Everything* I needed to know about economics I learned making leatherfoot haversacks

[Bauhb]

(*= almost)

I've been a tradeskiller for a very long time, but I never was really able to make a decent profit from it. I made some small cash selling MTP's in my 40's, but then I wound up accidentally crashing that market and moving on.

Lesson #1: Don't flood the **SMURF** market. It's no small feat to make too many consumable items, but I did it, and even tho I started selling MTP's at 10pp each, the price crashed to 4pp each due to competition in no time. Sure, MTP's are profitable at 4pp (even back when the cap was 250), but was it worthwhile? Heck no!

Fast forward a coupla years. I've looked at the bazaar a couple times and noticed how people are always selling tufts for leatherfoot haversacks. Well, I was adverse to buying tufts for 50pp each until I did the math one day. Turns out that the total cost for making a haversack is right around 4k, with the major 'swing' variable being the price you buy blue diamonds at (or, of course you can vendordive or loot them ).

So, long story short, I buy a whole lot of tufts, BD's, and so forth and make some bags. I make em tokens and put em' up for 6k. Day or two passes, no dice. So I go around and try selling them in PoK and the server auction channel. Still nothing.

So I try something a little drastic. I look to see how well the things would sell at 5k.

Within seconds I'm getting tells.

"how many do you have?"

"I'll take 4"

"do you take trades?"

and so on.

I kinda sat there for a second, then realized I was in tell hell and started replying, and more importantly, doing business.

Lesson #2: Your items are not profitable if they're not selling. If you can sell 5 items a week at a 2k profit, but sell 15 a week at 1k profit, you're better off dropping the price. Don't be afraid to drop the price if the item isn't selling.

I've been selling bags regularly for about a month or so now, and I get a lot of tells asking for deals or trades. I'm always as polite as I can be, but 99% of the time the answer is no. Why? Because I know from experience my product will sell at the price I set.

Personally I think the bags are a bargain at 5k. They're both cheaper and lighter than bag of the tinkerers. Does this stop some people for trying to cut the price down to 4k? Of course not But I explain to them that since I am trying to run a business, I need the price to reasonable to myself as well as the customer. If I'm not turning a profit, then why should I continue making them?

I also get requests for trades. Rarely will I accept one, because the item they're offering needs to be able to sell as well and as fast as the product I'm selling.

Lesson #3: This one can be difficult to balance with #2, but the customer isn't always right, all things considered. There's nothing wrong with telling the customer why they're wrong if you can do it in a nice way. Will you lose some business? Perhaps. But in my experience (and maybe I'm fortunate), the newly informed customer is more likely to be right

This whole post was sponsored by a conversation I had tonight. I was trying to buy acorns and BD's in the server auction channel, and out of nowhere a conversation ensues with someone whom i find out is my competition

him: 'man you going crazy on the haversacks? lol'
me: 'what? hehe they're great business =p'
me: 'i've been selling them like a month now /shrug'
him: 'I know, I see your messages :-)'
me: 'heheh'
me: 'people keep buyin em, i'll keep making them'
him: 'you drive the price down from 6k to 5k'
me: 'because i couldnt sell them at 6k, but at 5k they fly... and people STILL wanna talk me down to 4k lol'
him: 'you can't make very much off them buying bd's for 350 and tufts for 50p'
me: 'well, it's a question of how much profit you make per bag versus how quickly you can sell them, you know?'
me: 'and i make more profit selling them at 5k than i do at 6k'
me: 'i didnt do it to undercut anyone, i did it to actually be able to sell them'
him: 'well I have to sell mine for 5k too now, hehe'
him: 'because everyone knows you sell em for that so I'm forced to sell em for the same price'
him: 'its all good tho :-)'
me: 'well, do they sell quicker?'
him: 'yes they do actually'
me: 'mm hmm'
me: 'so you're thanking me then for helping you out? heheh'
him: 'yes thanks for helping me out :-)'

The market is a very fragile thing, of course. Supply could very well wind up exceeding demand, or perhaps someone might decide to start selling them for even cheaper. In the end, it's one big game, but for some people it's a lot of fun. Maybe this'll help you out some, I dunno. But I've learned a lot in the past couple months in how to successfully do business. And now I'm known as the guy who is always selling bags in PoK

Oh and uh

lesson #4: TRIVIAL FAILURES STINK

There now it's a primal scream

[Itek]

As I've often wanted to say in OTHER threads...

"The Bazaar price is the NOT-Selling price, not THE-price."

If things sold at the prices listed in the Bazaar... they wouldn't BE ... in ... the Bazaar. They would have sold.

Velium Hound Fur ... 1000 plat. Nope.
Velium Hound Fur ... 400 plat. I bought 20.

Next day....
Velium Hound Fur ... 1000 plat. Nope.

Manticore Mane ... 5 plat. Sold.
Manticore Mane ... 3 at 15 plat. Done deal my friend.
Manticore Mane ... 5 at 500 plat. You, sir, are smoking some VERY good halfling pipe-weed.

[Railina]

Personally, i would never price them below 5250pp

It's better than a tink bag, so it's a real value at the same price.

But it's your business. What server are you on?

oh, and i think i see how you killed the MTP market. You're not comparing short term profit to long term profit. It would have been even harder with MTPs, but remember, there are a limited number of people interested in buying haversacks at any price. And why didn't you drop it to 5500 first, to see how they sell there instead of dropping a thousand when they didn't sell initially?

[Rissenn]

Im doing the same version with Magnetized armor, Feran tunics, Murkglider robes and so forth. I see people selling them for a lot of cash and I have seen tehm there for weeks. I sell my stuff for a lot less and even with production costs, this has netted me around 400K the last month.

[Sylphan]

Yep, that's very true when there's a store-bought item to compare. The same thing happened with Coldain Velium Temper -- sell for more than the merchant and sell none, sell for less than the merchant, sell zillions.

But there are other markets... for instance Blue Ceramic Bands. They sell fine at 50 each. At 500 each you'll sell at least two thirds as many, at 1000 each at least half as many.

With blue diamond armor it used to be a seller's market. I'd have a backlog of orders, and if I could have farmed ingredients faster I could have sold more. It's hard to lower prices even if you want to, because some desperate buyer might get upset if he realizes you're selling cheaply to other people while he, offering a higher price, needs to wait. I even had one guy who'd buy everything I made for awhile and resell it for more... but that was ok, since it saved me time so I could spend more time farming.

The market for mistletoe cutting sickles is a current example. The number of sickles that sell per day at 200, 300, or 400 is about the same. People have been undercutting eachother, but it's not increasing the total number of sales.

[Drexxell]

"The Bazaar price is the NOT-Selling price, not THE-price."

These are some powerful words of wisdom. For the times that I want to put my mule up*, the first thing I do is /bazaar and search for every item I'm selling. I look for the lowest price my items are listed at. About 90% of the time, I find that I can live with a lower price than the lowest price listed in the bazaar.....so I set my price and undercut the whole market. Sorry if that makes me a bad guy, but in general it makes me a good seller. Maybe I'm not swimming in plat, but I'm also not swimming in inventory. When my item sells I've just freed up a slot in my trader satchel and put cash in the bank.


Drexxell
Wayfarers of Veeshan

*Another rant for another time is to verbally crucify the idiot who decided that I should waste one of my precious 8 characters as a mule, rather than building a way for me to sell items while I'm offline using a virtual consignment store.

[Bauhb]

Sylphan:

Well, sickles is one of those places on my server where the market is essentially dead. They go for as low as 250pp, which is far below what it costs to make them. At that point, it's just an issue of trying to get some use out of them. When I'd do my sickle binges, I'd look at the bazaar and see that I'd much rather tribute them.

Railina:

I agree that haversacks are a bargain at 5250, but the buyers may not. I get people who think they should cost 4k each. Obviously I disagree with them

When I decided to lower the price, I really didn't even consider 5500. It's not that drastic a drop. I sell several bags a day, so I'm happy with the decision

[Flehmen]

In general I agree with Drexxell... the one exception that I know of is Qeyons Afternoon Tea. I used to sell it for 20pp each... that's still a good profit considering the costs if you forage or are a sharp buyer... but it got to the point that I couldn't keep up with demand... I'd put up my trader and just simply sell out.... then it would be back to making more of the stuff....

So, I decided to take it easy and priced my stuff up to 35pp each... I don't have to do nearly as many combines, I still sell out regularly, and I am much happier with my time spent. I admit to trying to figure out the one or two sellers who have 800 or more teas for sale every other day for 20pp.... In the course of a week I usually see about 4k teas "disappear" from the market... sometimes the seller is just off-line, but more usuaully he is simply sold-out... In the end I pay more for tea leaves, and still get a bigger return so I can control my inventory and supply much easier. I mean sure, you can spend 100pp on a tea leaf and make 20pp a combine easily... but at what level do you value your own time?

IRL, my hats are off to the small business owners, but until *I* find something I want to spend 16 hours a day at, I'm working for a living. Much better time to profit ratio.

Take care!

[Phantron]

The way I figure is that if in the ingame stuff is 5250, what you're selling better be lower than 5250, not above it.

[Qaladar Bragollach]

A leatherfoot bag is better than a tink bag. So why should it be cheaper?

[Bauhb]

See, the problem with tink bags is that their price cannot change. playermade bags have purely dynamic prices. In a perfect world I would be able to charge more than a tink bag, but that just doesn't happen. People are only willing to pay so much for an item. The tink bag vendor doesn't care about that, and doesn't have to care. He has an unlimited supply and making 100 sales or 0 sales has no bearing on what he does, he just stands there and does nothing but sell more bags.

[Qaladar Bragollach]

On my server leatherfoot bags sell for 5300-6000pp.

More than a tink bag... which seems right to me since its better than a tink bag, but not significantly more.

Maybe some people will sell them for less than the price of a tink bag but that's their perogative. If someone is selling at less than market price, then someone else will realize this and start playing the middleman.

[Bauhb]

Look, maybe the tone of my original post was misunderstood.

I'm rolling in cash right now because of Haversacks. I'm not griping about anything. I'm actually quite happy, and was attempting to share my success story. I'm finally making money with tradeskills, and I wanted to spread the word.

A lot of the responses here are people hung up on things that they REALLY shouldn't be hung up on. The price of tink bags is irrelevant. The only thing that really matters is finding the sweet spot that your product will sell at quickly enough to be the most profitable. That number happens to be below the price for tink bags, but I'm selling bags quickly enough that it really doesn't matter a darn bit.

I'd love tink bags to sell for 6k, but if i can sell them 4 times quicker by cutting my profit per bag in half, then i've actually doubled my profit, haven't I?

There isn't a middleman in my case; everyone knows that I am always selling bags. People have tried buying bags off of me to sell for 6k only to see me selling more bags for 5k the next day. I'm almost certain it's happened.

I'm not talking about selling 1-shot things like lore drops, I'm talking about how I set up a successful business plan for selling goods that I can restock easily, in hopes that some of you can do something similar with whatever you can make. There are a few player-made items that are always in high demand, and knowing how to properly work the market means sometimes sacrificing profit per item to increase overall profit.

[Qaladar Bragollach]

I wasn't really meaning my comments for you Bauhb. Obviously economies vary from server to server. On my server, middlemen abound. Many people have multiple accounts and can afford to leave a trader up 24/7. Look at it from the middleman's point of view. Say I were to make bags and sell at 5k per (I don't as I'm not a halfling... just a hypothetical). It requires work to do this but I'm happy at that profit to time ratio. Middleman comes along and buys them and resells at 5500 (very common price on my server). Sure he makes less profit. Sure he makes it more slowly too. However he does 0 work for it. His profit to time ratio is hiuge... its practically free money.

Again like I said servers differ. If you were on mine, the second you put up haversack tokens for 5k, some level 1 bazaar trader mule would buy them all and they'd go up immediately for 5400 or 5500 or even 6k. Sure it takes capital to make that investment, but on old servers there's an absolutely horrendous amount of money in the economy.

This is the same principle by which vendor farming is so insanely profitable. NPC merchants being non-human charge practically nothing for things that are worth thousands or tens of thousands of plat.

[Railina]

Railina:

I agree that haversacks are a bargain at 5250, but the buyers may not. I get people who think they should cost 4k each. Obviously I disagree with them

When I decided to lower the price, I really didn't even consider 5500. It's not that drastic a drop. I sell several bags a day, so I'm happy with the decision

In my opinion, based on my experience, you could have been selling consistently at 5500 per. You will eventually outsell the market, either because you've made so many that everyone who wants them has them, or because something better will go into the game and people will get that to replace their haversacks and sell them off, or sell the new item directly.

As a monk i notice the difference between a tink bag and a haversack. At the same price, the haversack is a huge bargain (plus i don't have to run to Sol A). If you had made the price equal to tink bags, they would still be better and more accessable. The 250pp each difference isn't going to be a deal-breaker for anyone willing to pay the 5k you are selling for.

I'm not trying to lambast you, but i think it would be in your intrest to consider the other similar items in the future. The tink bag vendor certainly doesn't care if he makes any sales, but he's also not going to undercut your price. A better product for an equal cost a demonstrable benefit to the buyer.