Runescape Merchanting Guide


Table of Contents
Introduction
What to Merchant:
How to Merchant:
Hazards:
Other:

Fundamental Trade Factors


In this section, we delve into some of the factors that determine which items are the most fit for merchanting in Runescape. Keep this is in mind as we proceed towards the analysis section. While it may seem like a lot, really it isn't that difficult.

Rarity
Rarity, as the title suggests, is correlated to how rare the item is, either from NPC (non-player character) drops, or achieving it through other means. The rarer an item, the less supply of the item there will ultimately be.

Usability
Usability relates to the utility of an item. This falls into two categories:
1. Does the item have multiple uses or not? For example, a battle-staff has one use: making battle staves. Anyone not doing so probably has little interest in the item. Conversely, a yew log has multiple uses. It can be fletched into a number of bows as well as burned. In this comparison, the yew log has greater utility.
2. How accessible is the item? This consideration relates to the skill level required to obtain the item as well as ultimately use it. For instance, can the item only be obtained by killing a high level NPC or does the item require a high skill level to turn it into a useful end product (such as a potion).

Supply
Supply is one of the two most important considerations. The goal is to balance there being enough easily obtainable supply that price shocks are avoided. But at the same time, attempting to merchant an item that too many players can easily possess really limits upward pricing potential as someone will (more than likely) dump their items at below-market prices, which is not good. Supply does correlate to rarity, but the consideration here is more related to trade: do players trade the item often, but not too often? In this instance, high rarity items may not have enough supply.

Demand
Demand is the second of the two most important considerations. Because we are looking to merchant an item that has fundamental underpinnings, the item that we ultimately select has to be an item that players want, need, and are willing to pay to obtain. The ideal merchanting item is not one that can only be utilized by a few players with high skill levels. Again, supply versus demand.

Price
The best item to merchant in one moment could be the worst in another. Why? The price. As you will soon read, we recommend that merchants become familiar with a specific item (or set of items) so that they know the general price range that it floats between (high and low). When an item reaches the high end of this range, it's generally time to think about selling. Near the low, it's time to start buying (unless something has changed that has devalued the item).

We point to two key factors in measuring how an item's price stacks up for merchanting. The (1) first is easily obtained on the GEUpdate merchanting website: the items cost per XP. This number represents the items true value - not necessarily what merchants have driven it up to. The higher the number (away from 0 into positive territory, for example: 8, 20, 45), the more expensive the item is relative to its value to players aiming to advance a skill level ("Skillers"). The lower this number (including negative numbers), the cheaper it is to use the item to achieve skill levels. Remember: we're looking for items that players want.

The second (2) factor is tediousness. Skillers generally consider and attempt to balance two factors: price and tediousness; we're doing the same. Skillers might pay slightly more for convenience (less time and/or clicks), but they won't pay an outrageous amount. When an item has gone too far past its normal range, they may opt for another item that might take slightly longer, but that costs less. In doing so they get more experience for their Runescape coins; but they also take with them demand for the item. If they don't want to buy, you can't make money.

Leveraging
Assuming all other factors between items are equal, though this is rarely the case, there is still one deciding factor: the items market price relative to the total amount of capital that you have to invest. Because most items will have buy limits (the number you can purchase in a set period of time), leveraging your assets - picking an item that allows for the greatest capital investment - is one of the surest ways to maximize your return on investment. Cognizant of the fact that you may only buy 100 seeds in any four hour period, consider the following (extreme) hypothetical as a demonstration of this point:
You buy 100 harralander seeds at 100gp each. Your total cost: 10,000gp. After one day, the price increases by 5%. You sell your seeds for 105gp each, yielding 10,500 gp. You made a % profit, but this was only a menial 500gp.
Now, you decide to buy 100 ranarr seeds for 2,300 each; total cost: 203,000gp. After one day, the price increases by 5%. You sell your seeds for 2,415 each, yielding 241,500gp. Again, you made a 5% profit, but this equated to 38,500.
In sum, if you can afford to do so without investing all of your assets, pick an item worth more. Your return rate may be the same, but percentages are percentages. The greater the capital investment, the greater the actual GP return.

Volatility
Volatility refers to how unpredictable an item is. Items with wild price swings can be great short-term flips, but you should be aware that there is no profit guarantees here. You can determine how volatile an item has historically been by looking at the long-term graph. If you're more the "set-it and forget-it" style of merchant (which we are) its best to steer clear of these type of items. They carry with them additional risk.

Patience
Patience is a totally subjective consideration. As used here, this refers to how long you might be willing to hold onto an item to turn a profit. The reason this matters is that the less volatile the item is, the longer it may take to yield a profit. At the same time however, the less volatile, the better chance of avoiding expensive losses. Ideally it is best to balance patience and volatility. Too patient and you may never see a profit, too volatile and you might be asleep and miss the two seconds (an illustrative exaggeration) that the item was at its highest profit level. To paraphrase the children's story Goldilocks and the Three Bears, you want both to be 'just right.'
 
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