Runescape Merchanting Guide


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

Price Averaging


What you need to know: Never buy or sell your items at one price. Spread it out for better profit rates.

Cost Averaging is a very complex way of expressing a simple idea: paying less for the items you want to buy. Many merchants feel that the best way to merchant is to pour all of their gold into one item at once price (IE: spending 50 million coins on yew logs at 250GP each; sadly, this is more often than not a futile effort. Sure, if the price increases you will be handsomely rewarded, but there is no guarantee that a price will increase. Using price averaging, however, you can actually benefit from price decreases. In essence, the goal is spreading around your risk exposure.

The way price averaging works is simple: because prices are always changing based on supply and demand (even at different times of the day), there is no reason to invest all your cash into buying (or selling) an item at one price. Instead, you want to buy more items (if you have the available Runescape coins) as the price falls, and sell more items as the price increases (instead of holding onto them hoping for further gains).

This tip applies generally to consumables (think commodities such as logs, fish, prayer potions, etc) and it works as follows:
Suppose that you want to buy Yew Logs. The current "Guide Price" is 100gp each. Instead of buying 30,000 logs at 100gp each (2.5m GP), you would place 6 different buy offers.
Offer #1: Buy 5,000 Yew Logs at 99 each.
Offer #2: Buy 5,000 Yew Logs at 97 each.
Offer #3: Buy 5,000 Yew Logs at 95 each
...and so forth.

Suppose the price increases to 105 later on and you wish to sell because you received a TrendTracker notification that the price has changed direction. Instead of a mere 5% increase on your initial investment, you would dramatically increase your return.


 
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