Economy FAQ by whitelytning
Version: 1.0 | Updated: 04/09/15
Table of Contents
This guide serves as an introduction to the Path of Exile Economy. It will present the basic structure of the economy and answer many common questions so that you can better understand what is going on and not be intimidated by trading. It will NOT provide a get rich quick method, or teach you how to scam.
The economy in POE is probably very different than what you are used to and can be daunting to new players. There are two unique features: currency, and the leagues themselves, that need to be understood.
Unlike other games, in POE there isn't a single currency, like gold for example. Instead POE uses a variety of crafting materials called “orbs.” There are roughly 23 different orbs that are used in different ways to craft gear. These orbs are also the currency that are used to trade and purchase items. In general, the more uncommon the orb, the more valuable the orb is.
It may be best to think of this currency system kind of like the world currency market. If an American company is selling a widget for $10USD the widget will be worth a different amount of currency based on the type of currency offered. For example, if the widget was sold in the UK it would be worth 5 pounds sterling (assuming a 2:1 currency ratio). If it was sold in Russia it would be worth just over 500 Rubles. It's the same item but because the currency itself has different value, it takes different amounts of that currency to purchase the item.
The most commonly traded orbs are Fuses, Chaos, and Exalts. The exchange rates vary based on the league in which you are trading but a chaos will usually be worth 1.5 to 2 fuses and an exalt will be worth 30-40 chaos. You will see most players selling items for chaos or exalted orbs.
In POE the league system is probably also very different than other games and it has a dramatic effect on the economy. Leagues are 2 to 4 month isolated economies where all players start with nothing. These isolated economies go through fluctuations that occur in other economies but because of the short time span these variations are very obvious. For example, at the start of the leagues items and gems that help players get to maps are worth more than they would be as the league ages.
When the league ends these isolated economies get merged with the ongoing Standard league. All the items and currency that were created in the isolated league, get dumped into Standard and then another set of changes occur.
The effects of this league system is discussed more in Part 3.
Most of the problems people have with trading in this game come from a lack of understanding of supply and demand (S&D). I'm going to spend some time going over it, and keep referring back to this section because of how important it is.
Supply and demand is an economic model or theory. It says that “in a competitive market the price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers.”
A competitive market is essentially a market where no one is able to artificially set the price of an item or determine how the market operates. The economies in POE are very close to a theoretical perfect competitive market because the prices are based almost purely on the S&D in the market.
Important things to note about S&D
- The value (and price) of goods is fluid. There aren't any predetermined prices and the prices will change based on the influence of supply and demand in the market.
- With time the prices will settle. In standard the prices are much more stable because the market has existed for a longer time. In the short term leagues the prices change dramatically as the league progresses. A carcass jack could sell for 1 or 2 exalted at the beginning of a league but only 5-10 chaos toward the end. If you look on standard you will be lucky to sell it at all.
- The demand is important. If your item isn't something people want you will not be able to sell it for a lot, if anything. Demand is influenced by things like usefulness of the item and the popularity of a build-type that utilizes that item. Demand can change quickly and may be based on external factors.
- The supply is important. As more and more players are able to have access to items or end game content in which certain items drop the price will change. This is a reason being the first to find something, or playing a lot at the start of leagues gives you an advantage.
So how does all this supply and demand stuff actually work? Its complicated. Just know that it is the underlying cause for everything that is going on. If you aren't sure what is going on, try to think of it in terms of S&D.
Temporary Leagues go through general cycles based on the demand in the market. At the start of the league no one has anything. (no supply and lots of demand). As the league begins people start to find items and the economy develops. Items that will get people into maps will have high demand at first. People want hard-to-find useful gems, 5Ls and tri res gear and will buy poor-to-medium gear often and for a few chaos. Remember though, that there isn't a supply of currency to prices will be forced to stay somewhat low. More unique or harder to find gear has very little supply and people generally don't have the currency to make the kinds of straight forward trades you will see later in the leagues for this type of stuff so there is much more negotiating and price fluctuation for higher end gear.
As the leagues progress people no longer need the leveling gear because they usually have a character or two that are in maps and can find their own gear. Prices on those things plummet accordingly. At the same time the supply for some currency has grown so you will get price variations for currency ratios and higher tiered items.
There may also be temporary demand for oddball items based on the challenges and/or flavor of the month type builds. When new skill gems get introduced or if there are certain items that are needed to complete challenges there may be increased demand. For example some of the unique maps were selling for much higher towards the end of torment because of the full clear challenges than they normally do.
Hardcore leagues mostly follow the temp league model but with a major exception. Leveling gear/gems retain their value better because people are ripping constantly and re-running. The demand for these items doesn't drop as low as it does in other leagues.
Standard is not “broken” it is just more mature (its been around longer) than the other leagues. Remember that Standard is the permanent league everything else gets dumped into. This means that people have lots of items/currency they have found in the prior temp leagues and don't have to level new characters. There is a huge supply of common/average items with very little demand for leveling/mediocre items. It also means that if you have a truly exceptional item people have a lot of currency to pay for it.
Standard also has somewhat minor regular cycles that coincide with the end of the temp leagues. When the temp leagues end there is an influx of currency and people that want to convert the lower stuff to ex. You will see the price for chromes and alts change during this time due to the new influx of currency.
In POE there are essentially three ways to get items. First, you can get lucky and find them. Second, you can try to craft them, but this also involves luck. Or third, you can trade for them.
Trading gives players a way around direct RNG. Instead of relying on the in-game loot frequency or chance at finding a specific item you simply have to find or raise enough currency to be able to trade for an item. Trading is a great function and addition to any game so heavily based on RNG.
GGG has given players a few ways to trade. You can use trade chat, browse shops, or use poe.xyz. No matter how you do it, you will end up negotiating with another person so lets talk a little about negotiating.
Negotiating is a simple concept that people get in the way of. If someone has an item up in a shop they obviously want to sell it, the problem is when either (a) someone wants to sell it for an unreasonable amount or (b) someone wants to buy it for an unreasonable amount. Our goal in negotiating is to come to an agreement on a price both parties are OK with. This can usually be accomplished by doing several things.
- Treat the other person with respect
- Be realistic
- Keep the discussions going
Hypothetical example of decent negotiating:
Early in a league, player 1 sees Carcass Jack is on xyz for 30c b/o. It has decent rolls but player 1 determines he doesn't want to pay more than 25c for it so he contacts the seller.
Player 1: “Hi, I'm interested in Carcass Jack.”
(this lets the other person know exactly why you are messaging them and doesn't waste time or leave them hanging the way simply saying “hi” does.)
Player 1: “Would you be willing to negotiate? I think your price is a little high for those rolls and I would pay around 20 or 21c for it.”
(this may come off as a lowball but you have done a few things well, first you suggested your own price and said you wanted to negotiate. This is called anchoring and studies have shown that people who anchor or give a price first end up closer to their number in negotiating. Second you explained that it isn't your final price and you have justified why you want to pay that much. To the seller, this is much easier to accept than someone just saying they would pay you 20c, the more justification the better.)
Player 2: “ahh, that is way too low.”
(Typical response and it should be expected. We have to justify our low offer and good negotiators will make the person realize they can't justify their price)
Player 1: “there are several others on poe.trade with the same stats for around 25c.”
(more justification for the lower price.)
Player 2: “how about 27c?”
(this is good, he came down a little and it shows he is willing to work. We anchored below our real price point for this situation; we can come back at 25 if we want and now it might actually happen. Player 2 will also commonly respond here by either saying he isn't going to trade, or tell you to buy a cheaper one if they are there and not come down. If so, its normal and we move on.)
Player 1: “how about 23c and 3 alcs”
(we are now coming up and are only off by a little. We also throw in some extra currency to try to get the seller closer. We can use creativity instead of lose sales)
Player 2 would then usually come back with a final offer or ask for a different currency instead of the alcs and the trade would get done or it wouldn't. All trades won't go well. Just remember our goal is to buy/sell the item for the price we want.
The example is used to show that negotiating requires thinking ahead and getting to the underlying interests of the parties. Not all sales get completed. Some sellers and buyers just have unrealistic expectations but the more justification and information we can provide for our prices the better chance we have at getting to a reasonable solution. Remember you both want to get a deal done, don't do things to stop that from happening but you should also be willing to step away if something isn't what you like. A deal is not finished until you click accept.
Selling items comes down to S&D with an emphasis on demand. Does someone want this item? Would they take the time to trade for it? What do people want? Are the stat types good? Are the rolls good? If the answer is no to any of the above it probably isn't worth trying to sell.
There is no straight forward answer here. Look for items with the highest base type, then you want stats people want and solid rolls. Also pay attention to what can be crafted or more importantly what CANNOT be crafted.
It is something you will learn with time as you get familiar with builds and play more. Its ok to not know right away. Pay attention to forums and what other people are using for popular builds. Figure out how they work.
This is probably the hardest question to answer because the simple answer isn't simple. Prices are determined by supply and demand. It is what is great and what is not great about this game. Spell echo can get 5, 6, even 7 chaos at the beginning of leagues and then after a week or two it will be hard to sell for 2 chaos. The best way to price things is to pay attention to currency ratios or prices for a few common items and monitor how they change.
You can use poe.trade to get an idea but it won't give you the exact price. What a lot of people do is look for the cheapest items on xyz and either list for that or a little less and see if the item sells. If it doesn't sell after a day or two you can drop it a little more until it sells. (this is how prices drop for common items) Just be aware that the prices on xyz/trade are the prices of items THAT ARE NOT SELLING. If someone says there are others on xyz for 10c, that doesn't mean that the item they are selling is worth 10c. It means 10c isn't selling.
Here are some general rules about item prices during leagues:
- The very top tier items are going to go up in price as the leagues go on.
- The middle tier items are going to get cheaper as the leagues go on.
- The bottom tier stuff is going to be hard to sell after a few weeks of a league.
This is an easier question to answer. One of two things is going on: you are either asking too much, or no one wants your items.
Don't get personally attached to items. Its better to sell them and have currency coming in than to keep it in your stash to look at. The value is going to change and just because something WAS worth 20c doesn't mean you shouldn't sell it now for 10c and be happy with the deal.
But really, what it comes down to is that if you are having trouble selling items it because you are asking too much or your items are crap and no one wants them.
You have a choice. You could do nothing and ignore them, you could sell for that low price, or you could play ball and negotiate. Its up to you and will probably depend on the specific offer.
First, every offer under your asking price isn't a low ball. If I'm selling an item for 10c and someone offers 5c I'm not necessarily being lowballed. If I'm selling an item that is worth around 4 ex and someone offers me 5c, I more than likely am. But remember that coming in at a low price can be a viable negotiation strategy.
Second, don't take it personally. You are trading, not making friends and the other person is just trying to get a deal.
If you choose to respond you can say a number of things depending on what you want:
- “No, sry, b/o is x and the price is non-negotiable”
- “I'm willing to negotiate the price but that is too low.”
- “No, sry, I'm not going lower than y(a price lower than the listed b/o), let me know if you're interested.”
- “How about z (price higher than the listed b/o)?”
Just realize that the person contacting you has interest in the item or they wouldn't have messaged you. We know they are coming in low and are more than likely willing to spend more, we just have to figure out if we can meet at a price we will both be happy with.
Are you happy with the sale/purchase? If yes, you did ok; else, why not?
This question really depends on your mindset. Are you selling items to get the absolute maximum price or are you simply more interested in trading volume and continuously moving goods? Are you buying because you need the item for a build? Is the build working well now?
No one is judging the efficiency of your purchase/sale other than yourself. If you overpaid, just be aware of it and consider why it happened so you don't continue to do it.
Gamefaqs (http://www.gamefaqs.com) is solely licensed to display this guide entitled “An Overview of Basic Path of Exile Economics” on their website. Use on any other website or any other type of reproduction or public distribution of this writing is strictly prohibited without express permission from the author. Copyright 2014 Whitelytning, All Rights Reserved.
I have been playing Path of Exile since its release but am in no way an expert. I have played ARPGs for a long time and grew up on the Diablo games. I have enjoyed trading and playing the economies at endgame and understand them much better than most gamers. I wrote this guide after seeing the same questions being asked over and over. I think POE is a fantastic game and wanted to help the newer players understand what was going on. Contact me (PM) with any questions, comments, or to request my IGN for help.