Sunday, January 8, 2012

Buy it Low or High? Sell it low or high? Profit margin? (Part 3 or 3)

Hello, in the last posts I talked about buying and selling prices, the advantages, disadvantages, risks and opportunities with each of them. Today I will be going to talk about the profit margins.

Higher profit margin increases the profit per card/trade but typically, reduce the amount of trades and costumers flow, this more than any of the previous two topics must be taken very seriously.

High profit margin:

Buying cheaply and selling expensive, sounds great but with so many competition this might result on a very quiet bot experience.

Advantages: Higher profit, less time required to the bot owner to update/tune card pricing
Disadvantages: Low costumer flow or amount of trades.
Risks: Loss of credibility and costumers. Be reported to others as a bad bot.
Opportunities: Some players pick a bot and trust it with whatever he offers for  his cards, you might be lucky and grab a few of those  costumers with great cards for really cheap prices.

I'd recommend a higher profit margin to new bots, unexperienced bot owners, or bots that don't have a regularly updates price list/personal prices.

Low profit margin:
Buying a card at a high price and selling it for no much more it's a great way to attract costumers, but while you try to be the one who buys for the highest and sells for the cheapest at the same time  with a minimal profit you will eventually be back stabbed by the costumers you try to help.

Advantages: Higher costumer flow, credibility and costumer satisfaction.
Disadvantages: Pricing updates required frequently. Requires a big collection and stock of Event tickets.
Risks: Cards fluctuate all the time, and while others buy for 16 to sell for 19, if you buy for 17 to sell for 18 seems like safe profit, but when a card value drops very quickly, you will be the first to buy the card for more than its current value
Opportunities: When a card value rises quickly, yours might be the first to go, resulting in a possible loss of profit but if you update prices regularly and predict those fluctuations, the lower profit margins (higher buy prices) will result in you having those cards in stock, allowing you for a quick adjustment and gain a good profit.

I'd recommend a low profit margin to experienced bot owners, currently holding a big collection that update price list frequently, this person must be aware of how events and set releases affect card prices and be able to predict most fluctuations.

Hope these series helped you with your boting experience and decisions.

My next post will be about maximizing the speed of running (multiple) bots and on how to reduce the required resources to a minimum.

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