Trading and merchanting guide

Merchanting is the act of purchasing an item at a low price and then selling that item at a higher price, generating profit as the difference between the above unit prices. Merchanting is a popular method used by players to make money. Merchanting became less common after the addition of the Grand Exchange and the removal of unbalanced trade because many people believed that it was impossible to make large amounts of money through merchanting any more. However, some players began merchanting using the Grand Exchange and now this is a fairly common way to make money. There is no minimum amount of money that is needed to make money from merchanting.

How to Merchant
"Merchanting" is a general term that can be divided up into the following categories:


 * Investing: Buying items with the intention of selling them for profit several days to many months later, due to a gradual increase in price, or a more sudden reversal from falling in price to rising in price.
 * Flipping: Buying items with the intention of selling them as soon as possible, often as soon as the 4- hour timer has expired.
 * Manipulation: Buying items in very large quantities to reduce the quantities available for other buyers, forcing the price up and then selling the purchased items later at the higher price; this tends to be effective only for items which are rare or in high demand.
 * Arbitrage: Buying items in a market with lower prices and then selling them in a different market that has higher prices. This was more common before the GE, as players could buy certain popular items at pre-set game prices in the general store (or certain specialty shops) and then sell them player-to-player at a higher price. However, it remains possible since some specialty shops still carry a few items at prices well below the GE price.
 * A fifth category involves actually changing the items after buying them - for example, making sets from pieces, or potion decanting. This is not pure merchanting, as time is spent processing item.

How the Grand Exchange works
Understanding the Grand Exchange is important to merchanting. Free players may have 2 slots, while members may have 6. Players may not sell an item immediately after buying it, or buy an item immediately after selling it. More specifically, when an item is traded, a timer of exactly 4 hours is started, and the opposite transaction for this type of item may only be conducted when the timer has expired. The timer does not start over if additional items are traded. For example, if you were to buy some nature runes at 2 p.m., you may be able to buy more at 5 p.m. but still be able to sell all of them at 6 p.m. when the original timer expires.

There is no limit to the amount of items a player may sell in any given time period; however, all items have limits on the number that can be bought in a given time period. This also uses the 4 hour timer.

Not all items have the same buy limit. The following are buy limits for a selection of items:


 * Runes, essence, flax, logs, ores: 25k
 * Bars, Bolts, feathers, ashes, herblore seconds, dragon leathers, planks, food: 10k
 * 4-dose potions and summoning pouches: 5k
 * Most cheap armour and weapons (up to rune): 100
 * Most amulets and rings: 100
 * Most expensive armour (barrows, 3rd age, godwars, pvp): 10
 * Rares and spirit shields: 2

If an offer is placed in the Grand Exchange, and it is a valid offer (a.k.a not still on the timer), the game will search for all offers meeting your price or better, and instantly complete those trades, getting the prices of the already existing offers (not some sort of compromise price). If the offer is then not fully completed, it will wait until it is found by people placing in offers. Thus, all trades occurring in the Grand Exchange occur instantly for one person and not instantly for the other.

Basically, if you are trying to merchant, you do not want your half of the deal to be the instant half because you could have gotten a better price by waiting.

It also is important to not panic trying to buy or sell items when you still may be on the timer, because your trade will not be completed no matter how good your offer is. Many people appear to not understand this, and put in buy offers for maximum or sell offers for minimum when they are locked out. Then, when their timer expires, the offer becomes valid and is snapped up by a lucky person.

A common misconception about the Grand Exchange is attaching special meaning to the median price. In reality, the median price is the average price of yesterday's trades and may no longer be relevant.

In general, items are always rising in price or falling in price. If an item is rising in price, an attempt to sell it for median price will be instantly completed, and an attempt to buy for median price will not be instantly completed. The opposite is true for items falling in price.

Imagine that you could buy an item instantly, then sell it instantly. As an example, let's say that whips are 1800k median price, and you instantly buy for 1850k, and instantly sell for 1801k. This means that at the current time it is possible to buy or sell whips for any price between those two, but not outside this range. Of course, if you were buying, you'd want to buy for maybe 1802k, and if you were selling, you'd want to sell for maybe 1849k. You want to be the person who gets a good deal by getting people's instantly completed offers. You want to pay as little as possible, or sell for as much as possible, so that you beat out the next person in line for those instantly completed offers.

Notice the characteristics of this example: the item is rising in price, so the best buy offer is just above median price, but the best sell offer is much more above median price. If the item is falling in price, the best sell offer is just below median price, but the best buy offer is much more below median price. This model is not true if the rate of price change is too high; in some cases, an item may be completely bought out at the maximum price, or completely dumped at the minimum price.

Investing
The two most important elements of investing are to be aware of prices and price trends, and also how recent updates or general trends in RuneScape are affecting the market.

A common misconception is that a good investing strategy is to buy items that are going up in price. It is true that this is sometimes effective, but prices always fluctuate; in other words, price increases are always followed by price decreases, and vice-versa. These often are of the magnitude of several days each, but can be longer. In general, it is not a good idea to invest in items that have already been going up in price for a long time; rather, invest when the price is still falling but you think the price will start rising soon, or invest very shortly after the item has started rising.

Carefully watch the price of the item and sell them when the price starts going down or stays even. Ideally you would actually sell while the item is still going up in price, the day before the price reverses and item starts going down in price. However, it is not always easy to predict exactly when this will be. Players may want to use the RuneScape Grand Exchange on the Runescape website. Players may find the Grand Exchange Market Watch helpful, although the Grand Exchange Database can be even more helpful, and the prices are usually up to date.

Be aware that there are price manipulation clans which will artificially try to raise the price of certain items. They will continually buy an item until the price goes way up, then they will all dump the item, causing the price to crash. When they crash happens you will have no advance notice and you will be unable to unload your items even at minimum as the market will already be flooded. Be aware of this and when you see a common item going way up for no discernible reason, be very cautious in investing in it.

Another good way to invest is to read the Runescape news found in the homepage of the website, and look for new updates. For example, the release of PvP worlds resulted in increased demand for sharks, swordfish, runite items, dragon daggers, Dragon scimitars, and other popular player-killing equipment and supplies. If, before the update, you had seen this coming and stocked up on these items, you would have made quite a substantial amount of cash from the items raising. Another good example is rares. Before the holidays, people like to buy Santa hats. They will almost always go up in price in the weeks leading up to Christmas. Richer people will buy some of these, and sell them once they go up. However, due to a popular perception that Santa hats would be worth the most on Christmas, Santa hats have been known to crash before Christmas. In 2008, Santa hats started crashing several days before Christmas.

If you want to do some very long term investing you may not be concerned with small price trends, but rather hold onto an item for months with the hope for huge profit. For example, dragon bones were worth about 1800 coins each in December 2008, but as of July 2009 were worth about 3000 coins each. Also, prices of discontinued items seem to reach an annual bottom in late March or the middle of April, but then rise during the summer.

However, if you are thinking of investing a large sum of your cash, it may be worth it to research the general price that most of the items will stop going up or going down at. If you don't you may be at risk to lose large sums of money. Remember, unless you are very familiar with the price trends, you want items that are in good supply, not rares. You want items that players commonly use or consume, such as food, armour, weapons, and items needed for raising skills, such as metal bars for smithing. Once you have more experience with merchanting, you can then start working with rares.

In merch clans, it is commonly known that the leaders of each clan are using you, they have all the people in the clan make the price sky-rocket. When this happens, they sell before everyone else and make a profit off everyone else. It is advised to sell before the leaders to make a profit.

Flipping
Flipping involves buying an item for as little as possible and then selling for as much as possible within a few hours. See the whip example above for an illustration of how flipping works. Flipping is unique in that it can be used to profit from an item falling in price, by buying for much below the median price and selling for a little under in the median price. This is sometimes called reverse flipping as opposed to regular flipping for an item rising in price but this distinction is not always made.


 * Remember that it can be difficult to buy an item for below medium and sell for above medium, unless the price actually changes from falling to rising, because prices are virtually always either falling or rising, and often only switch every few days. Advice to buy for the absolute minimum and sell at the absolute maximum is not sound because it is very unlikely for this to occur unless you are investing and are actually predicting a price reversal.


 * When flipping you should have a selection of items that you should flip over and over. You can avoid the 4 hour timer by switching to another item after selling a previous item. This way you may be able to flip all your cash several times per day. In general you make 0.5% to 2% profit per flip, although of course it's possible to lose money, or make more than that. In a good day you may increase your net worth by 1%-2%; this can add up over time. Another way to avoid the 4-hour timer is to buy directly from a player instead of through the Grand Exchange, but it is often difficult to get either the quantity or a good enough price to make this worthwhile.


 * If you buy an item and find that a major crash has started and you cannot sell at minimum, you can either hang on it until the price rises again, or dump it at minimum. If you choose your items carefully, this shouldn't happen to you very often. A wise rule is to always do a test buy of a small quantity, and then resell to see how quickly the item moves. If you can buy ten easily, then sell ten easily, next time try to buy 50/sell 50, then try to buy 250/sell 250. Never start out buying a huge quantity of an untested item.


 * You also want to find items that are in your price range. If you only have 100k to invest on an item, you probably don't want to pick an item that is 50K as you would only be able to buy 2 of them. Instead pick items that are about 250-500 coins, that way you could buy up to 2000-4000 of them. Quantity is usually more important than price, but not always. If your investing funds are low, it is best to focus on quantity, then as your investing funds rise, focus on quality, such as high level armour, or weapons, or rares.


 * Pay attention to the charts, they are EXTREMELY valuable. How to find the charts: Go to the Runescape Home page. Click on the menu bar "Game Guide", then click on "Grand Exchange". Bookmark this page in your browser, it will serve you well in the future. This is your home base for merchanting. You can see which items are going up in price, and which are going down. Type in an item, such as "Law Rune" in the search box, then hit "Go." You will get a list of items which either have "law" or "rune" in the item name. Click on "Law Rune" which should be at the top of the list. The first chart you will see is the 30 day chart, hit the button at bottom right marked "90 Days". This will give you an overview of how the price has been increasing or decreasing over the past 90 days. For a longer chart you can also chose the "180 days" button. (which is almost a half year)


 * Using the charts you can usually predict which items will be increasing in price, and which will continue to fall. Be aware that many items will rise and fall repeatedly within a certain range, so the graph will look like a wave. These items are especially valuable as merchanting items, as they are somewhat predictable. You want to buy right at the bottom of the wave, and sell at the top. Looking at the last 30 days on the chart should give you an excellent idea of where the buy and sell point will be.


 * Another important concept is DIVERSIFICATION! Do not put all your money on one item. If it drops in price, you are in trouble. Try flipping 70% items that are resources like flax, food, bolts, ore, runes stuff people will need badly and 30% in technical items like armour, weapons or rares if your rich enough. Try to pick four to six good items (you may have to experiment to find four good ones) and just keep buying low, and selling high. Remember there are always impatient players who get rare items as a drop, such as corrupt dragon items, and they need cash fast, so they will sell for the minimum. That is great for you as you can buy cheap. Then later will come the impatient buyer, who has to have that item right away and is willing to pay a lot of money. Great for you also. You will be able to be patient and buy cheap, then you will also be patient and sell high. That is the key to merchanting, patience. Waiting for the right seller to come along, then once you have a good stock of the items, waiting until the right buyer comes along. Patience is everything. However, if you find the right items, you should be able to buy some and resell the same items within 24 hours. If you can't buy a supply of your merchanting item within 12 hours, you probably should pick another item, or rethink your price. Same goes for selling, If you can't unload the supply of items within 12 hours, your price is probably too high, or the demand is falling.


 * As a general rule, you want to buy overnight, and sell during the day. This is because there are fewer players at night and it will be harder for them to unload their items that they manufacture or receive as drops, so they get desperate and lower the price. Also demand will rise during the day, especially during "prime time" which is 4pm to 11pm EST.


 * Trial and error will let you know what the right price points are. Sometimes you can offer a single item at max, if it doesn't sell, cancel and re-offer at a lower price. Repeat until you find a price that the item moves easily. Re-offer all your stock at that price. You have to balance speed and profit. Sometimes it is better to sell something for slightly above market price in one hour than wait 12 hours to sell them all at maximum price. Remember, the key is profit per hour . If you can move more items quicker, you might make more money even though it's a smaller profit on each individual item. Ever wonder why stores have big sales? This is why.


 * Remember to treat the items as commodities. It doesn't really matter what sort of item is it. It can be an expensive barrows item, or something really lame like guam seeds, or bronze daggers. Don't worry about anything except if you can buy the item cheap and sell it later at a profit. Don't buy an item because YOU like it, you want to buy and sell based on what other people like, want, or need.


 * The market is volatile and prices and therefore supply and demand change hourly. Don't get frustrated if you can't buy something at a price you like. Move on to a different item. After a few weeks of merchanting you will probably have a list of your favourite ten or twenty items that you like to buy and sell. Everyone's list will be different, but find items that work for you. Be aware that some days will just be "dry" and you will have trouble finding any good bargains to buy and you will have trouble getting a good price for items you sell. Don't get discouraged. You will find that other days everything you do will be a "home run" you will make so much profit it will astound you. This is the nature of the business. Do not change the way you do business on dry days. It is easy to get desperate for profit and start making bad decisions. Do not let this happen to you.


 * Remember, most players (who aren't merchers) buy and sell either at minimum, maximum, or the market prices. It is easier for them just to punch one of those buttons and set their price. Therefore there will be hundreds of buy orders at minimum, and hundreds of sell orders at maximum. Don't fight that crowd. If you want to buy cheap, set your price a few coins above minimum, that way your order gets filled first. Same with selling, if you drop your price a few coins below maximum, your sell order will complete faster.


 * Also, don't get greedy. If you are averaging 1% to 2% return on your money per day, you are doing excellent. Don't try to do the "giant deal", or the "big score" in hopes of making a lot of profit all in one day. You want multiple small profits repeating every day, not one big kill. The big kill can end up killing you if the items decide to crash instead of go up.

Clan "merchanting"
It is worth noting that on June 8th, 2009, Jagex locked the clan chats of several well known merchanting clans, taking a somewhat firm stance against this form of merchanting, although no clear statements were made.

One of "merchanting" strategies is called group- or clan-merchanting, or price manipulation. It is analogous to collusion, which is illegal when done in the real world. While not strictly a rules violation (except in the forums, where posts to coordinate price-manipulation are strictly forbidden), most players consider it an unethical activity because the clan members benefit at the expense of other players.

The way this works is that a large group of players buy as many of a single item as possible, causing the price to rise over the course of several days. The players then sell back the item at the inflated price, resulting in potentially huge profits.

This collusion is a form of price manipulation and, while not formally against the rules (to date), is discouraged by Jagex. Jagex has stated that they can intervene as a last resort, "if we think price manipulation is going on, although the system has lots of safeguards to prevent that," so there is some potential for Jagex to actively suppress an excessive rise or fall in price. In one case, leaders of a manipulation clan claimed that uncut emeralds had failed because they had reached a price cap and Jagex had released thousands of uncut emeralds into the game, but there was no evidence that this had occurred.

There is much evidence of the leaders of some price manipulation clans engaging in unethical insider trading, acting on information before releasing that information to the clan as a whole: stocking up on the item before announcing it to the clan in order to buy at the lowest price, dumping their own merchandise to get the highest price before telling other clan members to dump merchandise, telling clan members to continue buying when the item has actually failed (in order to support prices while the leaders sell). They may also make a false show of democratic process, acting like clan members have a say in the choice of item when in fact decisions are made by the leadership. In most public manipulation clan chats, the option for unranked people to talk has been disabled. Players often may message ranked people to answer questions, but certain types of questions are ignored.

Jagex has issued conflicting statements about clan merchanting. In one post, Mod Jon H stated that, "We don't see anything wrong with merchanting per se," but cautioned that clan members had no way to determine whether their leaders were advising them in good faith or using them for personal gain. However, CEO Mark Gerhard later discouraged the practice of clan merchanting: "I see merchanting clans as pyramid selling schemes, where, typically, only a handful of players actually make any money and everyone else loses money - just like real-life pyramid schemes. Because of this, we are not in favour of them in RuneScape, and try to warn players not to participate in them." To date, however, there has been no obvious action taken to stop clan merchanting as a whole except, perhaps, where other rules have been violated. In fact, many players publicly advertise merchanting clans at the Grand Exchange every day with no apparent consequence.

Clan merchanting can be a very good way to make money, especially if you already have a decent amount to invest. However, the risks can be potentially disastrous, so paying close attention to prices and playing RuneScape regularly are important. Also, make sure that you can trust the merchanting clan you join. If the clan keeps "dumping" early, then never invest any money into that clan. If you aren't sure about the clan, do not immediately invest all of your hard-earned cash. Even when every appropriate measure is taken, however, there remain unavoidable risks.

As this is very much a "grey" area in the rules, players engaged in clan merchanting should keep abreast of Jagex announcements regarding rules and rule interpretations and should be careful that their own behaviour remains within the rules. Jagex is the final judge of what is or is not a rules violation, and allegations of deception involving present or possible future value of items may be punished under the item-scamming rules, so avoid anything that might be interpreted by others as deceptive or misleading, including insider trading and making promises about potential profits.

General list of items that could be merchanted
These, in general, go from items that a player without very much money can flip or invest in, to items that a player with much more money can use.


 * Adamant arrow(p++)
 * Steel bars
 * Runes
 * Lobsters
 * Flax
 * Big bones or Dragon bones
 * Potions
 * Dragon leathers
 * Seeds
 * Barrows equipment (be careful since there is usually at least one barrows item being manipulated)
 * Rares (can be good for investing but not flipping, since the buy limit is 2)
 * God wars items and other very expensive and weapons

Bad items for flipping include any items that are completely bought out or completely dumped at the minimum price. In general items like this are not great for investing either, unless you predict a price rise and buy items at minimum to try to get an early start. Also avoid items without much demand.

This is also helpful if you know what your doing and what time to sell and when the price is at its highest. all of these items listed may and can raise or drop very fast. watch the prices daily or when ever because you might be selling an item that dropped fast and might hurt your wallet in the end.

Armour Set Merchanting
Below are some commonly bought and sold sets. This chart will give you a rough overview of price trends, but may be slightly out of date. For more accurate information it is recommended to check the Grand Exchange graph for the specific item, available through the Runescape home page.

Note: to do this most effectively you may find it beneficial to have enough money for a few of the sets that you are thinking of merchanting. Please note that it can still work with one set, although you may not make as much money. For most of these sets listed, there is a max buy or sell quantity of 10 every four hours.

For F2P players or people with less than 700k:


 * Rune Armour sets


 * }
 * Adamant gold-trimmed armour sets


 * }
 * Adamant trimmed armour sets


 * }
 * Black gold-trimmed armour sets


 * }
 * Black trimmed armour set


 * }

For F2P players or people with more than 1m:


 * Guthix Armour Sets


 * }
 * Saradomin Sets


 * }
 * Zamorak Sets


 * }
 * Rune Gold-Trimmed armour sets


 * }
 * Rune Trimmed Sets


 * }

For P2P players with any amount of cash:


 * Any Barrows sets

|}
 * Any F2p Armour Sets listed above
 * See above


 * Splitbark sets


 * }
 * Infinity Sets


 * }

Set Combining or Splitting
Another technique is to work with armour sets. Occasionally you can buy a set of armour, split it up into its component parts, and sell most or all of the parts for a profit.

Occasionally, the reverse will be true, you can buy all the component parts at a good price, combine them into sets, and sell the sets at a profit.

Be aware that this method is only for experienced merchers, as you have to monitor the price changes on not just one item, but sometimes five items or more simultaneously (the set price and all the component prices). If you have unexpected trouble obtaining or selling one of the component parts, your profit may turn quickly into a large loss.

This method is extremely difficult (and not recommended) for F2P merchanters, as they only have 2 slots to work with.

Potion Decanting
The Method

Potion decanting is a great way of merchanting for the lower levels. In fact, you don't need any levels at all to use this method for making money! The basics of decanting is turning an item into another one which could sell for a greater value than its component parts e.g. Buying three potions of one dose tends to cost the same as buying one potion of three doses.

One example of a potion to decant would be the Antifire potion: Buy a set (at the mid price or lower) of, let's say 100 Antifire potion(3). Go to the Grand Exchange, and go to the South-west corner where Bob Barter is. Right click him, and select "decant". He will then turn all 1, 2, and 3 does potions into the 4 dose versions of each. This is essentially him using them all with each other, like players had to do before. Once you do this with several inventories of potions you will end up with 75 Antifire potion(4), which you then sell for a price higher than the component parts (in this example above the mid price). You don't make great profit out of this merchanting method in small amounts, but if the demand is there you will proportionally increase your profits the more you invest.

Suggested potions
 * Saradomin brews
 * Prayer potions
 * Antifire potions
 * Super restore potions
 * Super strength potions
 * Super energy potions

Profits
The fastest way to make money merchanting is by being the leader of a large manipulation clan. However, this is a questionable practice and not many people have this opportunity.

Else, the fastest way to make money merchanting is mostly flipping combined with some investing. It isn't too hard to make a profit of 1-2% of your total cash per day, unless you have billions (in that case you will not be able to be constantly flipping all your cash because there are not enough items available to do so).