Ethics and Concideration.. a Dwarf smith seeks advice

[Radasar]

Just a question
I'm an aspiring dwarven smith, and I have spent the better part of the last four months or so, slowly skilling up till now my smithing is 190, and I am trying to break the dreaded 200. I am making enchanted dwarven armor, mostly the breastplates because they have the highest trivial, and I figured they would at least bring my skill to over 200 the fastest. On the Bristlebain server, everything but the BP seems to sell slowly or not at all, so I have concentrated on the BP, and its costing me about 230pp per attempt, and Imbued armor seems to limit the sales because its Brell Serilis only. After many days of hording platt I made my first 20 attempts at the breastplate, and I find myself sitting on 19 out of 20 successes, and no skill increase. I am catching flack from other smiths in the bazaar for having so many BP's on sale, I am hardly wanting to ruin everyones chances to make a sale is there another way to break 200 from 190 as a dwarf, w/o trying the acrilia route, windstones are too rare for the tempers, and Imbuing Rubies just adds to the cost per attempt, Ive been killing elementals anywhere I can find them, and Iron oxide if far more common and has done wonders for paying for my smithing to this point. I just want everyone to have fun... any ideas?

[KennyCelican]

I would say you're not doing anything 'unethical' by selling what you've created.

You've made a lot of breastplates. Apparently you put out the cash, you beat the RNG, you have the goods. It is now up to you what you wish to do with them.

If you want to destroy them all, you can do that.

If you want to sell them all for double market value, you can do that.

If you want to sell them all AT market value, you can do that.

Heck, if you want to sell them below current market value, you can do THAT.

There was a big discussion on this in one of the old forums, the General Discussions or the Primal Scream, if I recall correctly (Lilosh? Do you remember? The one that had the really nice commentary on EQ Economics?)

What it boils down to is that having acquired the breastplates, you may now do with them what you wish, and others are free to not like it, but that doen't make what you do unethical.

In my personal opinion, selling them for below what the components cost you is unkind, because it actually kills the market by making people expect really unrealistic prices, rather than watering it down by making them expect lower than current market prices, but even if you DO sell below cost, the other sellers have the option of buying up all your stock and reselling it themselves if they want to keep the price up. If you ARE selling it for the cost of components, you're doing THEM a favor.

That about covers it, I think...

Did I miss anything, short, furry, and Lolishy?

[HoshiAdam]

AFAIK, there is no hard evidence suggesting that higher trivial items give a better skillup rate.

You might try only having 2 or 3 in your visible inventory on your merchant, instead of all of them. That gives buyers the impression that it isn't overly common.

Undercutting...Personally, I wouldn't undercut a product like cultural armor, it ruins the market for others.

[Glatius2]

My recommendations are as follows. Have no more than about 3 of the breastplates in your trader inventory, have the rest hidden. Its possible you'll sell two breastplates in a day, very unlikely you'd sell all three. And that way you don't make the availability of the item seem too common (perceptions are more important than reality in some cases). You'll also help to limit the number of people who try and bargain you down on your price.

I would also MATCH the lowest priced BP of the same type available in the market when you're selling. If after a few days of this you sell NO breastplates, you can consider whether or not the person you're matching is selling too high and perhaps lower the price a bit. Just keep in mind that once you lower the price people will expect the new price to be the price of BP of that type and you'll be forcing all smiths to lower their prices to match or go with out sales (as long as you have inventory anyway). Be thoughtful about price reductions. And price wars are evil.

There are always going to be a limited number of people buying that type of BP at any one time. Making the price too low won't necessarily sell more BPs, it may just lower the price. Be reasonable with what you charge but don't undercut the market dramatically or you devalue it.

These are of course my recommendations. They are meant to be a reasonable compromise between making a little plat and keeping the items moving from your inventory at a steady rate while doing minimal harm to the market and other smiths.

[KennyCelican]

A question: When you say 'Undercut', do you mean sell at a lower price than the rest of the smiths, or sell at lower than cost?

Selling lower than current is my stock in trade.

There isn't much of a tradeskill community on Vazaelle. Not no tradeskillers, but most do for themselves and guildies and friends of guildies. Most of the non-tradeskillers (of whom there are many) mock me for trying to work on tradeskills at all, whether in friendly jest at my hobby or in outright lack of understanding at why I'm not 'paying attention to the fun bits'.

In any case, that means that MOST of the items being sold are not being sold by the original creators, and as such have been marked up substantially, as the BIGGEST markup in any given retail transaction is the final vendor - to - consumer markup.

That and a limited sale time window leaves me in the position of having to work the economy of scale - I provide the final vendors with much of their stock, by selling at roughly double the cost of materials. I was actually suggesting that our Dwarvish friend try suggesting THAT to his detractors - that they buy his BP's at or near cost, then they make a profit with no risk, and he gets to skillup the way he wants to, rather than the way they'd like him to.

Now, I'm not at this point evaluating the efficiency of BP's as a skillup vector, someone else would probably be a better judge of that. I'm just commenting on the ethics of the situation.

[Lilosh]

MY NAME IS LILOSH

My name is Lilosh, NOT LOLISH


L I L O S H


And yes, while kenny is correct in saying that you can do with your successes, The rest of the server is free to call you a rat fink if you undercut them all. So long as you arent undercutting and killing the market, I see not problem with you having 19 Breastplates for sale.


If the other tradeskillers on your server dont like it, tell them to buy some from you.

<grin>


-Lilosh

[Radasar]

Undercutting

How does one define undercutting
It seems reasonable to me that if the mark up is based on the actual cost of the attempts, how high do you have to go?
The "rate" most people seem to want is 10 times materials cost, as a part time player, this seems hugely excessive
but lower skilled people seem to need that in order to make back their cost
if the my mark up is 400% (as a sales rep this is horrifically high to me) but still 1/3 the desired prevaling rate? is that undercutting and ruining the market?

[Glatius2]

Here is how I would judge undercutting, at least for an item such as a Breastplate. I look at the stats for the BP in question. I check on the prices for droppable BPs of similar caliber. For example, just for discussion, on my sever a Barbed Ringmail tunic typically sells for between 3 and 4k. I then look at what the current market price is for the BP I want to sell, factoring in my costs.

I pay over 2k in materials costs? I'm probably going to want to make about as much someone would for a Barbed Ringmail tunic, if the market will support that. I'd use that price as a starting point. Other smiths selling the BP for more? I'd consider if that seemed reasonable. I might even match their price for a while, just to test the market. However, if I ended up lowering the price to be more in line with the Barbed Ringmail, this wouldn't break my heart.

I pay around 1k or less in materials? I don't have to sell at the Barbed Ringmail price to do well. If other smiths are selling over that price, I probably would match the Barbed Ringmail price. If they were selling under, I'd match their price.

I consider it undercutting when once you've done this kind of research and comparisons between droppable and tradeskill items, and determined that the current price for the smithed item isn't hugely out of line, you go ahead and drop the price substantially anyway, say by 300-500pp or more, just to get them out of your inventory.

You can do this. Don't expect to make many friends in the process.

[Angelsyn]

Pricing on Cultural BPs is easy, IMHO.

How much does a Barbed Ringmail BP go for on your Server?

An Enchanted Brellium BP should go for nearly that much, because it's just as good... with a more limited market.

How much does an Acrylia BP go for on your Server?

An Enchanted Brellium BP should go for nearly that much, because it's better, but again a more limited market.

On Xegony, Acrylia BPs are 2k, Barbed Ringmail BPs are 2-3k. I price Mithril (Enchanted or Imbued, emeralds are relatively cheap) at 1800pp. I would price Brellium BPs at 1800pp also.

Of course, on Xegony the market for Brellium Plate is heavily contested and the prices fluctuate like crazy. I'm glad that's not true with the Mithril!

[Radasar]

undercut

Ah, I see, I have been basing my costs only based on the materials cost, I am not all that familiar with the droppable equavilents, Most of the armor I wear, I made, and only recently starting using a weapon I paid for. The comparable gear has always been so expensive I never could afford them, and cant even now
No item I have has cost over 500pp to make, my main weapon is a polearm I paid 400pp for and that stats on that far exceed anything the armor has. I just think that if you want an item that drops, go kill the mob that drops it. If an item is made, the price is based on the materials cost.

[Angelsyn]

Re: undercut

Ah, I see, I have been basing my costs only based on the materials cost, I am not all that familiar with the droppable equavilents, Most of the armor I wear, I made, and only recently starting using a weapon I paid for. The comparable gear has always been so expensive I never could afford them, and cant even now
No item I have has cost over 500pp to make, my main weapon is a polearm I paid 400pp for and that stats on that far exceed anything the armor has. I just think that if you want an item that drops, go kill the mob that drops it. If an item is made, the price is based on the materials cost.

Ah... the joys of innocence.

I'm an Accountant, trust me on this.

For many people, it's just not possible to go out and kill the mob(s) that drops the item(s) they want. So, that's where Pharmers make their money.
Tradeskillers make their money by making stuff that's nearly as good, as good, or better than what the Pharmers can bring in... and selling it for "the price that the market will bear".

Honestly, some things are sold at a marginal profit (Opal Steins, for example) while other things are sold at an incredible profit (Heraldic Plate, for example).

It's all about perceived value and market awareness. This is why so many say things like "Only put 3 or 4 BPs up for sale at a time". Once "the market" perceives that the goods you're selling are plentiful, they'll expect the price to be low.
When goods are rare, people expect the price to be higher.

Just look at what happened with Windblades! For a short time they were down to 20-30kpp... now they're back up to 65-90kpp! All because of the perception of rarity.

[Glatius2]

If an item is made, the price is based on the materials cost.

If everyone could make the items for materials cost, then you'd have a valid point. However, gaining a trade skill takes time. Gaining a trade skill takes tons of dedication. Gaining a trade skill takes thousands of combines. Now, you'd like to get to 250 skill in smithing I assume? Consider that if you purchased your materials at a cost of 1000pp per combine. And you charged only 1200pp per BP. You'd make 200pp per BP you sold, correct? That might seem like a reasonable enough profit to you and if you're happy with that, thats fine.

But consider, how many BPs will you have to sell to get enough plat together for an additional combine? You'd have to sell 5 BP as a profit of 200pp each to be able to afford a 6th combine beyond the 5 you started with, correct?

Now, if you increase the price to 2k per BP, and this was not unreasonable for your server, how many BPs would you need to sell for that extra combine? Answer, 1.

Each BP would gain you enough profit to make an additional combine beyond what you started with. If you sell each of those 19 BPs for 2k each you have 38k for additional combines, rather than 22.8k for combines. And if you were going to sell the same 19 BPs anyway for either price, which would benefit your goal more?

What I'm saying is, if you're giving reasonable value for the price you're charging and the price you're charging moves you closer to your goal faster, why wouldn't you?

[wombat]

Dwarf Plate

Hmm its a problem skilling up when you are not a cashed up uber twink, you have to pay your own way and that means selling your armour to players. Unlike Fine Plate you cant sell back to merchants at near cost.

I have a great deal of sympathy for your position as I am in it myself. I dont want to destroy the market but cant progress without sales. I dont have the cash reserves to powersmith on Sickles or sit back and wait on orders for Underfoot and Brellium Plate (am too unpredictable for success anyway on these).

I sell to my guild at adout 50% above cost for old cultural plate and Acrylia Plate, the guilds small races tanks are all brown now LOL! That helps everybody including me (skill ups). I hire out to other guilds to make them Sickles. In your case you arent high enough for Sickles yet.

Cringe, I suggest Shadowscream as an alternative, its horrible but doable, I dont do it due to bank space problems making 4 types of smithing item already (and a dodgy ISP for the no rent stuff). Basically I am 7 skill ups for 360 combines since the trivial patch (226/237) and look like taking to December to get to 230/241 at this rate.

Good Luck!

Radodverge of Quellious

[Nizanko]

Selling items for a price related to materials cost was what made early jewelcrafting (i.e., back in '99) completely unprofitable. Now that we have the bazaar, selling items for a price related to materials cost has made things like sow potions pretty much unprofitable as well, since sow potions are really pretty easy to make.

In my opinion, the key is to sell the items you create at a price suitable for the stats the item has. Of course, this only works if there is some rarity to the item - if there are thirty of an armor piece for sale in your bazaar, you're probably going to have to pick a price near the low end of the scale, or you'll end up holding the bag for quite a while. But if the bp's that Radasar is talking about aren't that commonly made - i.e., you are sometimes the only person selling the bp's - I'd try edging the price up as high as you can toward the price people pay for similar dropped items.

I've actually found that if you keep a relatively uncommon item for sale for a price higher than normal, sometimes when the cheap ones sell off, the new market entries will get priced similar to your price. (Again, this doesn't work for very common or very old items, as people come to expect a particular price for them, like 300pp-ish for a CBB, for example.)

Just my thoughts, of course - but I do like the idea of only putting 3 or 4 of your items up for sale at one time Just swap out traders' satchels for normal 10-slot backpacks and put your reserve stores in those.

[Girsham]

The most important thing to consider when selling things which you and other tradeskillers have made is that if it stacks up Statwise then it must stack up price wise with all other things available to your target buyer. With the price drop on the Barbed Ringmail Culteral Armour has become harder to market. Remember that if you are considering selling the BPs at below market value (even if only 250p less) you are undercutting yourself in the future aswell. The problem with some people is as they are coming up through the game and are just beginning to see their first real~ sums of cash together 2-3k they may have seen someone trying to quickly get rid of something. They save up to what the 'get rid of it' price is and then expect it to be theirs as soon as they get together the lowest possible price for the item. This may lead to flaming from some annonymous middy-newb (a little level 43 jerk maybe) and who needs that? /rank off /personal expire filter off. Sorry. I just realized how far off point I am now.