Re: Why do trading alliances not work?
Posted: Sat May 05, 2012 5:32 am
As someone who has considered himself a specialist trader in the past, I would pose the following question:
1 - How do you make a profit from your trading?
It is important, because that is the whole point of trading on a larger scale. So you need to find the "niche" that allows you to make a profit. And for every trader, there is usually only one niche that gives them the profit they are looking for.
The only way a trading alliance can work, is if your alliance can gather and maintain a large market share across all branches of trading. Ideally you would want the majority of the player to player trades going through the alliance or it's associates. That allows you to 1) control rates within the market and 2) withhold trades to hostile alliances. In turn, that gives your alliance a huge amount of negotiating power. You would have the ability to punish those who go against you, and give incentives to those who are friendly. You could even make a deal with a powerful war alliance for protection in exchange for good rates and regular trades.
If your market share is less than 20%, it's pointless, as there is no need for anyone to negotiate with you. They can just go elsewhere for their goods. And without you being able to defend yourself through other means, they will just farm/mass you when they choose to. It's also quite pointless if you only deal in one type of trade, UU sales for example, as an alliance can just adjust how they operate to compensate. If you can only control one area, then it must be the naq for $ market.
Of course as the majority of large scale traders already belong to major alliances, ensuring you can gather that kind of a market share across the game would be very hard. You must either entice them to your alliance somehow, or increase the supply and demand of your own goods until it outweighs theirs enough to damage their business. That means supplying far more than players like Da Vinci, who can famously raid and sell 5 billion UU a week, and FM who deals with quads of naq on a daily basis. And you wll need to be able to compete with their already ludicrously low rates in order to gain your market share, whilst simultaneously making enough profit to deem it worthwhile. On top of that, you add scammers, generally poor/slow traders, and having to continue business when many established players will be sitting on your accounts to prevent you from taking their carefully established market share.
All of those are reasons combined are why we have never seen a trading alliance rise up as a power. Is it impossible to do so? No. All that must be done by the alliance is to have someone online 24/7 able to fulfill any request for a trade, no matter what resources are being traded nor how small or large, in under 5 minutes. An example - If I want to buy 10 quad naq from your alliance, and you can provide at a good rate within minutes, it'll work. But then my friend wants 6 quad too. And his friend wants 20 quad. And we all need it today. Then someone wants a simple quick and easy trade of 10m UU for naq. And three other people want to buy 300m UU for naq. How do you provide all of that, where does the "stock" come from, how do you replenish it quickly, and how do you make a profit? Manage all of that, consistently for a few months, and your trading alliance could grow to be the most powerful force ever seen in this game.
~Norbe~
1 - How do you make a profit from your trading?
It is important, because that is the whole point of trading on a larger scale. So you need to find the "niche" that allows you to make a profit. And for every trader, there is usually only one niche that gives them the profit they are looking for.
The only way a trading alliance can work, is if your alliance can gather and maintain a large market share across all branches of trading. Ideally you would want the majority of the player to player trades going through the alliance or it's associates. That allows you to 1) control rates within the market and 2) withhold trades to hostile alliances. In turn, that gives your alliance a huge amount of negotiating power. You would have the ability to punish those who go against you, and give incentives to those who are friendly. You could even make a deal with a powerful war alliance for protection in exchange for good rates and regular trades.
If your market share is less than 20%, it's pointless, as there is no need for anyone to negotiate with you. They can just go elsewhere for their goods. And without you being able to defend yourself through other means, they will just farm/mass you when they choose to. It's also quite pointless if you only deal in one type of trade, UU sales for example, as an alliance can just adjust how they operate to compensate. If you can only control one area, then it must be the naq for $ market.
Of course as the majority of large scale traders already belong to major alliances, ensuring you can gather that kind of a market share across the game would be very hard. You must either entice them to your alliance somehow, or increase the supply and demand of your own goods until it outweighs theirs enough to damage their business. That means supplying far more than players like Da Vinci, who can famously raid and sell 5 billion UU a week, and FM who deals with quads of naq on a daily basis. And you wll need to be able to compete with their already ludicrously low rates in order to gain your market share, whilst simultaneously making enough profit to deem it worthwhile. On top of that, you add scammers, generally poor/slow traders, and having to continue business when many established players will be sitting on your accounts to prevent you from taking their carefully established market share.
All of those are reasons combined are why we have never seen a trading alliance rise up as a power. Is it impossible to do so? No. All that must be done by the alliance is to have someone online 24/7 able to fulfill any request for a trade, no matter what resources are being traded nor how small or large, in under 5 minutes. An example - If I want to buy 10 quad naq from your alliance, and you can provide at a good rate within minutes, it'll work. But then my friend wants 6 quad too. And his friend wants 20 quad. And we all need it today. Then someone wants a simple quick and easy trade of 10m UU for naq. And three other people want to buy 300m UU for naq. How do you provide all of that, where does the "stock" come from, how do you replenish it quickly, and how do you make a profit? Manage all of that, consistently for a few months, and your trading alliance could grow to be the most powerful force ever seen in this game.
~Norbe~
- This allows you to make quick sells or even buys while making some cash on the side.... many people I have done business with over the years can tell you... Be it UU/Turns/Planets,Raiding deals, Massing deals whatever that my prices were always usally right at that perfect spot to make everyone a profit both me and my customers
.... because as a trading alliance or partnership you can guess people will target you knowing or thinking you have resources to spare so make sure you all know how to kick some azz to defend whats yours.