MerchantingOr merching, is the act of purchasing an item at a low price and then selling that item at a higher price to generate profit. It is a popular method used by wealthy players to make money.
With the addition of the Grand Exchange, it is no longer simple for merchants to act as an intermediary between players who seek to easily sell and players who seek to easily buy — the Grand Exchange replaced this. Modern merchants, however, have found ways to work with and around the Grand Exchange to make money, including: long term investments, time-based arbitrage, price manipulation, "market value" to "street value" arbitrage, and item conversion.
Types of merchanting
Players can make money through several methods:
- "Investing": This involves predicting an item's long-term price trend and then acting upon it. A player will buy as much as possible of an item when they think it is at a low point and sell it when they think it is reaching a high point. To make money with this method, players must accurately make a prediction as to how a future or current game update or other in-game event will affect item prices in the future. Investing is more profitable when the item has large changes in price, and safer when these changes are predictable.
- "Flipping": This involves buying items and then selling them at a slightly higher price in the short term, often immediately after buying or even while buying. The main difference from investing, which relies on price changes over time, is that flipping exploits the spread between pending buy orders and pending sell orders as the source of profit. The buy-sell spread is created by the diversity of buyers and sellers with varying degrees of patience. Flipping is more profitable when the item can be bought and sold within a large price range, and safer when the item has a high trade volume.
- "Bulk quantity flipping": This involves buying large quantities of an item with a stable price range of a few coins, then selling that item for a slightly higher price. The profit on each item is very small, often only a couple of gold each, but the massive quantity results in large profits. Large amounts of available cash are often required to perform bulk quantity flipping, but can result in a higher profit than other merchanting methods. When bulk flipping, 20 million or more is almost surely needed to make money faster than possible at common high level training areas.
- "Street/forum merchanting": This method involves buying a bulk of an item then selling it on the street or forums for a higher price. There are some items that have a buy limit that is below the demand level of a player. For example, Battlestaves have a buy limit of 100 but many players who use them would want more than that. Players can take advantage by placing a quantity of offers over a period of time then selling it off forums for a higher price.
How the Grand Exchange works
If an offer is placed in the Grand Exchange, the game will search for all offers meeting your price or better, and instantly completes those trades, using the price of the already existing offer. If an offer is not instantly completed, it will remain until a matching offer is entered or it is cancelled. Thus, all trades occurring in the Grand Exchange occur instantly for one person and not instantly for the other.
Free players can only have a maximum of three offers in the Grand Exchange at any time, while paying members can have a maximum of eight offers.
Most items have a maximum quantity that can be bought every four hours. This limit was implemented by Jagex to prevent price manipulation. A full list of the maximum purchases can be seen here.