Overflowing stupidity

[scarebearz]

But this thread isn't discussing 2 star items, at least not specifically. It's discussing how the market works in general for crafted items. (You're the only one here to have even mentioned 2 star items, and that sounded more like an example than an indication of the scope of the discussion.)

This thread has been discussing 2 star crafts since post#10 and most of the following posts have been referring them and using them for examples.

I may have been the first to use the term "2 star", but everyone else knew those were the items being referred to.

[Niwashi]

This thread has been discussing 2 star crafts since post#10 and most of the following posts have been referring them and using them for examples.

I may have been the first to use the term "2 star", but everyone else knew those were the items being referred to.

Well, there it's definitely just an example. The topic is broader than that. Don't get so tunnel-visioned that you can't see when an issue is broader than just the little piece of it you're looking at. The fact that I'm looking at the issue from a different perspective is part of why I could see points that you were missing.

[Wulfies]

Hi,

I do not know where we got off topic here in reference to the OP's topic. We are talking about having a blind bidding system as they did in FFXI. IMHO, it doesn't solve the problem and only tries to mask it. Please see my post (its #12 in the thread)

This is what I was getting at. Why would you lower your price when you could make full value? You feel that because you farmed the mats then crafted the item yours is worth less than mine when I was lazy and bought the mats? You deserve the full 250k profit where as my lazy self only deserves 50k profit because I bought my mats.

My only want is for a more unified crafting community with stable prices and decent profit for everyone but that's impossible currently because most people are selfish d-bags that can't stand to see anyone do as well as them.

To Ricon, I ask "why not?" I do not know what your goals are, but when I put crap stuff on the market, I want the product to move and collect my gil as quick as i can. To me, as a person who farms everything, my CoGS (Cost of Goods Sold) are next to nil except for the time it took me to farm the mats. As a merchant, my goal is to sell first and sell it fast. I want to move more product and if i can do that cheaper than you and still make more profit than you, i can and I will. This is a basic business model.

Lets say mats are worth and sell for 200k.

Player 1 buys these mats and crafts their item, they list it at 250k. (The going rate)

Player 2 farms his own mats and crafted the same item and lists it at 150k.

Player 2 is in effect losing 50k when it sells, as he would have got 200k just from selling the mats.

It may be "pure profit", but it's still 50k less profit than he would have had from selling the mats and 100k less than has he undercut by small amounts.


It's up to Player 2 what he does, but he's still daft for doing it xD

From a personal PoV I don't care much about this happening, I sold enough when few others were selling them.

To Scarebearz, I ask the following. If I know my product at 150k will sell in 2 hours vs 2 days at the "going" price of 250k, why would i not sell it? To me, even if the person buying it, is just going to "flip" it, I could care less because I have made my money and have moved on. As the great quote from The Godfather: Part III says, "It's not personal, its business."

But meanwhile player 1 is gaining 50k player 2 is gaining 150k and selling it easier...

+1

The mats themselves sell faster than the crafted 2 star items, so player 2 would in effect be paying 50k to sell his stuff slower.

In terms of selling easier, no 2 star stuff on Odin sells very fast, price has little effect on the rate these things sell, as long as they are sensibility priced.

So a 2 star 9 mat item on my server priced at 300k would sell at about the same speed as if it were priced at 200k.

This is not always the case, there are markets of both mats and fully finished products that sell faster than others. It is upto the seller to find these "niche" markets and take advantage of the demand before everyone else and get out when your "niche" market becomes flooded with sellers. This is plain vanilla business strategy.

To your sentence regarding "sensibility priced," I am unsure how an item can be "sensibility priced." Price is dictated by demand. As demand rises price goes up. As a business person, you need to find these markets in demand and exploit them before everyone else.

Lets say mats are worth and sell for 200k.

Player 1 buys these mats and crafts their item, they list it at 250k. (The going rate)

Player 2 farms his own mats and crafted the same item and lists it at 150k.

Player 2 is in effect losing 50k when it sells, as he would have got 200k just from selling the mats.

That's only relevant if selling the raw mats would have gotten him what he wanted. If gil is the only motivation, then yes, he could have gotten more gil by selling the mats. Doing so, however, would mean he gets no crafting XP. A lot of the items that get sold on the market boards are the by-products of leveling crafting, and any gil they may or may not make is secondary. In that case, the goal isn't to maximize the amount of gil, but to maximize the speed at which they sell, so you can free up inventory space for making more items.


Overall, I think ApolloGenX got it right, with:

It was never worth those ridiculous prices.

Just because someone overpaid more for mats than a finished product is reasonably worth, doesn't mean that everyone else needs to artificially jack up the prices of the finished products in order to match.

Isn't the point of selling on the MB to make gil? The crafting leves give far better exp/hr than just straight grinding.

Also, from what i've seen, by-products of crafting are generally alot lower than other mats because everyone is selling it and everyone wants their stuff to sell for gil so that they move on to the next item. This is further proof that the MB is there for gil.

In regards to ApolloGenX quote, an item is worth what people are willing to pay. Also, people need to add some "cost" for the "service" of creating said product. "Ridiculous" is a subjective term

You obviously know little about crafting, no non-50's would even be trying to craft 2 star items. (Or have the stats to even try)

For other lower level items, yeah you are probably correct, but that's not what I was talking about.

But this thread isn't discussing 2 star items, at least not specifically. It's discussing how the market works in general for crafted items. (You're the only one here to have even mentioned 2 star items, and that sounded more like an example than an indication of the scope of the discussion.)

For levels 1-49, people buying mats are presumably those who want to level their crafting, or perhaps just craft something for their own use, when they don't feel like taking the time to do their own gathering as well. They'll often be willing to pay a premium for that convenience by spending more on the materials than the finished products are worth.

At level 50 the incentive changes, as you no longer need crafting XP, but the economics aren't all that different. Mats still tend to be expensive because there's still relatively fewer people taking the time to gather them. For some players, that doesn't matter. They still want the convenience of being able to craft without gathering so they can make gear for themselves or their friends. For those trying to make a profit at it, however, they're going to have a hard time doing so if they're paying a premium for the convenience of avoiding the gathering part of crafting.

You are right, for 1-49 you are usually buying mats to skill up crafts, these products will generally have an equilibrium. There will be both a steady supply and steady demand. But, at the same time there will be mats that are in low supply therefore you pay a premium, in both price and quantity (remember you cant buy from stacks).

Also, there are always going to be "profit centers" that can be exploited, it's just the matter of finding them. For example, I recently had a run where I was resupplying some +1 products pretty much every 5 mins because they were selling like hotcakes. I do not know why, but the "market" soon dried up and the product is selling at their normal rate and price. People just have to keep their eye out.



Now circling back to the OPs quote. All markets you will have this. By making the current system a "blind" all you are doing is removing transparency from the market. I am a big proponent for market transparency.

[scarebearz]

To Scarebearz, I ask the following. If I know my product at 150k will sell in 2 hours vs 2 days at the "going" price of 250k, why would i not sell it? To me, even if the person buying it, is just going to "flip" it, I could care less because I have made my money and have moved on. As the great quote from The Godfather: Part III says, "It's not personal, its business."

You are missing the point of that example:

Tomb mats do sell a lot faster than crafted items.

In the example the mats total market value was 200k, the finished item undercut to 150k.

Regardless of if the 150k finished item sells faster than the other crafter's 250k item, the undercutter is still in effect losing 50k easy profit, by not just selling the mats.

The fact he farmed all the mats himself is irrelevant, while the 150k may be "pure profit", it's still a minimum 50k loss on the gil potential and a senseless move on his part.

[ApolloGenX]

You are missing the point of that example:

Tomb mats do sell a lot faster than crafted items.

In the example the mats total market value was 200k, the finished item undercut to 150k.

Regardless of if the 150k finished item sells faster than the other crafter's 250k item, the undercutter is still in effect losing 50k easy profit, by not just selling the mats.

The fact he farmed all the mats himself is irrelevant, while the 150k may be "pure profit", it's still a minimum 50k loss on the gil potential and a senseless move on his part.

This is why I generally just up the tomb items and sell those... but if someone was stuck with inventory, they might cut the price to recover their investment.... especially if it has been sitting a while.

Frankly, the amount of time to farm the tomb mats isn't worth the marginal upgrade of crafted gear... and the more people that have comparable gear and collect myth stones... the less valuable that crafted gear becomes.... there are lots of factors as to why crafted stuff gets junkier and junkier with time.

Even so, better to cut your losses then have an overpriced inventory item that collects dust...but maybe someone made the junk, because -hey they leveled crafting and want to make the high level stuff at least once... even if it is junk.

(Don't forget the mats also fluctuate... if those dropped massively, it might have made sense to slash price on the finished product)

[Zigkid3]

You are missing the point of that example:

Tomb mats do sell a lot faster than crafted items.

In the example the mats total market value was 200k, the finished item undercut to 150k.

Regardless of if the 150k finished item sells faster than the other crafter's 250k item, the undercutter is still in effect losing 50k easy profit, by not just selling the mats.

The fact he farmed all the mats himself is irrelevant, while the 150k may be "pure profit", it's still a minimum 50k loss on the gil potential and a senseless move on his part.

You aren't completely wrong, but not completely right either.

if someone sold a good farming their own mats so COGS was 0, then they made money technically. You are right though in that if someone sold that item for 50k cheaper for no reason at all then they lost money due to their opportunity cost. (a drastic example would be farming for mats that took hours to obtain and then selling the finished product for a measly 5k, which means they lost money do to their opportunity cost because they weren't adequately paid for their troubles). So you are right in that sense.

However, there could also being a reason to sell for cheaper than the total mats required if someone farmed the mats themselves, and this depends on the inventory turnover which depends on the elasticity for the product depending on if it's inelastic or elastic. Of course this is assuming someone farmed the mats, in which the amount of time they spent gathering mats and how much they feel their time is worth is subjective. Also if someone is specifically farming mats over and over down to a routine, knowing what they're making etc... as opposed to people who happen to get the mats over time, then to them the mats would be cheaper (to themselves) than the ones on the marketboard, because they gained the mats more efficiently than most people due to economies of scale. Of course this is all assuming someone farmed the mats.

Now assuming if someone bought the mats from the MB, then made the finished product and resold them...then obviously they can't buy 200k worth and sell for 150k, as they'd lose from COGS alone. In this case, say item X costs 200k to make but it can only sell for 150k. this would be because if item X didn't have much demand to begin with. As a result, sellers won't produce item X because it is unprofitable to do so (assuming everyone buys mats), then supply would go down to drive the price up to the point where it would be greater than or equal to 200k.

[scarebearz]

Snip.

I agree, my example does not take into account all factors, but it was used to hopefully illustrate the foolishness of someone selling an item cheaper than they could sell the mats.


In terms of 2 star items being sold way below cost due to silly undercutters, I believe this is the main reason:

A crafter has been selling a lot of 1 star items and other things fast on the MB, they gear up and think "I'm going to make and sell some 2 star items!".

They list the item and expect it to sell as fast as their other items.

After a few days or less they get worried that it's not selling and a large part of their gil is tied up in this item.

They keep dropping the price / undercutting in large chunks because they are desperate to get back whatever gil they can ASAP.

[scarebearz]

To your sentence regarding "sensibility priced," I am unsure how an item can be "sensibility priced." Price is dictated by demand. As demand rises price goes up.

Demand is not the only influencing factor on prices.

If an item is overpriced, it will not sell regardless of the demand.

E.g. No wind shards on the market, so someone puts them up for 100000 gil each, they will be high in demand, but nobody would pay that for them.

[Wulfies]

You are missing the point of that example:

Tomb mats do sell a lot faster than crafted items.

In the example the mats total market value was 200k, the finished item undercut to 150k.

Regardless of if the 150k finished item sells faster than the other crafter's 250k item, the undercutter is still in effect losing 50k easy profit, by not just selling the mats.

The fact he farmed all the mats himself is irrelevant, while the 150k may be "pure profit", it's still a minimum 50k loss on the gil potential and a senseless move on his part.

Your key point here is "gil potential."

There there are 2 assumptions that you are using that I would like to refute. 1) There is no guarantee that your material will sell for 200k nor can you guarantee when the materials will sell, but I do know my 150k product will sell before your 200k materials will. 2) you are setting a valuation on the sum of your materials that may not be universally held. See my quote below:

I do not know what your goals are, but when I put crap stuff on the market, I want the product to move and collect my gil as quick as i can. To me, as a person who farms everything, my CoGS (Cost of Goods Sold) are next to nil except for the time it took me to farm the mats. As a merchant, my goal is to sell first and sell it fast. I want to move more product and if i can do that cheaper than you and still make more profit than you, i can and I will. This is a basic business model.

My theory is based on quick inventory turnover. This is my business model and works well for me (this may not be something you like but no one is forcing you to use this method.)

There is an old adage: "A bird in hand is worth 2 in the bush." I will take my gil-in-hand over the potential more profits for me.

Zigkid3 succinctly states my point.

in some cases its better to sell for less if it increases your inventory turnover rate.
Say someone can gain a net profit of 20k at price point A, or or gain a net profit of 30k at price point B. Price point B is higher which will result in getting 10K more out of the sale but it'll sell less often.
Say after 24 hours, at price A you were able to gain 20k for each sale and sold 5, so 100k total. In the same amount of time of 24 hours if you sold at price B and gained 30k each you may only sell 3 and gain a total of 90k.
So in 24 hours, it was better to sell at a lower price and gain less profit per item, but you sold a lot more in the same time frame.

Also, the fact that he/she farms all the mats has everything to do with this. By farming the mats, you are reducing your CoGS thus increasing your profits.

Demand is not the only influencing factor on prices.

If an item is overpriced, it will not sell regardless of the demand.

E.g. No wind shards on the market, so someone puts them up for 100000 gil each, they will be high in demand, but nobody would pay that for them.

To use your example, if I really need a wind shard bad enough and I am unable to obtain it myself, then yes I would buy it for 100k a pop. More to my point, we both know that certain materials/product are farmed/crafted more than others.

Lets take something that isn't readily avail, for example lets use a Black Pearl Ring +1. Now this ring is required for your GSM lvl 50 quest. I was able to go 3/3 on creating +1s so I put the other 2 on the MB. Saw that there were no +1s on the market and the last +1 sold for 8k. So I put my 2 up for 20k (2.5x the market history rate.) Within 24 hours both had sold, but a few others found that out and price dropped (my "niche market" was over saturated but I sold what I wanted.) Yes, it was stupidly high compared to the "sensible price" yet it sold cause there was a demand.

[Megido]

Hi,

As a merchant, my goal is to sell first and sell it fast.

And what a great merchant you are.. Your goal should be to sell as high as possible with as little time required as possible. You on the other hand spend more time to sell at lower prices.