RuneScape:Wiki Post/Editorials/GE Merchanting

GE (Grand Exchange) Merchanting
GE Merchanting. What is GE Merchanting? It is simply arbitrage while utilising the Grand Exchange as a means of buying/selling a high amount of items for a profit. It operates on the fact that the drops/rises of an item is dependent on supply and demand. GE Merchanting takes advantage of this and uses it to their advantage, effectively allowing groups (e.g. Merchanting clans) to manipulate prices as how they see fit.

Types of Merchanting
There are basically two types of merchanting: Both types of merchanting have their own set of pros and cons. Allow me to elaborate:
 * Clan Merchanting
 * Individual Merchanting

Clan Merchanting
If you’ve been playing the game as everyone else has, I’m sure you’d have noticed “merch clans” popping up all over the place. For those players who have not heard of these clans, they are simply clans that are setup by players with the main purpose of “uniting” a group of players into merchanting a certain item.

Why this works
This works mainly because the drops/rises of an item are dependent on the demand.

High demand => Increase in price

Low supply => Increase in price

Clan merchanting does this to a degree which may be termed as perhaps, overkill. They get many players to put offers for thousands of a certain item at a high price (usually max). With the supply being sapped immediately, there is a high demand and an extremely low supply:

High demand + Low supply => Greater increase in price

This leads to a dramatic increase in price. Don’t believe me? Take a look at this:

Regen bracelet
http://i640.photobucket.com/albums/uu124/calebchiam/RegenbraceGEChart.png

As seen quite clearly, the Regen Bracelet went up by more than 100,000 coins before the clan merchanting it decided to dump the item, leading to a quick drop in price. For merchanters, such drops/rises in prices are common occurrences. Something that marks a commonly-merchanted item is the drops and rises in its price. Take these two graphs for example. They happen to be rather commonly-merchanted items.

Amulet of power
http://i640.photobucket.com/albums/uu124/calebchiam/Powerammychart.png

Red spiders' eggs
http://i640.photobucket.com/albums/uu124/calebchiam/RseggsGEChart.png

Cons
However, depending on what time zone you are in, you might miss the “dump time”. This “dump time” is basically when the clan decides to sell/dump the item. Should you miss it, chances are that you will be losing a lot of money. With other members of the merch clan selling the merched item long before you did, any demand for the item is probably long gone. And with many other hapless players such as yourself, there is an oversupply.

No/Little demand + High Supply => Greater decrease in price

Individual Merchanting
Basically, individual merchanters are players who are not affiliated with any clan chat and choose to rather buy/sell items on instinct, not whether a merch clan is merching/dumping a certain item.

Pros
It can be considerably more profitable, as individual merchanters have a chance to buy a certain item in greater quantity. This is because there aren’t any merch clans sapping the supply of that item. If they bought a commonly-merched item and things go their way, a merch clan will start merchanting that item, causing it to rise in price. This way, the individual merchanter need not compete with other merchanters to purchase certain items. It also allows them to purchase the item at a relatively low price.

Take my example: I happened to purchase 5000 power amulets at 3100 coins each. Later, a merch clan decided to merchant it, causing it to rise in price dramatically (as seen in the graph above). I later sold all of the power amulets at 3500 each, earning myself 2 million.

Cons
However, things may not always work out your way. You may have to wait days, weeks or even months (depending on the item you bought) before the price of the item begins to rise.

Conclusion
Well there you have it, this is basically an overview on GE Merchanting. Hopefully, this should give you a more in-depth understanding on what GE Merchanting is all about and how profitable it can be. 16:29, 15 May 2009 (UTC)

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