LootMarket consistently advertise very large discounts on items compared to the Steam Market. It is common to see 15-20% off a Steam Market price. To see why, click here.
Key
LM = LootMarket
SM = Steam Market
Due to this discount, I wondered, could I make money by trading between markets. A little math cleared this up.
How do we make profit?
1) To convert the LM item price (X) to SM, we multiple by discount (C) so this becomes over 100% regular item price. For max profit, we want to find the largest discount between markets.
2) This item is sold on Steam Market, so lets take out the commission percentage (B) by multiplying the value before it by 1 * that commission.
3) Here, there are two ways to physically receive that value.
Variation 1)
4) Next, we want to sell this item on LM. So to get the revenue out of a Steam account into a LM account without taking a hit from people who convert items to cash, we would have to buy an item on Steam Market with a very low LM discount (D). This means when the item is transferred over to LM, we don't lose too much value on the item.
5) That item used to store the value of revenue we got from selling it on the SM. It is then sold on LM to get cash out. Let us take out the LM commission (A).
You don't make any profit until a 30% discount, which is sort of unlikely to find on LM. At 50% you would only make 10% profit, this nearly impossible. This is assuming best case scenario, and no price changes.
Assuming 10% initial discount (more likely) and most peoples commission of 10% on LM, you would not make profit until a 45% discount, which is completely outrageous, and ignoring risk factors.
No profit
Variation 2) Find someone who trades on steam market. If you can sell the items directly to another person who trades more actively on SM, you could find maybe 15% discount to them. If they trade exclusively on SM, they may find this profitable. If this is true, and assuming a 7% LM commission, which is achievable, you can start makin profit at 30% LM discount. Still pretty low margins, risky, and slow.
No profit
TLDR: The commission margins are so high on both markets you cant make money even if items were sold without price changes (which is even more unlikely).
