Magic Items and their resale value

[Ridley's Cohort]

Exactly. Demand for most magic items is low. Supply likewise, meaning the number of magic item "dealers" will be vanishingly small. And this is in a medieval world where you can't blithely trot around the countryside looking for buyers; every time you have to venture out of Point-of-Light A and make your way to Point-of-Light B, you incur a hefty cost to provide yourself with security. There is no eBay in D&D.

Under those circumstances, 20% is quite reasonable, even generous.

I would agree that being paid a modest fraction of the full value for cash on the barrel head, right now, today is hardly unreasonable. Whether that fraction is most appropriately 0.2 or 0.5 or 0.1 or 0.7 would depend on the particulars of the world.

But what this fraction would reasonable depends intimately on the commonality of magic items in the world.

As a player, I would say "Fine. 20%. Now I ask what I can buy at 25% of the full price."

If the market is so harsh, surely there are going to be occasional random items that a merchant will happily sell for a quick return. Even if half these items I buy have defects, I could be a net winner.

The illiquidity of the market cuts both ways -- I can get both lousy deals and fantastic deals base don being at the right place at the right time with a pile of cash. If we want to be logical at all.

 

[interwyrm]

This design decision actually seems to fall more in the camp of 'realism' than 'balance' to me.

Anytime you go buy something in a store, how much do you think it's marked up from what the retailer paid for it? I'm not in that business, but I always expect that it's something like a 400% markup, especially given the ridiculous sales retailers have sometimes.

If adventurers are the wholesalers that the merchants get their goods for, you should expect that they are selling them for 4-5 times the amount they bought them for.

And that's the case.

 

[Dausuul]

As a player, I would say "Fine. 20%. Now I ask what I can buy at 25% of the full price."

If the market is so harsh, surely there are going to be occasional random items that a merchant will happily sell for a quick return. Even if half these items I buy have defects, I could be a net winner.

Why would the merchant have such items? If the merchant buys something, it's because he thinks he can sell it, eventually. He'll be putting in the work to find buyers anyway, in order to offload the rest of his inventory, so why should he give you a special deal on this one item?

Now, you offer to take a big chunk of his inventory off his hands right then and there, you might get a discount.

 

[Intense_Interest]

If the market is so harsh, surely there are going to be occasional random items that a merchant will happily sell for a quick return. Even if half these items I buy have defects, I could be a net winner.

The illiquidity of the market cuts both ways -- I can get both lousy deals and fantastic deals base don being at the right place at the right time with a pile of cash. If we want to be logical at all.

"Right place, Right time" happens about one in a million, logically. Fire-sales that other merchants/powerful folk haven't already taken advantage? The only time that you can assume that your character is there is if you caused the fire-sale, which is a different kettle of fish entirely.

Meanwhile, an Adventurer that wants to carry his +4 Pig Slayer around instead of buying Magic Defenses is a great target for Dragons or Orc Hordes and such that will steal your .

The "real" reason that the 20% rule exists is because the WotC and/or the GM doesn't like enforcing the economic reality of an Ancient Red Dragon stomping out your piddly level 4 party because they tried to sell it at a modern return on investment.

 

[Yergi]

To quote from Darth and Droids, "Any GM worth his salt knows that shopkeepers must always be retired adventurers with oodles of levels in martial arts or the Jewelled Sword of Hacking Impertinent Hagglers to Bits under their counter."

I would just like to say thank you for leading me to that comic. You have officially ruined any productivity I would've had for the rest of the day.

 

[Ridley's Cohort]

"Right place, Right time" happens about one in a million, logically. Fire-sales that other merchants/powerful folk haven't already taken advantage?

Depends how much magic is floating around. Depends on how flexible you are about what to buy.

In a world like Forgotten Realms it is pretty obvious that the "one in a million" opportunity could happen every day in a big city.

Yes, if I want a very specific item like a +2 Goblin Bane Frost pickaxe this afternoon, one in a million is probably an overestimate. If I want "any magic cloak" or "any interesting weapon more magical than the one I have" and I am willing to spend a week or two, then these assertions of rarity do not make any sense.

 

[Ridley's Cohort]

Anytime you go buy something in a store, how much do you think it's marked up from what the retailer paid for it? I'm not in that business, but I always expect that it's something like a 400% markup, especially given the ridiculous sales retailers have sometimes.

That certainly is not typical.

At the extreme end for retailers (perfumes, jewelry) markups can be 300%-400%.

The more normal goods are 100%-200%. Most items in your FLGS would be marked up 100%-150%.

And then some things are less. For example, I am pretty sure automobiles are not marked up even 100% at the retail level. But those are complex financial arrangements where the dealership might put up relatively little of their own capital (and dealerships often make their big profits in maintenance).

In the actual Middle Ages, there were very expensive but non-rare items in the form of armor and fine warhorses that were bought and sold. It might take some months to close the deal, but the typical cut of the middlemen was 10%-20%.

 

[jelmore]

Is anyone else a bit put out by the resale value of magic items in 4th edition?
It seems a bit weird that they are only worth 1/5 of their value when resold. I'm guessing this is for "game balance" or some such but it is far from logical. A magical item doesn't become less useful or worn out from someone else's use therefore it shouldn't depreciate too much. Surely other adventurers should be willing to buy the items at a better rate than 1/5.

Ever sell books to a used book store? I would be absolutely floored if they bought your books in cash for 1/2 of the price of a new copy (or even 1/2 the price of a used copy, for that matter).

If I'm a merchant, I don't have an unlimited amount of space to store my merchandise, and limited funds with which to purchase inventory. Spending 150 gp to buy a 300-gp +1 sword (assuming that's the sticker price) means that if I can't sell that sword, I've just thrown 150 gp down the drain. And if 80% of my inventory is stagnant, that's a lot of wasted money.

Buying that same +1 sword for 60 gp? That's a much more comfortable risk for me to take; if it doesn't move, I can slash the price by 25% or even 50% and still make money. Or maybe I can offer it in trade to acquire something of higher value to me: giving someone a +1 sword that is "worth" 300 gp in order to acquire an item that I would have offered 200 gp in coin is a sweet deal on both sides.

As for magic weapons not depreciating, sez who? I can think of two whole categories of magic items (scrolls and potions) that are single-use only. Who is to say that 40-50 years of constant use won't wear down the blade of even a holy avenger?

To have even the semblence of a real economy, supply and demand have to play a factor. Rather than force DMs to learn how to run a business, WotC abstracted it to say that "magic items can be sold for 20% of their list price". You are free to treat your merchants as dispensers for unlimited funds and items if you wish.

 

[see]

I just want to see how are they going to explain that in the Forgotten Realms

Well, they're killing off multiple gods (including the goddess of magic), making wizards go insane, and blowing up the Outer Planes. They can probably manage to disrupt the economy while they're at it.

 

[frankthedm]

As a player, I would say "Fine. 20%. Now I ask what I can buy at 25% of the full price."

If the market is so harsh, surely there are going to be occasional random items that a merchant will happily sell for a quick return. Even if half these items I buy have defects, I could be a net winner.

The illiquidity of the market cuts both ways -- I can get both lousy deals and fantastic deals base don being at the right place at the right time with a pile of cash. If we want to be logical at all.

That is a good point. Browsing for bargains ought to be an option. It will also be a great way to get a better look at D&D's rich history of cursed items.

Also such a lowball purchase % should allow for PCs with good social skills to haggle a bit