Silk Road forums

Discussion => Silk Road discussion => Topic started by: Fallkniven on March 29, 2013, 07:29 am

Title: [Solved] Question about shipping prices and hedging.
Post by: Fallkniven on March 29, 2013, 07:29 am
I know 1.5 bitcoins a year ago was a reasonable amount of money for stealth shipping and i would have happily paid that for a $90 order. But i'll be damned if i'm paying $150 for shipping for that same order today.

Can shipping prices be hedged like listings can be? If not, then Vendors need to update their shipping prices as the price of bitcoins fluctuates.
Title: Re: Can shipping prices be hedged? It's getting very expensive.
Post by: Wadozo on March 29, 2013, 09:15 am
I think they already are. The coins for shipping and held in the same spot (Escrow) as the coins for the order itself. Would seem very strange to me if shipping costs weren't hedged when the actual order is. I must say, I haven't come across any vendors charging excessive costs for shipping in my travels. Keep in mind that there may be some vendors who don't hedge their orders at present, which may be the cause of an increase in shipping costs if they haven't adjusted their price.
Just realized I have basically repeated your final comment in your post Fallkniven. Sorry about that.
Title: Re: Can shipping prices be hedged? It's getting very expensive.
Post by: PhilipJFry on March 29, 2013, 03:57 pm
Hedging protects against value loss of coins, it is of no use when the coins keep going up.

The shipping costs are converted to the actual coin value before they are displayed. There is no need to adjust the shipping costs manually, since this is already done automatically by the sr system. This is valid for hedged and unhedged items.
Title: Re: Can shipping prices be hedged? It's getting very expensive.
Post by: laplace on March 29, 2013, 05:20 pm
The shipping costs are converted to the actual coin value before they are displayed.
Do vendors enter the actual shipping charges in dollars?
Title: Re: Can shipping prices be hedged? It's getting very expensive.
Post by: danknugsdun on March 29, 2013, 05:48 pm
The shipping costs are converted to the actual coin value before they are displayed.
Do vendors enter the actual shipping charges in dollars?

No not entered in USD, entered in BTC. If a vendor doesn't peg their listings to USD then the BTC price will not change on the listing. I'm sure most if not all vendors peg to USD, they would be stupid not to.
Title: Re: Can shipping prices be hedged? It's getting very expensive.
Post by: Fallkniven on March 29, 2013, 09:03 pm
Personally, i have my account set to show all listings in USD, not BTC amounts. But saying that, the drop-down shipping menus always display BTC prices regardless.

So, to my question, do vendors need to manually update their BTC shipping prices to stay at the same USD amount as bitcoin values fluctuate?
Title: Re: Can shipping prices be hedged? It's getting very expensive.
Post by: Wadozo on March 29, 2013, 10:14 pm
As PhilipJFry (a vendor) posted, all shipping costs are hedged automatically by the SR system, whether the actual item ordered is hedged or unhedged. So, the shipping costs are always pegged to the US Dollar, meaning $130 for shipping is way too much IMO.
Title: Re: Can shipping prices be hedged? It's getting very expensive.
Post by: Fallkniven on March 29, 2013, 10:33 pm
Cool, thanks for the responses people :)

I guess i won't be making that purchase after all... $130 to ship a 1/4 oz of weed, fuck that! ;)
Title: Re: Can shipping prices be hedged? It's getting very expensive.
Post by: Wadozo on March 29, 2013, 10:40 pm
Can't say I blame ya!!  :o That's certainly an expensive postage option.
Title: Re: Can shipping prices be hedged? It's getting very expensive.
Post by: RxKing on March 30, 2013, 09:32 am
Did you try messaging the vendor and tell them about the ludicrous price for their shipping?  I believe 99.8% of vendors list there prices in dollars....he must be the .02 that has them in btc...as that shipping price is ridiculous..



On a side note...the question you asked originally ...would make zero difference.

The hedge option is just for the vendor and has NOTHING to do with the buyer. When you are a vendor, and you hedge an item, you are paying SR 6% to guarantee that whenever the buyer finalizes...the price you get for the coins..is the exact same as when the item was bought. That means up or down you get the price the btc was valued at in SR at the time the buyer paid for the item.  This is something that could be useful if you are a vendor that has items that could take more then 5 days for the buyer to finalize...or in some  weeks. And they don't want to gamble/take the risk of coins going way down in that time. Also you can't choose to hedge single items. Either all your items are hedged or none.

The problem is that over the past 13 months...the btc has only gone up... And when you hedge you don't get the upside. So if your item sells for $50 then you get $50 whenever the buyer finalizes. Now lets say at the time you sold the item the btc was valued at $50 per coin. So the buyer paid 1 coin. Well in your account you only see $50. Not the 1 btc. So if the btc is valued at $100 at the time the buyer finalizes in 2 weeks...well you will get in your account the amount of btc that equals $50....in this case you would get .5 btc......Minus of course the 6% juice you paid.

I think there are a lot of vendors that don't understand this..but there seems to be a even more buyers that do not understand. So even if the buyer had the item hedged it would not change what YOU paid as you know exactly what you are going to pay before you put in your pin # to buy the item. And of course the shipping is included in that final price. It is not separate.

So if I am selling a pill for $30.00 each and the btc is worth $30 at the time of the sale and it is hedged, I of course will get $30 for that pill when the buyer finalizes. In fact in our accounts there is a tab for BTC and for dollars when our items are in escrow...if you are a vendor that does not use the hedge system, like myself, then that is always $0. So what I see is the number of btc I have in escrow, the number of btc i have in my account that are mine, and then I see the value of the coins I have in my account  minus what is still in escrow.  I would have to take a calculator out to figure what the escrow account is valued at.

If I was to use the hedge system,  I would not see the btc in escrow as that would be zero. And in the hedge box I would see a US dollar value. And that dollar value stays the exact same regardless of what the btc is doing...so the amount in my account of the btc's I have is always going up and down...but if  I were to use the hedge system, the value of my escrow account waiting for the items to be finalized would never be changing.

So either way it does not affect the buyer what so ever.

Now there is a way the hedge option could affect you....if you were to put an order in with an un-hedged order..and that vendor refunded you..he would be refunding you the actual amount of btc you paid. Not the dollar amount you paid. If it is a hedged item, you will get a refund the dollar amount you paid....not the btc amount. I think that is what confuses people.

I have had people place an order on Saturday at 5pm my time..so there is no way for me to ship it until Monday. So when they bought the item btc was worth $50 each. Now on Monday it is 10am and I still have not shipped it...but now btc has gone up to $60 a coin, so they have messaged me to please cancel the order so they can re order at the new price of the btc. It is bullshit but I understand so I will cancel the order...but I will not let them reorder. Because if it go's the other way, I would never cancel the order.

The real truth is that every single buyer on here only gets btc because they have to use it to make a purchase. So they should get the btc, make the purchase and care less what the btc value is. But of course greed is natural and if people can make a few bucks they will. And that is what it usually means..... few bucks.


Title: Re: Can shipping prices be hedged? It's getting very expensive.
Post by: Wadozo on March 30, 2013, 09:53 am
Nice post RxKing. +1 to you. Clear, concise and to the point. Factual information from actual vendors is always well received, especially from those such as yourself.  :)   
Title: Re: Can shipping prices be hedged? It's getting very expensive.
Post by: Fallkniven on March 30, 2013, 08:52 pm
I think you might have misinterpreted my question RxKing. I was curious as to whether the shipping costs are hedged. Not the items cost itself, i am aware that the items prices, if hedged, will show fluctuating bitcoin values. (Or am I wrong in thinking that the item and shipping prices are 'separate' items?)

I dont recall seeing the BTC prices in the shipping menus ever fluctuating. They always appear to be a static BTC price, no matter how much bitcoins go up in value (or am I wrong here too? and they actually do fluctuate in the menus and i just have not noticed?). That's why I brought it up in the first place. Because the listing i was watching remained at $90 due to being hedged to a dollar amount, but the shipping prices for the item were not changing their BTC value.

Two vendors that I have now asked about their super high shipping prices, have apologized to me and lowered their shipping prices dramatically.
Title: Re: Can shipping prices be hedged? It's getting very expensive.
Post by: RxKing on March 30, 2013, 10:28 pm
I think you might have misinterpreted my question RxKing. I was curious as to whether the shipping costs are hedged. Not the items cost itself, i am aware that the items prices, if hedged, will show fluctuating bitcoin values. (Or am I wrong in thinking that the item and shipping prices are 'separate' items?)

I dont recall seeing the BTC prices in the shipping menus ever fluctuating. They always appear to be a static BTC price, no matter how much bitcoins go up in value (or am I wrong here too? and they actually do fluctuate in the menus and i just have not noticed?). That's why I brought it up in the first place. Because the listing i was watching remained at $90 due to being hedged to a dollar amount, but the shipping prices for the item were not changing their BTC value.

Two vendors that I have .asked about their super high shipping prices, have apologized to me and lowered their shipping prices dramatically.

I understood you totally. But you are saying a few different things. In this last message that I have quoted... Both things you put in parenthesizes happen to be correct! Sorry :-[  Also you are using the word hedged to in the wrong sense. I know what you mean to say. But there is also what I explained earlier...that a vendor could be one that hedges his items or a vendor that doe snot hedge. Either way that would in no way affect you the buyer and in no way would that affect the shipping price. If you read what you are saying in this message you are saying that an item is set to the dollar but the shipping is set to the btc. Well in fact both are set to the same thing and in this day and age...99.8% of vendors have their listings pegged to the dollar not the btc. You are using the word hedged. But hedging is different all together. So to go back to your original question, yes you are just missing that the shipping actually fluctuates. Just like the item price to the ever changing bit coin. So you are always going to pay the same price in dollars but obviously not in btc. So when the vendor had $90 shipping it was a mistake by the vendor...that is why he changed it. And yes you have just missed it.

But your original question was can you hedge shipping because when you wrote that you assumed incorrectly that the shipping did not move but the item did. When in fact both do. As we set shipping and item price to the dollar. But your question was can shipping be hedged. Well that question is a no. As shipping is "included" for all practical reasons when a vendor is in fact on the hedge system But again that is just for him and not you.

So basically you asked the wrong questions based on your thought process of the way shipping works as you thought that it did not fluctuate based in part on seeing a $90 shipping price..from not 1 vendor but a couple. But I believe I have it covered and I have your questions answered! 

Did I say it correctly?
Title: Re: Can shipping prices be hedged? It's getting very expensive.
Post by: Fallkniven on March 30, 2013, 10:57 pm
Yes :) Thank you! All is clear as crystal now ;)