The current system where the seller discloses the offering price will not work in a stagnant economy, or whenever an item's supply exceeds demand. In a stagnant state like what we are in now, undercutting is too fierce, and is easy to do since you know how much your opposition is selling. It keeps driving prices down until there's no more incentive for sellers to produce that item.
A few nights ago I was trying to sell one stack of woolen cloth, there were 2 other suppliers, so I did what anyone would naturally do I undercut by a tiny margin. Turns out one of the other guys was actively watching and undercut me. Within 4 hrs or so, we volleyed back and forth 3 times each until I gave up and went to bed.
Some might say hey this is just a natural way for the market to find its equilibrium, but as a crafter I think this system favors the buyers too much. Now please give the following points some thought:
1) Say you have 7-8 crafters providing a single item where there are more sellers than buyers. Some of them are bound to be impatient sellers, they will keep undercutting and kill everyone's profit. With open descending prices, the price will fluctuate so much overnight.
2) So some crafters will lose out, what's going to happen to the items in their inventory, stuff will keep building up going unsold? Raw materials are so abundant via mob drops and leves, and gotta go somewhere and get processed, therefore supply of items are going to stay high no matter what.
3) In the future, there will be a short spike where weapons & armors will be in demand when 2.0 goes live. But when that wave of players cap their crafts too, the same old problem will happen again, excess supply blah blah blah...
This whole stagnation is caused by open descending offering prices. The ward system benefits the most recent supplier solely, it makes the economy really volatile, unfair and it shouldn't be that way. The classic auction house with closed prices should be brought back (I know it's still being considered for 2.0) to completely replace market wards.
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Alternatively, increase the prices for selling items to NPC's so crafters have a way out.
Sorry for the wall o' text, hopefully the developers will deal with this looming problem.
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02-19-2012, 06:15 PMlucas_bThings to address in 2.0: Open Descending Price Auction will not work
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02-20-2012, 02:53 AMRaldo
I don't have much to say about your post except this part...
...to which I respond with a big fat no, no, no, no, no, no, no, no, nooooooooooo. This creates money out of thin-air. The more money in circulation, the less money is worth--textbook inflation.Quote:
Originally Posted by lucas_b
It is my opinion that the core problem is that the supply of raw materials far outstrips the need and no manner of market finagling will fix the issue, but I can't think of any solutions for them to correct that problem. -
02-20-2012, 05:34 AMAmandaHuggenkissExactly, raw materials are worth more than finished items.Quote:
Originally Posted by Raldo
OP idea is bad, I am against it. -
02-20-2012, 06:22 AMSayam
What you describe is exactly how markets work in plenty of games with functional auction houses or other selling mechanisms. The reality is that if there are more suppliers then people that want to buy items prices should drop until some of the sellers leave the market because it is not worth their time. Making it so that the markets hides the value just means it'll take longer to get to the point you are already talking about. As long as there are more items then people that need them some will not sell and the price will get dropped. It might just take a few extra weeks. Ideas like materia as well as good consumable items are ways for items to leave the marketplace.
If they make adjustments in 2.0 so that items are generated and used in more similar rates this will help with the problem and undercutting will be a viable tactic for selling your items faster but not necessarily to get the maximum value out of them long term. -
02-20-2012, 08:09 AMN4RD
How about you make a FFXIV Crafters Union Linkshell ...? when a new small guy comes and trys destroying ur target prices with 5-6 stacks u destroy him for the next 2 days by all droping the item price down 70% less than its material Price " all agreeing afcourse " togather united .. when hes gone or vendored using npcs get the price back up ...
remember crafting is a smart peoples game ... dont craft somthing u might loss ... take ur time ... craft smart .. craft smart ... craft somthing sellble uncontrolble ... i wouldnt go into the Utsumi:ichi Raw materials bussnis ur gona get ur self killed i remmber thos guys they dont care if price drops they put 20-30 stacks using mules as well.. -
02-20-2012, 04:42 PMAsiaine
Isn't this illegal in most countries?
Not to mention mean?
Underlying problem needs to be address: Excessive and easy to obtain raw materials that have no value when crafted.
Most obvious and illogical example:
Oak Wood = 2,000 gil
Oak Lumber = 800gil
The only thing oak wood can become is oak lumber. So the minute you use your wood, you've lost money. As a Botanist/Carpenter, I chop up oak wood, sell it, then buy oak lumber. Saves me time and money, but is illogical ^.^; -
02-20-2012, 04:44 PMAsmerethttp://www.mooglebox.com/entries/oak-log.phpQuote:
Originally Posted by Asiaine
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02-20-2012, 05:44 PMAsiaine
Thank you for pointing that out. I had not noticed it was also used directly in a cane.
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02-21-2012, 02:17 AMRoaranI am one of these people, and I think I can help you understand why. Your distinction between buyers and sellers is something that simply does not exist. Everyone is a buyer, or what economists usually call consumers. Everyone produces and becomes a seller in order to consume more. Acquiring gil or money is not an end, it is only a means to an end - consumption. The real value of your currency is determined by the amount of things you can consume with it. If you want prices to be higher so you can acquire more gil, then, undoubtedly, you will not be able to buy much more with the extra gil you are acquiring through production. By working to increase profits of the producers, you invariably reduce the worth of the gil you earn and your real wealth.Quote:
Originally Posted by lucas_b
These 7-8 crafters role in the economy is to fulfill a need or want of the consumers. Excess supply means that consumers, willing and able to buy the items at that price, no longer need or want that item. Simply producing more at the same price and expecting profit is absurd. The only way to sell those items is to create more demand or reach more people that need or want it, but are unable to purchase at that price. The only thing the producer of the item can do is lower the price to reach a broader market. Only the developers can create more demand for the items by altering systems in the game itself, such as implementing the materia system.Quote:
Originally Posted by lucas_b
Another key concept is competition. Because you are not the only producer in the market, you must operate simultaneously with others. When supply exceeds demand, each individual producer makes a decision of the value of their labor and will decide accordingly to either lower their prices, shift production, or drop out of the market.
Typically the more effecient producers retain their profits at lower prices; and, because they are more effecient, they are rewarded with the business of consumers. In doing so, the economy is capable of having the most effecient production and providing the most goods and services at the lowest price.
Where you see stagnation, I see satisfaction. Try to imagine the FFXIV market as if it were real life. Everyone's needs or wants are essentially satisfied for the large part, so the only work to be done is in satisfying the needs of a very small sector of the market. If this were real life, we would all be happy and free to do whatever we wanted every day.Quote:
Originally Posted by lucas_b
That said, your attribution of the 'stagnation' being caused by the pricing system is not entirely accurate either. Causes in economics are typically VERY basic and always being limited to just a few things. When you step away from these very basic causes, you lose sight of the whole thing.
What's causing the current state of the economy is LACK OF DEMAND. There are no consumers who want the goods and services that are available. And there are many different reasons and solutions for this, but addressing the price system is not one of them. -
02-21-2012, 04:03 PMlucas_b
@Raldo, regarding increasing NPCing prices, after a bit more thought, you're right probably we shouldn't tamper too much or else it might give rise to gilselling activities etc.
@Roaran, thanks for the input. I consider myself as a seller and not much of a buyer because I churn out drops and local leve rewards into finished products, my sell to buy ratio is probably like 10:1. (Which illustrates why demand is so low in the market nowadays too, if the average player is just like me)
The whole undercutting/adjusting for equilibrium thing is understandable for the time being, and I'm willing to price my goods down in order to compete, even though it's a bit frustrating.
But just to clarify, my main argument is about the open price system that the wards use now. It benefits the newest seller to join the selling queue ONLY. So every new seller undercuts the previous seller, and at the current rate, more sellers join the queue than buyers buying out the stock on sale.
Whereas in the closed price auction house, 7-8 sellers MAY THINK THEY ALL have an equal chance to make the next sale, cancelling the need to drastically undercut the prices. By not knowing how much competitors would price their goods, every seller would undercut very little to minimize potential loss.
I'm not proposing a fix to excess demand, if I were I would ask SE to decrease leve rewards, change recipes etc, that would be a slightly different but more complicated topic.
Changing the price system is going to stabilize items prices (less undercuts) giving some reassurance to big sellers like me and other crafters out there.