As we approach the end of the month i come to the time when i "clear the books".
By that, i mean put almost all my Sell Orders to the lowest price in the market even if this means i will be making a loss.
Normally
Each day i update the prices of my Sell Orders to ensure they are the lowest on the market. This only takes a few minutes.
But Sometimes . . . . .
Occasionally, i will see that competitors have posted items for sale at way below my price. I then have three decisions to make - do i stick, or do i follow, or do i buy it out myself.
If following would put me in a loss position than physiologically this is hard.
Firstly, i very very rarely buy the item myself. I don't want to build an inventory of such items. For all i know, the Seller may have more to sell.
So, typically, i will look at the Jita price and the daily volumes of sales where i have the Sell Order on. If the competitor's price is at or below Jita price then i leave it - someone will come and buy it. if the daily volumes suggest that someone will buy this item in the near future then i also leave it.
However, sometimes i find that i am stuck with a Sell Order with a number of competitor Sell Orders at prices a long way below me and no sign that they will be bought out.
Booking the loss
At this point i then have to take the view that it is more important to release what isk i can from the Sell Order to reinvest in the market rather than leaving it tied up in a Sell Order that does not work.
Therefore, the Sell Order gets put to the lowest and the objective is just to get it sold.
Clearing the books
In the middle of the month and at the end of the month, i do this across all my Sell Orders that have competitor prices much lower, rather than just the odd one here and there.
I suspect this books losses of about 1 to 2bn isk in the process.
Painful, but therefore i start the new month with a clean book and all Sell Orders with a chance of being converted to isk.
The alternative is for part of the book of Sell Orders to actually have no chance of making a sale and so just sitting there taking up isk that could be deployed elsewhere on the market.
I am not an investor, i am a Merchant that Trades in this part of my business. And i need to ensure i avoid building a stale book of business.
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ReplyDeleteInteresting post. Never thought about clearing the books and giving a chance for an item to breath within a fixed period of time.
ReplyDeleteI think that most of the items that I will try to sell as quick as possible, and really don't like to chase too much. I've been doing arbitrage, and I update created orders once a day or every other day.
But then there are those items that need to be either dramatically undercut. If it's a shallow amount of items that are undercutting, or if it's an item that doesn't cost much, and hence the profit lost is not too big, I may just put myself at the top just to avoid others suffocating/stacking and losing the opportunity to get rid of the item before it tanks more.
Perhaps reducing the price drastically every 2 weeks might make sense in terms of avoiding the isk burn and effort of the chase when undercut.