Guild Wars 2

For the past few weeks I’ve been spending a lot of time flipping dyes and I’ve realized something interesting that, as far as I know, isn’t true for any other large market – nearly every dye with a price between 20 silver and 1 gold has a margin that can be used to create money.

I have some of my own ideas as to why, but I’m sure there’s something I’m missing here that’s driving the large difference…

So, what does everyone else think is the reason?

P.S. ~ Flipping dyes is actually not a terribly great method of making money because of low turnover, outside of a handful of specific ones. Just as a warning to anyone who reads this and decides that it’s time to get into the dye market.

Thank you very much for breaking this way of income for dozens of people.
Very well done, Sir!

Low turnover discourages flipping so the margins are better?

Or the standard forum answer: OMG, the dye market is being manipulated!!!!!!!

Thank you very much for breaking this way of income for dozens of people.
Very well done, Sir!

Because it’s just so hard to find another market in which to flip items…

To be serious, though, if a single post is going to ruin the margins for the entire market than I have my answer – people were just being lazy about exploiting a particular market.

On the other hand, I really doubt that’s the case, and am rather convinced there’s something fundamental that is different – and, therefore, interesting – about the properties of this market.

Low turnover discourages flipping so the margins are better?

This is one of several reasons I was considering, but I’m not convinced.

There are a handful of dyes that have an average turnover considerably less than one day, and at least two of these are in the top ten percent when it comes to wide margins.

To be fair, that particular data is only from about the past month or so, as that’s when I started tracking, but it seems as though that answer is not a complete one.

Fuschia.6573:

For the past few weeks I’ve been spending a lot of time flipping dyes and I’ve realized something interesting that, as far as I know, isn’t true for any other large market – nearly every dye with a price between 20 silver and 1 gold has a margin that can be used to create money.

I have some of my own ideas as to why, but I’m sure there’s something I’m missing here that’s driving the large difference…

So, what does everyone else think is the reason?

P.S. ~ Flipping dyes is actually not a terribly great method of making money because of low turnover, outside of a handful of specific ones. Just as a warning to anyone who reads this and decides that it’s time to get into the dye market.

You don’t think that the new dye packs are gong to have any effect on the market? I find your timing for a thread about making money on the dye market interesting, even with the post script.

Dyes are different because they are permanent unlocks for a character, they can have a large aesthetic impact for not a lot of money, there’s a huge number of colors, there’s lots of variation of how the look on different parts of different armor, multiple colors can be applied to one outfit, and there’s a lot of variation in what different folks think looks cool.

Demand for dyes is not the same as say demand for a stack of ore or a weapon. You can collect all the different colors without needing more inventory space, and you can apply them without out any additional cost (like a transmutation stone). And you can toss the cheap ones in the forge and gamble on getting something better.

You don’t think that the new dye packs are gong to have any effect on the market? I find your timing for a thread about making money on the dye market interesting, even with the post script.

If it does – I’m not positive one way or the other – the most it will do is change prices, not margins, and margins are the only particularly interesting thing about the market.

Dyes are different because they are permanent unlocks for a character, they can have a large aesthetic impact for not a lot of money, there’s a huge number of colors, there’s lots of variation of how the look on different parts of different armor, multiple colors can be applied to one outfit, and there’s a lot of variation in what different folks think looks cool.

All of this explains why demand for dyes exists. It doesn’t explain the large margins.

Demand for dyes is not the same as say demand for a stack of ore or a weapon. You can collect all the different colors without needing more inventory space, and you can apply them without out any additional cost (like a transmutation stone). And you can toss the cheap ones in the forge and gamble on getting something better.

Again, more talking about demand than margin. It does, however, help to explain why people would be buying large numbers of dyes without any desire to flip them – I always seem to forget use of the Mystic Forge when it comes to theorizing and whatnot.

Fuschia.6573:

Again, more talking about demand than margin. It does, however, help to explain why people would be buying large numbers of dyes without any desire to flip them – I always seem to forget use of the Mystic Forge when it comes to theorizing and whatnot.

How can demand not be related to margin in this game? I’m confused as to why you think they’re separate.

There are a large number of possible colors of dye that I could get from a drop (or even making dyes using the chef recipes). I want a specific color of dye, and even though I’ve found a bunch of dye, it wasn’t what I wanted. I’m going to dump the dye colors I don’t like/want, and I’m going to pay a premium to get the specific colors I do want. Bam! margin.

Some colors are more popular than others, they have higher prices and lower margins because folks recognize their value. Most colors don’t appeal to everyone, so the value that different folks place on particular colors varies widely.

How can demand not be related to margin in this game? I’m confused as to why you think they’re separate.

Demand is a separate concept.

Demand for consumption or other long-term use dictates price, as you are simply buying above the highest bid and consuming the good. Spikes in demand can influence margin, but, generally speaking, simple shifts in demand will only increase or decrease the price while the percentage margin remains the same, HAEC.

Included in demand for consumption is the demand for long-term speculation, as you are holding onto the item for later use.

Demand for short-term speculation purposes does have an impact on the margin. Since you are buying above the highest bid and selling below the lowest offer, you are constantly decreasing the margin by profiting off of it.

What you listed previously were reasons for consumption demand, which has little to no impact on the actual margin itself – and what impact it does have is largely related to increased turnover rates causing an increase in demand for short-term speculation.

As to the rest of your post, some of those concepts seem correct and are part of my outline for an answer to the question. I initially did not post that outline so as to encourage people to, hopefully, surprise me with something I didn’t know. I may post it later, once it’s a tad more well-written.

Fuschia.6573:

How can demand not be related to margin in this game? I’m confused as to why you think they’re separate.

Demand is a separate concept.

Yes demand is a separate concept, but it’s not unrelated, which probably would have been a better choice of words. Without trade data, we’re basically taking a stick and poking it through holes in a crate to trying to figure out what’s in it.

Fuschia.6573:

(snip)
Demand for short-term speculation purposes does have an impact on the margin. Since you are buying above the highest bid and selling below the lowest offer, you are constantly decreasing the margin by profiting off of it.

Which is something that folks forget when they bash traders – the folks flipping stuff bring the bids and asks closer together. There are a lot of opportunities in dyes because of the huge variation in how folks value them, the tendency of individuals to highly value different specific colors at different times (breast cancer awareness month, changing a character’s color scheme, collecting all the dyes), and the large number of dyes in the pool that make it difficult to get exactly what you want dropped.

The reason why I think some of those margins stick around longer than on other margins is simply because there are 300+ different products to track and the demand is predictable for only a few of the most popular dyes (Abyss, Celestial etc.) It’s a lot of work to find the opportunity and there’s always the risk that it’s more lightly traded than you think it is…

The reason why I think some of those margins stick around longer than on other margins is simply because there are 300+ different products to track and the demand is predictable for only a few of the most popular dyes (Abyss, Celestial etc.) It’s a lot of work to find the opportunity and there’s always the risk that it’s more lightly traded than you think it is…

This seems like the most important reason.

Combine it with the general increase in ‘irrational’ behavior and opportunity cost of time associated with virtual markets and it probably accounts for what I couldn’t already explain.

The supply of dyes seems to be driven primarily by people who:

• Open a unidentified dyes and
• Don’t use the Mystic Forge and
• Don’t care about maximizing profit — they want their coin right now.

The demand for 20s+ dyes (as well as others) seems largely driven by people who want a specific color for a specific character for a specific look. Those are people willing to “overspend” relative to the market.

This tends to keep WTS prices high (people willing to spend a premium) and WTB prices low (people willing to take any amount).

Flipping is almost a good thing for this type of market, because it tends to increase WTB and decrease WTS, allowing the supplies to earn a bit more and the consumers to pay a bit less.

For commodities, the demand is driven by usage and supply driven by farming (either intentional or byproduct from other gameplay). Flipping tends to slow down the volatility of this type of market, but doesn’t have as much direct impact on prices.

There are lots of other flipping opportunities out there like dyes (“I want now” demand vs “any coin I get is great” supply). But these can all be found relatively quickly by submitting the right queries to sites like gw2spidy.com, as long as you know where to look.

John Smith.4610:

The reason is due to the type of item that dye is, and how people interact with it. Not the different quantities of dye.

This. It’s one of the only (if not only) what i would call tradable perma consumables in the game

John Smith.4610:

The reason is due to the type of item that dye is, and how people interact with it. Not the different quantities of dye.

And no one suggested that it was?

Unless, of course, you are saying that part of the reason isn’t low turnover and the necessity of combing over a large number of listings coupled with the increased opportunity cost of time in virtual markets – less time, more opportunity cost.

You’d be wrong on that count.

To be fair, that applies to many markets on the Trading Post, but dyes is one where the sheer amount of information to look through is quite high and the turnover rate is quite low, both of which exacerbate the issue.

EDIT: Illconceived Was Na essentially outlines why the margin would exist to begin with, and what I’ve stated here seems to outline what is stopping speculators from abusing it so much.

As such, I’d consider this more or less answered unless someone has either an additional great insight or some counter-argument to one or the other of the two statements.

Generally the lower the turnover, the better the margins. Less people are willing to bother with lower turnover.

In my opinion, there are 2 things that make price differences in sell / buy orders:

1. A spike or dip in supply
2. The risk you take in flipping the item

For the dye market, you aren’t really going to have spikes or dips in supply. You might get spikes in demand, though.

I think the biggest factor for the differences in price is the risk in flipping the item. To be honest though, long-term flipping almost anything has very little risk. As long as it is semi-reasonably priced, it will eventually sell. Specifically for dyes, they can take a long time to sell. People want to make gold quickly. They won’t let buy orders sit for a long time, and they won’t like the long wait for dyes to sell. The fact that there isn’t a huge demand for dyes (as a whole) probably scares off many that play the TP, as they can invest in more liquid items.