Why people is undercutting ? need gils, them want max sells, it give more gils than waiting.
How them do ? them is camping at retainer, they certainly do instance, but check all times they can and undercutting, the only thing to do is the same, if you wanna make gils you don't have other choice than fight with others.

The realy bad thing is compet with the Cheating also, i saw a group auto AOE and AOE heals for days in the same place.
Also Bot for crafting, when you see so much stacks of HQ of a item you don't know if them craft with or without any bot.

SE can detect Bots but not all way of cheating (any script that just enter command in your place it's a other story)

Spirits Bonding still a good way, i think Materia would be Hard to Oversupplied, them need times to farm them^^
And them sell fast.