Question: What is the impact of traders/resellers/middlemen on an item's price?

TheOneOmega

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It's not uncommon within our community to hear it suggested that the presence of traders/resellers/middlemen/etc. lowers the prices of the items traded. For example, many claim that traders are at least partially responsible for the declining value of Vibrant Sweat. However, it's not obvious to me why this purported casual relation holds. It's certainly easy to imagine a scenario where a bunch of traders compete with each other to find buyers, but it's just as plausible to picture a bunch of traders competing with each other to find sellers, thus having the opposite effect on an item's price.

For example, consider an item with a price range $1 - $1.50, for which the market is comprised of an average of 600 producers and 600 consumers (100 producers willing to sell for no less than $1, 100 willing to sell for no less than $1.10, 100 for no less than $1.20, 100 for no less than $1.30, 100 for no less than $1.40, and 100 for no less than $1.50; and 100 consumers willing to buy for no more than $1.50, 100 for no more than $1.40, 100 for no more than $1.30, 100 for no more than $1.20, 100 for no more than $1.10, and 100 for no more than $1).

Adding to this market an average of 100 non-producing/non-consuming traders (who buy for no more than $1.20 and sell for no less than $1.30) will have the immediate impact of making it harder for the 300 ">= $1.30 producers" (producers willing to sell for no less than $1.30, $1.40, or $1.50) to sell but easier for the 300 "<= $1.20 producers" (producers willing to sell for no less than $1.20, $1.10, or $1) to sell, and harder for the 300 "<= $1.20 consumers" to buy but easier for the 300 ">= $
1.30 consumers" to buy. This restructured liquidity would incentivize ">= $1.30 producers" to become "<= $1.20 producers," and "<= $1.20 consumers" to become ">= $1.30 consumers," but since these are zero-sum changes, it's not apparent that they should impact the item's value. All other factors being equal, why shouldn't the item's price range remain $1 - $1.50?
 
Traders I don't think affect anything really, it all comes down to supply/demand/ and accepted price point. For instance some traders will buy up just under regular mark up and sell to the low end crafter (smaller amounts) for slightly better mark ups actually upping % slightly for a resource sale by sale. Most of the bigger bulk ore/enmatter traders stopped when mining mark ups collapsed, like at FOMA who in their right mind will buy say iron @ 100.5% or so to sell @ 102% and as a result many miners tt finds.

Traders in general provide liquidity to those who wish to keep turnover active and want ped now for a little less %, even auction hounds i guess hold mark up on their bid wars. After all if they weren't there (which now it seems they have declined greatly) who would have bid on that gun/sword or whatever on last orders under current mark up? Without them the final price sold would have been much lower.
 
If a trader offers 100.5% for any resource that exists ingame, and he find sellers at that rate, it is not the traders fault that price went down, its the sellers fault.

Prices are made by supply and demand, for sweat I can tell you, we have a huge oversupply vs very low demand.

If you buy sweat at 2.0/k you can have several million bottles in no time, you just need to know whom to ask.
Its on stock already !

Traders offer an important service in EU, they give liquidity to those who have to low stacks to auction it.
 
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