolutely trivializes finding odd bits for questing, and selling treasure trail junk has never been easier. I don't know much about the fluctuations in the upper echelon of items, so i can't say much about that.

 

 

 

But i definitely like the GE. I don't think it's killed merchanting

[Inuashakent]

I like how some herbs lowered in price... :

[ego_scorpion]

Herbs are anything but low in price. Although for anyone who cared to level it, herblore was never a hard skill, considering that 9 out of 10 people will sell their high end herbs for 1k each.

 

 

 

Seconds was a big problem however, iuf you were doign it the smart and quick way of ubying everything, making pots, then selling those for lowest price to get your money back. GE made certain skills more troublesome. Herb price to potion price ratio is just plain whack, there was a big debate about that on RSOF forums and some herblaists are even trying to rally everyone to stop selling potions.

 

 

 

Dragonhides are also insainely expensive right now in comparison. Granted eventualy things might settle down. One of the reasons prices are dropping though is because some of the prices were way too high, while others prices are being greatly influenced by the botters. I have had my willows on GE sinse day 1, they are still up there at lowest price without any chance of ever selling.

[yuki1236]

i actually think its pretty nifty

[HatshepsutLecter]

I am seriously loving this exchange. It made it super easy to get all of the seeds that I needed to get the last couple of farming levels I've been working on for the Varrock diary. :