Thursday, September 11, 2008

Trade Wars

Well lots has gone on since I last posted.

I found myself taking an unexpected vacation for three weeks. Something happened to my communications modules, and I was unable to get information or interact with the market or any other spacer activities. Ce la Vie. Before this, everything was running pretty much business as usual. I expanded my markets to include some of the higher end minerals and was hauling several loads of minerals a day.

When I lost communications, I was stuck waiting for everything to be repaired and come back online while I was stuck drifting aimlessly. When I came back online, I found my trade routes highjacked and in control of my competition.

So begins the trade wars. You lucky miners. The price for minerals has gone up tremendously since I started the trade wars. At some points in time the price for minerals at mining outposts has exceeded the price offered for minerals at the trade hubs. Not the best situation for a trader of any level, however I didn't let that stop me. Eventually things started to settle out and the prices offered at trade hubs were increasing since the supply was dwindling. No one is going to sell minerals for less than they pay for them, and I am no different. I may take a small hit in percentage and allowing myself to just break even to continue the trade war and regain control over my regions, but I won't sell my self short.

Instead I got sneaky. In the old world market place, this would be considered illegal, it would be considered market manipulation. Here is how it works. Because I am trying to regain the market place, I increase my buy orders. However, instead of my competitors letting me do so, they are also raising their prices. As I mentioned earlier, eventually the average price for minerals at the mineral outposts was exceeding the highest prices offered at the trade hubs. I can find orders FAR out, but as you know running REALLY long trade runs is a major loss in productivity. I give up trying to beat them out, and I sit wondering for a few days how I can work this out. Then it dawns on me. Each time my competitor raises their prices, they are now offering to buy minerals for MORE than I paid for them. Hmmm. I can sell them my minerals without moving them anywhere. The profit isn't as high, and I still have to pay taxes and brokers fees for the transactions, but I am not loosing any money. I also realize I can buy minerals cheaper at the trade hubs than I can at the outposts. Couple that with a couple of good buy orders in adject low sec systems, and I find myself in a profitable situation again. I am now running minerlas TO the mining outposts at a profit.

So lets run this again. Since my competitors will NOT let me regain my systems, I keep THEIR prices high by competiting with them for buy orders. While their prices continuous are raised higher than mine, I sell them the minerals I would otherwise have brought to the trade hubs. So they are paying MORE for MY minerals, because THEY keep wanting to raise the prices. Hey they may be making a profit, or maybe not. I don't know I don't care, but they are by the very nature of the beast, by their very competition have given me an opportunity to exploit them and profit myself. As it turns out with quite a bit less work also.

I have also started buying minerals in lowsec. Not far into lowsec, just one jump in on those border systems where low sec status pilots try to sell their goods because they can't come directly into high sec. I can get minerals a lot cheaper there for sure, and when things get hard like I have described here, it can help boost those lost profits.

Its risky running into low sec, but I don't do it stupidly. I make sure the system is safe to enter before I enter, and I get out as fast as I can. And I run when someone shows up in the local channel. No need to court disaster. I have even considered purchasing a second freighter, so that if I must temporarily abondon a freighter docked in low sec, I still have a freighter in high sec for continued normal use. It's still risky, remember I never said there wasn't a risk. You however just need to not be stupid about it.

So I have learned something here, I have learned how to conduct a trade war successfully. I don't even think my competitors have a clue what's going on either. Though they may, and they may not care. And I may quite possibly be letting the cat out of the bag here, but that's a whole nother thing entirely.