Diablo® III

RMAH - Buyer's perspective - Why Fees are OK

(Please change the forum catagory if appropriate)

Cliffnotes: If a player is using RMAH to buy *and* sell, then there is only a $1 fee for items, not 15%. Continue reading to see why this matters.

Please look at RMAH from a buyer's perspective. People have been so eager to 'cash out' that they missed how easy Blizzard made it for people to buy items. Let's say that I start off with $100 in my account. I use it to buy Windforce. After a month or two, I get bored and sell it. (huge assumption here) assuming it is still worth $100, then I can sell it and get $99 back. Now, I can spend it on another item, say, Grandfather, Monarch, etc.

At the end of the month, let's say I sell the items and quit. (same large assumption) assuming the items are still the same price I paid to get it, I can sell Monarch and end up with $98. When I cash this out, I will get $83.30 back. I spent only $17 to run around with the best items in the game for a few months or even a year. Not bad right? This $17 will most definately be covered as I will sell all of my items before quitting. So it will be free, or even profitable.

The RMAH is a great way to safely/legally buy items! The 15% only bites if you cash out, ie, if you only plan on selling and never buying from RMAH.

The above is far more common than this forum is giving credit - just remember, for each item you plan on selling, there will be someone happily buying it.

Now to address some risks/concerns:
1. Items like Windforce will likely drop in price before stabilizing. There is no guarantee I can resell it for $100.

2. Commodities are consumable. Money spent here will not be resold.

3. Since the seller is "losing" 15% for cashing out, this means the buyer could have got the item for 15% less! - True, but this would be illegal. Also, this price is driven by both supply *and* demand. So this implies that both counterparties were willing to trade at this price. Also, keep in mind that sellers will be competing against people who are just selling/trading the same item for battle.net cash, which they will spend on future RMAH purchases. This means that these sellers are not going to lose 15%.

4. Blizzard RMAH is the only legal way to purchase items, so this is a monopoly. I recognize that 15% is a bit high. Assuming black market RMAH websites were to facilitate buying gold, these markets would also be charging a spread/fee. Continuing this argument, players would illegally trade directly with one another (good old dropping items on the ground!). This is extremely risky. Now, looking back, having these transactions 100% secured and backed by Blizzard is worth it. (especially if you spend the money on items instead of cashing out)

5. By having *any* fee, the cost of the fee is shared by both Buyer and Seller. The point of this thread is to show how the fee is much less than everyone is screaming about, if you remember that not everyone is cashing out immediately.

As a quick disclaimer, I have no intentions of buying items. I hope to find and sell items my character doesn't need. I have seen so many complaints about the 15% fee that I wanted to discuss why RMAH fees that bad. Though, as I continue to update this thread, I am convincing myself it's not too bad to buy items! *scary*
Edited by Tsunade#1284 on 5/2/2012 8:24 PM PDT
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To save people from TLDR, this will contain FAQ based on questions brought up in this thread.

1. What about buying gold? There is a 27.75% fee if I cash out!
My post was focused on the buyer's perspective, meaning that cashing out is only done once, when the player is quitting. This means that the fee for buying/selling gold on RMAH is only 15%. This is perfectly fine, since the Gold AH is also charging 15% for all transactions. (This information could be outdated -- please correct me if I'm wrong.)

2. What if the market becomes oversupplied by RMT farming or botting?
Botting will hopefully be banned by Blizzard (and/or Inferno mode will be too hard to bot).
An oversupplied market is a great situation for buyers. That means the same $100 I used in the example could be replaced with $10. Everything else remains the same. In the end, that means I only spent $1.70 to "borrow/lease" the best items in the game.
Also, there will probably always be a short supply for the best legendary items. If every player has one, then there is no reason to keep playing. Blizzard would probably release new content to keep everyone playing.

3. If there is a 30% fee, why don't I just charge 30% more on RMAH?
The 30% fee is only assuming you cash out. Other players may be selling with the intention of using that money to buy other items. These players will only have a 15% fee and therefore can undercut you.
Edited by Tsunade#1284 on 5/2/2012 8:33 PM PDT
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Well, I think RMAH is a good thing, but if you sell gold with a 30% fee, it is not good for the buyer or the seller. Add 30% to your buying cost, since it could have been sold for 30% less, which means Blizzard is taking a 30% cut. This is not good for either end. I dont mind selling on RMAH, because in 3 mouths, the prices will drop out after RMT farmers have oversupplied the market. [The rest, I couldn't understand, after staring and rereading this for several minutes] :(


You brought up a good question for me to address. I've edited your comment so that it is easier to understand. It honestly took me a while to figure out what you've said and I had to hope that this wasn't a troll reply...

So basically, you are concerned about a 30% cut for commodities. It's actually only 27.75%, not 30%. This transaction fee is only if you are cashing out. Otherwise, you are only losing 15%, which is perfectly fine. Remember, even in the Gold AH, there is a 15% gold fee. So this is to be expected.
Edited by Tsunade#1284 on 5/2/2012 7:36 PM PDT
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90 Pandaren Shaman
14370
05/02/2012 07:27 PMPosted by Tsunade
[The rest, I couldn't understand, after staring and rereading this for several minutes] :(

I think the gist of what he was saying in the last few lines was that the market will eventually become oversupplied and sellers will undercut each other until the items are worthless ("all good things must come to an end").

I don't think that is necessarily a given for the ultra-rare items if they're anything like what D2's were, but that may ultimately depend on how effective Blizzard is in terms of cracking down on the botters/dupers and/or the rate of new content creation (new rare items created post-release / expansion packs / etc.)
Edited by Flapjack#1623 on 5/2/2012 7:43 PM PDT
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Thanks Purge. I've added and replied to this in my second post (FAQ).

Since this thread was written from the buyer's perspective, an oversupply just means it will cost less :) But anyway, at some point, the prices will have to stabilize.
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I think another thing Wolf is referring to is the fact that since Blizzard/PayPal is taking a 30% cut (really 28ish%), some sellers will increase the sale price by 30% (just for the sake of a nice round number, I'll stick with 30%) to cover those fees. So an item they would originally sell for $100 ($70 profit after fees) will be sold for $130 ($91 profit after fees), or even $142 ($100 profit after fees). In this scenario, the 30% fees are bad for both parties: buyers pay an increased cost of commodities, and sellers lose an unusually large portion of the sale.

Personally, I don't see how the RMAH can be good or bad. It'll just depend on how the community as a whole uses it. I'm withholding judgment on the system until I've actually seen it in use, but if the history of online gaming is any indication, things will get worse before they get better.

As cracked.com once put it:

"If MMORPG players were around when God said, "Let their be light" they'd have called the light gay, and plunged the universe back into darkness by squatting their nutsacks over it."
Edited by Qualran on 5/2/2012 8:11 PM PDT
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So an item they would originally sell for $100 ($70 profit after fees) will be sold for $130 ($91 profit after fees), or even $142 ($100 profit after fees). In this scenario, the 30% fees are bad for both parties: buyers pay an increased cost of commodities, and sellers lose an unusually large portion of the sale.


Bear in mind that this is a global (huge) auction house, so there should be enough participants in the market for me to say the following:
The seller would not be able to mark up the prices, because they would also be competing against players who are not planning on cashing out the money.

So for example, if I am also selling gold, I would undercut you and sell for $100 ($85 after fees). Since I am offering a better price, my transaction would be completed, whereas yours would not. The fee for me is only $85, because I plan on using that money to buy items instead of cashing it out.

If in fact, I am describing a very small population of people, then that means the selling price would be $130, not $100. This means that after fees, I ended up selling for $110.50. In some ways, Blizzard's cashout fee is encouraging people to re-invest and spend their RMAH "earnings."

Edit: I do agree -- By having *any* fee, the cost of the fee is shared by both Buyer and Seller. The point of this thread is to show how the fee is much less than everyone is screaming about, if you remember that not everyone is cashing out immediately.
Edited by Tsunade#1284 on 5/2/2012 8:23 PM PDT
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Bear in mind that this is a global (huge) auction house, so there should be enough participants in the market for me to say the following:
The seller would not be able to mark up the prices, because they would also be competing against players who are not planning on cashing out the money.

Edit: I do agree -- By having *any* fee, the cost of the fee is shared by both Buyer and Seller. The point of this thread is to show how the fee is much less than everyone is screaming about, if you remember that not everyone is cashing out immediately.


I agree with you that the fees aren't nearly as bad as some people are making them out to be, and I feel that the principals of economics will win out. The market will balance itself after a few months, weeks if we're lucky. I certainly wouldn't recommend spending real "buy burrito with it" money on any purple pixels at launch, though. Sellers are going to be milking it for all they can for as long as they can.
Edited by Qualran on 5/2/2012 8:35 PM PDT
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Yep. Until prices stabilize, it's much better to be a seller. That's one of the reasons I emphasized that buying a $100 item and reselling it months later for $100 wont resell for the same value until the prices stabilized. Once the prices stabilize, I think it's a great way to have some fun and dabble with buying items.
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Selling items for $ is fine. My problem is the 15% cut that is taken from the gold AH and commodities. Going from a buck for an item, to potentially $37.50 for a stack of commodities is absurd.

edit: I guess that it's more aimed at farmers. But it sucks for penalizing the player.
Edited by Yodogg#1853 on 5/3/2012 1:46 PM PDT
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05/03/2012 01:45 PMPosted by Jerk
My problem is the 15% cut that is taken from the gold AH and commodities. Going from a buck for an item, to potentially $37.50 for a stack of commodities is absurd.


The only expensive commodities I can think of are gold, crafting materials, and rare dyes.

Interestingly, gold + crafting materials can make an item =). You can make items and sell the items for money! This should solve the problem, assuming the markets have fairly priced the results of the items you made. Unless, it turns out to be more of a gamble... I will not opine on gambling via crafting items.
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Here a free, unasked for bump.

+1 :D

Getting commodities of te GAH and the rest from RMAH (if you plan on occasionally clicking the buy button or after getting to ~200$ in b.net rotating the money around without buying Blizz store stuff) is the best option and 15% fees are not that high.

The 15% on GAH is there as a gold sink that can and probably will be adjusted later, it is necessary.
Edited by Kain#2376 on 5/4/2012 7:09 AM PDT
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Nice to see a thread not entirely full of idiots (to be honest, i dont even see one above my post)
Edited by Sogrin159#1310 on 5/4/2012 11:44 PM PDT
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05/02/2012 07:55 PMPosted by Tsunade
at some point, the prices will have to stabilize.


Shouldn't prices decline over time as more gold/items are generated by the player base? This would take a long time for rarer items, but theoretically at some point, there could be enough randomly dropped to meet the demand. It will be the supply that drives the demand, and the less of the supply, generally the higher the cost.

We're seeing that right now with Geforce 680 GTX parts, for instance. But eventually if they make enough, the price will drop, and then a new generation will come out and they will greatly decrease in value.

So, what would keep the prices stable?
Edited by BigWheat#1353 on 5/5/2012 12:56 AM PDT
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