There is one question that I’ve been asked far more than any other so far. Different players express it varying ways, but root issue is that for many people the price that at which they should list an item for sale on the GTN is a point of frustration and confusion. They feel like the person in the image and are paralyzed by the unknown. I’ve answered the question as best I could each time it came up, but it is often at the end of an interview or a comment on Reddit, so it is difficult to explain well in the moment. This is the best thought process I could distill on a Saturday afternoon, and there are many players with much higher credit balances and many more hours spent on the GTN, so this is by no means perfect and I would love to hear from others as well.
What is your time horizon?
This is the most important distinction and guide everything else in this decision process. There is a positive relationship between time flexibility and profits, which means that the more patient you can be in selling the item the more profit you can obtain in the transaction. For simplicity, let’s assume that all time horizons can be placed into one of three buckets:
- Immediate means exactly what it sounds like, the goal is to sell the item within an hour of listing it on the GTN. This will be the least profitable time horizon bucket because the speed of converting an item to credits is the top priority, not profit margins or total returns. If possible, avoid this scenario at all costs. If you have anything that you can sell to a vendor, exhaust that sort of option first.
- Short-Term means that you don’t want the listing to expire if at all possible, but you don’t need the credits today necessarily. This is much better than the previous bucket, but the daily fluctuations of the GTN price of items can still cause profit margins to crumple in this bucket.
- Long-Term means that you have more than enough credits in the bank and would be happily re-list an item for a couple weeks if it meant 50% higher profits. You may not even list an item at all if the market is over-supplied and you are in this bucket.
The questions that I’ve received indicate that a lot of players want to be in the Long-Term bucket, but struggle to get there or stay there for long. The Short-Term bucket is not a bad place to spend most of your time; the Long-Term bucket requires a level of commitment to the GTN that might take away from your other in-game priorities, so it isn’t for everyone and that’s not a bad thing.
The Worst Case Scenario
The seller in immediate need of credits is in the worst case scenario for selling on the GTN. In my experience, the best way to turn that around is to drastically lower expectations. My recommendation probably sounds drastic at first, but it is forgoing some potential profit to ensure the quickest sale possible. There are times when selling at a loss is even worth it if your need for liquidity (credits) is grave enough, but there are almost always items that you can sell for 50% of their going price and still make a profit. For instance, any of the Grade 11 purple materials can be sold under these conditions for prices that are still 2-3 times their acquisition cost.
The goal of the drastic undercutting is to offer a price that is low enough to attract market makers as buyers. Since speed of sale is the goal, more buyers is an essential ingredient and market makers don’t buy items listed at 10% below normal. If the market price of an item is 20,000 normally and you list 10 units for 10,000 each, you will almost certainly have 100,000 credits (before GTN commission) in an hour. The other 100,000 that you sacrificed was the cost of the quick credits that you’ve essentially “paid” the market maker who bought your items to resell over time at the normal price.
The final note about desperation sales is to remember to exhaust other options first. Sell stuff to vendors, have an alt send credits to the broke one, or reach out to that person in your guild that always works the GTN and see if they’ll buy the item off you for 75% of the going rate instead of 50% on the open market. At the end of day, it’s like Kevin Spacey’s character says in the quote above, “this is what the beginning of a fire sale looks like,” and selling it quick means selling it cheap.
The Gut Check
The most qualitative box is the pink box in the middle bucket, which attempts to differentiate along the spectrum of sellers that aren’t quite long-term sellers, but are in emergency liquidation mode either. The way I’d recommend approaching the question is to imagine that the listing expires after two days without the sale occurring, how would you feel? The process of re-listing is always annoying so that’s the best case scenario, but if that thought makes you anxious because you really need those credits by that day then it moves you, both graphically and in listing price, toward the immediate seller a little bit. There’s no precise answer on this one, but that’s why markets are so interesting to follow and analyze.
Without further adieu, here’s my high-quality work with boxes and arrows:
The gold box offers some helpful pointers, but there are many in this community that have spent more time in that gold box than me, so there’s certainly more they could add I’m sure. I am planning a follow up post this week focused on that gold box and on what it means to be a market maker on the GTN. I’m also going to reach out to a few market makers and see if anyone would be willing to offer some tips of their own in that upcoming post.
As always, thank you for reading!
– Andrew | SWTOR Economics