Grand Exchange: Your thoughts?

[Matok]

actually i also thought about this.

 

The question is: will the GE will enable people to set prices according to quantities?

 

Will a player,selling 20k laws, will be able to set rules for his stock.

 

for example:

 

1-10 laws - 700 each

 

100 - 999 - 400 each

 

1k-10k - 300 each

 

and so on..

 

I dont belive this type of sophisticated merchaing mechanism will be implemented so,you're right , it might have some effect on some of the markets.

 

On the other hand, why the seller should care if 1 player bought the whole stock or 20k players bought 1 law each...its not like he's selling manually 1 by 1..

 

i guess we'll have to wait and see

[Fey_Warrior]

Hi ixfd64,

 

 

 

Thanks for taking the time to write up and post your analysis.

 

 

 

My suspicions have been related to this since I know myself, it means I can set a price (possibly higher) and forget it.

 

 

 

This will mean the real bargain hunters will still be driven to market worlds and marketplace forums to see what more their money can buy.

 

 

 

I'm personally not going to undersell simply to get a quick sale if I can place my advertisement and let it take care of itself. The same principle seems to work on ecommerce websites where prices seem generally higher or else carry other issues of delivery delay (like Ebay) because the seller is offline and one can't negotiate a deal with them live, which is why weekend classifieds still have good circulation and readership.

[Mr_Cheese]

Another grand exchange conspiricy theory, just wait till it comes out!!!

 

 

 

on topic though this is a very interesting point. players might also make 3 "shops" one with 10k coal 180e

 

 

 

one with 1k coal 190 and so on.

[Duke_Freedom]

The reason that many sellers offer bulk discounts is to reward the buyer for buying from them.

 

 

 

People aren't charity organizations who reward nice people. The only reason people offer discounts is to sell their items faster, because they sell for a lower price. Buyers always seek the cheapest sale possible, and 10gp off on a bulk sale of 20K coal still means you have to pay 200K gp less.

 

 

 

The reason that most buyers do not pay much for items in small amounts is that the seller is mostly likely trying to clear the bank and is not serious on making any profit on the item

 

 

 

The main reason is that most buyers need bulk materials. Buying up items in small portions is an inconvenience and costs time (and thus money). Buyers will want to re-earn that money by buying smaller amounts for less money per item.

 

 

 

Thus, even these sellers are likely to list the highest reasonable price.

 

 

 

They will most likely proceed to sell slightly below market price because they still want to get rid of it (fast).

 

 

 

Here's another thing. Some items in high demand are worth much more to individual buyers than people buying in bulk. For example, a player desperate for a law rune might pay 1,000 GP each, while a player planning to use them for training magic might pay only 300 GP each. That's a 700 GP difference.

 

 

 

The total amount of sales of 1 law rune for 1,000 is extremely insigificant in comparison to the total amount of sales of bulk law runes. Hence, no effect at all. Furthermore, one can even argue that the occassional sales of 1 law rune for 1,000 is already reflected in the bulk price of law runes, because those who sell the 1 law runes generally bought bulk laws.

 

 

 

Suppose that a player wants to sell 100 green dragonhide bodies. He can sell all 100 bodies at 6,000-7,000 each, but that will probably take days. However, if (s)he sells the bodies for 4,450 GP each, it might only take minutes. The player might save 50 hours of selling time by sacrificing 115,000 GP. In those 50 hours, the players could have made much more money or gained a lot of EXP. Most players would choose the latter option. However, with the GE, the player can have the items sold automatically, while the player gains skills. Thus, this will drive the prices up.

 

 

 

No, it will mostly likely drive prices down instead. The way such goods are sold currently goes like this:

 

 

 

Skiller: Makes 100 dragonhide bodies sells to merchant for 4500 each because that saves him valuable time.

 

 

 

Merchant: Upmarks the dragonhide bodies to 6500 (an upmark of 2000) each due to the time involved in selling the dragonhide bodies individually.

 

 

 

In the new system the skiller will be putting the 100 dragonhide bodies in the GE himself. As a result, the actual market price on the GE will be somewhere between 4500 - 6500 each instead, which is lower than the widely considered market price of 6500 before.

 

 

 

Any thoughts?

 

 

 

Sorry to say, but your conclusions are rather invalid in my opinion.

[Turtle_GS]

I would like to point out that one of your assumptions is incorrect.

 

will house a huge new addition to the game: the ability to offer items to buy and sell across ALL servers and to ALL players!

 

So, if Jagex makes this as they say they would, it should include a selling feature, which means that there probably won't be the mass inflation you described.

[Hydraides]

Please Explain to me how you can only sell to the grand exchange??

 

 

 

Someone would have to buy your items, no?

[ixfd64]

I mean, players can have the GE sell items for them, but they can't have the GE buy items for them. For example, the player cannot specify that (s)he buys coal at 180 GP each and have people put coal there.

[qeltar]

 

First of all, my analysis is based on five assumptions:

 

 

 

1. The GE will basically function as a large player-owned shop

 

2. Players will be able to set their prices for their items

 

3. Players will only be able to use the GE to sell items, and not buy them

 

4. Players will be able to buy items from the GE like from a shop, with just a few clicks

 

5. The GE will be available to free players

 

 

 

The most important assumtion is #2. If players could not set their prices, then this analysis will be wrong.

 

 

Actually, your most important assumption really is #3, and I believe it is incorrect. Even what little Jagex told us about this in the BTS contradicts it: "the ability to offer items to buy and sell across ALL servers and to ALL players!".

 

 

 

That's one reason why your conclusions are incorrect.

 

 

 

Another is that you are not taking into account the fact that there are thousands of people with billions of gold worth of items clogging their banks that are going to try to sell them using the GE. Initial prices will drop, sometimes significantly; this will level off but I believe that as a whole prices are going lower as a result of the GE, not higher.

 

 

 

Edit: Turtle_GS mentioned the buying thing, I missed it before.

[lord_british]

If you can only sell to the GE, how are you going to buy items that other people can only sell?

 

 

 

That logic would mean that the GE will rapidly be full of items that NOONE can buy #-o

 

 

 

*EDIT* well, looks like a few people have beaten me to that one :shock:

[Fools_Taco]

What have you been smoking? The GE will bring more sellers into the market. More sellers means more compition, more competition is lower prices. What country are you from?

[Olbritishchap]

3. Players will only be able to use the GE to sell items, and not buy them

 

 

 

Then who's supposed to buy them?

[blackrazor]

I would put forward the economic hypothesis (not originally mine) that the source of profit lies in the inefficiency of supply and / or demand (and time).

 

 

 

Put simply, it is easier to make a merchanting profit, when buying or selling is a pain, and a merchant takes the time and develops the skills to overcome that barrier.

 

 

 

The GE will probably reduce inefficiency, by bringing all the servers together into one global market and allowing for selling while your character is off doing other things. This should help reduce inefficiencies in selling & buying (larger markets, more variety, more choice of competing deals) and also reduce inefficiencies in time (selling while doing other in-game activities or even while offline).

 

 

 

This means that prices will tend to cluster into a narrow (more efficient) margin of bid and ask, making merchanting (reselling) a less viable proposition.

 

 

 

For high volume items, such as "crafted goods" (I use this term loosely, i.e.: plates, kites, bows, amulets, etc.), the price will likely wind up near the high-alch or npc price. These items tend to be "over-produced" as by-products of the very nature of RS's leveling game, and with high liquidity, high efficiency markets, their pricing should reflect that. Some people will need these products for personal use or high-alching, but generally in quantities far lower than production.

 

 

 

Raw & consumable materials, i.e. runes, essense, logs, high-quality food, ores, coal, gems, feathers, perhaps arrows?, etc., will likely see a price drop, but NOT down to high-alch or npc prices. These are produced in large quantities, but are also consumed in large quantities as part of the leveling game. They will achieve a stabilized price, with a narrow bid & ask (regardless of quantity), so merchanting these will make less sense once the GE is established. They will still be purchased for leveling, and also as a hedge against the "gold piece".

 

 

 

Scarce items (barrows, whips, dragon armors & weapons, trimmed items, etc.) will also see a price drop, but still well above high-alch or npc prices. These items are in scarce supply, but over time they become less scarce, as more enter the market than leave it. Of course, this is partially offset by new players entering the game and demanding these scarce items. Thus over time, prices will drop on these items, but slowly.

 

 

 

Rare items should rise in price, because there is zero new supply. These slowly trickle out of the game, while the player population (and demand) continues to grow and / or churn.

 

 

 

These price trends would exist without the GE, but they should be amplified and accelerated by the GE's efficiency. Equally important, the bid and ask on items should shrink dramatically, making it much harder to "turn a quick buck" on a resell.

 

 

 

The best investment will be in investments that follow (relatively) predictable market changes over time. For example, if one assumes that holiday rares will only get rarer, then even with a narrow bid / ask margin at one point in time, the price should still trend upwards over time. This will make rarers an even better investment when the GE is enabled (better, because there will be fewer alternative good investments with the GE in place), further helping these items to inflate.

 

 

 

In conclusion, I think the GE will "standardize" prices to a narrow bid /ask, making it harder to turn quick profits by jumping servers, changing locations, or coming on at different times of the week. In short, less short-term merchanting.

 

 

 

Price trends will move faster towards their current trends. Crafted goods should drop to near high-alch, consumables should drop a bit or hold steady, scarce goods will tend to drop (but more slowly), and rares should inflate.

[Georgelemmons]

The quantity based price is a great idea!!! If it's not implemented, email it to Jagex!!!!

[Randox]

Ok, I'll give you that bulk normally costs more, and the GE will allow people to charge bulk prices for smaller amounts. But what you forgot is that many people will lower their price to make items sell faster, especilly when many poeple are selling the same thing. Over time the normall price will fall to match these low prices. Once this happens people sell even lower again to make things sell faster. The cycle continues untill people arent willing to sell any lower.

 

 

 

So we might see an initial price hike, but the price will slowly lower after the first week.

[Berrakus]

There are so many assumptions about this system that you have to make no one can make an educated guess as to the true impact this system will have. Since Jagex has been a little sloppy with their updates here recently, I'm more worried about mistakes that they are going to make: Duplicate items being sold, Not getting paid for your items, etc. This has the potential to be really bad at first.

[Solidus_77]

There are so many assumptions about this system that you have to make no one can make an educated guess as to the true impact this system will have.

 

 

 

That's not exactly sure. We can make educated guesses based on the information given. Formulating an educated guess can be done with just a bit of information. What we cannot do is make accurate guesses.

 

 

 

Since Jagex has been a little sloppy with their updates here recently,

 

 

 

And what is this assessment based on?

 

 

 

 

 

I'm more worried about mistakes that they are going to make: Duplicate items being sold, Not getting paid for your items, etc. This has the potential to be really bad at first.

 

 

 

Calling them "sloppy" due to the existence of bugs is completely unreasonable. It is just impossible to cover every single outcome when you're dealing with something as complex as a video game.

[Animaslayer]

you can buy things otherwise how does the seller sell?

[dotdotdot]

 

3. Players will only be able to use the GE to sell items, and not buy them

 

 

 

 

..You're kidding right? If someone puts something up for sale, someone has to buy them.

[dutchdreams]

For those that don't understand:

 

 

 

What ixfd64 means is, that he thinks you can't put in buying orders that will remain active. In other words, he assumes that the only way to buy from the auction house will be done by buying things that are actually up for sale.

 

 

 

Example, he expects it will not be possible to put in an order like:

 

- 'Dutchdreams buying 1 million sharks at 1 gp each'

 

- 'Dutchdreams buying 40000 phats at 1 gp each'

 

- 'Dutchdreams buying 20 green masks at 20 mill each'.

 

 

 

(compare to auction houses irl, where you can only bid on items that are actually up for sale...... you can't bid on future items)

[Feldron]

Your half right half wrong

 

 

 

I want to lv my construction i got money so i buy the plank instead of wasting time making them repeat for every skill you can use resources to lvl

 

 

 

So resources will be bought

 

 

 

also now look at the forums

 

30k planks tons of these

 

300k planks a few of these

 

 

 

So these guys have so much reasource and players are buying resources so they sell them in the exchange

 

 

 

What happens then to resource price when you got like 60 players with vast amount for sale they sell for a bit under each other to get them goods sold first so they can get back to making more money the guy with 30k would not want to sell higher then the guy with 300k no one would simple would take too long when a g under sells fine

 

 

 

now then if you look on the forums you will find players sell for 10% under fairly often well so the base decrease will be 10% and will go lower with every large merchant in the line

 

(remember frees and members are both on the exchange they said across all severs)

 

 

 

So expect open prices on the great exchange to be 10-20% for every exp resource in the game this will happen in the first few days

 

 

 

However i believe the price for resources will settle at 10-50% lower the current by the end of the month

[Naruto_1001]

I just think some items will go down in price and some will go up, as an example, Yew Logs will go up because members won't take the time to go get them in F2P world from F2Pers while Strength potions will go down in F2P because members can faster get them then F2Pers and will sell them.

[tuggernongy]

Listen to qeltar and Duke_Freedom, they know what they're talking about :

 

 

 

Prices for most items will drop initially due to market being flooded with them, especially items that are produced through resources (things like potions, items that are smithed, etc). These items will drop until an equilibrium is reached where sellers won't go lower, and buyers are happy with that price, without supply / demand tugging the price around too much.

 

 

 

Items that can be collected on f2p that members want / need (limps / red eggs / zammy wines, maybe big bones partially?), will likely all drop too, due to the elimination of the middle-man merchanters (assuming it works on f2p, it will be in varrock and they do say all worlds).

 

 

 

Other items that are hard to find buyers for (niche items, like TT rewards) will likely drop too, as people unload their hoards.

 

 

 

All this selling means allot of prices dropping, but it also means these people end up with lots of cash on their hands. "prized" items will probably rise; maybe not party hats, but good outfits etc. GWD gear will probably stabilise for a while as demand for it goes up.

 

 

 

Finally, some items will stay steady or rise: this will mostly be "resource" items. The people with the most stuff to sell off are mostly skillers; these people will use their fresh money to buy up their skills more; therefore increased demand for resources.

 

 

 

That's just my interpretation of what will happen, based on the limited knowledge we have of how the GE will work. :)

[ixfd64]

That does seem reasonable. I should probably start selling off some of my items before prices drop.

[Rahila]

The day that the GE comes out i'll be selling my red mask for 39m

 

 

 

4 months ago i bought it for 39m, prices are now at 35-36m, so i'm praying that red mask owners unite and raise the price to what it should be #-o

[lord_british]

As this Grand Exchange is supposed to link everyone across all the servers I have these thoughts :

 

 

 

What about ex-members on F2P worlds : Will they be able to sell their "Member Object"s in this GE?

 

 

 

They shouldn't be allowed to buy them, unless they are P2P, but then...why try this on a F2P world if you are a member?