Please Undercut Wisely

[Zfz]

When enough people undercut "unwisely", the "wise" ones are over-pricing.
In an MMO, the value of an item ultimately is decided by how much people are willy to pay for it.

[MomoOG]

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?

If the perceived value of the BUYER is 10k (meaning people are buying the item at a reasonable rate at 10K) then it is bad business on your end to drop it down to YOUR perceived value of 7k. Undercutting by a tiny amount to get to the top of the list make sense but to drop it by 3k even though the buyers are still willing to buy at 10k is just silly unless you are Robin Hood and are trying to give money away for altruistic reasons. However, if the item is not selling at a reasonable rate at 10k then it makes sense to try and bring it down to a price where it will sell at a reasonable rate.

[Lstkaws]

If the perceived value of the BUYER is 10k (meaning people are buying the item at a reasonable rate at 10K) then it is bad business on your end to drop it down to YOUR perceived value of 7k. Undercutting by a tiny amount to get to the top of the list make sense but to drop it by 3k even though the buyers are still willing to buy at 10k is just silly unless you are Robin Hood and are trying to give money away for altruistic reasons. However, if the item is not selling at a reasonable rate at 10k then it makes sense to try and bring it down to a price where it will sell at a reasonable rate.

Actually that is exactly what steel mogul Andrew Carnegie did. He dropped steel prices and massively undercut his competition (or threatened to). Granted he was vertically integrated, but the principles the same. Moving inventory fast has a lot to be said for it; if you can keep it cycling. Works especially well with high volume items (consumables and the like).

[ApolloGenX]

Considering you can get diremite easily from both mobs and from leves, there's no surprise that someone came in and blasted the price with volume.

Cutting your profit on a per item basis to quickly move volume is a viable strategy. You might make less per sale, but you can make more per day in volume.

I love how these whiny threads about undercutting keep popping up.

Volume sales strategies only work on common or easily procured products... which is why I find the whining so hilarious. You are crying that you can't overcharge for some common junk, because someone is just flooding the market and taking profit on volume.

Stop pretending you are selling something valuable and trying to gouge. Understand that you are selling common junk, and that if you want to overprice it that's fine...but don't be surprised when you aren't competitive.

When I get bored now, sometimes I just look for "crafters" trying to rip people off in the market and I will flood the market with items at a low price. New players that don't know that it is junk might be fooled and actually get ripped off... so I put stuff out there on the cheap so they can get it and keep leveling. I still make a profit, but I'm not trying to get rich on one sale like some people.

[Inquisitor]

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?

As long as that 7k is enough more than market price of the materials to net what you consider a reasonable profit, then no, you aren't a low-life even though you are undercutting. But if you sell it for less than the market value of the materials then you are NOT making a profit, even if you farm all the materials yourself. That last part is important and something a lot of people just can't see, to understand. If the market cost of the items you've gathered is greater than the price at which you sell the finished product then you would have been better off just selling the materials and not bothering with the crafting.

Edit: I know the poster I'm replying to did not mention materials being 'free' as some others have said. I'm just clarifying the difference between sensible undercutting and, well, stupid undercutting.

[Astarica]

Stop pretending you are selling something valuable and trying to gouge. Understand that you are selling common junk, and that if you want to overprice it that's fine...but don't be surprised when you aren't competitive.
New players that don't know that it is junk might be fooled and actually get ripped off... so I put stuff out there on the cheap so they can get it and keep leveling. I still make a profit, but I'm not trying to get rich on one sale like some people.

A lot of people can't seem to get over the fact that the item/service they provide is junk and therefore the correct price tends to settle toward junk.

And what you describe really only matters to crafting materials. If you're a brand new player with absolutely no clue how the game works, you'd quickly come to the conclusion that no finished product in the level 1-49 range is worth paying for given you can do FATE while naked. I've put level 40 HQ weapons for 200 gil before and it took a while to sell, and I'm pretty sure I was not being undercut by anyone. In some cases I am the only seller. People simply don't have a need for these things. A lot of people seem to live in this parallel universe where people constantly buy gear upgrade as they level from 1-50 even though there is no incentive to do this whatsoever. You don't need it for FATE grinding, and if you do dungeons, you'll have better.

[OldGeezer]

As long as that 7k is enough more than market price of the materials to net what you consider a reasonable profit, then no, you aren't a low-life even though you are undercutting. But if you sell it for less than the market value of the materials then you are NOT making a profit, even if you farm all the materials yourself. That last part is important and something a lot of people just can't see, to understand. If the market cost of the items you've gathered is greater than the price at which you sell the finished product then you would have been better off just selling the materials and not bothering with the crafting...

Who made material suppliers the authority figure on the setting of prices? Maybe the material crafters are gouging the other crafters, who then in turn gouge the final customer. Two wrongs don't make a right. If I don't follow this plan I'm a low-life? Pardon me for not being a lazy-ass and making the materials myself. If someone wants to spend 7k on mats and sell a finished item for 8k that is their choice, However, if I go out and get the mats myself, I don't have to sell the same item for 7k. I can sell it for 5k and I make more money instead of buying mats. I don't need big piles of money to fil the coffers of the material suppliers because I don't buy things from them anyway. I should not be penalized or ostracized due to other people's laziness.

[Inquisitor]

Who made material suppliers the authority figure on the setting of prices? Maybe the material crafters are gouging the other crafters, who then in turn gouge the final customer. Two wrongs don't make a right. If I don't follow this plan I'm a low-life? Pardon me for not being a lazy-ass and making the materials myself. <snip>

That doesn't make you a low-life. But if you are selling the finished product for less than what you could get by selling the materials then you are being rather dim-witted. Not evil, but very ignorant.

Edit: I don't consider undercutting to be immoral except in cases where some jerk says, "Ha, I've got so much gil that I can cause the market for fleece to collapse just for the fun of it!" Taking the opportunity cost of gathering your own materials into account is in your own self interest.

Edit 2: Your idea that people who don't gather their own materials are lazy is ignorant and insulting. If you work in a steel mill, are you considered lazy because you didn't go out and mine the iron ore (and coal and misc other minerals used in a particular alloy) yourself? If you work in a car assembling plant are you being lazy because you didn't mine the ore and smelt it yourself? Not to mention the glass, plastics, circuit boards, and everything else that goes into a car. If you run a retail outlet chances are you didn't do anything with the merchandise except buy in bulk to resell in smaller amounts at an increased price. You must think retailers are REALLY lazy.

[zdub303]

As long as that 7k is enough more than market price of the materials to net what you consider a reasonable profit, then no, you aren't a low-life even though you are undercutting.

Net cost of materials for an Aetheryte Ring on Coeurl atm would be between 900-1200 gil based on crystal/cluster prices. Most items you're still making a 500-600% profit margin on Coeurl, I think most people just perceive that 60 seconds of their time to be worth more than a few thousand gil.

[ArmorKing]

I love it when people undercut the current trend by 50% in desperation to "sell now".

I grant their wish, then relist their product back to the current trend and enjoy the (basically) free Gil.

Funny thing is, this happened to a friend of mine. He listed at 800. Undercutters went 799, 798 etc. So he listed more at 500, 499 etc. They answered by pulling their 799s and relisting at 450, 449. He bought up/pulled everything under 800 and reposted all at 800 and sold.

There ensued a slew of cursing on /shout from the "aggrieved" undercutter. It was glorious.