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  1. #1
    IncGamers Member Leonhart's Avatar
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    Can anyone show me how to figure out this 4.5$ line?

    The RMAH will become a place to only sell gold IF no items that are worth more than 4.5$ drop. Once items are worth more than 4.5$, they're worth listing on the RMAH. 4.5$ or less, and you're better off selling them on the GAH and then selling the gold on the RMAH. This is all due to the 1.25$ fee for items and 15% fee for gold on the RMAH, and 15% overall fee on the GAH.
    quoted from: http://diablo.incgamers.com/forums/s...d-Only-on-RMAH

    Can anyone show me how to figure out this 4.5$ line? I knew the 15% fee for gold on RMAH and 15% overall fee on GAH, as well as the flat 1.25$ fee for items on RMAH. But I did a terrible work in maths during school time. :P






  2. #2
    IncGamers Member Eeryck's Avatar
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    Re: Can anyone show me how to figure out this 4.5$ line?

    Quote Originally Posted by Leonhart View Post
    quoted from: http://diablo.incgamers.com/forums/s...d-Only-on-RMAH

    Can anyone show me how to figure out this 4.5$ line? I knew the 15% fee for gold on RMAH and 15% overall fee on GAH, as well as the flat 1.25$ fee for items on RMAH. But I did a terrible work in maths during school time. :P

    The equation is this

    Item price * 15% GAH blizzard cut = Gold return

    Gold return * 15% RMAH Blizzard cut = Seller return

    You then solve the following two equations for when the two 15% cuts are = to $1.25.

    $4.5 is the price point of an item where selling straight away on the RMAH becomes more cost effective for the seller. It is the point where their two cuts taken by selling on the GAH then converting gold to RM is offset by the flat $1.25 fee set by Blizzard in the RMAH for more expensive goods.



  3. #3
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    Re: Can anyone show me how to figure out this 4.5$ line?

    Quote Originally Posted by Eeryck View Post
    The equation is this

    Item price * 15% GAH blizzard cut = Gold return

    Gold return * 15% RMAH Blizzard cut = Seller return

    You then solve the following two equations for when the two 15% cuts are = to $1.25.

    $4.5 is the price point of an item where selling straight away on the RMAH becomes more cost effective for the seller. It is the point where their two cuts taken by selling on the GAH then converting gold to RM is offset by the flat $1.25 fee set by Blizzard in the RMAH for more expensive goods.
    Still not quite understanding where the 4.5$ figure comes out, i mean to figure out the lowest working price we need to make a proportion:

    15% - 1.25
    100%- x

    and x =125/15; x=8.3$

    so as far as i understand only items above 8.3$ in price, will it be worth to put on RMAH. Please explain where calculations went wrong.



  4. #4
    IncGamers Member
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    Re: Can anyone show me how to figure out this 4.5$ line?

    Eeryck has it right. I'll try explaining it more clearly:

    When you sell an item on the GAH and then sell the gold on the RMAH, you lose 15% twice, meaning you get 0.85*0.85=0.7225 of what the original buyer was willing to pay. In other words selling in this way induces a 27.75% fee instead of 1.25$.

    When you sell something for 4.5$, the 1.25$ fee is 27.77%, which is almost the same as what you would lose if you sold on GAH and then sell the gold.

    If you sell something for more than 4.5$, you end up with more money in your pocket if you sell on the RMAH, and if you sell for less than 4.5$, you're better off selling on GAH and then selling the gold.

    Note there is a hidden (but very reasonable) assumption here: I'm assuming the buyer doesn't need to convert gold<->$ in order to buy your item, or at the very least that for every buyer that needs to convert gold to $ there's another that would need to convert $ to gold, so they even out. Since the amount of gold sold on the RMAH is equal the amount of gold bought on the RMAH, this isn't an unreasonable assumption to make. Or at the very least, there is nothing more reasonable that you can assume, or at least I don't think there is




  5. #5
    IncGamers Member Eeryck's Avatar
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    Re: Can anyone show me how to figure out this 4.5$ line?

    $1.25 = Mathematical Break point for maximum break even seller fee when you have double fee.

    Selling an item on the gold AH for the gold equivalent of $4.5 would give the seller $4.5 * .85% = $3.83 worth of gold

    Selling $3.83 worth of gold on the RMAH would give the seller $3.83 * .85 = $3.25 (rounding error ignored)

    Selling an item for $4.5 or greater on the RMAH would give the seller $4.5 - 1.25 = $3.25 the break even point.

    So items over the $4.5 RM value threshold become more directly profitable to the seller by posting directly on the RMAH.



  6. #6
    IncGamers Member Eeryck's Avatar
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    Re: Can anyone show me how to figure out this 4.5$ line?

    Quote Originally Posted by galzohar View Post
    Note there is a hidden (but very reasonable) assumption here: I'm assuming the buyer doesn't need to convert gold<->$ in order to buy your item, or at the very least that for every buyer that needs to convert gold to $ there's another that would need to convert $ to gold, so they even out. Since the amount of gold sold on the RMAH is equal the amount of gold bought on the RMAH, this isn't an unreasonable assumption to make. Or at the very least, there is nothing more reasonable that you can assume, or at least I don't think there is
    It is the nuisances of this assumption that I guess are at the heart of the other thread that I started.

    I don't believe that a dedicated player that is looking for a BiS item is going to be willing to convert gold to real money to purchase the item. Especially if they are adverse to RMAH in general. This conversion would bring the B-Net Balance cap back into the equation also.



  7. #7
    IncGamers Member
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    Re: Can anyone show me how to figure out this 4.5$ line?

    I don't really see any obvious reasons for why people would be more likely to buy gold on the RMAH in order to purchase an item on the GAH than they will be likely to sell gold on the RMAH in order to buy an item on the RMAH. There really are many arguments that can go both ways for why one might be more common than the other, and in the end we don't really know.

    If people end up never using real money to buy/sell stuff for personal reasons, then RMAH will lose a bit of value and that will need to be factored in, yes. But if that actually happens there are a boatload of other issues, like how the hell is the real money market going to get going - Nothing will be worth more than 4.5$ if people aren't willing to spend $!!




  8. #8
    IncGamers Member Eeryck's Avatar
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    Re: Can anyone show me how to figure out this 4.5$ line?

    Quote Originally Posted by galzohar View Post
    I don't really see any obvious reasons for why people would be more likely to buy gold on the RMAH in order to purchase an item on the GAH than they will be likely to sell gold on the RMAH in order to buy an item on the RMAH. There really are many arguments that can go both ways for why one might be more common than the other, and in the end we don't really know.
    It is not the actions of the same individual but the actions of many different types of people:
    *The dedicated player looking for a BiS item, he would farm items and gold to buy something on GAH but probably not buy gold outright and very rarely if ever buy a BiS directly from the RMAH
    *The get over the hump guy - already has some gold, can see something they want but don't want to grind that out. Buy some gold get it now. Still cheaper than buying outright on RMAH
    *The instant gratification/twinker - again he will be motivated to supplement but not buy outright
    *The rich kid - He is the one that everyone is banking on being in surplus. But no one is willing to admit being.

    The time it takes for items to sell on the RMAH with comparison to the GAH may also further compound this behavior. Everyone has in game gold. If I have to make a decision and take a risk to sell my gold and wait for it to sell to get something I want on RMAH I am not going to do it. However, if I need 10k more gold to get the same/similar item on RMAH I will buy the gold instantly and get my item instantly, even if I have to pay slightly more than what the current exchange rate says the RM version of the item is worth.

    Quote Originally Posted by galzohar View Post
    If people end up never using real money to buy/sell stuff for personal reasons, then RMAH will lose a bit of value and that will need to be factored in, yes. But if that actually happens there are a boatload of other issues, like how the hell is the real money market going to get going - Nothing will be worth more than 4.5$ if people aren't willing to spend $!!
    Getting two markets going at the same time is just too complex. People won't want to manage it. The only reason an item would not go over $4.5 is if you insist on cost efficiency. I would argue that the market forces would ignore this inefficiency for one solid trading platform. With the oft repeated requirements that gold is viable and there is item rarity.



  9. #9
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    Re: Can anyone show me how to figure out this 4.5$ line?

    easy, someone has something, they want money for it, they list it for how much money they think its worth, they have ten rmah slots and there is no fee to list anything, they just leave their very best ten items up there till someone bites.




  10. #10
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    Re: Can anyone show me how to figure out this 4.5$ line?

    You are also assuming everyone will have some gold and wish to use it to buy items and only use real money to buy additional gold to bridge any gaps. But since items worth more than 4.5$ will likely be worth a lot more gold than one can easily farm, the amount of current gold you own may be negligible compared to the actual cost of the item you're trying to buy, in which case you would prefer to just buy it on the RMAH for cheaper (and yes it'll be cheaper on RMAH than on GAH if it's worth more than 4.5$, as the buyer gets to keep a bigger portion of the profit and thus wiling to sell for a bit less).

    Maybe people will just prefer to use a single simple gold platform and only buy gold on the RMAH. But there is really no indication that that will actually happen. People are both lazy and cheap, and that combination can cause any number of unexpected things, and not necessarily what you are assuming...




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