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Monday, 25 June 2012

When to sell inks instead of glyphs

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My minimum price for selling glyphs is 40gold.  It takes 3 inks to make a glyph therefore i should be indifferent to sell inks at c14gold each.

However, i must consider the actions of me selling inks at this price.

Firstly, the only buyer of inks are other scribes and the only reason they would buy inks is to craft glyphs or other inscription items or to level.

I can’t slow down the levellers (the future competition) by restricting my sales of inks to Blackfallow Inks – they can merely buy those inks and convert them to their required inks.  So, by selling inks i do provide the future competition with a route to levelling.  But at least i pick up gold along the way.

The other Scribes will be buying my inks to produce items to post on the Auction House to compete with me.

Now, by selling inks at 14gold i am setting their floor price at c40gold per glyph.  Given most of my competitors are willing to take glyph prices down to 15gold my actions of selling Inks at 14gold is forcing them to reset their prices upwards and therefore forcing discipline into the market.

Another way of looking at this is that for every 3 inks my competitors buy off me i therefore can claim 40gold of each glyph they sell (i am their cost price).

I can withdraw my sales at any time.

Therefore, i am happy to sell inks at 14gold each.

My cost price per Ink is 7 gold (it takes c3.33 Whiptail per Ink) therefore my profit per Ink is 7 gold (or 21 gold per 3 inks bought = the profit per glyph sold at my minimum price of 40gold).

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