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Topic ClosedTrade hub development: Where to send merchants?

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Brandmeister View Drop Down
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Direct Link To This Post Posted: 26 Feb 2013 at 03:33
Originally posted by Ketla Truttensis Ketla Truttensis wrote:

This would at least tend to make more exotic items more expensive.

Why would that be desirable? If you want people to trade more, then the items need to be less expensive, not more expensive. Besides, the most exotic items already have ludicrous prices. Crafted weapons and armors sell for far above their amortized advantage*. While there might be situations where that makes sense, I think the prices are established by big players who draw large amounts of free gold from their cities. This drives down the transaction volume.

I've been quite interested in the way this affects rare resources prices. Realistic pricing would incorporate some basic economic factors like rarity, troop cost to obtain (relevant with anatomies), time cost of harvesting, and most importantly the ultimate utility of the finished product(s). There is also a huge amount of speculation in the rare resource market. Players park armies on resources they never harvest (which diminishes supply), but other players have large stockpiles of rare resources. It seems to me that crafting is so slow--even with workshop specialization--that the number of players crafting to sell items is dwarfed by the present stockpiles of rare resources. The only resources that seem truly constrained are elemental salts (although I admit that I have looked hard and never once seen a gharial). Theoretically this should drive down the prices of some of the input resources, but people seem content to just let the unrealistic sell orders sit in the trade hub for months untouched.

I've been toying with the idea of an equipment auction, but I'm concerned that small and midsize bidders would get completely swamped by large players with huge piles of available gold. I don't see a fair way around that, either--if you're not taking the highest bidder in an auction, then you're not really running a legitimate trading floor. There is also an issue of the time to modify trade orders, although an auction might be a good way to make that research line more relevant.

Finally, the current system of posting taxes with a sell order, instead of on a transaction, is a bit difficult. The gold should be held in escrow by the trade hub, and if the sell order is canceled, it should be refunded to the player (perhaps less a small fee). I know you can modify orders after a time, but every time I look at doing that, it gives me a headache.

* Take the total build and maintenance cost of the equipped troops, paid over a period of 3-, 6- or 12-months. The current equipment pricing indicates that it's better for an army of size X to build Y% more troops than buy X units of crafted items that provide a Y% advantage.
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Direct Link To This Post Posted: 26 Feb 2013 at 04:42
I'm a small player who has been trading through faction hubs almost since I started (trading was the thing I focused on at the beginning). I've made reasonable profits by selling basic resources in my local hub using Centrum prices; everyone else at my local hub wants a 2x or 3x markup. I don't sell rare items because I use them for crafting, but I do keep an eye on Centrum prices for craftable animal parts. Usually the prices are ridiculous, but every now and again there's a deal, and I jump on it.

I agree that the trade system in Illy probably doesn't work as well as it should, largely because most players don't have the foggiest notion about economics. But rather than complain about it, I'm doing my best to leverage as much profit as I can from it. That's the best any individual player can hope for.

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Direct Link To This Post Posted: 26 Feb 2013 at 04:45
I'm hoping that peace will bring greater involvement in crafting & therefore greater supply in the market...
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Direct Link To This Post Posted: 26 Feb 2013 at 05:30
Trade always centers around supply and demand. 

Put simply there is very little demand for almost all crafted/gathered items. 

I'm surprised that stuff doesn't just sit in your warehouse unable to be sold.  But I think this is a speculating market at the moment.  When the next update comes if you happen to be the one with a stockpile of the rare res thats actually made useful you will make loads.  Where as if your the one who sold a newly useful rare then you end up losing out.   
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Direct Link To This Post Posted: 26 Feb 2013 at 05:37
@Kumo: Did the war slow down crafting? Based on the graphs in Centrum, activity seems to have remained fairly strong regardless of whether alliances were fighting each other. The only spikes seem to be the tournaments. If anything, the war seemed to cause a lot of volume in troop production items like saddles, horses, armor and weapons.

Originally posted by Llyr Llyr wrote:

I agree that the trade system in Illy probably doesn't work as well as it should, largely because most players don't have the foggiest notion about economics.

That's the crux of it. Most folks just aren't sure how to price items. I have occasionally gotten some good deals in Centrum, but that's the exception. I think if you want to offer large amounts of finished crafted goods at reasonable prices, you've got to own the particular rare resource squares required to make them.

I know the point of trade is to make gold, but honestly, you could just make cotter cities and harvest herbs to make millions. Or just get big, but not post huge armies, and bank the excess gold. That isn't necessarily satisfying gameplay. For me, I want to be the biggest at something (beer) and to see my crafted items getting traded in markets and getting used in cities.

In the coming weeks, I plan to try some different experiments in trade. One will probably be an auction attempt. I might write a forum article that explains my reasoning for pricing items a particular way. I might try offering crafted items at close to their yearly amortized value, which is fairly low for biome and terrain-specific gear. I don't know what will happen there... mostly likely someone will just snap them up, and either sit on the items or ship them to Centrum to be re-posted at current market prices. But who knows, it might create some interesting activity, especially for some smaller players.
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Direct Link To This Post Posted: 26 Feb 2013 at 12:33
Originally posted by Llyr Llyr wrote:

I'm a small player who has been trading through faction hubs almost since I started (trading was the thing I focused on at the beginning). I've made reasonable profits by selling basic resources in my local hub using Centrum prices; everyone else at my local hub wants a 2x or 3x markup. I don't sell rare items because I use them for crafting, but I do keep an eye on Centrum prices for craftable animal parts. Usually the prices are ridiculous, but every now and again there's a deal, and I jump on it.

I agree that the trade system in Illy probably doesn't work as well as it should, largely because most players don't have the foggiest notion about economics. But rather than complain about it, I'm doing my best to leverage as much profit as I can from it. That's the best any individual player can hope for.
PvE zone in The Broken Lands may cause more players to appreciate the array of mechanics available to traders in the game since the military mechs will be effectively be nullified there.
 
The PvE zone will present the devs with a clear idea as to whether the trading game will generate enough Prestige Expenditure or not.
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Direct Link To This Post Posted: 26 Feb 2013 at 16:28
Brand-- I'm not sure the war slowed down crafting, but I do know that it kept many folks from doing gathering and crafting that otherwise might have. So it may have prevented growth in those areas... So hopefully we see a spike in activity!
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Direct Link To This Post Posted: 26 Feb 2013 at 18:40
One that REALLY needs to be fleshed out is how pricing can be normalized.

One thing the Dlords did was look to set a price on amount of time, each resource used, and how easy it was to aquire it.

This allowed us to price the items fairly and yet still relitively cheap compared to previous prices (this was before the crafting update). Thus we undersold many as we still obtained what we (Dlord) considered a reasonable profit. Then people began just trying to sell no matter if they got any actual money value in return. For them, just gold was a return not taking into account the above which helped to establish value.

As a quick example: 
1 Wood = 3 Gold
1 Iron = 3 Gold
1 Food = 2 Gold
1 Clay = 1 Gold
1 Stone = 1 Gold

The above doesn't include time nor T3 resourses but just basic T2 stuffs. But it begins to give a general feel for what prices should look like. This obviously is something each person or alliance should determine, so as to determine the kinds of profit margins you are willing to entertain, however you SHOULD have at least an knowledge of the minimum it costs you so as to know when you are actually getting and obtain a profitable business venture

However since most don't even understand the concept of 'equitable value' that helps to normalize markets and not just in regions but across the board, you have overly expensive prices and absurdly undervalued items sold below any rational cost. The concept allows for places that can create in an area equipment easily and thus a bit cheaper, and extend it outward toward far off places for higher prices.  (Iceheart is an easy example for spears).

It gives gold it's proper value and something that makes gold worth more than just soldiers and makes the rich know how rich they are or are not!

Anyway.. that is my Market rant :)
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Direct Link To This Post Posted: 26 Feb 2013 at 19:24
Cost, rational or otherwise, does not determine price.

Value is fair only when determined between a willing seller and a willing buyer.

Price is determined by Supply and Demand.

Where is that Invisible Hand?  I know I left it here somewhere.
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Direct Link To This Post Posted: 26 Feb 2013 at 19:42
@TD: while that might be theoretically true, there are a number of unusual distortions in Illy's markets. For example, raw resources and money are both produced spontaneously with zero cost. Production capacity and time are more valuable than the inputs--I think you stated the other night that your only goal when producing troops is to maximize strike power per minute of training. But that makes sense in an environment where the required weapons and armor are produced from free materials. If your input item production capacity is greater than your troop production capacity, and troop maintenance is far more expensive than build cost, then that makes sense. It just doesn't map to the real world very well.

@belargyle: That's a really interesting approach. I probably wouldn't use that for crafted items, but for beer, weapons, armor and horses that's a great model. It gives people a rough idea of the item's basic value. If you factor in time, the price should be a good reference. Then it makes perfect sense to me that the prices of items would fluctuate around that due to events that generate demand, like tournaments and wars.
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