Undercutting

[dspguy]

So I had a conversation today with someone in my hunt party, and he brought up undercutting. When he said that you should undercut by only one gil, I told him that if someone does that to me, I drop my price by 1k. And he didn't like that. He said, that if you do that, the price drops, and all sellers lose money, but if you only undercut by 1 gil, then the price remains high for everyone.

The marketboard doesn't work like the real-world economy.

Normal people walk into a store (or go online) and make a decision to purchase a product for various reasons (emotional and financial). Players in FFXIV likely make the decision to purchase the item before they even see the price. Which means, it doesn't matter what the price history is. And it doesn't matter if the offers listed are 99996, 99997,99998, etc. Most players don't shop around.

So by undercutting by 1000 gil, you drop the market for everyone for absolutely no benefit to anyone. It isn't like if I drop the price of an item listed for 100,000 to 50,000 that there's a server wide message that shows up to everyone: "Attention: The Electrope Barding's price on the Marketboard has been reduced by 50,000! Report to the nearest Marketboard to check it out."

The discount you offer by undercutting is done in a vacuum. No one knows about it unless someone just happens to check the marketboard for that item at the time that they made the decision to buy that item and before the next seller comes in 1 gil lower than you.

A few expansions ago, I started completing all my crafting logs. I'd HQ everything I needed to complete the logs, then fill up all of my retainers with this stuff. On Day 1, I'd list it all and undercut by 1 gil. Let's say I had 100 items to sell. Given that ARR/HW stuff isn't the most popular, I wasn't expecting it to sell immediately. There was very little undercutting competition on this stuff, but there was some. I kept on top of it. I was the lowest seller on all of this. I sold about 40 of these items at highly inflated prices. I'm talking stuff like a Yew Longbow HQ for 50k when it costs about 300 gil to make it. By Day 7, I dropped price by 50% on everything left. No sales for another week on almost all of the remaining items.

I then got curious - and I dropped the price to about 10-20 gil over the vendor sale price. I probably sold about 3 of the remaining 50 items at that price. And I left it there for another week. Then I vendored it all.

My conclusion? No one was buying because no one was looking. It didn't matter how much I undercut (by 1 gil, by 1000 gil by 10% or by 99%). The decision to buy is made before the buyer checks the marketboard. It wouldn't matter if I was selling a level 30 craft that takes seconds to craft for 100x more than the cost of materials or whatever I was selling it for 1 gil more than the cost of materials. All that matters is that you have the lowest price at the very moment demand is present - specifically, when someone checks the marketboard to buy it.

Edit: Are they special cases to this? Of course - higher cost items, some players might just "check" to see if there's a deal. You know, like a 15M gil mount that someone listed for 1.5M by accident. But generally speaking, for the vast majority of what's on the marketboard, I'd say the above applies. Undercutting by more than 1 gil is fairly pointless and benefits no one.