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Benefit of tanking the price of an item?
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Odav Klaskion
Viziam
Amarr Empire
#1 - 2015-11-09 14:46:41 UTC
I'm fairly new to market PVP so this may be something super simple that I'm just not aware of. What benefit is there for someone to tank the price of an item?

In this case, I'm selling Item A. Suddenly, someone posts a bunch of them at 20% less than I'm asking. I drop my price to match. They then drop another 20%. At this point, my profit margin just got demolished. I'm not incredibly liquid so I'm counting on the ISK from selling these within a short time frame, which is why I chose this fairly highly traded item. I could sit on them to see if the market bounces back but I'd rather not.

The only reason I can see to tank the sale price is to entice someone to buy his whole group at once to keep the price from falling further, which I can't really afford. What am I missing here?
Tom Hagen
Pandemic Horde Inc.
Pandemic Horde
#2 - 2015-11-09 15:07:17 UTC
"The only reason I can see to tank the sale price is to entice someone to buy his whole group at once to keep the price from falling further,"
Lets put that at number 1.

2. This is market PvP, by demolishing your profit and your liquidity he will also slow your progress when it comes to trading, and possibly you ability to branch out and compete on several products.
Alternative force someone out of the market who rather go and run mission or such because it isn't lucrative to stay on the market.

3. When you keep following him down the rabbit hole, at one point the price is so low, close to production cost or lower so it makes sense for him to buy up your stock and then raise the price again. Almost free inventory for him.. Of course it isn't "free", but when you buy out high velocity items at production cost you at least don't have to bother with production time or transporting goods.

This was just a quick reply, there are certainly more reasons..

I would recommend to split your inventory in different sell orders and keep pushing him down with just one or two in order to see where his limit are. Maybe he will buy you out, and you will have to consider if it makes sense to push him down again and buy him out before his limit, or just ditch your stock on him and move on.
If I wasn't ready to compete at my competitors level, I usually left a stack above his breaking point just to damage his profit margin, see reason 2..
Odav Klaskion
Viziam
Amarr Empire
#3 - 2015-11-09 16:38:44 UTC
Thanks for the insights! I won't be following him further but I think I will try splitting my stock and running him lower.
Spruillo
Lord Narg Corporation
#4 - 2015-11-09 16:48:54 UTC
spread orders out too, 20-60 items each if your in the t2 module market. It also helps if you actually play the game and know what stuff is worth. Quick example, 300k cargo expanders transported to a sub-hub where they sell 4 500k and move quickly

PLAYIN SPACE TRUCKS VROOM VROOM
Spruillo
Lord Narg Corporation
#5 - 2015-11-09 16:51:09 UTC  |  Edited by: Spruillo
Spruillo wrote:
spread orders out too, 20-60 items each if your in the t2 module market. It also helps if you actually play the game and know what stuff is worth. Quick example, 300k cargo expanders transported to a sub-hub where they sell 4 500k and move quickly

Guns do well too, the competition is stiffer buying or selling. Peripheral items such as t2 nanofibers etc buy and sell quicker
And im sick and tired of hearing this market pvp crap. It's making a buck, no pvp involved. You want pvp, undock.

PLAYIN SPACE TRUCKS VROOM VROOM
HeXxploiT
Doomheim
#6 - 2015-11-09 17:17:56 UTC  |  Edited by: HeXxploiT
It looks like the question you are asking is slightly different than what the thread title suggested but I will post this just because it's on the same topic.

Eve's market as realistic as it is tends to be exaggerated. There are a great many items where the bid and the ask have a significant spread.

If i decide a particular T1 item is going to increase in price in the future I begin putting buy orders in to acquire the item at the lowest possible price expecting to accumulate stock over an extended period of time.
Let's say I want to acquire 100,000 of an item where the ask is 400,000isk and the bid is 80,000isk.
I've comfortably picked up 20,000 of the item and unexpectedly over the course of a week five new buy orders have appeared driving the bid up to 250,000isk.

So the buy orders(bid) look like this;

Quantity---price
500---------250,000
500---------250,000
1000-------200,000
700--------150,000
750---------140,000
1000-------80,000

I have 20,000 of this item. Experience has taught me that if I can wipe out those top five bids I will then be able to begin buying the item back at a lower price and significantly increase my profits in the long run.

This is a commonplace trading tactic.
Talon Kane
ExeKrab
#7 - 2015-11-09 17:52:46 UTC
You can also study the market graphic and try to speculate wether or not the price will go back up. (if you can afford some of your assets and liquidity to be on hold).
Once the sell order price gets very close to the buy orders price, many people will choose to a) cancel their sell order and sell quick for a fast isk injection or b) buyer will buy the low priced sell orders, in both case, it will most probably mean a raise into the sell order price.
If you don't have the capital to wait for the price to go back up, I suggest you sell asap, even if you lose a little bit of isks, then you can pick other items to trade (also you need to diversify, to avoid situations like these).

« I must not fear. Fear is the mind-killer ».

♣♣♣ I offer a character pricecheck service ♣♣♣
Cista2
EVE Museum
#8 - 2015-11-09 17:56:18 UTC
Odav Klaskion wrote:
I won't be following him further

There's the reason :)

My channel: "Signatures" -
Sabriz Adoudel
Move along there is nothing here
#9 - 2015-11-09 21:12:39 UTC
Sometimes the person believes (rightly or wrongly) that the item is fundamentally overpriced and wants out of the market.

I did this with Rattlesnake hulls when the exploration changes occurred, sold into the initial panic but before the full consequences were understood by others. Avoided big losses by doing so.

Other times, it's not a response to a fundamental change but just an attempt to ruin your profits.

Lastly there's the impact of T2 BPO owners which are very noticeable on some items - BPO owners might run a month worth of production then dump it all on the market with one order and go back to producing - those orders are often lower priced. For those, I wait a week after their monthly dump.

I support the New Order and CODE. alliance. www.minerbumping.com
Kaivar Lancer
Doomheim
#10 - 2015-11-10 11:08:09 UTC
It depends on the quantity of the items in the order that's undercutting you.

If there's a small amount, it's probably market PVP and perhaps the trader is trying to beat you down to production / minerals price and snap up your stock, especially if you're selling a large quantity.

If it's a large amount, then the trader is dumping stock en masse. You can do some "market pvp" yourself, undercut him with a small order, and snap up his stock when he takes the bait.
Kitah Ferranti
Tulip Factory
#11 - 2015-11-10 11:16:45 UTC
If someone undercuts my price, I will aggressively undercut them until there is no more profit to be had for anyone. They then have a choice: to go away to other items (great!), buy me out (great!), or tank their price to below cost so that I can buy it from them to resell (great!). On items that are expensive for me, I prefer they do option 2 so that I can free capital; on items that I know well and have a good handle on, I prefer they take option 3. That said anytime I deter another trader from messing in my items is always a good turnout.

The reverse situation is also employed by me. If someone outbids me, I will close the spread such that the item looks much less attractive to trade in. If they follow my bids, I will try to lure them into overbidding, meanwhile I will be scouring the surrounding regions for cheaper instances of the item to dump on them. The item needs to be at a certain price point and volume for me to get involved with in this manner: enough to be worth my time; not enough to wreck me if my plan doesn't work out.
Sabriz Adoudel
Move along there is nothing here
#12 - 2015-11-10 21:52:14 UTC
Kitah Ferranti wrote:
If someone undercuts my price, I will aggressively undercut them until there is no more profit to be had for anyone. They then have a choice: to go away to other items (great!), buy me out (great!), or tank their price to below cost so that I can buy it from them to resell (great!). On items that are expensive for me, I prefer they do option 2 so that I can free capital; on items that I know well and have a good handle on, I prefer they take option 3. That said anytime I deter another trader from messing in my items is always a good turnout.

The reverse situation is also employed by me. If someone outbids me, I will close the spread such that the item looks much less attractive to trade in. If they follow my bids, I will try to lure them into overbidding, meanwhile I will be scouring the surrounding regions for cheaper instances of the item to dump on them. The item needs to be at a certain price point and volume for me to get involved with in this manner: enough to be worth my time; not enough to wreck me if my plan doesn't work out.


I prefer to close the spread by placing a high buy order for 1 item at each of several awkward to reach lowsec stations.

I support the New Order and CODE. alliance. www.minerbumping.com
Kitah Ferranti
Tulip Factory
#13 - 2015-11-11 11:05:25 UTC
Sabriz Adoudel wrote:

I prefer to close the spread by placing a high buy order for 1 item at each of several awkward to reach lowsec stations.


This is a pretty obnoxious/smart tactic. Will try it out.
Sabriz Adoudel
Move along there is nothing here
#14 - 2015-11-12 00:05:39 UTC
Kitah Ferranti wrote:
Sabriz Adoudel wrote:

I prefer to close the spread by placing a high buy order for 1 item at each of several awkward to reach lowsec stations.


This is a pretty obnoxious/smart tactic. Will try it out.


It is hilarious when a large order then '0.01 ISKs' your order in the hub, and you then proceed to dump your entire stack on that order.

I support the New Order and CODE. alliance. www.minerbumping.com
TheSmokingHertog
Julia's Interstellar Trade Emperium
#15 - 2015-11-13 02:15:56 UTC
Odav Klaskion wrote:
I'm fairly new to market PVP so this may be something super simple that I'm just not aware of. What benefit is there for someone to tank the price of an item?

In this case, I'm selling Item A. Suddenly, someone posts a bunch of them at 20% less than I'm asking. I drop my price to match. They then drop another 20%. At this point, my profit margin just got demolished. I'm not incredibly liquid so I'm counting on the ISK from selling these within a short time frame, which is why I chose this fairly highly traded item. I could sit on them to see if the market bounces back but I'd rather not.

The only reason I can see to tank the sale price is to entice someone to buy his whole group at once to keep the price from falling further, which I can't really afford. What am I missing here?


The other player wants you out of his / her market.

"Dogma is kind of like quantum physics, observing the dogma state will change it." ~ CCP Prism X

"Schrödinger's Missile. I dig it." ~ Makari Aeron

-= "Brain in a Box on Singularity" - April 2015 =-
Jerry T Pepridge
Meta Game Analysis and Investment INC.
#16 - 2015-11-13 03:19:40 UTC
Since coming back a few weeks ago, i have noticed (at least my TZ) most of my shortlist is dead/asleep market pvp wise.

i still get undercut but not on every item. not a real need to be aggressive - set price point and leave it.

must be worse for yanks & euros, the competition i mean.

@JerryTPepridge
TheSmokingHertog
Julia's Interstellar Trade Emperium
#17 - 2015-11-13 03:44:19 UTC
Jerry T Pepridge wrote:
Since coming back a few weeks ago, i have noticed (at least my TZ) most of my shortlist is dead/asleep market pvp wise.

i still get undercut but not on every item. not a real need to be aggressive - set price point and leave it.

must be worse for yanks & euros, the competition i mean.


Just watchlist people making volume in your markets, decide your price when they go offline.

"Dogma is kind of like quantum physics, observing the dogma state will change it." ~ CCP Prism X

"Schrödinger's Missile. I dig it." ~ Makari Aeron

-= "Brain in a Box on Singularity" - April 2015 =-
Jerry T Pepridge
Meta Game Analysis and Investment INC.
#18 - 2015-11-13 04:06:42 UTC
TheSmokingHertog wrote:
Jerry T Pepridge wrote:
Since coming back a few weeks ago, i have noticed (at least my TZ) most of my shortlist is dead/asleep market pvp wise.

i still get undercut but not on every item. not a real need to be aggressive - set price point and leave it.

must be worse for yanks & euros, the competition i mean.


Just watchlist people making volume in your markets, decide your price when they go offline.


not just a pretty face are you

@JerryTPepridge
Pookoko
Sigma Sagittarii Inc.
#19 - 2015-11-14 02:02:35 UTC
In the earlier days many years ago when I started trading I had to turn items quickly too in order to keep cash flowing.

There are already good ideas here in your situation, but once you build more capital and can afford to let them sit on market, there are also some items that you can put up on sell orders and forget about, because updating market orders constantly to undercut others can get tiring & very time consuming.

I do this normally when I'm going away for a weekend or on a holiday or something. Just place your sell orders at price point that is somewhat reasonable (obviously this is the tricky part and where you need to have a good 'feel' for the price of an item), and by the time you come back it is quite likely they have all been sold without you babysitting them & 0.01 isking them every day.
Tear Jar
New Order Logistics
CODE.
#20 - 2015-11-14 02:32:25 UTC
Odav Klaskion wrote:
I'm fairly new to market PVP so this may be something super simple that I'm just not aware of. What benefit is there for someone to tank the price of an item?

In this case, I'm selling Item A. Suddenly, someone posts a bunch of them at 20% less than I'm asking. I drop my price to match. They then drop another 20%. At this point, my profit margin just got demolished. I'm not incredibly liquid so I'm counting on the ISK from selling these within a short time frame, which is why I chose this fairly highly traded item. I could sit on them to see if the market bounces back but I'd rather not.

The only reason I can see to tank the sale price is to entice someone to buy his whole group at once to keep the price from falling further, which I can't really afford. What am I missing here?


To free up capital.

You can sit on 10 billion isk in item A while waiting for the price to rise(which may or may not happen). Or you can sell the items quickly and move onto the next venture, hopefully making more money than you would have sitting on item A.
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