Introduction - Part 2

In this part of the guide we will be focusing more around short flips, I will teach you the basics of the art of flipping and hopefully after reading this you will be able to start your Runescape flipping career. If you are still unaware of what short flips/flipping is please refer back to part 1 of this guide. Please note you can always join the Runeguru clan chat or add me and Private message me on Runescape for additional advice or suggesting corrections for this guide.

 

 

What is a successful flip?

A successful flip would generally be defined as a flip where you have made a minimum of 1% profit on the money that you invested in i.e. 1 gp for every 100gp you put in. This number might seem low but if you flipped a cash stack worth 10m every day for a year, investing all profits back into flipping, you'd have roughly 380 million by the end of the year. Of course the general goal would be to achieve a better percentage profit, but the lower profit margins shouldn't be underestimated. In fact in theory it only takes making 2% profit every day on a 10m cash stack to reach a 14 billion cash stack by the end of the year.

 

 

Calculating a successful flip the easy way 

So obviously it's all good me saying a 1% profit is making 1gp on every 100, but calculating whether you'd make this profit on several random prices on several different products can be hard for some, so I have made an easy formula for you guys. The formula is the following:

Buy price of product/potential profit = Profit reference number                     where / means divided by

To achieve at least a 1% profit margin the number received from this calculate must be 100 or lower. This formula works a bit like handicaps in golf, the lower the number the better the profit is. A product with a profit reference number of 50 makes twice the profit of a product with a profit reference number of 100. I will go into more detail on the topic of profit reference numbers in the part 3 of this guide alongside other advanced techniques. But for now you need to know that for to be a successful flipper  you should always go for products with a profit reference number of  100 or less. Products with profit reference numbers over 100 are really bad and unless there's something special about the item you should probably never use them for flipping.

 

How to flip

 

Step 1 )  Choose a product

In my example I have chosen steel arrows, steel arrows is quite an actively traded product with 1.2m to 1.6m steel arrows being traded daily. I recommend choosing very actively traded products at the start of your flipping career, items such as ores, foods or runes, this is because you can flip them quite quickly and safely. As you grow in confidence you can try less actively traded/potentially higher profit items. Note: I will go into more detail in advanced guide.

 

Step 2 ) Check the margin/profit reference number 

This is probably the most important step of flipping, you want to make sure the margin will give you a minimum of 1% profit on the flip, so this means for every 1000 coins you flip, you should be getting at least 1010 coins back at the end of it. So for this we need to work out whether the profit reference number is 100 or less for this product.  So using my example of steel arrows first I want to work out the instant buy price. To work this out I put in an offer ridiculously above the actively traded price. In the case of steel arrows I put an offer in the G.E. for 50 gp to test actively traded price. 

As you can see I received 1 steel arrow for 34 gp despite putting an offer in for 50gp, this is because the grand exchange always matches your buy offer with the cheapest seller of that item, in this case the highest seller is selling at 34gp. Therefore 34gp is called the instant buy price.

 

Next I'll want to work out the instant sell price, I put my steel arrow on sale for 1gp and it sold for 32gp. This is because again the grand exchange matched my sell offer with the most expensive buyer of that time. As it sold for 32gp, this is my instant sell price

As you can see here, a quick comparsion, the steel arrow was bought by me for 34gp, and I sold it for 32gp. As it instantly sold for 32gp, this would be my instant sell price.

Now I'll want to work out my profit reference number, as steel arrows were being instant sold for 32gp, this will be the price I will be purchasing them at. The difference between the instant buy and the instant sell price was 2gp ( 34gp - 32gp), this will be my potential profit. 

So using the formula stated before: 32/2 = 16, this will be my profit reference number. 16 is an incredibly low profit reference number, meaning it's a good flip, for every 16gp I put in, I get 1 gp back.

 

Step 3)  Place the order

Now using the instant sell price (32gp in this case) place the order. I know the buy limit of the product is 7000 and as I bought one to test the margin, I can now only buy 6999 of them, so I place that in as you can see below. I also recommenend never undercutting unless necessary, I will explain why later on but since I've stopped undercutting my profits have blown up. My next section will involve teaching you the dangers of undercutting, how to over-cut using bot dumps and make huge profits.

 

Step 4) Sell at instant buy price and make easy money

The instant buy price here was 34gp so I will sell the arrows I bought at 6999. And finally here's a quick comparison to show you guys profit before and after flip. I made 13,998 off 224k. 14K might not seem as a lot but for the amount of money I put in, this is an incredible amount.

As you can see here, I bought 6,999 steel arrows at 32gp each for 223,968 and I sold them at 34 gp each for 237,996, making a 13,998 profit off just 223,968 gp!

 

 

Conclusion

Of course based on the example of steel arrows you might not think flipping makes good money as 14K is hardly a fortune. I used steel arrows as a very basic example, and it has very low steel arrows. For the money I invested the profits were good, flipping requires huge stacks to make big money, even if the product has a very high profit reference number. If I had done a bigger flip with the same profit reference number as steel arrows but used 24 million gp, I would have made over 1.4m in one flip. Of course finding products with high profit reference numbers is hard when you have more GP, but hopefully in my following parts to this guide I can provide some help. 

Please read part 3 for more information on flippers. In part 3 I will be providing advanced information  on flipping focusing more on undercutting, why you probably shouldn't do it, and how to make a huge profit from taking advantage of bot dumps.