Selling loot for half price - why?

[Thornir Alekeg]

From what he says, you can:

1. Sell legally to the guild at 10%, buy legally from the guild at 100% of list.

OR

2. Sell illegally via the black market at 25%, buy illegally on the black market at 25%+; I'd guess ca 50% of list after middlemen get their cut.

And that is what makes no sense to me. If the black market can sell it for only 50% of what the legal sale is, then what would be the incentive to pay PCs more for the item than what they can legally? I just don't see much of a black market forming around paying more for the goods and charging less; their profits are lower, the risk of being caught isn't offset. Unless the black market is being run by a Robin Hood type organization, I feel there must be some kind of restriction on the legal sale and purchase of magic items, other than the fact that one group does it all, for this to make sense.

 

[S'mon]

And that is what makes no sense to me. If the black market can sell it for only 50% of what the legal sale is, then what would be the incentive to pay PCs more for the item than what they can legally?

IT'S DIFFERENT PEOPLE!

The people who buy at 10% sell at 100% are authorised Guild agents, presumably a favoured few.

The people who illegally buy at 25% and sell at 50% are criminals.

Look, IRL you can buy goods legally or illegally, and pay a lot less for the illegal version. This model makes perfect sense in a monopoly situation.

 

[Mark Hope]

I italicized "relatively" to emphasize that despite its high price on Athas, steel is relatively cheap in Tyr compared to its neighbors. Any time a good is cheaper in one place than another, there's an incentive to buy low, sell high. Steel swords are portable and durable, so I would expect them to migrate from Tyr, where they are relatively inexpensive, to the rest of Athas.

Right. And some does. When I say it isn't relatively cheap, though, I am comparing it its Athasian alternatives like obsidian, stone or agafari wood. So despite its comparative low price in Tyr, there are other even cheaper alternatives everywhere else. Steel remains a luxury product (and a prestige one) for those who can afford its meagre quantities. Everyone else makes do.

 

[S'mon]

I feel there must be some kind of restriction on the legal sale and purchase of magic items, other than the fact that one group does it all, for this to make sense.

That's what he said, that you can only sell to this one organisation (the Guild, say) and you can only buy legally from this Guild. This kind of thing was historically common, eg the Printers' Monopoly on books. There were historical monopolies on a vast range of good and services, including beer! I believe Sir Walter Raleigh was granted a patent (monopoly) on all beer sales in London. If you wanted cheaper than Raleigh's-sale-price beer, you bought it illegally. If you were a brewer and wanted to get more for your beer than Raleigh's-buy-price, you sold it illegally.

 

[S'mon]

And that is what makes no sense to me. If the black market can sell it for only 50% of what the legal sale is, then what would be the incentive to pay PCs more for the item than what they can legally? I just don't see much of a black market forming around paying more for the goods and charging less; their profits are lower, the risk of being caught isn't offset. Unless the black market is being run by a Robin Hood type organization, I feel there must be some kind of restriction on the legal sale and purchase of magic items, other than the fact that one group does it all, for this to make sense.

How do you think the market for stolen goods works IRL?

 

[mmadsen]

When I say it isn't relatively cheap, though, I am comparing it its Athasian alternatives like obsidian, stone or agafari wood. So despite its comparative low price in Tyr, there are other even cheaper alternatives everywhere else. Steel remains a luxury product (and a prestige one) for those who can afford its meagre quantities. Everyone else makes do.

We can agree that few people would buy a steel sword when there are much, much cheaper alternatives that are almost as good. That doesn't change the fact that if a longsword costs, say, 1,500 gold pieces in Tyr and 3,000 gold pieces in the neighboring city-state, then there is a huge incentive to buy "cheap" swords in Tyr and sell them for twice as much elsewhere.

 

[Mark Hope]

We can agree that few people would buy a steel sword when there are much, much cheaper alternatives that are almost as good. That doesn't change the fact that if a longsword costs, say, 1,500 gold pieces in Tyr and 3,000 gold pieces in the neighboring city-state, then there is a huge incentive to buy "cheap" swords in Tyr and sell them for twice as much elsewhere.

As I've said two or three times now, yes, this happens. And, as I've also said, my interest in the economics of the gameworld peters out somewhere around here...

 

[Kaladhan]

They way I see it, the criminal organizations wouldn't have the best of items to sell. They would only sell stuff they consider useless for them. They're motivation is not only to run a profit, but to better equip themselves. Good luck in convincing them to sell those gauntlets of ogre strength.

So they buy a lot of things, but only sell what they deem useless (or not worth it's price).

 

[Thornir Alekeg]

How do you think the market for stolen goods works IRL?

Well, I haven't had a lot of experience fencing things, but IRL, stolen items are sold for less money than market value, but I believe you will also find that it pays a lot less than the market would as well. The reason someone who steals an item is willing to sell it to a fence or pawn shop for 20, 30 or 50% of its value is because it is stolen. The restriction I keep talking about is that the person could be arrested for trying to sell it through legal channels. In this case it sounds like there is no reason why a person would fear selling the magic items legally, they just want more money for it.

I say it is unlikely that there would be much of a black market that would pay more and sell for less than the existing market, if doing so was illegal. The profit margin is lower and the risk is higher.

 

[JVisgaitis]

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?

Because its used equipment. Yeah its not realistic, but it works for 99% of the people out there. There is nothing stopping you from having that price fluctuate based on other circumstances (demand, war, availabilty, etc.).

You want to talk about something really crazy with economics in D&D? How is it possible that a high level fighter carry's around the wealth of an entire kingdom in his sheath? Also, why don't they send large expeditions into dungeons to get out all of the millions of gold pieces that are laying around?

It's a game and very little makes sense if you try and apply a hard dose of reality to it.