The correct formula of breakeven

The correct formula of breakeven

in Black Lion Trading Co

Posted by: Afya.5842

Afya.5842

Times to times when trading, I have to calculate the breakeven price. The usual formula is cost/0.85. That’s a estimate however. In low priced items may have <1c fees and I can’t seem to make the correct formula for that. TPcalc’s calculation, seems to be wrong too (although I’m not 100% sure).

In tpcalc, try 4c buy and 5c sell with qty 1. It’s 1 copper lost. That’s correct I’m pretty sure.
Now try qty 250. It’s 62c profit.

I don’t even know if that’s how the actual TP works or TPCalc’s error. When TP calculate the fees, does it calculate every single item’s then sum it up or calculate as a whole?

The correct formula of breakeven

in Black Lion Trading Co

Posted by: Mystic.5934

Mystic.5934

it’s probably how the real TP works. the reason is rounding – it always against your favor
buy for 4c is you pay 4c
sell for 5c is you pay 1c to list, then when it sells for 5c, 10% is taken out = rounded to 4c. that’s 3c return = 1c lost.
250 is trickier
sell for 250 × 5c = 62.5c cost to list, rounded to 63c. if all 250 sell at once, final value fee will be 250 × 5 × 0.1 = 125c. if they sell one at a time, final value fee will be 250 x round(5 × 0.1) = 250 × 1 = 250c. so if you sell 250 at 5c, the total fee will range from 188c to 313, making the return range from 937c to 1062c = -63c to 62c profit (when considering you bought it at 4c each)

The correct formula of breakeven

in Black Lion Trading Co

Posted by: Afya.5842

Afya.5842

wow, that blows my mind.

That means the tax is calculated per purchase from buyers, not when the money is collected. And that means especially in large volume, the profit calculated may not be as much as calculated depends on how large the buy orders are.

The correct formula of breakeven

in Black Lion Trading Co

Posted by: Mystic.5934

Mystic.5934

yes. but selling larger amounts will always be more profitable than smaller. the listing fee will be smaller, and it’s nearly guaranteed people won’t be buying them one at a time, though this depends on the item.
I usually don’t consciously factor this in. Only case I do is saving up several crafting materials (such as carrots) before selling. Like times when TP gives just a bit more profit than merchant (selling one at a time might give 1c profit, but 30 at a time would give 70c profit)
For most things, I will usually assume ~3c less profit than predicted due to this. It basically keeps me away from trying to flip things that sell for less than 10c.