How to properly use SCM sales as proof.

[jjjon123]

What is SCM?

 

SCM stands for the Steam Community Market.

 

It is a place where you can buy and sell items for steam wallet funds. Items are listed like classifieds by price from lowest to highest.

Advantages of using SCM over traditional outpost/user2user trading is that it is automated and officially run by Valve. Disadvantages of using SCM are the fees involved with selling and lack of support for all items.

 

Why start using SCM as proof? Its automated like a trading bot, there are all kinds of fees involved, and it uses wallet funds not ref or keys!

 

Well, there is a very important reason to start paying attention to the SCM and that is popularity. When SCM was first released, there was not very much you could sell there. The complicated fees and currency conversion made many bp.tf users and moderators skeptical of its valid use as proof, me included. But as SCM matured and valve made more and more items marketable,

more users started using the SCM for trading. Today, there is an interesting situation arising: the popularity of SCM has reached a point where certain items are traded on SCM in higher volume than on trading websites. As a result, you cannot accurately determine a price for certain items using only data from traditional trading websites because of the lack of volume being traded on outpost and classifieds.

 

Botkiller weapons, killstreak kits and fabricators, collector's sets/items, and some genuine/vintages are some examples of these items.

 

When to use SCM.

 

The idea isn't to open up SCM as valid proof on every suggestion. You shouldn't be using SCM when there is plenty of data available on tf2oupost. SCM proof should only be used when other proof is lacking and the price gap between SCM and outpost/bp.tf is significant. It should become obvious to you in the examples to come.

 

Understanding the SCM.

 

Here is where I will explain the basics of the SCM.

 

 

This is a graph that shows the sales in the past week of the strange silver botkiller rocket launchers (mk. II). Every item on the SCM has a graph like this.

 

Points on the graph are plotted every hour. The price shown at each point is the median (average) price of every sale that happened in that hour followed by how many sales occured.

This graph shows about 80-100 sales in the past week. Now you may be saying to yourself, "well this graph doesnt show if the weapon had parts or it was painted", yeah I know but we are talking about 100 sales, you really don't expect all of them to have parts do you? Besides, when we use a value we derive from the SCM, it will be very conservative so any sales with parts would not skew the data much if at all.

 

If you scroll down, you will see the listings. This is just like bp.tf classifieds, you can look at it yourself. If you click on the "Buy Now" button on any of the listings, a window will pop up like the one shown here:

 

Now here is a very important part about the SCM and this is the fees. This is a major reason why the SCM was thrown out the door in the first place, the fees were to complicated to deal with. But we must get past them and it really isn't all that bad once you understand the way it works.

 

Fees are charged to the seller. The buyer pays an amount and fees are deducted from what the seller receives. Here you can see that the fees add up to 15%. All prices shown on the graph are the total prices that the buyers paid. In order to get the amount that the seller received, you just divide the price on the graph by 1.15. Do not multiply by .85, you will get the wrong value!

 

Converting wallet money to keys/ref.

 

This is where things get interesting; in order to be valid proof, we must show the SCM sale in terms of keys or refined. Doing this involves a lot of math and thinking but it is necessary if we are going to come up with a more accurate price.

 

The first step is to find a way to bridge the gap between wallet funds and traditional currency. Well, that's easy, keys are sold on the market! So our first step, really, is to get an average price for keys and for the item we are trying to price. (It is important to mention here that we are only going to be using keys as our go between currency, if you use your wallet funds to buy paint, tickets, or snag good deals, we are not going to put that into the equation.)

 

Keys are easy to figure out. The graph is pretty straightforward, just draw a line down the middle. I will be using $2.41 as the price of keys.

 

To determine an average price of the strange silver botkiller rocket launchers (mk. II) we must look back at the graph:

 

As you can see, the peaks level off at about the red line or we'll say $2.00. The troughs on average stay around ~$1.40. Since stranges with parts might skew our price on the high side, we will take a price near the bottom of the range. Let's say $1.50 just for an easy round number.

 

Every graph is not going to be this easy, sometimes the points can fluctuate a lot and you must consider unknown factors such as level, paint, and strange parts. But if you take it slowly and stay very conservative, you should be fine.

 

Here is what we know so far:

 

Keys = $2.41

s. BK rocket = $1.50

 

Now we can't just divide $1.50 by $2.41 to get our answer, Why?, because of the fees. We must figure out what to do with the fees valve deducts from each and every sale. There are three ways (four actually, but two of them give you the same value) to work our the fees involved:

1. Keys -> Items (Direct)
2. Keys -> Items (Substitute)
3. Items -> Keys (Substitute)
4. Items -> Keys (Direct)

• Keys -> Items (Direct)

 

What I mean by direct is that buyer is going from pure keys in his inventory to the item he wants. The buyer sells his keys for wallet funds then immediately purchases the item he wants.

 

Ex. Lets declare some of our variables:

 

Let the price of keys be $2.30

Let the price of our item be $115

Remember that fees are 15%

 

(I will be using these values for the other examples so remember them)

 

1. First, our buyer must sell his keys in order to acquire wallet funds. He will be selling them for $2.30 but remember that there is a fee for the seller so he does not get the full $2.30. To determine what he gets for each key, let's divide the price of keys by 1.15

 

2.30/1.15 = $2.00

 

2. We know now that for each key, our buyer will receive $2.00 in steam wallet funds. Now all we must do is see how many keys it takes to purchase the item our buyer wants.

 

115/2.00 = 57.5 Keys

 

There is your answer: 57.5 keys. To buy the item, our buyer must sell 57.5 keys. Why is this information useful? It tells us that the MAXIMUM our buyer will have to pay is 57.5 keys. We can use this information the same way we use buyouts; if we can show that it is cheaper to buy an item directly off of SCM with keys than the price bp.tf suggests, than it is likely time for an update.

 

 

• Keys -> Items (Substitution)

 

Substitution means that instead of buying keys, our buyer chooses to buy items instead. Whereas I began with pure keys in the previous example, now I am saying that our buyer already has some wallet funds and instead of purchasing keys, he decides to buy an item.

 

1. Our buyer starts out with X amount of wallet funds. If he decides to purchase keys, it will cost him $2.30 each. Instead, he will buy an item worth $115. To see how many keys he could have gotten we divide:

 

115/2.30 = 50 Keys

 

 

 

• Items -> Keys (Substitution)

 

This example is very similar to the previous example except I am looking at it from the seller's point of view. The money that the seller receives for selling his item is being substituted for the funds he would get from selling keys. We are trying to determine how many keys the seller would have had to sell to get the amount he received from selling his item.

 

1. First lets figure out how much our seller actually received from selling his item for $115. To deduct the fee, we must divide by 1.15

 

115/1.15 = $100

 

2. Now must find out how many keys the seller would have had to sell to get $100. The price of keys is $2.30 and since we are selling, we must deduct fees again.

 

2.30/1.15 = $2.00

 

3. All that's left is to divide the amount received from selling the item by the amount received if our seller had sold keys to find our final substitute quantity

 

100/2.00 = 50 Keys

 

As you can tell by now, both substitution values are the same. As far as being usable in proof, there is nothing much you can do with it except use it to come up with general prices for things you otherwise have trouble pricing. A great example to use the substitution method for is Killstreak Kits. Since KS kits are unmanageable to price traditionally, our only alternative is to use SCM for our pricing information. When you have a KS kit being added as sweets in a proof, you can now figure out a price for it with some level of sensibility and accuracy.

 

 

• Items -> Keys (Direct)

 

If you have been paying attention, you should know where this is going. Just like the previous example, I am looking at it from the sellers point of view, but instead of substituting, I am determining how many keys he could buy after selling his item. We are going directly from items in our sellers inventory to keys in our sellers inventory.

 

1. Just like before, our first step is to figure out how much our seller actually receives from selling his item for $115. Remember to deduct the fee.

 

115/1.15 = $100

 

2. Our second step is to determine how many keys he can buy with the money he received from selling the item. The price of keys is $2.30

 

100/2.30 = 43.5 Keys

 

That's it, our buyer was able to get 43.5 keys from selling his item. You should really only be using this method as proof that a item's price needs to be increased. What you are showing is that the bare MINIMUM number of keys the seller would be receiving is more than the current suggested price.

 

Recap: How to handle fees in different situations.

 

- Use Keys -> Items (Direct) when LOWERING a price.

Why? Because we are showing the maximum an items costs to purchase on the SCM, going directly from keys in your pocket to the item.

 

- Use Keys -> Items (Substitute) when DETERMINING a price.

Why? Because using either of the direct methods are too extreme, all we need is a general price to work with.

 

- Use Items -> Keys (Direct) when RAISING a price.

Why? Because we are showing the minimum number of keys received from selling an item on the SCM, going directly from the item in your inventory to pure keys.

 

Conclusion

 

In our example of s. silver botkiller rocket launchers (mk. II), if we are trying to raise the price we would use Items -> Keys (Direct) and come up with a value of ~.54 keys or 3.77 refined.  If we just need to determine a rough price, we use Keys -> Items (Substitute) and get a value of ~.62 keys or 4.33 refined.  If we are simply lowering the price, we use Keys -> Items (direct) and come up with a value of ~.71 keys or 5 refined.

 

The point I am trying to make is that the SCM has gotten to the point that it cannot be ignored. Some items are traded primarily or even exclusively on the SCM and to price them accurately and correctly, we need to look at all transactions made and not just those made on tf2outpost. If we learn to use data from the SCM properly, it will become a valuable resource for updating the prices of certain items. If we ignore it, sections of bp.tf's pricesheet will slowly become outdated and ignored as more and more users use the SCM to buy and sell those items.

[Cedarium]

I read that

[DiamondHavoc.]

Nice. I read it all. Cookehs please.

[Jacobmeister]

Pretty sweet actually, I've seen people use SCM as proof and it just hasn't worked out - maybe it'll become a more viable form of valuing items. Nice little tutorial!

[Teeird]

Base64 2.0

[The Radiated Banana]

This will get more precise prices,but we shouldnt look at mean prices. Someone might buy a crate for $500, but maybe there are 100 solds at 0.03.

[Python.]

I still don't believe this form of trading should single-handedly effect the low-end or high-end of an item

[Hugh Jazz]

This will get more precise prices,but we shouldnt look at mean prices. Someone might buy a crate for $500, but maybe there are 100 solds at 0.03.

Quote:

Every graph is not going to be this easy, sometimes the points can fluctuate a lot and you must consider unknown factors such as level, paint, and strange parts. But if you take it slowly and stay very conservative, you should be fine.

[Slocumruls]

This is pretty much exactly how I evaluate pro kits/fabs/weapons when buying/selling and it tends to be a very reliable method.