How to deal with resellers

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Zimoon
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How to deal with resellers

Post by Zimoon » Sun Nov 25, 2007 5:48 pm

Too good to be forgotten, written by good old Spare Haseo and still read at http://www.swgcraft.com/forum/showthread.php?t=22457
Spare Haseo wrote:Overview

Reselling is not a new problem. The concept is simple buy low, sell high. As a reseller I will tell you its never personal its business. If I see something I can buy and make a few bucks on I am all over it. I am more a loot reseller than anything else because no one will ever be able to tell I am doing it. Some people buy crafted goods and then sell them at a higher price on their vendors. Either way people get upset and normally ban the resellers from their vendors and its done. That’s the easy way and I bet the resellers head on to the next vendor not solving the problem. I have devised a unique way to nail a reseller and make money in the process.

The Concept

The concept is simple but does require some work and patience. The main reason why a reseller does the things he does is

Make fast credits
Boost his/her own inventory supply without crafting their own goods

Simple enough right? Well having fallen victim to resellers myself I decided to fight back but in my own way. I do not believe in banning people from my store, it’s just not my style. After one and a half years playing SWG I have one person in my ignore list so you see I can be tolerant.

Let’s say for a product you decide to make Crafting tools. I go to the bazaar and check the going rate and let’s say its 50k a tool. You make your crafting tools and sell them for 30k undercutting the competition and you are selling the tools hand over fist. You notice you have one person buying all your stuff and reselling for 50k. Oh no what to do? Ban? No. You beat them at their own game.

Most crafters have a tendency to list everything they craft when its ready. This is where you go wrong. A reseller scans the vendors in search of deals nabs and lists then it takes you another 3 days to get all your items crafted again and in 3 days you are bought out again. Instead of listing 100 items list 10 and wait. Reseller comes and buys 10 then relist another 10 and keep doing it. Then at any given point there are 10 of your items listed for 30k while his list of 50k items keeps growing. At some point he realizes crap I have spent way to much and need to undercut the guy I am buying from. Say he takes his prices down from 50k to 25k undercutting your 30k undercut him again to 15k. At some point the reseller gives up and you emerge the winner.

You are the winner because not only did you make money from the reseller but you just took resources you harvested and made a killing on it.

Proven Results

I did this with metal recyclers and Palm fronds and it worked like a charm. The palm fronds started out at 10 to 20 mil on infinity and by the time I got done they were down to 1 to 3 mil.

I had 5 to 6 palm fronds but only listed a few at a time. Over time I saw the same names so I kept under cutting the server price and I kept making money while I noticed that the resellers stopped buying from me. Then I undercut them so bad they were hoping to make their money back. Same with Metal recyclers, one was listed for 6 mil when I had 5 in reserve. So I sold one for 3 mil and it sold overnight to guess who? The guy with the 6 mil one. Then I listed yet another and overnight it was gone again. Listed another and this one stayed for a while and I said what gives? I noticed meatball dropped his prices to 3 mil to match me. Not to be deterred I then listed 3 more for 1.2 mil and in 3 days I noticed the other guy had done the same but still he could not go to 1.2 he went to 1.5.

Last I saw his were still up there while mine had sold. After that whole deal resellers hitting my vendors stopped and it has not been a problem since.



I like to think I stopped a few resellers in their tracks and soured the grapes from them doing it again J Just keep in mind resellers are trying to make money so if you can continue to out-produce them and know you can have a steady stream of product then have fun with your reseller and make him go broke. You are the one who wins in the end

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Post by hoek » Fri Nov 30, 2007 1:22 pm

/hero Zimoon

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xorbok
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Post by xorbok » Wed Dec 05, 2007 1:15 pm

Sorry, i see no problem with resellers. If you produce a product and sell your gizmo for 1 mill credits, and i pay your price, i have the right to do what I want to do with my newly purchased gizmo. If I chose to sell it for 2 mill and buyers are willing to pay me for it, its all good. You produced the item and sold it for what you wanted to or felt was a fair price, i paid that price. If i sell it for 2 mill and someone buys it and sells it for 3, thats fine too. If you don't want people buying all the products and selling them for more, sell them for more, or make more. Capitilism is not a bad word.
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Post by Zimoon » Wed Dec 05, 2007 2:16 pm

xorbok wrote:Sorry, i see no problem with resellers. If you produce a product and sell your gizmo for 1 mill credits, and i pay your price, i have the right to do what I want to do with my newly purchased gizmo. If I chose to sell it for 2 mill and buyers are willing to pay me for it, its all good. You produced the item and sold it for what you wanted to or felt was a fair price, i paid that price. If i sell it for 2 mill and someone buys it and sells it for 3, thats fine too. If you don't want people buying all the products and selling them for more, sell them for more, or make more. Capitilism is not a bad word.
And I see nobody saying anything else around here :lol:

If you by chance believe this post is totally against resellers, read it again, please. I take it as a way to coexist.

/Zimoon

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Re: How to deal with resellers

Post by Holden » Wed Dec 05, 2007 4:58 pm

Spare Haseo wrote:Overview

Reselling is not a new problem.

<...>

I have devised a unique way to nail a reseller

<...>

Well having fallen victim to resellers

<...>

At some point the reseller gives up and you emerge the winner.

<...>

The palm fronds started out at 10 to 20 mil on infinity and by the time I got done they were down to 1 to 3 mil.

<...>

I like to think I stopped a few resellers in their tracks and soured the grapes from them doing it again

<...>

have fun with your reseller and make him go broke. You are the one who wins in the end
(Emphasis mine.)

Yes, because all that is "Yay, resellers!" :shock:

"Coexist" generally doesn't include concepts like "nailing them," "souring their grapes," "make them bankrupt," or "you win."

This entire plan summarizes to:
  • Have enough product to flood the market.
  • Set your price below market.
  • List only enough to make it tempting to buy out.
  • When someone buys you out, list a little more.
  • When prices drop, lower your prices more!
  • When interest in the product goes on the wane, go for the kill! Bring the prices down to rock bottom and clear your inventory!
  • You harvested your resources for .25CPU, what do you care about market pricing?
The tone and terminology are very anti-reseller. Beyond that, it utterly fails to account for anyone else being in the market other than you and the reseller - other crafters, for example, who may not appreciate someone coming in and crashing the market.

It also assumes that you have more ability to produce than the reseller has credits. I can't speak for other servers, but Starsider has some extraordinarily wealthy resellers; buying everything I've ever made, bought, harvested, or looted would be well within their capability, and without putting a significant dent in their budget. (And I'm saying that as a billionaire crafter, with probably close to another billion in resources.)

The only resellers truly hurt by this methodology are the ones who are buying you out because they make the same product and you're cutting into their profit.

Honestly, Z, I'm surprised that you endorse this, given the "Undercutting the Market" section of your Beginner's Guide for Traders:
Zimoon wrote:Undercutting the Market

While tempting to a newcomer and rookie, undercutting the market is bad, both to yourself and to your fellow crafters.
  • If you sell anything you will just loose the difference up to the market price, it is given the sneering buyer.
  • If you sell too much you are soon out of resources -- and business.
  • Trying to increase your prices at a later point will just annoy your clients and they will probably leave you.
Hence, keep an eye at your production costs (everything included), the market prices, and your sales flow. Consider your quality, uses/charges, etc., and price accordingly. Balance with some common sense when necessary.

Normally the principle of supply and demand works, but after all, this is a game so there are alien factors too.

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Re: How to deal with resellers

Post by Zimoon » Wed Dec 05, 2007 6:27 pm

Spare Haseo wrote:... As a reseller I will tell you its never personal its business. If I see something I can buy and make a few bucks on I am all over it.
I guess we have the freedom to read into Spare's text whatever we want, which is great. Rather see it is a contribution to a discussion that ever so often pops up, and then it is always "How do I stop the resellers?" Spare's reply was "Don't! Play their game!"

Many new Traders are amazed at some prices they see and perhaps want to address it by selling at much lower prices, still giving them a meager wage. Then they are most probably outsold to resellers, and feel they must strike back. "Do that!", Spare said, "with their own means".

Does Spare dislike all resellers? No, obviously not. Just those that scams the entire market, which his example illustrates. Those that inflates prices. He thought Traders could do fine without asking for humongous amounts of credits. But Spare never argued for ultra low prices or a regulated market either. We that were there, at the old SWGCraft knew quite well were we had each other ;)

Me quoted is slightly out of the context. Read it like this, remembering I am fully for a free market but under the special context of a game:

Some newbies think that if they only cover up for their expenses they are fine. Yes, at least they cannot really complain, can they? But they will never be able to get those costly things that they later realize they need (SEAs of different kinds, buffs, etc., that are really expensive). That is since they are new to crafting and the market. The guide is not titled "Advanced Crafting", on the contrary, I assume the reader to be quite new to the game as such.

I remember myself as a new Medic, pre-NGE when Medic was a lite Doctor, and started crafting Stims. Until I fully understood what it took I didn't understand the prices, but as soon as I became a little more seasoned I did see why the prices were what they were. Actually I didn't account for some equipment I had yet not realized I must have. But being smart enough not to sell at resource prices times two but almost at market prices I sold well and were able to put aside some cash to be able to buy Avian Meat when I needed that (100+ CPU DR/OQ/PE). Those were the days.

I don't want any Trader to be 'out of business' or being under-paid when they deserve better.

Undercutting is not the same as following the market price but just at the bottom line of it. Assumed you want to sell at low prices, as rookies often want to. And if your agenda is to dampen the inflation, that is often enough. Too low and you are either outsold or abused by resellers.

I presume you misread my kind advice as something else. It is not! I want the new Trader to earn what s/he deserves and not to fool themselves into something they regret a few weeks later.

Knowing how the market in a game works is knowing a moving target as the developers change the conditions from time to time, just by adjusting a loot drop table, or by adding some feature or whatever. Other times the players drift to new areas of the game and suddenly the flavor of the day is very different than your stock is set up for. On top of that some Traders afford one or more combat toons that patronizes their Traders, pulling the legs for other Traders.

In the end of the day, relax, enjoy the moment, it is a game, go laugh! I don't think we are too much apart when doomsday is here :)

/Zimoon

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Re: How to deal with resellers

Post by Holden » Wed Dec 05, 2007 7:37 pm

Zimoon wrote:I presume you misread my kind advice as something else. It is not! I want the new Trader to earn what s/he deserves and not to fool themselves into something they regret a few weeks later.
Not at all, though I think you misinterpreted the context I was quoting you in. I was expressing my surprise that you endorsed Spare's plan while doing such a good job of encouraging beginners to price according to the market. The two don't obviously lend themselves to coexistence (there's that word again). :lol:

I would argue that yours is the better approach to sales. If you're priced within reasonable range of market price, resellers won't make enough profit off you in the first place. If you think market price is wrong, you'd better have the budget and production capacity to back that up.

As you say, though: At the end of the day, it's just a game. If we didn't enjoy it, we wouldn't be here. I just didn't want to leave this with you thinking I'd misinterpreted your Guide; it's very well written and full of good information and good advice. :D

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Post by Zimoon » Wed Dec 05, 2007 9:08 pm

Thanks, both for the praise and for the clarification. I see we are much closer to each other than I first thought :D

I agree that some of Spare's text may lend itself to some ranting over resellers (that's a bit how Spare is ;) ), etc., its main advice,

Code: Select all

if you do not want to be outsold to resellers, do not put it all up at once!
is a good advice.
/Z

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Post by busymalla » Thu Dec 13, 2007 6:09 am

Either that or you can track them down in real-life and beat on them, like at the end of "Jay and Silent Bob Strike Back". :lol:

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Re: How to deal with resellers

Post by Ibaum » Fri Jan 04, 2008 4:05 am

Maybe this is an improvement on the idea: instead of undercutting the reseller again, allow him to sell at a slight loss... to you. Buy your item back from him and sell it again at the original price. This allows him to undercut you, but you in fact have the opportunity to profit from the item multiple times. Theoretically this would keep the market up better than Zim's idea.

It would look something like this:
1. Find market price for item.
2. Sell slightly cheaper. (still problematic, because may bring market down).
3. If reseller reposts your item, release more of your original goods into market at slightly cheaper price.
4. When reseller ultimately lowers price to undercut you, buy item back and relist at same price as you originally set.
5. Make more profit on item you already crafted without having to make more.

The effect is similar, but the process is longer. Say item normally sells for 50k, and you list for 40k. One player keeps buying your items and reselling at 50k, so you continue to release your goods at 40k. Sooner or later to make money back he will have to drop to 40k, but may just try to get rid of inventory so drops to say 35k. You buy the item back and relist for 40k. Net profit = 40k for first sale + 40k for second sale - 35k buying item back = 45k. While it keeps the market up better than continually undercutting each other, it still ultimately brings the price down at least somewhat.
/Ibaum

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Re: How to deal with resellers

Post by Lektopa » Sat Jan 05, 2008 5:15 am

What about market control? There are only a handful of Mustifar tables listed on Starsider, most at 3m+. One person was undercutting by selling for 850k.

I bought them. Decided I didn't have a use for them, and I listed them on my vendor to match market prices. There's undercutting, then there is sheer foolishness.

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Re: How to deal with resellers

Post by Zimoon » Sun Jan 06, 2008 10:43 pm

Ibaum wrote:snip
I never said that resellers undercut the market, they seldom do, they just buy out somebody that undercuts the market and resell it at regular prices. Most often resellers know the market very well, it is their job to know. That is why I wrote my initial few advices to beginner traders in the guide, one reason is to avoid being outsold on a whim, quickly out of resources, and business. The other advice, Spare's, is to put up only a part of your produce at the market, making it impossible to buy you out.

So, in essence:
My advice is to avoid severe price undercutting since you will only loose credits on it but ripe frustration.
Spare's advice is to limit the number of items you put up.

As the market looks like a reseller will never ever buy unless there is a profit margin, why should s/he?
Lektopa wrote:There's undercutting, then there is sheer foolishness.
I cannot agree more. And how does your experience comply with my general advice? :D

/Zimoon

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Re: How to deal with resellers

Post by Lektopa » Mon Jan 07, 2008 5:55 pm

Well they haven't sold, but neither have the others that were listed so I'm not sweating it. :)

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Re: How to deal with resellers

Post by Tyfo » Sun Jan 13, 2008 12:31 pm

I always hated those exploiting my service and products, just because I offered top products for a cheaper price than other's. But, I just banned them from my store, and most of the time the problem was solved.

Ironically, I have made most of my money (epic flying mount, loads of enchants, gems, twinks) in WoW by reselling things. But the difference is that it's loot versus my unique items in SWG.

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