Silk Road forums

Market => Rumor mill => Topic started by: ppass on June 14, 2012, 05:45 am

Title: Compensated Pricing
Post by: ppass on June 14, 2012, 05:45 am
Hey fellow SR'ers. An odd question has been plaguing my mind the last few buys and maybe some vendors can shed a bit of light on the subject. (This is why this is in the vend section :D)   As you all may have noticed the bitcoin to dollar exchange rate is going up in favor of the bitcoin. When I started on the site 3 months ago btc was around 4.6 coins to the dollar. This seemed reasonable in relation to vendors pricing at the time so I was glad to pay. As of right now btc are tottering in between 5.8 - 5.9 coins per dollars. This may not be much but when spending 300+ dollars it starts to add up.  :(  I am curious as to how vendors handle these recent fluctuations, do you raise or lower price accordingly to match what are more or less "street" values? Or do you ride the wave and keep accepting higher pricing in your favor? Please feel free to weigh in, and keep in mind this is not a complaint nor directed at any vendor in particular, pricing for most has remained fairly competitive, I'm just curious as to how vendors change their practices.

-Cheers
Title: Re: Compensated Pricing
Post by: Cozmo on June 14, 2012, 05:58 am
Most sellers peg their prices to the Dollar (an option you can change in settings). So the the cash input stays the same really. While the bit coin goes up and down. There is the option is make a listing and peg it to the bit dollar, but i suspect most people don't actually do that. Unless you see the price changing everyday (if in settings you view prices in $ not bitcoins).
Title: Re: Compensated Pricing
Post by: Pupilsbrah on June 14, 2012, 06:24 am
Correct me if I'm wrong, but isn't this what they call "hedging"? (when the listing is synched to the US dollar, not just a flat btc price)
The only indicator on this I have seen for an item is when it is in your SR cart. Would be nice if it were immediately visible in the search listings. (not really necessary though as it would only really save cautious people a minute or two)
I'm sure the is a plausible reason for both methods, but wouldn't it cause the btc rate to be overall more stable if hedged listings were compulsory on SR?
Personally my fav vendors and their listings are synched to the $.
Title: Re: Compensated Pricing
Post by: Cozmo on June 14, 2012, 07:58 am
hedging is different, as it relates to funds in escrow. Because mail can take 2-3 weeks to deliver (bitcoin prices can rise or fall dramatically) and because the actual transaction is held in bitcoin (although the seller might have pegged it on the dollar) in 2 weeks time the bitcoin will drop half in price from $5 to $2.50, thats if you choose hedging. So on that $500 deal that you sent out 2 weeks ago. your not going to recieve $250 because you hedged your transaction, you will receive $500. It works in reverse aswell. I.e. bitcoin prices going up, 2 weeks from now it doubles, you're still getting $500 not $1000. Hence the 9% SR fee, they do alot of work, them admins.
Title: Re: Compensated Pricing
Post by: ppass on June 15, 2012, 12:02 am
Excellent info Cozmo. I never did understand the hedging process before.

-Cheers
Title: Re: Compensated Pricing
Post by: ppass on June 17, 2012, 07:36 pm
Back again, with 6.40 btc to USD. I don't see much price variation considering. Any thoughts?  :'(
Title: Re: Compensated Pricing
Post by: philter3 on June 17, 2012, 08:15 pm
For some vendors.. such as myself, who do not purchase what they vend (i.e. they grow their products that they sell) and who also happen to be Bitcoin enthusiasts... we don't peg prices to the dollar. We peg price in Bitcoin. I run my accounts in BTC, pay my server costs in BTC, pay S.R. commission in BTC etc.

I don't really cash out (except for using BTC to buy myself drugs or computer equipment) and I don't have a % conversion cost back into USD. The money is all getting tucked away in a secure wallet for a future when the dollar is kaput or nearly worthless from inflation.

I won't change my prices unless I need to do so because it's making me non-competitive....

Those who have to reup with THEIR wholesaler have a different set of assumptions though....
Title: Re: Compensated Pricing
Post by: Cozmo on June 18, 2012, 08:02 am
Well philter3 in a space of a week or so, the jump $5 to $6 per bitcoin, has made your products 20% more expensive. Now if you have quality product, thats fine, and if your loyal customers are happy to pay 20% extra on the exact same weight and quality then thats fine, you sir are laughing. But realistically if my usually supplier jumped up 20% in price, i'd be having second thoughts. Thats just me personally, and i think alot of people would feel the same way.
Title: Re: Compensated Pricing
Post by: Pupilsbrah on June 18, 2012, 01:31 pm
Thanks for correcting me Cozmo! I had a feeling I might have mistaken what that was actually for.

This might be a dumb question, but is there any easy way to spot whether an item is pegged to the dollar? like a tick next to the listing I have just overlooked or something?
ATM I have just lurked on SR for long enough to see which way my fav vendors seem to operate.
Title: Re: Compensated Pricing
Post by: ppass on June 18, 2012, 05:42 pm
Well philter3 in a space of a week or so, the jump $5 to $6 per bitcoin, has made your products 20% more expensive. Now if you have quality product, thats fine, and if your loyal customers are happy to pay 20% extra on the exact same weight and quality then thats fine, you sir are laughing. But realistically if my usually supplier jumped up 20% in price, i'd be having second thoughts. Thats just me personally, and i think alot of people would feel the same way.

This was the stance I was taking, I wonder if the admins would take a look at this at some point. As of right now I've been holding off on purchasing coins or product, due to the fact that something I had purchased one week ago at 215USD is now costing 300USD with no difference in quantity or quality. (which was excellent I might add) I hope more read this thread and weigh in, as I feel this issue may become more prevalent as the bitcoin rises in value.
Title: Re: Compensated Pricing
Post by: Cozmo on June 18, 2012, 09:39 pm
Quote
This might be a dumb question, but is there any easy way to spot whether an item is pegged to the dollar? like a tick next to the listing I have just overlooked or something?
ATM I have just lurked on SR for long enough to see which way my fav vendors seem to operate.

No easy way, except if you see the price fluctuate with the bitcoin dollar. But i have seen when i have ordered with certain people, the ticket number you click to see the actual transaction, can be shown at bitcoins or dollars. So i think after you make a purchase you can actually see if its pegged at the dollar or bitcoin via that route. But other than that, there is no way i can tell.

Quote
This was the stance I was taking, I wonder if the admins would take a look at this at some point. As of right now I've been holding off on purchasing coins or product, due to the fact that something I had purchased one week ago at 215USD is now costing 300USD with no difference in quantity or quality. (which was excellent I might add) I hope more read this thread and weigh in, as I feel this issue may become more prevalent as the bitcoin rises in value.

SR is a free market, and by that very definition you can change it by just being a consumer as much as you can by being a seller. Buy somewhere else if you don't like the price. Tell the seller how much their price has gone up (they probably have known, but they maybe don't know how it affects their consumer base).
Also that 215-300 is a 40% jump, maybe thats a number they pulled out of their asses. That they can blame on the bitcoin jump.

But like i said dude, you as a buyer, have exactly the same amount of power as a seller on the free market, don't like the prices, say your going somewhere else. They might change their tune. They might not, the product may be excellent. But if i went into the supermarket, and saw a 40% increase in my favorite yogurt, i'm damn well going to change yogurts.
Title: Re: Compensated Pricing
Post by: ppass on June 19, 2012, 12:51 am
But like i said dude, you as a buyer, have exactly the same amount of power as a seller on the free market, don't like the prices, say your going somewhere else. They might change their tune. They might not, the product may be excellent. But if i went into the supermarket, and saw a 40% increase in my favorite yogurt, i'm damn well going to change yogurts.
This is kind of the point of this thread, the hopes that more will read and stop to think. :D Thanks for all the sold info Cozmo.

-Cheers
Title: Re: Compensated Pricing
Post by: ppass on June 19, 2012, 05:12 pm
Update: One of my fav. vendors has taken notice and is in the works for a compensated price drop. Lets hope others follow suit.