Merchanting with Free Trade - Predictions & Preparations

On Merchanting with Free Trade - Predictions & Preparations

[Guide originally posted on Rune-Tips Merchanting Forum]

​

As you all know, Jagex has made the decision to return unbalanced trade as well as old-style player killing to Runescape. To all of us here at Rune-Tips and anyone who who engages in Grand Exchange merchanting or investing, this update will have a profound impact on the way we play the game.

Some of the players reading this may remember the days before the Grand Exchange was implemented and Free Trade was removed - Merchanting was a completely different animal. Now, with the largest update Runescape has seen in years around the corner, we all want to know how to best prepare ourselves.

Will this update kill merchanting as we know it?

Quite simply, no. The Grand Exchange will be kept with adjusted price limitations, and older players will remember that the Grand Exchange and free trade co-existed for some time before the eventual removal of free trade.

What will happen to the economy once free trade is returned?

I will state it very strongly - once free trade is returned, there will be a period of 3-6 weeks during which it will be exceedingly risky to invest. A wide variety of factors will make the market extremly volatile, some items will crash and some will soar. New price baselines will be set for many items, and while there is extreme risk of losing a large amount during this update there is also the chance of a lifetime for the prudent and well-informed merchant to nearly double their wealth.

If you are new to investing or have a problem with taking risks, I HIGHLY recommend you liquidate all your assets - sell all your investments and high-value items immediately, and lay low until a month has passed. For the rest of you, I will provide the information you need to take advantage of this opportunity.

Effects of the update

Right now, the system of regulated trade has resulted in the price of many items "artificially" being raised or lowered based on the dynamics of the Grand Exchange. These items will quickly and immediately become either gold or trash once the update has taken place.

Manipulation clans

Four words - your time is over.

General dynamics of Grand Exchange merchanting

Despite the commotion, the truth is that the basics of Grand Exchange merchanting will go unchanged once free trade has returned. New dynamics will mostly effect the newer or higher-value items, while basic investing and flipping will go unchanged.

Even with free trade, the vast majority of transactions will be made on the Grand Exchange instead of in person. For more common items and supplies, they will be sold almost exclusively on the Grand Exchange.

More expensive, items however, will be sold mainly in the area around the Grand Exchange in worlds 1 and 2. This will provide a distinct profit opportunity for merchants who wish to learn the art of old-style merchanting, in which items are bought and flipped manually. Once they have settled in price, the rares market will be extremely lucrative for the more skilled of these merchants.

Immediate advice for the update

Immediate investment - PvP supplies

The second part of this update, the return of old-style Wilderness PKing, means of course that PvP supplies will be in high demand. Stock up on the following items:

• High-level food (Sharks, Lobsters, Swordfish)
• Basic weapons and armor (Rune scimitars & platebodies, dragon daggers, etc)
• Strength potions and other PKing supplies
• Runes and ammunition

High-level weapons will likely rise or fall depending on Jagex's decision regarding item-protection prayers and the details of the old-style Wilderness. It is likely, however, that most of these items (with the possible exception of insanely-priced weapons such as Godswords) will rise.

Effect on Rares

For the lucky among us who own any type of rare, prepare for a wild ride. The reason rares have become so overvalued in the last few years is because of the existence of the Grand Exchange's trade limits - the 5%-rise-per-update rule kept the Grand Exchange price of rares well behind the true street value, and as a result rares became exceedingly hard to buy and sell.

Once free trade is returned, the price of rares will stabilize, and violently. I predict that the eventual street price will fall somewhere between the current Grand Exchange value and the current street value for each item, but undoubtedly there will be a violent period in price fluctuations before this level-out occurs. To rare owners, I can only suggest that you remain calm and keep your bearings for the first few weeks - thankfully, rares are the only thing that will have a guaranteed value in the future.

So what should I do to prepare?

In preparation for this update, I will be putting approximately 75% of my money into a variety of mainly PvP-related items that I predict will earn 40% or more on my investment (I will release a full list of these items for RT members only in the merchanting Items section of this forum). In addition, I will be selling several of my rares and most of my high-level items with the intention of repurchasing after the update.

Feel free to post your action plans and additional information and speculations on the results of the upcoming changes. This update will provide the opportunity of a lifetime for those with the cleverness and knowledge to take advantage of it.

http://forum.rune-tips.net/showthread.php?6130-On-Merchanting-with-Free-Trade-Predictions-amp-Preparations-Official#post71231

 

I think you are over estimating on your earnings to be honest, a 40% increase in investment is a little generous because you have to consider the time and labor that would need to be put into it. With free trade you can no-longer rely solely on the GE to sell your goods because there will be independent street sellers undercutting your prices for quick sales in the main merching worlds. Well, at least that is how I remember it back before the GE when I merched PvP supplies. If I remember correctly, street price of simple items like a rune skimmy could fluctuate wildly from day to day. I know you have time and patience but I believe you will see something more of an upper teens to lower twenties return on your investment. Though anything now is a wild guess as to how this is going to effect the economy, besides one word - Volatile.

In no way do I mean offense with this post, just a logical rebuttal.

 

Nero, I made close to 60% on my investments back when they introduced PVP. If anything, 40% is being conservative if you know where your money should go given an opportunity of this magnitude.

 

Hey merchant in the dark, you were selling your guide back then right? I remembered you were very respected and your guide was good ( you released it for free somewhere ).

Thanks for your advise but there are some points which i have doubts in :

-Merchant clans : they will not die completely. If they manage to buy out an item ( through GE ) , it will still rise in G.E won't it?

So how will free trade affect it? The face value of the item will still rise as long as the item remains bought out.

 

wow very nice written,i bet u put in alot of effort,i think i will spend my mon ey buying more rares as u suggested during the 1st few weeks of free trade and old wildy release*

 

But you, my friend, are not the average player. A dedicated merchant can get 50+% profit off a smaller investment, but dumping all of your money into one item is a thing of the past. You will now really have to diversify because of the changing environments that the free-market will present to the merchant. Old style merchanting is really a lost art, all of these new age players will have to adjust to learning street prices and where you can get the cheap stuff and how to flip for profit by hand.

I am honestly glad the Merch clans are gone, they are why the economy is in shambles. A clan with plenty of money will no longer be able to change the market so drastically. This was very well written and had many great points. Thank you for sharing.

Nero

 

I haven't been around Sythe as much since I've been spending most of my time on Rune-Tips - but whenever I release a major guide or project, I usually cross-post to Sythe as well for the benefit of everyone who merchants here. As for my guide, I intend to release a new one once the update has gone through.

The reason manipulation clans worked is that they took advantage of the trade limitations. They were able to buy out items in the Grand Exchange and create items with "inflated value", now that free trade will return this "inflated value" will mean nothing off of the grand exchange.

FYI, a manipulated piece of crap that they buy out in the GE can still be bought and sold for 1gp or nothing on the street.

On top of that, the only reason they were able to sell the inflated-price crap in the first place was because of junk trading. Needless to say, junk trading is now irrelevant due to the return of free trade. Therefore, manipulation clans have been dealt a death blow.

Thanks for asking me to clarify this - I'll post an expanded section on the death of manip clans on the Rune-Tips.net version of this guide.

EDIT: To answer your second point, a diversified portfolio of investments is something I do always recommend. However, in a situation like this, it's acceptable (and preferable) to have a narrow portfolio if you know exactly where to be. Runescape isn't as complicated as the real-life stock market, amd we can take advantage of that.

 

I am just excited about this, I can remember when you released your very first merch guide here. We actually had quite a long talk about it, I was Y0u_G0t_Pwn3d back then. I doubt you remember me.

I do agree, very much so, about moving your investments into the PvP market. These items are going to sell like hot-cakes. I personally favored rune skimmys and lobbies.

 

yes, although their inflated piece of shit can be given for free/sold for any other price outside the G.E price, if they still manage to buy out the item, there will be less supply therefore more demand. so people will have no choice but to pay a higher price for the item?

e.g if we hoard sharks, sharks rise ( whats happening now which is pretty annoying )

 

It is very rare that any manipulation clan can buyout any item that is not a "useless piece of crap" like the stuff you usually see manipulated. The only reason they could convert a useless 7k tree seed or piece of sandstone into cash was the junk market.

Technically, buy-outs were possible ever since RSC. Someone could have stood on the street corner buying an item until they had it all. Why didn't they? Convenience.

The days of easy and convenient buyouts are over. What will replace them? Who knows, but it certainly won't be junk manipulation.

 

The problem with merch clans is that they aren't gaining physical wealth anymore. A buying out of some item doesn't increase your market value because there is no longer such a thing as market value.

Hence, putting billions upon billions of gp into some item in the hopes that its price will rise will do you little good.

 

@ merchant in the dark

that is true, but what about items like saradomin brews?etc. yes like what you said most items are junk, but bigger clans like smokin mils are capable for merching such items. im pretty sure they did sara brews/other necessities before.

In the past you could not actually really buy-out it so easily. There were over 160 worlds. But with G.E now it makes it so much easier

@ determinate
what about necessities like brews etc. ? i know they are hard to do, but possible with a huge clan like smokin mils.

also, although they are not gaining physical wealth anymore, im pretty sure they can sell to the future junk buyers soley for merchanting purposes? perhaps, no one really knows the future.

thanks for the answers guys.

 

The ge is just going to replace standing in world 2 fally but its same comcept less work.

 

-taken out-

 

Thank you for that post. I think I'm going to invest in sharks

 

Sharks are an excellent investment, I remember them rising significantly during the last PvP update. A good F2P alternative is lobsters.

 

Interesting

 

Food and pots will sell out.

It seems that food is already being bought out in preparation for the update.

 

You are right about most things regarding the pvp items however because manipulation clans will die doesn't mean there is no room for item manipulation.With free trade now a single person can hoard tons of single item without being stoped by ge rules.

 

Does this mean I should sell my full bandos in preperation for the update?