Please Undercut Wisely

[DenzelTaru]

some people really misinterpreted my OP and or forum title.. some that are replying to me or the topic sound like they didnt even read what i said

i didnt write this to moan about undercutting..

i simply wanted to say.. if you are undercut.. undercut at a sensible rate.. don't drag an item through the dirt, cos people go off the current selling price that they see.. so it doesnt matter if it usually sells at 1000g for instance, if you undercut to 500gil everyone will start undercutting you.. and then another you will come along and drop it even further.;.

yes economy blah blah.. but we are in charge of this economy..

[Astarica]

Unless you've nothing to do other than updating your price on your retainer, undercutting by 1 gil is a very bad strategy, because it's very possible the moment you leave town you'll find someone else undercut you by 1 more gil. Let's take Fleece, something that actually has a dependable demand. On my server the last sales tends to be around 300 gil, and there are usually at least 100 sellers of Fleece. What do you think is the odds that you'd be able to put up Fleece at 299 gil without any of the other 100 sellers noticing and responding?

No, you need a drastic undercut in a display of force. It has to be at least 250 gil if not 200 gil. This tells other guys "Don't mess with my prices unless you want to drag the price of Fleece to rock bottom", and this will usually work. If it did not and someone then puts up Fleece for 249 gil in response, then that also tells you putting 299 gil had almost no chance of working (the guy putting 249 would certainly put 298 as well). In this case, unless you've nothing better to do than updating your prices all day, a price war is inevitable. Someone willing to go 249 gil will certainly match your 299, 298, 297 and so on prices.

Additionally, when dealing with items that sells in low quantities (based on market history), you often want to go low enough to tempt the other sellers into buying your item in hope of propping up the market. This is because there's a very good chance you might not sell the item at all. For example if I see market history shows a given item has been bought 3 times in the last week, I should not expect this item to be bought at all.

[Claire_Pendragon]

Ya, I hate this, and don't understand it, but I have a few friends who all do this.

Something sells for 50,000g, and they will under cut it to 1,000 or less.

I'm like "Why?"

Them "I just wanted to clean my inventory out, I dont care about the gil."

In almost every scenario, its always because their bags are full, and u can only sell so much at a time.

So technically, the real enemy is inventory space, and limited AH sales.

[Reiterpallasch]

It's quite simple, I can sell around like, 15 of those 3k items a day when people go "Wow, that's cheap compared to the one that sells for 10k!" And thus I have made 45k while the person who sells the item for 10k has made 0 gil.

Or you could sell for 9,999 instead of 10k, and people will go "wow, that's cheaper than the one that sells for 10k!" And thus you will have made 149985 instead of 45k without completely destroying the market for a particular item.

[Astarica]

It's amazing how much wishful thinking is involved in these 'undercut by 1 gil' theory. Let's take something that moves in relatively high volume like Fleece. Let's say you see 5 listed at 300 gil, the last one bought was at 300 gil, so I guess the 'undercut by 1' theory guys would conclude 299 gil is totally the right price to sell it.

But if 300 gil is the price the market will pay for this, why are the 300 gil sales still there? Is the magical buyer just not buying right now? If you actually tried to put Fleece up for say 250 gil, you'll find that most of the time it takes an hour or so at least before it sells. It's certainly not flying off the shelf as soon as you put it up. Honestly, do people seriously think there are these buyers constantly looking at fleece and say, "I totally won't buy that at 300 gil, but the moment it drops to 299 gil I'm going to buy it up!" It usually takes at least an hour before I sell my vastly lower price one. Whether this is because someone immediately undercut me again or not, I don't know, but if it takes an hour to sell at 250 gil, how long do you think it'll take to sell at 299 gil? You really think no seller will noticed that someone put up a 299 gil in the next hour for your sale to remain the lowest?

Now, something that is sold in low quantities you might be correct to assume that the magical buyer is just not on right now (since the item is bought rarely, it must not be very frequently checked), but then again what makes you think all the other guys wouldn't notice you put something 1 gil below the previous high in the time it takes for this buyer to show up? The only way you can be sure is if you've nothing better to do than updating retainer prices all day, and I guess if you do that, yes you can just lower 1 gil at a time, though you'll probably find that there are guys just as bored as you that will quickly go one lower.

[Inquisitor]

Ya, I hate this, and don't understand it, but I have a few friends who all do this.

Something sells for 50,000g, and they will under cut it to 1,000 or less.

I'm like "Why?"

Them "I just wanted to clean my inventory out, I dont care about the gil."

In almost every scenario, its always because their bags are full, and u can only sell so much at a time.

So technically, the real enemy is inventory space, and limited AH sales.

I wouldn't undercut to that degree but there are definitely times I post things at less than what I would like simply because between the gathering and crafting I don't have the space to hold items until the market for them improves.

PS We actually need a posting fee like most other AH systems. It would really cut back on the constant relisting just to undercut and make for a more stable market.

[Dorin]

If you are buying the materials to make your items, then you are crazy. I gather all my stuff, and barely buy anything from vendors; all profit.

Hmph.

You know what they say about time, and how time means money, right?

You can make a lot more of money by buying the materials you need instead of gathering them yourself. By doing that, you are actually losing money.

[Boa-Noah]

It's the same way in TF2 and most markets controlled by the user, everyone wants to sell their items and make the gold, everything for sale is earned in one way or another by players thus the value of those items are determined by how each individual values them, the problem here is that in the rush for quick sales to make dosh the best way to do that is to undercut, we all love a bargain right? Of course we do, so slap that bad boy down for the half the price of your competition and BOOM you just made a sale, however the next schmuck that comes along has the same idea so he undercuts, and then someone undercuts him, and soon the market is flooded with lower and lower costs, especially if demand is low as players will continue to pile on the discounts throughout the day.

Eventually the price has permanently dropped by a large margin and it'll continue to plummet until there's a form of equilibrium, usually when the price is around 10-15k, that's when people start nickel and dimeing each other, everyone wants to make money after all and less than 10k is chump change.

Unless it's materia, in which case if there is no demand there is no value and thus they're slapped on the market for less and less until it's not even worth it to convert that materia, much like the elemental materia, no one can use it, no one wants it, it's like playing those scratch and wins and instead of winning enough to cover your ticket you just lost out on 10$ with a dud card that isn't worth the paper it's printed on.

[mindful]

Called real world economics supply and demand. With the cheapen wal mart sells That will happen. One thing on this game. You will notice that certain days of the week mon-thurs less players less supply and demand for the popular items the prices will increase to a peak on friday morning then from friday to sunday the prices drops down a ton from more people playing on the weekend. So you can buy up on the weekends and try to save for the sells on weekdays. This only works if other people not doing the same thing. Yet like any time or day might be having to wait longer for the max profits or You can try to sell many items like the wal mart and target stores strats were you sells. For small profits on the dollar but a lot items.

[rex1976]

don't undercut unless you're really hardup for gil or if you are clearing out junk inventory that you would drop on ground or sell to npc to clear up space. i was getting really frustrated with undercutting and decided to just keep an inventory 4 pages on each retainer. when i log on i check my items for sale, and if the market value has dropped below a 400% markup i pull that item from market. with 4 pages on one retainer you have 100 items ready for market at all times, when you're inventory drops to a point where you cannot put a 400% markup on 20 items it is time to restock. i craft for about 5 hours/week(no life gamer), and make roughly 2M in sales each week 1-1.5 of that being profit. once your gil and inventory are straight you can actually take advantage of people who undercut you, making you happy to see them stuck with inventory that you collect by baiting them into undercutting you to a point where you know you will make a 200% plus markup on their items in the near future.