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A look at commodity vendors.

Discussion in 'UHall' started by TullyMars, Apr 18, 2012.

  1. TullyMars

    TullyMars Sage
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    First off I am not looking at the bugs in the system (there are many)
    Nor I am looking at items that cannot be sold (certain potions, dyes, etc etc)
    I am going to explore the ups and downs of the actual system and how it is used.
    I will be looking at these from the owner and the customer view.
    This is coming from an experienced commodity broker who has seen these brokers come and go.

    1. Vendor fees
    OK everyone who has tried one of these says the vendor fees are outrageous. They can get you. You have to be smart with your pricing, markups, quantities, etc. But I don't think they are the game stopper everyone thinks they are. 5% weekly fee on items you sell (if you don't use your commodity vendor to sell items you pay no weekly fee) is a little higher than a regular player vendor. If you work out the vendor fees of a regular player vendor you come out roughly at 4.2% per week. The 5% commission on buying items is not too bad either. You are paying for a unique process that only those vendors can do. The 5% commission on selling items...that is pure silliness. The regular player vendors have no such commission and gain a distinct advantage here. The devs would be good to remember that people paid real life cash by buying a booster pack to use these vendors. To subject them and only them to this gold sink is crazy.

    2. Pricing, Mark Up
    Like I said earlier, you have to be smart. Running these vendors poorly will soon deplete your bank account and have you screaming foul. I think a proper difference between the sell price and the buy price is roughly 30%. This means if you sell something for 2000 gold you should buy it for 1400 gold. The difference in sell and buy can be lowered if you have a fast moving product but 30% will allow an item to sit on your commodity vendor for 1 month and still let you get a small profit. Here is how it will work out.

    A player sells you this widget for 1400 gold.
    They get 1400 gold, your vendor pays 1470.
    It sits for 1 week priced at 2000 gold, costing your vendor another 100 gold in vendor fees.
    2nd week another 100 gold gone
    3rd week another 100 gold gone
    4th week another 100 gold gone.
    Then it sell for 2000 gold.
    The player uses 2000 gold, but your vendor only gets 1900 gold.
    So if you do the math you made 1900 gold gross after 1870 in expenses and made 30 gold net.
    Of course if it sits for less time you make more gold.

    3. Quantities
    First off the ability to just buy 1 or 2 or however many you need is a godsend to many players. Why have to buy 10 packs from a player vendor when I just need 3 to get this imbuing done? So that is a great concept and works well.
    Now as an owner you have to set the right quantities for buy and sell. If you are using the 30% idea you want to have a quantity that will sell in a month. If you set it to buy too many, trust me people will sell to you and using up all your gold supply. If you set it to buy too little, people will sell to others and get accustomed to selling to the others and stop looking at your stall. But if there is any question...always opt for a smaller quantity. And make sure you learn the system and set it properly.

    4. Quantities and the UI.
    New commodity vendor owners screw this up all the time. It is to the point that whenever you set up a commodity vendor you better come on a second account or have a trusted friend tell you how things look. Everyone seems to understand the buy limit...but then they screw up the sell limit. The sell limit should be renamed to the reserved limit. Because if you have a number other than zero in that spot...the vendor won't sell that amount. Example if I have a buy limit of 1000 and a sell limit of 300...This means my vendor will not offer to sell any of those items until the stock is above 300. When I get 575 in stock the vendor will list the extra 275 for sale. It will not dip in to the first 300 of the quantity ever. I have tried to explain this to many newer commodity vendors. They sit there and wonder why they buy and buy but nothing ever sells. It is usually because in the UI they set their buy limit and sell limit to the same number. The other common mistake is they put no buy limit and thus can buy as many as their gold reserves will allow. This is a sure fire recipe for having all your gold taken and leaving the commodity vendor business complaining.

    5. The Buy but no Sell commodity vendor.
    OK some have taken it upon themselves to skirt the 5% sale commission and the slightly larger weekly fee. They just use the commodity vendor to buy and then remove the items to sell on their own regular player vendor or on a rented luna vendor so they can be advertised on some search engine. This all well and good but there are a couple flaws in this thinking.
    One, when you separate what you are buying from what is selling, you are doomed to have too much of one thing. You could counteract that by adjusting your buy limit as you pull off items but it takes a very logical mind and good amount of work and attention to detail.
    Two, when a player sells you something...they have no idea what you are going to charge at your vendor because many times they don't even know where your vendor is located. This promotes ill will in the community because they assume you are buying for 100 gold and selling for 10 mill. I like the fact that you see what I am buying it for and what I am selling it for even if you don't agree with the markup. It allows the customer more information in his decision to sell to you.

    6. Stall Rental
    The stall rental is just potential grief. A guy sets up...and is doing pretty ok...has some customers...has some suppliers...has reasonable pricing and markups...etc. Then he has to spend a 100k (or more) to defend his stall each week. Or he can bid on another stall and move. If he does neither he will have to reclaim all his stuff within a week...bid and win a new stall and set up again. This is one of the reasons my stalls are in Fel. Less competition for stalls.
    On top of that their is a flaw in the bid system. Say I bid 20k on a specific stall and I lose because it wasn't enough gold and the owner or some other player out bid me. My bid stays there until I manually remove it and I keep bidding week after week at no additional cost to myself (other than the initial 20k). Now week after week, the owner of the stall loses 20k from his bid matching protecting the stall unless the player comes back and removes his bid from my stall. The only way as the owner to stop defending against this same bid week after week is to let the bidder win by moving or abandoning my stall.

    7. Price wars.
    Oh yes there have been some price wars on Atlantic. It has gotten cutthroat among some of the major commodity vendors and it actually has benefited the normal players. You see people were vying for suppliers and customers. So the price a player has to pay for goods came down, and the price a player will receive for goods they sell has come up. The margins have shrunk. Some of the cuthroat practices are selling large quantities of slow movers to "buy only" commodity vendors so they have no money to buy anymore. Runes and tamed animals with vendor critiques have been seen. Price fixing, liquidations, stall bidding, etc etc. You name it and it has been done. Mostly benefiting the average player because of the shrinking margins. It can be fun if you are into that. So you have to remain smart, or at least smarter than the next guy. You have to figure out when it is best to lower or raise a price and deal with the consequences. Otherwise UO bankruptcy is in your future.

    Summary.
    There are many things that are wrong with the system but there are some serious benefits. Those who still only shop Luna with search engines are really paying too much and should at least check the magincia bazaars. The fact that players can liquidate there hunting loot at a commodity vendor and not have to run a vendor themselves is a major plus. Being able to buy or sell 1 or 2 or 100 or 60,000 at a time is great for the average player. Having multiple people supply a vendor reduces "the grind" that so many complain about, because each persons excesses they are willing to sell usually translates into someone elses shortfalls they are willing to buy.

    I would love to hear other peoples perceptions on the commodity vendor and though there are some big flaws in the system would love to discuss what should be happening and how we can make it happen for the community on these vendors.
     
  2. Tina Small

    Tina Small Stratics Legend
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    Thank you so much, Tully! I agree 100% on the 5% commission to sell things. You paid for the booster pack and then you get smacked with that too? Forget it. Also, it's really aggravating to set up something like a pet stall, fill it with pets you want to sell but that will in no way fit back in your stable, and then have someone come along and outbid you so you lose your stall. Then you go check and find out that they didn't take the stall. All they wanted to do was force you out of business. I have to wonder how many people who were new to using them have had that happen a time or two and then just threw up their hands and gave up on the whole mess. Also, how many people haven't even tried to buy from the bazaar vendors because they think they need to have the booster pack to use it? I'm pretty sure you are able to buy from the vendors when using characters who don't have either booster. I'm not so sure about selling to commodity vendors though. Do you know?

    Oh, one other bit of feedback. Something I actually like about the system. I love that when you buy goods they show up in your pack on a blessed commodity deed. That is sooo handy on Siege or if you're using a Fel vendor.
     
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  3. TullyMars

    TullyMars Sage
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    The booster pack is only to set-up a stall. Buy and sell to those vendors can be done on the most basic account. The only thing I am not sure of is... if it can be done on a trial acocunt.
     
  4. TullyMars

    TullyMars Sage
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    An interesting observation made by another commodity vendor today.
    I confirmed it on some of mine.
    The vendor fees are pro-rated down to the second!
    On one of my vendors I have 238,958 weekly vendor fee.
    That means roughly 34k a day or 1422 an hour or 23 gold a minute.
    So I opened my vendor and looked at the bank balance...then opened up and looked a minute later and sure enough 23 gold less.
    So I redid the look see after about 30 seconds and it was 12 gold less.

    Now don't get me wrong, I like this...there is no abusing or skirting vendor fees like there can be with regular player vendors...and I think this should be applied to both styles of vendor.
    But it is disheartening to see your money go like this.
    Plus it feels like once again because I decided to go the commodity vendor rather than a regular vendor...the rules are strictly enforced with me and not everyone else who runs a regular vendor and has their gold taken out once a day and if the item sells before that time has no vendor fee withdrawn for that item.
     
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  5. Nimuaq

    Nimuaq Lore Master
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    This is how it is supposed to work since it is a weekly fee and is already mentioned on the notes: Encampment System

    I'm currently using a New Magincia stall as a fisher market where fishers can buy and sell any fish/crustacean with only 1% commission (see: Fishermen's Guild of New Magincia Re-Opened | Stratics Forums). The main idea behind it is to help fishers for fish monger quests and the selling and buying prices are too close to each other so that they can sell the same type (or any other type) of fish they bought later to balance the cost.

    However, I can't price the fish and crustaceans too low since it might be bought by other vendors and sold for much higher prices (happened twice). So both the buying and the selling prices are high which cost me a lot of gold because of that 5% weekly fee. It is really hard to keep this stall running which is not for profit (loses gold each second as you already mentioned :)) and only designed to help the fisher community.
     
  6. TullyMars

    TullyMars Sage
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    Aye, I knew the vendor fees were pro-rated...just didn't realize it was down to the second. Kind of figured it was by hour or something.

    I commend you on your not-for-profit attempt.

    But there is a couple things to consider.
    Your stall is not for profit but I don't think you intended it to lose money on every transaction.
    Lets just pick shore fish.
    In your linked post you said
    That means I come and sell you 40 shore fish for 100k.
    Your vendor pays 105k for that transaction (the 5% commission)
    Now say I turn around and buy that same 40 shore fish for 101k
    Your vendor only receives just shy of 96k for that transaction.
    So in essence for a buy and sell you have lost 9k worth of gold.
    That does not factor in the pro-rated second-by-second vendor fees at all.

    Now if I was a griefer and willing to blow 1 million gold of my own, I can suck out 9 million gold off your vendor with the same 40 fish in 1000 transactions. I would not profit but griefers are rarely in it for profit.

    So may I suggest that your buy price should be no more than 90% of your sell price (10% off of your sell price or 11% mark up from your buy price depending which way you like to work) or your not-for-profit attempt will be pure charity and cost you too much. I would even go so far to suggest that if your buy price is 85% of you sell price (15% difference or if you do mark ups 18% mark up) that will cover the commissions and a weeks worth of vendor fees and you still would be a non-profit service.


    Now as for the buy out...I have seen this happen too in many commodity vendors.
    The best way to combat this is supply and advertisement. If someone buys you out and upcharge on their vendor and you re-supply your vendor and people know to look at your stall first...then you win. If they keep buying you out and keep buying you out...you have to keep stocking like it is no problem and sooner or later they will haven 1000s upon 1000s of stock they have to sit on because no one would be buying theirs. If they made the mistake of vendoring all of it at a higher price...well they will have to sit on the vendor fees as well.
    Your idea of raising the price will also work, but at some point you have to say "enough is enough, if this guy wants to keep buying me out at 2500 gold per well that is the price and so be it." sooner or later if you can keep up with stock...his price will come down and he will lose money over the course of time.
     
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  7. Nimuaq

    Nimuaq Lore Master
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    Your whole analysis, from the 10% difference to the vulnerability to grief, is quite accurate. However, that is how I want to use the encampment system. My view is, if the encampment system is designed in such a way that the vendor owners are forced to charge 10% more from their buying price just not to lose any gold, or, in other words, I can't run a stall to help the fisher community without losing gold or pricing at least 10% more than the buying price, then this system, which encourages greed by forcing you to price more than what you think is a fair price, is not appropriate for the city of humility.
     
  8. TullyMars

    TullyMars Sage
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    You sir are correct.
    If I dared to dream, I'd imagine a setting for the commodity vendor where you can list it as non-profit and the buy and sell price would become the same for each item and all fees would disappear.
    But I am sure that would be abused in some form or the other and I have learned through 15 years to not dream too much.

    Again, I applaud you on your fishermens exchange.
    More people need to come into the commodity vendors thinking, "Is what I am doing providing any service to the community?"
    Along with that question comes a whole slew of questions (Is my pricing reasonable? Am I going to lose my shirt? How can I make it so everyone wins? Is someone else already providing these goods in a better way than I can? etc etc)
    If I see any in my guild taking a cross shard trade transfer trip to Europa, I hope to send them with a donation of fish and crusties for your noble cause.
     
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