Silk Road forums
Support => Customer support => Topic started by: hackattack2077 on August 05, 2013, 08:56 pm
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Hi,firstl,I would like to clarify on some points. Could someone explain a little better what hedging and exposing escrow means? Second,Ive been taking a whack on all my sales so far. Say I just put up a listing for 70 pills that cost 1400 bucks and the customer paid an extra 20 for overnight shipping. How does my account only have 1360 in it,when it should have 1420? Am I getting screwed here? I thought the commission for sr was only like 4percent. Also,what does pre and post commission pricing mean? Like I have a 500 dollar listing,and its set at 532 already? Sr's commission is 32 bucks out of my 500? But on top of that,I dont even get my original 500 dollar asking price. Its like Im getting whacked 3 times more than what Im supposed to. Ive had to pay for overnight shipping out of my pocket like 3 times now because the money does not add up of which I should be getting. What am I doing wrong? If I want 100 bucks for an item,what do I do to make sure 100 bucks is in my account after the transaction is over. Not like 80 bucks. Am I messing up on the pre or post commission thing,or expose/hedge escrow option? Please help,Im losing money thats not mine.
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If you do pre-commission pricing then the comission will be added to your asking price, you are most likely seeing the loss due to hedging. According to the seller's guide you'll get about 4% less per transaction by using hedging, you're basically paying 4% for the privledge of using USD instead of BTC.
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hi, I'll try to answer your questions as best I can:
1. Could someone explain a little better what hedging and exposing escrow means?
Answer: hedging protects you against the fall of the bitcoin price. If you sold an item to a customer for $200, and the price of the bitcoin was $100/bitcoin when the customer made the purchase, he pays you 2 bitcoins for the item. Those 2 bitcoins are now in escrow. If you do NOT hedge your orders (expose escrow), then you receive 2 bitcoins when the customer finalizes the order and releases the funds, no matter what each bitcoin is worth. If the price of the bitcoin went down to $90/bitcoin during the time the order was in escrow, when the customer finally releases the funds, you essentially only get $180, because you're paid 2 bitcoins. You lost $20.
If you hedged your orders, when the customer releases the funds, if the price of the bitcoin went down to $90/bitcoin, you STILL get $200. Now, you pay a percentage for this service, so you actually receive $200 minus 4% = $192. Still better than $180. But, if the price of the bitcoin goes up during the time your funds are in escrow, you don't get more money, you still receive $200 minus the hedge fee. If you expose escrow and the bitcoin price goes up while funds are in escrow, you do make more money. So it's a gamble. For me, I definitely hedge my orders, the bitcoin price is too volatile for me to gamble. I don't want to have to worry if the price of the bitcoin plunges 30% while my funds are in escrow that I lose that much. I'd rather just get paid the same amount that I charged and the hedge fee is worth that peace of mind.
2. pre or post commission pricing.
Answer - ok SR fees are more like 10 or 11%, not 6%. And hedge fee is 4% more, so you could pay up to 15%, that's why you are seeing a lot less in your account. If you want to get $100 for a listing, hedge your orders, make your listings pre-commission pricing, and put like $104 in the box when you make your listing. In that case, if you put $104 for the price, the customer is charged the SR fee and he will see it listed at something like $114. Then you get $104 from the sale, minus the $4 hedge fee = $100.
QM
Hi,firstl,I would like to clarify on some points. Could someone explain a little better what hedging and exposing escrow means? Second,Ive been taking a whack on all my sales so far. Say I just put up a listing for 70 pills that cost 1400 bucks and the customer paid an extra 20 for overnight shipping. How does my account only have 1360 in it,when it should have 1420? Am I getting screwed here? I thought the commission for sr was only like 4percent. Also,what does pre and post commission pricing mean? Like I have a 500 dollar listing,and its set at 532 already? Sr's commission is 32 bucks out of my 500? But on top of that,I dont even get my original 500 dollar asking price. Its like Im getting whacked 3 times more than what Im supposed to. Ive had to pay for overnight shipping out of my pocket like 3 times now because the money does not add up of which I should be getting. What am I doing wrong? If I want 100 bucks for an item,what do I do to make sure 100 bucks is in my account after the transaction is over. Not like 80 bucks. Am I messing up on the pre or post commission thing,or expose/hedge escrow option? Please help,Im losing money thats not mine.
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Thank you guys,you really made it easy for me quality meds,youre the man! I like how you kinda spoonfed it to me,better than the sr customer support answer I got! You guys are awesome. And now I know what I have to do.
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One more question,how to give you guys +1 karma lol?? Its got something to do with my post count right?
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You can give karma when you hot 100 posts.
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Just recommending that you read the SR wiki. It will answer a lot of your questions, make you a better seller, and keep both you and your customers safer.
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^^^^This
Thread locked as resolved.