Extreme Market Board Undercutting is a Problem. Who ultimately benefits from this?

[YojimboM]

Oh boy another undercutting thread my favorite! I undercut all the time, I just want my stuff to sell fast ( and this is the case for most players that do undercut ).

I don't care if my profit margin isn't huge, I'm still rolling in gillions. If someone wants to buy my cheaper items to try to relist, that's fine with me... I'm just going to keep listing more. I only craft and gather in game, I don't raid so I have time.

You know you're just losing money that way, right? Unless you only undercut by 1. Lowering a price drastically doesn't actually speed up sales. It's just like real life. When people want to buy something, they already have the money for it. If it isn't selling it's because there is no demand, not because it's too expensive.

If you do undercut drastically and get resellers buying your items instead, then you're creating a market bubble that won't last, and you just murder your own market for a long time and lose even more money.

All of the people with warped views on how markets work end up ruining it for everyone and themselves for the sake of being impatient and trying to fart out as many sales as they can instead of making real money.

[Kleeya]

You know you're just losing money that way, right? Unless you only undercut by 1. Lowering a price drastically doesn't actually speed up sales. It's just like real life. When people want to buy something, they already have the money for it. If it isn't selling it's because there is no demand, not because it's too expensive.

Lol what. I dont know in what ig and irl worlds you are living where there is no poor people, and where everybody is swimming in so much money that they can afford everything they want for normal or high prices, but it is not the same as mine XD

[Ultimatecalibur]

You know you're just losing money that way, right? Unless you only undercut by 1. Lowering a price drastically doesn't actually speed up sales. It's just like real life. When people want to buy something, they already have the money for it. If it isn't selling it's because there is no demand, not because it's too expensive.

You are wrong there. Lower prices can increase sales because buyers can have very different preferred purchase prices and purchase price limits. Something like a mount will sell slower when priced at 20 million than it will at 5 million and both will sell slower than those priced at 900 thousand even without a change in supply. Demand in general can be high for an object but high prices can shrink the number of buyers willing to make a purchase.

Undercutting by 1 gil or even 1% of the standard price won't noticable increase speed of sale, but a decrease of 5% or more likely will unless their is low or no demand for an object.

[Raven2014]

You know you're just losing money that way, right? Unless you only undercut by 1. Lowering a price drastically doesn't actually speed up sales. It's just like real life. When people want to buy something, they already have the money for it. If it isn't selling it's because there is no demand, not because it's too expensive.

lol what?

The people who "willing to pay" is just a subset of the people who "want" set. That means there are plenty who want but not willing to pay - depending on the price. The easiest in game example is glamour. I'm not poor, although whether I'm rich or not depending on who you ask (over 100mil) but I had never pay for map glamour (like Ao Dai, Quintess ...etc...) when they come out. I have a very specific price that I'm willing to pay for these items, and that under 200k.

Would be curious which country you live in since you cite "irl", since it must be one that doesn't follow the economy norm. Either that, or you're a super rich millionaire that have the only factor deciding your purchase is your "want" irregardless of what you have to pay.

[YojimboM]

lol what?

The people who "willing to pay" is just a subset of the people who "want" set. That means there are plenty who want but not willing to pay - depending on the price. The easiest in game example is glamour. I'm not poor, although whether I'm rich or not depending on who you ask (over 100mil) but I had never pay for map glamour (like Ao Dai, Quintess ...etc...) when they come out. I have a very specific price that I'm willing to pay for these items, and that under 200k.

Would be curious which country you live in since you cite "irl", since it must be one that doesn't follow the economy norm. Either that, or you're a super rich millionaire that have the only factor deciding your purchase is your "want" irregardless of what you have to pay.

Just because you don't want to spend over 200k on glamour doesn't mean there aren't people out there who would in equal quantity. I've sold high-priced crafted glamour for every single expansion for millions of gil per craft, multiple times per day. It has to be a very, very low demand item if someone is not willing to pay extra to get it. In which case, the price wouldn't be high in the first place. People aren't posting crafted glamour for ~5 mil without anyone buying it, you can check the sale history even. And for the record, 200k is an extremely low price for those kinds of things, no one would ever sell them that low when they're current because people buy them frequently enough at 10-20x that. Even a single material for the current map glamour costs more than that.

It's the same for something like a luxury car or bespoke tailored suit in real life. Those things cost exorbitant amounts of money but some of the most profitable companies in the world sell them. If the issue was ever really the price, then the seller goes out of business.

And when you drop the price of a high demand item, it creates a bubble, like I mentioned. Which is the thing everyone that has responded saying "lower prices sell faster" is forgetting. The price will rapidly crash and stock will deplete and demand will fall, then the price resets itself back to its original place. Sellers lose money or drop out of the market because their items suddenly become worthless. It ends up wasting time for everyone involved since then sellers start pulling items from the market to wait on the price to rise again. Keeping a steady, consistent price on an item is always the most sustainable way to sell, and undercutting by 1 is how you do it. It puts your items up first and also maintains the established price.

Lol what. I dont know in what ig and irl worlds you are living where there is no poor people, and where everybody is swimming in so much money that they can afford everything they want for normal or high prices, but it is not the same as mine XD

Poor people aren't buying luxury items. High end crafted items are not "normal" items. You don't go buy a $3,000 suit if you deliver pizzas. The same as someone that barely plays not buying a 3-5 million gil glamour piece. Most people's most valuable possessions are things like housing plots, since those are useful for everyone, and those cost a massive range of prices. And that's why, even being such a massive investment, even "poor" people save up to get them, because they are useful and desirable to have no matter what. Usefulness is more important than price or value, and that is always relative to the buyer. Sometimes people get lucky and catch super cheap deals on things, just like in real life too, but that is always the exception and never the rule because that is simply not sustainable.

[LineageRazor]

And when you drop the price of a high demand item, it creates a bubble, like I mentioned. Which is the thing everyone that has responded saying "lower prices sell faster" is forgetting. The price will rapidly crash and stock will deplete and demand will fall, then the price resets itself back to its original place. Sellers lose money or drop out of the market because their items suddenly become worthless. It ends up wasting time for everyone involved since then sellers start pulling items from the market to wait on the price to rise again. Keeping a steady, consistent price on an item is always the most sustainable way to sell, and undercutting by 1 is how you do it. It puts your items up first and also maintains the established price.

It's wasted the time of everyone trying to maintain the high price, certainly. But the undercutter? It's time very well spent. Their product has sold, and they have cash-in hand. They recognized that the market was due for a change.

Undercutting by 1 isn't undercutting at all. It's a cheap attempt to sell your product without actually bending to the market pressure. It works, certainly - up until the point where someone actually wants to guarantee a sale, and makes a MEANINGFUL undercut.

If the only way to sell your product is to undercut by 1, there's too much product. A more drastic undercut is not only okay, it's NEEDED. The price needs to move down to the range where folks will actually purchase it. Seventeen copies of a product at 800,000, 799,999, and 799,998 where maybe two have sold in the past week is not the sign of a healthy market. If I were to try to sell this item, I'd mark it at 700,000, or even lower. In the next week, mine would sell for certain, and maybe one lucky 799,998 would manage to sell, assuming folks didn't wise up and (Lower the price?).

[Kleeya]

Poor people aren't buying luxury items. High end crafted items are not "normal" items. You don't go buy a $3,000 suit if you deliver pizzas. The same as someone that barely plays not buying a 3-5 million gil glamour piece. Most people's most valuable possessions are things like housing plots, since those are useful for everyone, and those cost a massive range of prices. And that's why, even being such a massive investment, even "poor" people save up to get them, because they are useful and desirable to have no matter what. Usefulness is more important than price or value, and that is always relative to the buyer. Sometimes people get lucky and catch super cheap deals on things, just like in real life too, but that is always the exception and never the rule because that is simply not sustainable.

You seems to think that if you are poor and will never make enough money for that in your life, you dont want to buy luxury items at all, which its false. Someone who barely plays can very well still want this 3 millions glamour piece. Someone who deliver pizzas can very well want a 3000 dollars suit. But they can't because they dont have enough money for that, and never will. Now drop drastically your prices to 100 gils/100 euros so they can afford them right now, and what do you think will happen when they see that ? Do you really think they will not buy one for their personnal use ?

Each time i see someone complaining that they dont have money for this minion/mount/crafted item/etc at the market board, that's someone who would have buy it right away if the price was low enough so they can afford it. Thus speeding the sales instead of waiting days, even weeks, for a few selected rich ones to buy your items. You make less money per customer, but you sell more items, more often, to more people. And you are also making free space quicker for the next items to sell.

[Raven2014]

Just because you don't want to spend over 200k on glamour doesn't mean there aren't people out there who would in equal quantity.

I guess you don't do math.

- When did I say just because I don't there is no other?
- You seem to miss the part when I said "those who willing to buy" is just a sub-set of the "those who want"? That, or you don't understand the context of subset.

I've sold high-priced crafted glamour for every single expansion for millions of gil per craft, multiple times per day. It has to be a very, very low demand item if someone is not willing to pay extra to get it.

That's simply a concept of supply and demand. I'll let you in another secret of mine: I sale even the thing I want if I can fetch a good price for it, and wait to buy it back later for cheap. It's what I usually do with new EX primal drop. Even if I want the items for myself I still sell them for millions when supply is scared, and happily buy them back later for peanuts once everyone and their brothers have some to sale.

In which case, the price wouldn't be high in the first place. People aren't posting crafted glamour for ~5 mil without anyone buying it, you can check the sale history even.

See above, you missed the concept of "subset".

And for the record, 200k is an extremely low price for those kinds of things, no one would ever sell them that low when they're current because people buy them frequently enough at 10-20x that. Even a single material for the current map glamour costs more than that.

And for the record, I had bought almost every single glamour I wanted in the game, and had never paid more than 200k for them.

It's the same for something like a luxury car or bespoke tailored suit in real life. Those things cost exorbitant amounts of money but some of the most profitable companies in the world sell them. If the issue was ever really the price, then the seller goes out of business.

And how much a market share is those luxury? Do you think BMW sustain itself by making RollRoyce that is only made to order? Sure, I bet they make a lot of money per Roll Royce sale, but is that the majority of their profit? Or is it from the main stream sedan/SUV that they sold by the hundred thousands?

You seem to have a very narrow understand despite using big jargons, so let me spell two very simple logic for you:

First - Pricing for the most part bases on supply and demand. If like you said, you can post an item for 5mil a days several times, and can move several of such item a day, then there is no reason for undercutting. Undercutting only happens when supply start exceeding demand. I'm an omni crafter who had "lazily" made ~60million in this expansion, and it's a simple pattern. New patch - first week - big money. Say I made an armor set to sale, posted it, and it sold even before I finished crafting a 2nd set ... you think I would undercut during those time? Hell no, I was selling faster than I can make! But, does that trend last forever? It nose dived very quickly as each week went by for reason I already stated:

+ Demand drops among the "willing to pay". That doesn't say no one want it after the first rush, but the people who wanted and haven't bought it are the people who don't want to pay the price.
+ Supply increase as more crafter joining the market (finishing leveling, supply chain catch up). And this is when the undercutting happens. If I post the same armor and now instead of being sold within the hour, it sits there for a day, of course I will drop the price, because I want to sell 'more'. The reason why your 'irl' example is a laugh because the main principle of free-flowing economy is sale by volume. If you can chat up the people who had "billion of gils" in this game, you can see they practice the exact opposite of what you're preaching.


Second - Now, of course there are times when the undercutting happens outside the supply-demand chain. And I can guarantee you usually when that happens, it's not because people are dumb, rather it's the people who think "they are dumb" are the one being played. I don't do it any more, but in other MMO (like GW2) I had been part of "consortium" that can play the market - going through length from extreme price cutting to controlling the supply chain. Taking short term loss for long term gain, and I know there exist some crafter alliance in this game that as well. This actually peak during 3.0 when SE make crafting a hardcore content, and I would guess ever since they have tried to make crafting more simple/accessible to reduce the power of these alliances.

The point I'm making is if you see some kind of anomaly and attribute them as "people are being dumbed", I would advise not to question your better. Chance is, you're dealing with people with far more power and resourceful then you are. See how often these kind of topic pop up? Notice how many of the post with peopling ranting "it's not worth it any more so I stop doing it" kind of response? Guess what, that's exactly the intended effect. :P

[MomomiMomi]

You know you're just losing money that way, right? Unless you only undercut by 1. Lowering a price drastically doesn't actually speed up sales. It's just like real life. When people want to buy something, they already have the money for it. If it isn't selling it's because there is no demand, not because it's too expensive.

If you do undercut drastically and get resellers buying your items instead, then you're creating a market bubble that won't last, and you just murder your own market for a long time and lose even more money.

All of the people with warped views on how markets work end up ruining it for everyone and themselves for the sake of being impatient and trying to fart out as many sales as they can instead of making real money.

You're completely wrong on that. As others have stated, just because you have the money to purchase something doesn't mean you're willing to buy.

Want some real life examples? I never, ever buy video games at full price. I wait for them to go on sale. And even if a sale isn't good enough, I still won't bite. I'll wait until they reach what I consider them to be worth.

Or grocery shopping. A normal price for something might be 89 cents. I won't buy and will even do without it at that price. Even when it reaches 59 cents, I might buy a few, but not many. Once they reach my preferred price, 49 cents, that's when I buy a month's supply.

In-game, if something is too expensive, I'll either do without it, or I'll obtain it myself. For example, if I'm gearing up one of my jobs, and it would cost me 200k to purchase a set of gear, I'd rather just craft it myself. I can afford 200k easily. I have more than 1000x that much. But I'm not going to pay it.

Also, "too expensive" is a factor of demand. "Demand" is not only wanting something, but having the money and being willing to pay for it.

[DumdogsWorld]

Snip!

I envy you for being able to buy any groceries for 49 cents.