Selling loot for half price - why?

[Mark Hope]

Several reasons:

- The merchant needs to make a profit, so he can't give the full price if he wants to make a profit.
- There might not be an immediate market for the item - thus the merchant binds significant monetary resources into an item which he isn't sure he can sell. He will only do so if he gets a significant price cut - if not, he will probably prefer to invest something with more immediate return.
- Loot sold by adventurers might come with angry former owners attached. That's much more risky than buying it from magic item creators themselves - and thus, another price cut is warranted.

To get in the right frame of mind for the sale and purchase of magic items of dubious origin, replace "magic item merchant" with "black market arms dealer". The level of paranoia is probably not too different...

These are some interesting reasons - thanks They are largely circumstancial (apart from the first point, which stands to reason) and so need not always apply. But there are definitely times when such things might be sensible, non-arbitrary factors worth incorporating into buying and selling.

 

[Jürgen Hubert]

I think it is possible to sell magic items for their full value. But to do this, the PCs need to find their own customer - someone who already wants the precise magic item they have.

But that requires time, a significant amount of legwork - let's hope someone in the group has a high enough rank in Gather Information - and a community where it is possible to find such people at all.

And if they are doing that, they might piss off the "regular" magic items dealer, who will likely resent any encroachment into their territory. If the setting uses medieval conventions, it is possible that such merchants even have a legal monopoly in the city for this trade. And even if not, they will still be leery of outsiders trying to break into their business.

High-level characters with good magical transportation (i.e. teleport without error can visit several cities in rapid succession and try to find someone who will purchase their items at close to market value. But even then the whole process might take several days. The only alternative is to deal with the professional merchants - and accept that they are going to take a large cut.

 

[Jdvn1]

Yes, but given that D&D makes no distinction between used and new items as far as usability goes (charged items like wands notwithstanding), it's a meaningless qualification. Plus this doesn't answer the issue of whether those items that the PC buys are actually new. In the real world, I can buy second hand items for a reduced cost. Surely PCs can do the same. And if they can't, why should NPCs always be able to?

It has nothing to do with the items being new or used--the game doesn't make a distinction between buying or selling a new longsword or a used longsword. When you sell your loot, it's assumed you're selling to a merchant who's going to resell it to someone else--and the merchant needs to make a profit off the sale in order to make a living. It doesn't matter whether he's reselling new or used items, either way he has to have the markup.

Now, if you're selling to someone that will use the gear, he'll probably be willing to pay more than 50%--I'd say around 80% (if he wanted to pay full price, he'd just go to a merchant).

 

[Jürgen Hubert]

These are some interesting reasons - thanks They are largely circumstancial (apart from the first point, which stands to reason) and so need not always apply. But there are definitely times when such things might be sensible, non-arbitrary factors worth incorporating into buying and selling.

It's just similar to how traders operate in the real world. Ideally, merchants will purchase goods that they can sell as fast as possible for a profit. If they can't sell these goods fast, their profits will drop - a large amount of money will be "bound" into them (and thus can't be used to make even more profit for the duration in which they are stuck with it), and on top they have to spend a lot of money for keeping them secure. Thus, if they are unlikely to be able to sell the items soon, they will only buy them at significantly reduced prices.

And purchases from adventurers will often be seen as suspect. "I found it in an abandoned ruin" sounds rather similar to "It fell of a truck" or "I inherited it from my dear old grandmother." Would you trust adventurers when they claim that there is no catch to the items they sell?

No, with items purchased from adventurers there is always some sort of risk that there is more to the item than it seems - an enraged former owner, which might be anything from another merchant the party rogue stole the item from, to a not-dead-enough lich whose tomb the adventurers disturbed.

Thus, magic item merchants will use some sort of risk assessment when purchasing items of unknown quality - just like real world traders, banks, and insurance companies do. They need to balance the possible risks inherent in purchasing the item with the possible profit - and that ultimately means that they need to increase their profits. Thus, they will offer less money for the items.


Hmmm... Maybe I should write up some sort of rule system for magic item trade in Urbis to take all these things into account...

 

[Mark Hope]

Agreed - effort is required to locate a buyer. I'm not much one for the "just gimme a list and you can have it" approach to buying and selling (unless time is very short in a session). I don't make the players haggle over every copper piece, but they do need to at least describe what they are doing to find a suitable buyer or seller.

As it happens, I'm running Dark Sun at the moment, so the whole economy is wildly skewed anyway. There are no regular buyers or sellers of magic items at all, for example, so where such items are concerned, genuine effort is always involved. The characters in that game have started their own small merchant house, which they operate as a sideline to other activities, employing a handful of knowledgeable NPCs to lend expertise and advice where needed.

The last items that the characters sold were a pair of masterwork steel weapons. They sold these to another merchant house (Inika, for those who know DS). The Inika merchants were happy to pay close to full value for the items, knowing that they could later resell them in another city for double their actual value. (Iron and steel go for market value in the PCs' home city, and up to double that elsewhere due to Athas' metal scarcity).

It's these kinds of factors that make sense to me. They don't take any more time to incorporate, and make for a richer setting imho. Of course, not all settings need to take such things into account and it's not to everyone's liking. It has just been on my mind a fair bit recently, given the existence of Athas' dynastic merchant houses and the activities of the upstart PCs and their precocious House Murlak...

 

[Mark Hope]

It's just similar to how traders operate in the real world. Ideally, merchants will purchase goods that they can sell as fast as possible for a profit. If they can't sell these goods fast, their profits will drop - a large amount of money will be "bound" into them (and thus can't be used to make even more profit for the duration in which they are stuck with it), and on top they have to spend a lot of money for keeping them secure. Thus, if they are unlikely to be able to sell the items soon, they will only buy them at significantly reduced prices.

And purchases from adventurers will often be seen as suspect. "I found it in an abandoned ruin" sounds rather similar to "It fell of a truck" or "I inherited it from my dear old grandmother." Would you trust adventurers when they claim that there is no catch to the items they sell?

No, with items purchased from adventurers there is always some sort of risk that there is more to the item than it seems - an enraged former owner, which might be anything from another merchant the party rogue stole the item from, to a not-dead-enough lich whose tomb the adventurers disturbed.

Thus, magic item merchants will use some sort of risk assessment when purchasing items of unknown quality - just like real world traders, banks, and insurance companies do. They need to balance the possible risks inherent in purchasing the item with the possible profit - and that ultimately means that they need to increase their profits. Thus, they will offer less money for the items.


Hmmm... Maybe I should write up some sort of rule system for magic item trade in Urbis to take all these things into account...

Heh, well on Athas it is pretty much taken as read that most things that you buy and sell have someone's blood on them at some point along the line, so that's less of a factor in my current games, but definitely one that is more relevant in more civilised climes

There's a great (2e) DS supplement called Dune Traders that has a simple system for dealing with comparative levels of supply and demand of differing products between the cities and towns of the setting. It doesn't encumber play but allows for an added level of richness to the world.

When you sell your loot, it's assumed you're selling to a merchant who's going to resell it to someone else...

I suppose that it's that assumption that is part of what bothers me. I'd rather allow the players to take the added few seconds to say "I want to approach Duke Blunderspank and see if he wants to buy this magic sword from me" or contact the local wizard guild to sell them these scrolls or whatever if they want to. I can see the reasoning for the 50% rule. I just don't see the need to arbitrarily apply it in every situation, especially when the alternative doesn't take significantly longer to play out - or is done over email outside of the game.

 

[mmadsen]

According to the PHB, when characters sell their loot, they only get half the market price for it. Yet when they buy new gear, they pay full price. Why does this discrepancy exist?

It exists in the real world anywhere you don't have a perfectly efficient market. It takes time and energy for buyers and sellers to find one another, something we forget in our modern industrialized, mass-media society, where corporations spend millions making sure the right products get to the right customes at the right time, and we just walk into the store and buy whatever we want.

There is only a miniscule chance that anyone who wants the loot, which is often hyper-specific, and has the money to buy it is right there when the adventurers limp back to town. The person buying the loot is a middle-man, and the middle-man can't tie up 100 percent of the resale value in an item unless he thinks he can turn it around instantaneously with no effort.

If he can't turn it around instantaneously with no effort, he needs to buy it at a substantial discount to justify the amount of time his money will be tied up and the amount of effort he must make to find a buyer.

 

[ColonelHardisson]

There really isn't a problem here. It's just a shorthand system to speed up play. If you want PCs and NPCs to haggle over prices, then do so.

 

[mmadsen]

Iron and steel go for market value in the PCs' home city, and up to double that elsewhere due to Athas' metal scarcity.

Why hasn't all the iron and steel from the home city found its way elsewhere yet?

 

[Steel_Wind]

I use an opposed roll based on diplomacy for both buying and selling.

Each "1" on a D20 is equal to a 5% price shift, with a sale beginning at a base 90% of value and a purchase at 100%. I set the maximum at a 40% swing so that the party is not getting horribly screwed every time.

The PC in the party with the best diplomacy does the haggling.

Example: Lorak has a diplomacy of 12 and is up against Bellathoran the Wizard shopkeeper with a diplomacy of 18 when trying to sell magical kit with a base value of 1,000 gp.

Lorak rolls a 9 on a D20. Adding his diplomacy he has a "21".

Bellathoran rolls as 13 which, together with diplomacy, is a 31. The difference is "10" in favor of the merchant, a difference of 5%x10 = 50%. That exceeds the maximum permissible 40% swing, so the PCs will be selling at only 50%.

Had Lorak rolled a 16 and Bellathoran a 4, the resut would have been:

Lorak 16 + 12 = 28
Bellathoran 4 +18 = 22

A difference of 6 in favor of the PC. This difference, when multiplied by 5% = 30% price shift in favor of the PC. Added to a base of 90% (it's a sale, not a purchase of magic gear) means that the PC sells the gear for more than its value at 120%. That's 1,200 gp for the item.


Bards have their uses after all...