I really don't want to moan about undercutting but....

*Shrug* I have no issues making millions of gil with aforementioned tactics but I guess I'm one of those "rich trolls" - whatever that means.

It's pretty obvious that the majority of complainers have little knowledge of economics beyond basic supply/demand curves though, so I'll just leave you to your speculations. Enjoy the markets (or lack of).

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Originally Posted by Lyrinn

*Shrug* I have no issues making millions of gil with aforementioned tactics but I guess I'm one of those "rich trolls" - whatever that means.

It's pretty obvious that the majority of complainers have little knowledge of economics beyond basic supply/demand curves though, so I'll just leave you to your speculations. Enjoy the markets (or lack of).

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There are a few issues with your post:
1) Just because you made millions doesn't mean you made as much as you could've; such a thing could be achieved by sheer volume of sales, even if you do intentionally cut into your profit margin. Realistically, however, there's not much to be gained by undercutting more than a few gil unless you do it to somebody who posts some ridiculously unrealistic price for an item or undercut by so much that people are going to wait you out (which is usually because you undercut so much that your profit margin is a joke).

2) Obviously misread my previous post. I stated that undercutting by 5-10k gil does NOT force people to undercut by that same amount (on, say, a Vanya's). It's just about enough that I can't buy and re-sell for a tangible profit margin b/c of tax. Instead, I either wait it out or eat the cut in MY profit margin if I want to sell it now. The only way for your statement to be true is for the market board to force it to be true through arbitrary restrictions, which would be a dumb idea BECAUSE rich trolls would post a glut of the item at a stupid low price and people would be forced to match it or undercut it by 5-10% to be "fair" unless they could buy it all out or wait a long time for it to clear. And with gil being a bit worthless, some asshole with a few million gil and an axe to grind could have some real fun screwing up the economy for a server for a few days.

3) You say that people complaining about those who post massive undercuts don't know economics, but I'm getting the very distinct impression that you've never effectively graduated from theory to practice, and like to quote theories you "can't be bothered" to recite (read: couldn't if you tried unless you copied from a book or website). The stuff I'm saying is not some massive insight that your average player can't understand, it's common sense that should be apparent 5 minutes after you start looking at the market board closely.

If my item is undercut and the market doesn't clear out in a week I do what any business would do fire sale the dang stuff. I don't want it in my inventory if it doesn't sell. I want it gone and I'll move to something with more liquidity. Sorry if you think that is under cutting but that is my business model. But you can be damn sure it is not by 11 gil.

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Originally Posted by Wilbow

There are a few issues with your post:
1) Just because you made millions doesn't mean you made as much as you could've; such a thing could be achieved by sheer volume of sales, even if you do intentionally cut into your profit margin.

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You're half right, because instead of looking for "best profit," I work within the context of "what is the most profit I can make given a select subset of items." As for the other half, if my goal was to maximize profit/time and I'm making more through sheer volume of sales ... I'm doing what I set out to do. Potential means little if it takes you weeks or even months to achieve. How do you think Walmart works?

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2) Obviously misread my previous post. I stated that undercutting by 5-10k gil does NOT force people to undercut by that same amount (on, say, a Vanya's). It's just about enough that I can't buy and re-sell for a tangible profit margin b/c of tax. Instead, I either wait it out or eat the cut in MY profit margin if I want to sell it now. Realistically, however, there's not much to be gained by undercutting more than a few gil unless you do it to somebody who posts some ridiculously unrealistic price for an item or undercut by so much that people are going to wait you out (which is usually because you undercut so much that your profit margin is a joke).

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You even said it yourself - if someone undercuts 5k~10k, you either wait it out or you take the steep penalty yourself to undercut. If you undercut by just 1, then you're almost guaranteed to have someone undercut you without blinking. The entire point of steep undercutting is to reduce the number of immediate competitors while simultaneously increasing potential demand, which increases the probability of your item being the cheapest on the list when the next demand comes in. From there, there are two basic possibilities: (1) the lowcutter just wanted to get rid of his item quick, so once it's gone, life can resume as normal, or (2) the person re-supplies at that same low price, which will likely start a crash. If option 2 is chosen, you actually get an interesting rubberbanding effect where prices will start high, drop to no profit, and then repeat over a period of time.

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3) You say that people complaining about those who post massive undercuts don't know economics, but I'm getting the very distinct impression that you've never graduated from theory to practice, and like to quote theories you "can't be bothered" to recite (read: couldn't if I tried unless I copied from a book or website). The stuff I'm saying is not some massive insight that your average player can't understand, it's common sense that should be apparent 5 minutes after you start looking at the market board closely.

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I guess all my market dealings thus far have been theoretical musings and not actual practice, and I just happen to earn millions when the average player can't earn even 2.

The reason I said that was because in every complaint thread I've seen about undercutting, the majority of them have been very simplistic in their reasoning and arguments. "Why make 4.5k profit when you could make 4999 profit?" Black and white arguments everywhere. Common sense is merely the big picture - the "my cost is this, my profit margin is that, I want to max profit margin." If that's all you look at, you're not going to make as much as someone who reads the small print. And if you've taken any sort of upper level economics, business, or statistics class or have experience in application, then you should be able to read the small print.

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Originally Posted by Lyrinn

You're half right, because instead of looking for "best profit," I work within the context of "what is the most profit I can make given a select subset of items." As for the other half, if my goal was to maximize profit/time and I'm making more through sheer volume of sales ... I'm doing what I set out to do. Potential means little if it takes you weeks or even months to achieve. How do you think Walmart works?

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Oh no, I completely agree with you there. You're goal in the long run is to make the most gil with the least amount of time and effort. But I disagree in that I think there's a difference between lowering profit margin to push it out faster and undercutting more than you have to.

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You even said it yourself - if someone undercuts 5k~10k, you either wait it out or you take the steep penalty yourself to undercut. If you undercut by just 1, then you're almost guaranteed to have someone undercut you without blinking. The entire point of steep undercutting is to reduce the number of immediate competitors while simultaneously increasing potential demand, which increases the probability of your item being the cheapest on the list when the next demand comes in. From there, there are two basic possibilities: (1) the lowcutter just wanted to get rid of his item quick, so once it's gone, life can resume as normal, or (2) the person re-supplies at that same low price, which will likely start a crash. If option 2 is chosen, you actually get an interesting rubberbanding effect where prices will start high, drop to no profit, and then repeat over a period of time.

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I go heavy on alch right now, so let's take an example:
1) It's Friday or Saturday, Twintania runs are in full swing, and I see a distinct lack of supply in the Mega-Pot of Vitality market. Easy cash.
2) I look at the previous sales, see that HQ sold for, say, 500-600 gil. I KNOW demand will be about 1.5x-2x as much as mid-week, and I can reasonably assume somebody being pestered to hurry up already and get to Wineport won't be price shopping, so I shoot for a final cost of 900 gil - 1000 gil, to be on the safe side (I have tried and succeeded with 1500-1600 gil each for Mega-Pots of Strength, which is about as ballsy as I've gotten so far). I post the pots, however, at 1100-1200 gil.
3) 95% of the time the pots sell at that price, or some person comes and tries to undercut me by 5-10%, putting it at around 1000-1050 gil.
4) I proceed to undercut by 5 gil and sell everything for more than I originally wanted. It works.


My grudge isn't so much with you (other than the "holier than thou" vibe you give off), but rather the person who basically bragged about going on a crusade and undercutting massively to try to spite people who undercut by 5-10 gil. It's a valid tactic, and works because people let it work.

And the reason why 5% undercuts don't usually work on the market board is because, unlike in many real life situations, the cost of reagents is NOT usually a massive limiting factor here, but rather the lack of buyers as compared to sellers. If I could, I'd make millions of gil in a day making HQ Madman's Whispering Rods for 500 gil and selling for 5-7k each; however, the fact that 10-12 get sold every day TOTAL even on a busy server is a major limiting factor. So do I give a damn if you go from 6.5k gil to 6k gil? No. I'm just going to post for 5.995k, sell it, and snipe the limited business opportunity. I'd rather have 23,980 gil before tax than shoot for 24,010 gil and get nothing.

That clarifies things a lot. If I was giving off such a vibe, then I apologize as that was not my intention. It's funny because

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Originally Posted by Wilbow

So do I give a damn if you go from 6.5k gil to 6k gil? No. I'm just going to post for 5.995k, sell it, and snipe the limited business opportunity. I'd rather have 23,980 gil before tax than shoot for 24,010 gil and get nothing.

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is exactly why undercutting and crashing happens in the first place, but that's also the same mentality I have when I'm playing cat and mouse on the market board. We're pretty much on the same page - well, minus the profit margin issue but we can agree to disagree there.

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Originally Posted by Lyrinn

The reason I said that was because in every complaint thread I've seen about undercutting, the majority of them have been very simplistic in their reasoning and arguments. "Why make 4.5k profit when you could make 4999 profit?" Black and white arguments everywhere. Common sense is merely the big picture - the "my cost is this, my profit margin is that, I want to max profit margin." If that's all you look at, you're not going to make as much as someone who reads the small print. And if you've taken any sort of upper level economics, business, or statistics class or have experience in application, then you should be able to read the small print.

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The reason I started this thread is because Vanya Robe of Healing is now selling for less than the NQ mats cost. It wasn't about maximising profit, it's about making any profit at all. I don't have a buisiness degree, nor do I use fancy lingo but I do know if the mats cost more than the finished item then sell the mats instead.

It kills me when I put something on the board for 4k (going rate at the time)... Then come back a few days later to see those items selling for 1k

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Originally Posted by Artemiz

The reason I started this thread is because Vanya Robe of Healing is now selling for less than the NQ mats cost. It wasn't about maximising profit, it's about making any profit at all. I don't have a buisiness degree, nor do I use fancy lingo but I do know if the mats cost more than the finished item then sell the mats instead.

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Your OP doesn't say at loss, it says very little profit. In any case, I don't see why this is such an issue. If you think the Vanya Robe isn't selling at a proper price, then buy it out and mark it up. Otherwise, there's obviously not enough demand to clear out the low-priced robes and people are just dumping them, or they think because they farm the mats themselves everything is pure profit (you'd be surprised how many people actually believe this). Do as you say and sell the mats or find other items that do sell for profit until the Vanya Robe market clears out. Not everything is going to be profitable at all times. If you're complaining about those people and not the act of undercutting, well, stupid people exist. Nothing else to say there.

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Originally Posted by Lyrinn

Your OP doesn't say at loss, it says very little profit. In any case, I don't see why this is such an issue. If you think the Vanya Robe isn't selling at a proper price, then buy it out and mark it up. Otherwise, there's obviously not enough demand to clear out the low-priced robes and people are just dumping them, or they think because they farm the mats themselves everything is pure profit (you'd be surprised how many people actually believe this). Do as you say and sell the mats or find other items that do sell for profit until the Vanya Robe market clears out. Not everything is going to be profitable at all times. If you're complaining about those people and not the act of undercutting, well, stupid people exist. Nothing else to say there.

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The bolded bit drives me nuts, honestly.
In truth I decided to test out my 2 star HQ synthing macro's, had never done one before so I wanted to make sure everything worked ok. I checked the market, found an item I could make 15k profit from (Vanya Robe) and then synthed it up. Macro's and everything worked great but by the time I'd revisited the market Someone had crashed it to 50k per piece. By the time I'd made my second post in this thread it was down to 47k (hence my change in profit argument)

All I've done is stored the one I made until the market recovers, it just baffles my mind as to why people put so much effort into leveling a craft only to not make any money using it because they can't undercut intelligently. I have no problem with undercutting per say, it's only when morons crash everything.