How to Short Sell Items on MB

[dspguy]

P2's item is being returned, w/ potential interest.

In your initial "7-point plan" there was no mention of gains made by P2 (otherwise known as the Benefactor in your MB strategy). If P1 is splitting the profit with P2, then I can see people maybe being interested in this.

An FC member and I had our own mutually beneficial agreement. If he found a niche in the market that involved a crafted item, he bought all materials, I did the synth (0 cost to myself) and he listed the item. I got 1/2 the profit. Done. Simple. Seemed fair and it worked. This even worked if he found a direct buyer (no MB involved).

[IIBEEFCAKESII]

In your initial "7-point plan" there was no mention of gains made by P2 (otherwise known as the Benefactor in your MB strategy). If P1 is splitting the profit with P2, then I can see people maybe being interested in this.

An FC member and I had our own mutually beneficial agreement. If he found a niche in the market that involved a crafted item, he bought all materials, I did the synth (0 cost to myself) and he listed the item. I got 1/2 the profit. Done. Simple. Seemed fair and it worked. This even worked if he found a direct buyer (no MB involved).

Sure. This is optional. The Benefactor may decide the terms of essentially loaning the item. Since it is a variable that is decided between P1 and P2, and the terms can be anything, that's ultimately left up to the players. I should have made this more clear in my OP. *I edited to reflect.

The main point of OP was to bring to people's attention the concept of liquidating inventory at the right times and rebuying, at a lower price, something you plan to use in at a future date. The frequency at which this is done can yield major profits, especially with a large static inventory.

[Nicobo]

P2 may notice his product was being sold for 10k by the signature and also notice P1 bought the borrowed item for 5k... ^^;
iI would suggest P1 just buy cheap but not borrow form P2.

[IIBEEFCAKESII]

P2 may notice his product was being sold for 10k by the signature and also notice P1 bought the borrowed item for 5k... ^^;
iI would suggest P1 just buy cheap but not borrow form P2.

Then P2 stands to make no interest (potential terms) off a static item if he/she has no time to flip, and P1 does not make the difference on product "A" initially because it is locked into a duplicate item. Short selling another player's product that does not have time allows P1 to make the now "Freed" Gil work for him/her through another item/product. Growth then becomes relative to time. It is a time tradeoff. Not allowing value to remain in an item unused during periods of demand in the cycle.

[Victdeus]

I get what you're saying Beef, and I can see how it would be useful. Thanks for the thread! It's a simple concept, I just never thought to do it in that "direction". I think a lot of players view game markets as simple, random, game environments and don't realize that the MB can, and typically does, react like real world markets. I'll take a stab at what you're explaining but from a less technical economic stand point.

Scenario 1:
It's Friday night and P2 has 41 unique items that he wants to sell. However, he only has 2 retainers, meaning he can only sell 40 items (20 per retainer) right now. The remaining 1 item, even though it holds a value if sold (weekday=300gil, weekend=1000gil), returns no value to P2 as it sits in his inventory. In this scenario, that 1 item will yield P2 0 gil so long as it is idle in his inventory and P1 makes 0 gil since he's not involved.

[Victdeus]

Scenario 2:

It's Friday night and P2 has 41 unique items that he wants to sell. However, he only has 2 retainers, meaning he can only sell 40 items (20 per retainer) right now. The remaining 1 item, even though it holds a value if sold (weekday=300gil, weekend=1000gil), returns no value to P2 as it sits in his inventory.

Enter P1. P1 has nothing for sale by his retainers. He borrows the 1 item P2 has in his inventory idle and agrees to split the profit 50/50 with P2 upon returning the item. P1 sells it for the weekend price of 1000 gil.

On Tuesday, P1 buys the same item for 300 gil from the MB, yielding a net income of 670 gil (less MB fee) and he has the same item in hand. P1 returns the item to P2 with half of the profit (335 gil) and retains 335 gil for his efforts. In this scenario, P2 yields 335 gil from an item that he still has and P1 makes 335 gil from an item "they never owned". Win/win!

[Victdeus]

Another simple way to look at this is to reverse the farming/buying and selling model. Players start the game with 0 gil. They farm something and sell it on the MB until they have some gil. Then, they buy low and sell high to gain a profit off items. This approach REQUIRES you to have gil now, BEFORE you can make a profit. Short selling is the reverse of this as you don't need any gil to start. A brand new player with 0 gil can immediately borrow an item and use short selling as a means to make gil without farming and selling. This approach requires NO GIL to yield a profit. (I know, you don't immediately have MB access with a brand new character, this is to demonstrate a point.)

[Victdeus]

And of course, I must say that I would NEVER attempt this type of short sale agreement with a stranger. Short sales should be used as a cooperative measure to help P1 and P2 simultaneously. Attempting this with someone you don't know can swing all of the risk onto you if you're P2 (since you'd be giving product to someone you don't know for "free" up front). Attempting this with a stranger as P1 is much less risky. But if P2 doesn't fully understand the concept, it can get messy as they may accuse you of cheating them (meaning they don't get how it works) or they could start demanding a larger cut of the profits since they loaned you the item (which destroys their chances of you helping them short sell in the future).

[IIBEEFCAKESII]

I get what you're saying Beef, and I can see how it would be useful. Thanks for the thread! It's a simple concept, I just never thought to do it in that "direction". I think a lot of players view game markets as simple, random, game environments and don't realize that the MB can, and typically does, react like real world markets. I'll take a stab at what you're explaining but from a less technical economic stand point.

Perfect! Sometimes I make things sound to complicated. Every scenario you posted is a great example of how short selling can be used as a tool to gain Gil. I want players to understand, this is just one of many ways to accrue value over time. Short selling should be used in addition to buying low selling high, in addition to farming, in addition to crafting, in addition to services etc... Instead of putting all of their eggs in one basket, players should diversify their Gil. But, to summarize your points, if someone is a new player and doesn't have all these options at his/her disposal, or the player sees opportunity knocking at a specific moment relative to a certain item, take advantage of the MB!

Thanks Victdeus for helping break down the concept further! Happy Gaming.

[Conradus]

1. This isn't something done with random players. This is only done between individuals that trust each other (i.e. siblings, spouses, friends, FC mates). Risk is mitigated because of this. I thought that would have been implicit in the statement.

2. The point is not to spend Gil that's already wrapped up in the locked value of the product. Instead of limiting your scenario to buy low sell high and leave P2's value locked into the product, inventory is rotated in a cyclical fashion. To put it more clearly, it is a way to make Gil off of an item that you want to RETAIN but don't want to have to INVEST more Gil in.

Player 2 should be owed a fee over and above the return of his item for being put to the trouble of lending it.