Please Undercut Wisely

[Mitski]

The bulk of your profit is made from other crafters, which makes the whole thing a Ponzi scam. Ponzi scams are not sustainable, and add to the fact that most MMORPG decline on a server level after launch, the pool of suckers to make your money from is ever decreasing, so you have to be very aggressive. If you're playing on say WoW when it was new, you could afford to be less aggressive because the game was clearly growing so you figure there will always be new suckers to buy your stuff, but you can't do that here.

The second person in this thread to misuse this term Ponzi Scheme.

"A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from existing capital or new capital paid by new investors, rather than from profit earned by the individual or organization running the operation."

Personal sales you make in FFXIV are not a ponzi scheme.
-There are no investors
-Real profits are earned

I'm sick of people using (or attempting to use) terms they don't understand to sound impressive.

[OldGeezer]

Hence why I said I don't advocate strictly doing one method or the other. If I have time, then of course I'll go farm the mats myself.

But the way things are on my server at least, I'm still selling faster than I can craft for half the day. Mats cost average 3k, items sell for 10k+. I'm not competing with other farmers for hours to make an extra 3k when my retainer is standing around with open slots.

Maybe one day, I'll go super tryhard and build a stochastic model just to see how much downtime for farming I have. Too much effort for a game though.

Well a 70% margin is great. Level 40+ item, I take it. If you can still make 70% a few months from now I will be very impressed, because you're not making that on the middle-tier stuff unless you do it yourself.

[Astarica]

I'm sick of people using (or attempting to use) terms they don't understand to sound impressive.

So you're tired of hearing yourself?

An item like Twinthread is produced by a crafter that can only be sold to another crafter. While in theory the buyer of the Twinthread can turn it to say, Militia Robe, this is overlooking the fact that whoever made the original Twinthread most definitely can make Militia Robe as well. The reason the seller of the Twinthread did not turn this into a Militia Robe is because he already figured out there isn't a market for the finished goods, so instead he sells it to other crafters, making the whole thing a Ponzi scam. Even raw materials like Cobalt Ore is almost certainly from one crafter to another, given DoL jobs are generally harder to level than DoH jobs. Crystal shards are almost certainly mined by someone who have crafting skills at some point (unless that person realized from the get go that leveling up crafting is clueless), and is of course is only useful to another crafter.

While the market for finished goods is not a Ponzi scam, this is also rather limited. For example the high 40s jewelry sells at a decent price, but my server's log reveals 10 of those has been sold per day, and there isn't exactly a significant barrier of entry to make such things. Even here, most of those sales are likely to be used in spiritbonding, which is one of the few recurring consumable goods in this game. I can sell an Aethernyte Ring at 500 gil and turn a profit, though at that price I might be better off selling Gold Ore or Rose Gold Nugget instead, which again goes back to the Ponzi scam.

[Lstkaws]

There's this thing called opportunity cost. In the time it takes you to farm all the random mats and shards (especially shards) to make "pure profit," I'll likely have sold more in the same time for a total profit greater than what you earned...

Depends on the current cost of shards. Shards go directly to overhead. You need to figure this in as cost and use the derivative to ensure it is the most efficient way of doing business. These days shard costs are generally low enough that buying shards is by far the best use of ones time. I usually make sure they are under 20g a piece as that is the cutoff for me to make my profit margin in a down market.
If shard costs were high it would make sense to vertically integrate that portion of the process.

[Mitski]

*SNIP*

I'm still waiting for the part about the investors, the fraud, and the illegitimate profits. Please continue...

[Tiraelina]

...

It couldn't possibly be a leatherworker that doesn't have weaver buying the twinthread.

Not even remotely possible.

[Lyrinn]

It couldn't possibly be a leatherworker that doesn't have weaver buying the twinthread.

Not even remotely possible.

Shh, let him live under his rock in peace. There is no interaction between DoH classes.

[Jynx]

Why would prices on any item remain high when there is a massive overabudance of all materials?

If your higher prices were fair then you would still sell them even if people decided to undercut you, the problem is that people are able to generate more supply and sell at a lower price threshold than you are willing to drop to. It's not their problem that you refuse to lower your prices to compete with market demand of a slow selling or (Fast selling but quickly supplied) item.

If the cost of goods is outweighing the cost of aquisition you need to switch to another market there are still a good deal of sustainable items but like I said if the game continues to de-emphasize crafting and make the generation and aquisition of materials childs play there will never be a real market in the game. Just front loaded gold rushes when new items appear.

[zdub303]

At this point, we're at the inevitable conclusion to the market.

What people are charging for finished goods is raw material price + perceived value. Perceived value mostly being the time input that goes into making that item (being the time it took to level and gear the class as well as the 45-60s you spent going through your macro rotation to make it HQ.

Considering raw materials are worth almost nothing due to an overwhelming supply that could never keep up with demand... most items are pretty much selling for their perceived value. Well... everyone has a different perception of value.

It takes me about a minute to turn 3 gold ore into an Aetheryte ring... I see a lot of people selling these rings for 10k+ while I will happily sell them all day for 7k.

Am I being a low-life undercutter or just selling for what is the value I place on the 60ish seconds it took to make that ring?

[MomoOG]

see above ^ when i am undercut on a flooded market logically (by 1 or 10 gils) i will undercut the market seemingly illogically. i do this because 1) you've made me mad, 2) because i am baiting the rest of the sellers into undercutting me again, and again. to the point where you are selling at a breakeven or below cost price. at wich point i will buy your items and pull all of mine from the market. then i wait a day or 2 and put the items back up after market corrected itself. stop scratching your head

1) If you are undercutting because you are "mad" then you are undercutting based on emotion and not logic. Therefore it is not "seemingly illogical".
2) Your second point is banking on the assumption that the other people are going to get baited. This is of course at the risk of selling your own stuff cheap and the people who are trying to bait don't even get baited. Most people can do basic math and figure out where they break even you know?
No I think I'll still keep scratching my head thanks.