3 Steps to Making Millions: THE guide to Vending&Exchanging!

[Pheregames]

For an updated guide please check [here]



Ever wish you could get all those wonderful items but can't afford them? In just three simple steps you can make MILLIONS of gold, and you can do it with minimal effort! .

Ever wish you could get all those wonderful items but can't afford them? In just three simple steps you can make MILLIONS of gold, and you can do it with minimal effort!

Notes:

Econ lessons are in a different color so you can skip over if you don't want to actually learn. [HEY! IT'S THE WEEKEND KAY?]

I'm very open to your comments, good or bad, as they improve the guide. Feel free to drop me a PM if you have any sort of questions.

The guide is structured by how much gold you have. Stage 1 is where most will start, and by stage 3 you'll be rolling in the gold. The extra help section near the bottom of the page answers some questions and has added info for those who like it. There's also a TL;DR on the bottom of the front page.
 

[Pheregames]

Introduction:

My first vending guide was rather successful however a fair amount of time has passed so I believe that it is time to revise the guide and rewords things. The full first guide’s goal was to make things as easy as possible but left many questions unanswered. This guide’s goal is to teach you everything you need to know to take about 30k and turn it into millions. I have dry humor. If I made you snort-giggle while reading, I feel equally accomplished as teaching you how to vend.

EXCUSE ME… but there are words on the page. Lots of them. They’re starting to scare me…
I understand, I really do. I got all the text out first and I’ll be adding pictures to make things easier on you. Just drop me a PM with what you’re not getting and I’ll make some pictures so help you understand. If your not getting it, your most likely not the only one, so your actually helping :]  

[Pheregames]

Preface:
To begin with, please understand some of the terminology I’ll be using in this guide


The following two words are typically interchangeable, however is how I will be using it. As a whole, these are loose terms...

Vending- What this guide is all about. Action takes place in both the “vend” and the “exchange”. [The traditional word meant buying from the vend, and selling in the vend]

Exchanging- Buying and selling items [with profit in mind] in either just the marketplace, or just the exchange forum.
[The traditional word meant buying from the exchange and selling in the exchange or in the vend] [Confused yet? That's why I went over these words]

Exchange- The exchange forum is where you will come to BUY items; you are looking for people to SELL you theirs here.

Vend- The Marketplace where you will SELL your items here; you are looking for people to BUY your items here. There is a nominal 5% tax on each sale.

AB-Auto-buy ; HB- Highest Bid ; SB- Starting Bid  

[Pheregames]

Foreword:

Before you are able to begin your conquest of monopolizing Gaia as the number one vendor, you need some start up capital. There are a number of ways to do this, and vending small items is not one way I would recommend. You should get that gold though another means, such as posting, playing games, or selling unwanted items. My assumption is that you have basic knowledge of the navigation of Gaia and that you have a trading pass already [ if not please search for a guide, or contact me via PM].

You are shooting for about 50k however 25-30k will cut it. Things become easier the more gold you have to work with.

Stage One~ Starting out: 50k+

This section deals with taking that startup gold and working with it until you’re able to have both an active and passive amount. As of now, all your gold is “active”. This is to say that you are constantly buying and selling your investments.

Our first step is to find a suitable thread to buy from. Try and look for a thread [in the exchange] that is reasonably new. I look for a thread that’s still on it’s first page, or less than 10 minutes old. You may try to find some steals at an inventory sale [where the user has lots of items] but you are likely to be outbidded or have a higher amount of competition. The plus side here is that they tend to take lower offers. Let’s say that you find a good thread, “S> Mythrill Armor + Other items!” It has only 2 posts, both bumps, and no offers yet.

The next step is looking for a good item. There are a number of items in your price range but the most commonly asked question is “What should I vend with?”.

There are a number of things to look at here: Price, Cost, Net profit.

--Price: This is the ticket value of the item. We’ll say that the LMP [Lowest Market Price] is 55k.

--Cost: Isn’t this the same thing as price? No. [Econ warning!] The Cost here is an opportunity cost, meaning it is an implicit cost which often may outweigh any explicit costs and thus lower your utiles per gold. This is the transactional (precautionary to an extent) motive to take place at the highest utility per unit of gold. Utiles, if you haven‘t taken an econ class, is a measurement of “jollies“ or happiness / satisfaction that someone gets at the given price. [/econ] The thing here is that while the item may have this SUPER low ticket price, it may bear a high cost.
For example, Jack’s Joy is sometimes sold on the marketplace for 300k, but bought in the exchange for as low as 20k. You’re thinking what a huge profit, right? That item--I learned-- is nearly impossible to sell for any profit. The idea is to find an item that won’t take months to sell with all your gold tied up. Check the marketplace and see if A) The ABP [Average Buy Price] is around that of the LBP, and that there are a number of listings. Click on “Show Graphs” to see if people are buying this item before you want to, especially if you want to turn it around. Nobody buys a house and tries to flip it without looking it though!

--Net Profit: Remember that the price you bid defines how much of a profit you will make. The lower the bid, the more you’ll profit [assuming it gets accepted]. This is where many people try to “lowball” people--often getting them ignored and ultimately having their good offers rejected as well. To counter this, have a decent starting bid. Try to bid about 80-90% of the LBP [or ABP, whatever is lower]. Depending on the item, lower works as well but most people selling will accept an offer 90% of the LBP, giving you a net profit of 8%. That a few times adds up fast.

Example time!
You enter the thread and politely say, “40k for the Mythrill Armor please!” Let’s do some math, 40k/55k is about 72%, not a horrible bid but you’ll most likely be quoted with the word “Add”. Let’s go for 80%; to do this multiply the LMP by .80 [that is point 80, not times 80], and then round up to a nice number. You bid 44k; your on the right track and your offer might be accepted. The game here is to sometimes bid aggressively to prevent others from bidding an item up. Sometimes bidding 85%-90% right off the bat will ensure that you get the item and don’t have to deal with bidding. The seller says 45k and it’s a deal; the trade is sent. Bidding may not always be this nice, so read up on the bidding section.

Step three~ Selling the item and figuring out net profit.
Congrats on buying that item. The LMP was 55k, and the price you bought it was for 45k. Simply subtract 45k from 55k, and you’re looking at 10k as the profit. Now you have two options: The vend or the exchange. You may look into the exchange forum, but you just came from there and you know how low people bid and it’s really hard to make a profit, but it’s the best place to sell an item you can’t rid of [Oh hoh, some people miscalculated their costs huh?] or for an item that the 2% tax takes a large portion of gold away [IE items priced in the millions and beyond]. We’ll head off to the vend. Check once again the price of the lowest priced item. The two schools of thought are to either sell just above that price, or sell just below that price. Selling above is a viable option and nets a higher profit, but selling below saves you time and costs only a few pieces of gold. The lowest priced item is 55k so we’re going to sell below that at 54,700 gold. Try to sell your item below by a bit of a way, instead of just one gold less because then if somebody tries to sell theirs for 49.999, yours is still higher on the list and will be sold faster. Your net profit for that [remember the 2% tax] will be 8606 gold. Not bad for spending 5 minutes or so and a heck of a lot faster than posting.

From then on it’s simply lather, rinse, and repeat. Repeat being key.

Wait! What if I LOST gold? Well… did you sell the item yet? Sometimes the market swings up and down. You may wish to bide your time just a little or cut your losses. You can avoid this by really checking up on the item BEFORE you buy. Nobody loses gold from a good item choice. You haven’t made a “lost” until you’ve sold the item off, your gold is simply tied up in items.

But Phere... that gap between stage 1 and stage 2 is so large!
When you feel confident you can move onto stage 2, however the more gold you have going into stage 2 the easier it is and faster you make gold. Keep your gold active for a bit more and get used to it, but feel free to read over and play around with it a little.  

[Pheregames]

Stage Two: Getting into the mix 300k-500k

It seems that you have a grasp for this since you made a pretty good profit now, right? I hope so, if not I’ll go sit and cry in the corner for leading you down the wrong path. I MEAN, keep at it! wink At this point you have more gold to work with and now you can begin to move your strategy from the simple “day-trading” of buy and selling to actually making investments in items and branching out into those Eis [Evolving items], RIGs [Random Item generators], and Mcs [Monthly Collectables, previously Dis, donation items] and Sealed Letters/Envelopes [Which are Mcs before the 15th of the month]. This requires a larger capital. It’s hard to tack a number on this because EIs have such a wide range, but your going to want about 300k to work with, 200k being the minimum I’d suggest. Sure, you can get one of these items for less, but here we’re going to move from having all your gold “Active” to having part “Active” and part “Passive”.

--Keeping your Active gold… Active [and happy (assuming gold can be happy)]
Now it may seem very temping to put all your eggs into one basket and invest into these very shiny items… but eggs break. They crack and they ruin and they make items like the experiment and people want to just give them away and all that gold you once had is now gone like those two chocolate bars I left out in the kitchen before going to class [seriously].

Your going to want to partition part of your gold. While there are no physical way to do this [save for “holding” your gold in a trade], simply pick an amount and make a promise to yourself that your not going to spend that amount on anything except investments to make more gold. I had a 1:1 ratio going on when I had about 2 million, but have moved that to a lower ratio since then. You typically want to have more gold in your “active” account, then your investments, mostly because you can make more of a profit at one time by using more expensive items. While you may get a 500-1000 times increase on some old sponsor items, that’s sometimes only 500-1000 gold, less your 2% tax. In addition, you may want to set off a block amount as your “emergency” funds; think of this as your rainy day fund--or “oh-em-gee that’s a new item with rainbowunicorns~! I NEED IT” fund. Whatever works for you. [mini-econ lesson: This is the speculation motive for having currency /learning]

Once you’re content with your separated amounts, either into two or three parts you’ll learn to work with all the various groups separately. This may sound as if it’s a daunting task, it’s no different then normal. For your active gold, continue doing the same thing as your used to--move to higher valued items as you see fit, but always do a quick calculation to see if your going to actually get a worthwhile return. Sometimes a 8k gain seems nice, but it’s less than 1% of the item’s value, making it relatively inelastic and the market could swing 2% in just a few seconds, potentially putting you in the red.

[Econ alert: An item’s “elasticity” of demand [since the supply is out of your control on a large-scale] is measured by the change [delta] from the initial price minus the new price divided by the initial price. The greater this number, the more elastic that item is. Below 1, the price change is inelastic--this means that the price change doesn’t effect the buyers by much of a degree. Suppose you went to the store and you buy your favorite drink and you notice that it went up one penny. Does it simply outrage you and now your not going to buy it? The answer is no; since the 1 cent increases is a fraction of a percent, it matters very little, however it will turn off a small degree of buyers. At exactly 1, the item is unit elastic, this means the number of people who want to buy vary directly with the price changed. At greater than one, the item is elastic, and even the slightest change can greatly impact the amount of buyers. /learning]

Letting your passive gold make you rich while you sleep--Literally.
This is every Gaian’s dream. By buying an item and selling it back is a great way to make a profit, however you can win big by using your passive gold wisely. Once you’ve found a suitable item, your going to want to hold onto it for a set amount of time [calm yo self: more info later] and let the value grow. Your item choices here are much more limited here though. Below is a snazzy list I’ve made with obviously too many rows but it’ll help.  

[Pheregames]

Type of Item /// Wait times recommended /// When to buy /// Profit range /// Reliability /// How many?


• Sealed Letter // >7 days /// 3rd-5th of the month // 1k -35k if sold on the 14th or 15th// Very reliable// Buy as many as you think you’ll be able to sell.
  
  
• Sealed Letter selling as a MC// 13-15 days // 3rd-5th of the month // (-)20k - 100k // Unreliable // Use with caution.
  
  
• MC LETTER short term // 25-28 days // 22nd-25th of the same month // -5k - 20k // relatively unreliable // no more than 15% of passive gold. [or 2 if low on funds]
  
  
• MC LETTER long term // 6 months - 1 year // 22nd-25th of same month, second set a month later around same time // -10k - 1 mill plus // relatively reliable after first month’s progress // no more than 80% of passive gold.
  
  
• Cash Shop Items // X // Never // Unlikely // Good luck // Cash shop items rarely are worth making a passive investment, however they work as active investments or use for vending.
  
  
  Type of Item /// Wait times recommended /// When to buy /// Profit range /// Reliability /// How many?
  
  
• Limited/Event CSI // 2 weeks after event; or use as long term// midway/late event // Moderately unreliable // No more than 15% of passive gold.
  
  
• Active Items // X // Never //Less and less // Just give away gold// can I use a negative number? Since an active item [we’ve only had faunzy’s flute] constantly pumps out the same items, the supply is so large that it can never be valuable. Make a profit fast and sell as soon as you can.
  
  
• Rapid EI // Near end of evolutions [taking a chance to wait till it fully evolves] // A few days after announced // +/- 50% // I wouldn’t recommend // One. No long term bonus either.
  
  
• $5 or less EI --Only buy first gens// When your happy.//4-6 days after announced // 50-100k// Reliable once item is established // No more than 50% of passive gold.
  
  
• $8.99 and over EI-- First gen only// 4-6 days after announced // 25k-1mill + // Very reliable// 95% of passive gold + [Emergency funds? ]
  
  
  Type of Item /// Wait times recommended /// When to buy /// Profit range /// Reliability /// How many?

 

[Pheregames]

The special case of RIGs:
While Random Item Generators are neither an active or passive item, you may treat it as either and make a profit if done logically. Do NOT buy a single rig. You will not have a success story. And if you do, don’t press your luck. Statistically against you like no other. You need multiple tires to make a profit; be weary, you may end up in the red.

You can keep them closed, buying bundles, unpackage the bundle [not opening them], and sell the single ones for some profit.
OR
You can buy a bundle, open them all up, and sell each of the items, with various amount of loss or profit.
OR
You can buy a bundle, play the game [if a “stage” RIG] and sell at a high stage, often netting a really good profit.

While some RIG items are great to active vend with, they aren’t consistently reliable passive vends as the degree of change isn’t worth the wait most of the time. There are a lot of counter-examples, but they are all case-by-case. If you find a good item that came from an EI, and it shows the signs of a good item, it most likely is [assuming it’s not day one of the RIG or anything].

I spend about a million gold on each rig, play them all, and sell instantly. I actually sold at a high stage which got me 1.5 mill, and played the rest, with just one or two pulling a profit, but last RIG I got an item worth 900k on my first try. A RANDOM ITEM GENERATOR is… random. There are some success stories of people buying just a few and all of a sudden getting one of those super rare items and they’re able to sell it for a billion gold or something crazy and now they can buy anything they want. Likewise, some rich Gaians are reduced to rags. Quit. While. Ahead.  

[Pheregames]

Stage Three: Let’s have a siesta~ 500k to millions and millions
[props if you got that joke]

While Stage 2 glanced at this topic, this is where your passive gold makes you so much of a profit you sometimes wonder if you even need to do active amounts, why not just raise your emergency fund and wait for good items? Remember when I told you it was really important for you not to question me in step two? I lied. The cake was a lie. But it was for your own good. At that point you really needed not have such an investment in the future, but if you’ve made it this far, your most likely have a grasp on everything and may already have been moving towards this direction. Since your wealth will now be coming from longer term investments, it’s a long waiting game, but since you have a nice gold cushion, you may want to just take some time and relax and do something else. This is also a good idea if you’re going on a trip somewhere.

Speaking generally, your gold--as gold-- is not making a profit just sitting there. Throw your gold into items [as outlined above].

Your going to increase your investment by diversifying and stockpiling; the basics of “hoarding”. Your just taking long term investments and multiplying your chances. This is where you can make the big bucks but be aware that this takes time. Event items here can actually make a lot of gold. Take the event bags, X-mas or Halloween in particular, wait 11 months and 15 days and you’ll make about 5-10k each bag--from the ones you bought for 50g-1k! Originally hoarding letters was the only way to hoard, however you can also use some EI and RIG items. One idea is to buy a good chuck of an EI, sell it right before the last evolution or the first day of the last evolution, wait about two weeks, buy back even more, wait for it to leave the cash shop and a month or so later you can begin to sell them off with increased profits!

The largest issue with hoarding is simple: you have a LOT of one item.

DO NOT FLOOD THE MARKETPLACE WITH ALL YOUR ITEMS AT ONE TIME.

If the supply was about 2 a day and all of a sudden there’s 30 today, guess what, supply and demand. More supply and the same demand causes the price to drop. Drastically. Sell your hoard off to another hoarder or SLOWLY sell your items off.

Sometimes hoarding is called Harvesting--it’s similar however harvesting is the idea of taking a few of each and every item, rather then a large quantity of a single good item. Harvesting is innately safe but your wasting a lot of your passive gold.  

[Pheregames]

Stage 4: Hey, I thought you said it was 3 easy steps!

It is. But now that you’ve come this far, what are you going to do now? While many continue to make more and more, others begin to become content with the amounts they have. This may get a little preachy, but try and give back to others. I’m sure you didn’t get this far without a donation or help. Give back a little and get some karma points [who knows, maybe it’ll help with your next RIG?]. Buy some avi art, donate to charities, throw a contest, donate to the person who made you rich [hint hint heart ], or simply share your knowledge. Up to you.

TL;DR
Recap


The exchange is where you buy.

The Vend [the Marketplace] is where you sell. [mostly]

Buy a "Sell-able" item. Most commons are not. Sponsor items are rarely.

Typically, the more of the items other people are selling that you're bidding on, the safer it is. Buy an item with 95 other people selling, rather then that Jack's Joy with a 300k Price Gap and 2 sellers. [[Game items is the exception], but then again you don't want to vend them anyway]

Know the "Cost" of the item.
[Warning: Econ lesson] The VALUE of an item is not hard to find. Check the vend and use some common judgment. However the cost of the item is a little harder to find out. As we don't need to look at the factors of production this time, the only real thing you're "losing" is Time and the opportunity cost. The opportunity cost is the value of the trade off you're doing. The trade-off is giving one thing up for another because you're willingly trading. This may be a service [such as bumping] or a good [like that new MC]. You value the item more then your gold. However, is the effort you're willing to put in to re-sell that item worth the ticket price? Take for instance Jack's Joy; a rather high end item that will occasionally bump itself up to a high price but will have little demand [the desire or want for the item AND the present ability to buy it; one without the other is useless. Just beacuse to want the shiny thing doesn't mean the demand for it goes up].[/learning]

Knowing how to bid is important, MMkay?

Try to bid a fair amount first. If they accept your bid quickly, it stops from having a bidding war, and time.

Try to bid 90% [or less maybe? I wouldn't recommend 85% or less. Go for 93% for expensive stuff ] of the LOWEST Vend Price. [[Use your calculator, take the vend price, and multiply by POINT 90 to do that; Lazybones]]

DON'T TRUST TEK-TEK. USE THE VEND'S PRICES.

Sell the item for slightly less then what the lowest one is.

Think about long term investments.

If you're loaded, donate to some nice people.  

[Pheregames]

Reserved to feature questions  

[Ebania]

Thank you very much for posting your great guide, Pheregames! I'm sure it will help many members! heart  

[Common Pothead]

just remember when it comes to the exchange its always a risk. smile  

[a random artist appears]

thank you for this guide! I will have to try it when i have more gold  

[Meeeki]

Nowadays people make millions of gold in daily chance -- well thanks for guide!