Undercut Hell

[Doki]

Before patch day I bought 8 of each "Pirate's" item for 2 character's 4 retainers, and 2 more to hold onto. I paid on average 500 gil for them and about half of them sold within hours of the patch going live for 25k a pop. However the remaining 6 or so dropped to 8k since people undercut so badly, even on items clearly in demand. Since the items were unique, I couldn't just easily buy them all up and resell them. I still got rid of all of them and came way out ahead, just annoyed that people suck so much at making real gil.

[Relaeh]

Everyone undercuts b/c their dumb and do not know the meaning of the word patience...you playing an mmo but are in a hurry.

[Kyoskai]

Everyone undercuts b/c their dumb and do not know the meaning of the word patience...you playing an mmo but are in a hurry.

[Canopia]

I just wish people wouldnt undercut by such large numbers and severely driving the prices down. There are so many items up on the block that are selling for less than their vendor value which is pure comedy. If you want to undercut a product just do it by smaller increments, maybe 1-3% of the previous value. So you can get yours on top and possibly keep the value of the item in question.

[Felessan]

Undercutting by massive ammounts is really stupid guys why do you do it.. it infuriates me and I am sure alot of crafters agree.

You are a margin trader - you trade relatively small amount of items with high margin and it's understandable that you become upset when someone undercut you heavily, eating away your margin.
The problem here is that there are also a volume traders and for them volume is important and for this they a) need a better demand, that achieved at lower price and b) want to get into a better selling position on a market to ensure that all of their volume will sell. Undercutting helps with both at once.

Large undercuts skip over this value and over time end up lowering the maximum fair market price. Lower it far enough and those people responsible for supplying the item will leave the market and you've created a scarcity. So now, not only have you made the economy less over all, which hurts everybody, but you've also made it harder to find those items you are looking for.

Economy is cyclical. Lower price spurs a much higher demand - thus by proxy a much higher demand in components. What is bad for crafters (working at breakeven prices) is good for consumers and gatherers (as high demand in craft leads to high demand in components thus price for them picks up). And vice versa - high prices means low demand and prices for components become depressed.

Everyone undercuts b/c their dumb and do not know the meaning of the word patience...you playing an mmo but are in a hurry.

I usually craft one day inventory of food and want to sell it in one day. For this price is manipulated so 80% of inventory could be sold in one day, and if there is oversupply or lack of demand - price is undercutted easily to prevent building up of inventory.
And if there is too much of a price war, I just leave this particular item market for several days as price will come back from breakeven spot eventually, no one want to work without profit for a prolonged period of time.

If you want to undercut a product just do it by smaller increments, maybe 1-3% of the previous value. So you can get yours on top and possibly keep the value of the item in question.

If you want demand to really picks up, undercutting by 1-3% will do nothing.

[kidvideo]

I just wish people wouldnt undercut by such large numbers and severely driving the prices down.

Also said by Microsoft after the Sony Playstation 4 press event.

[giantslayer]

Undercutting is fine, its how you make your sale, being the top of that list.. but do it by sensible ammounts and stop ruining the economy.

So what I hear you saying is that low prices for consumers caused by competition ruin economies?

[DenzelTaru]

So what I hear you saying is that low prices for consumers caused by competition ruin economies?

no what i am saying is dropping the price by 10-50k at a time is ruining it.. i knew i would get many trolly answers or answers like "so its only good if it goes your way" people fail to see what it does when people drop it like that..

a 1gil price war is alot better than a 10k war..

[Nyalia]

I used to think like you did, and then I started crafting more with more money banked. There were many, many times recently when I've undercut by thousands, if not tens or even hundreds of thousands. For instance, 2.4 comes out with a trivial way to get FC3s, but a high need for FC3s. The market is doing well at first because people don't realize what's changed, so you undercut by only a bit. You don't want to overcut, because other people are going to realize the trick soon enough, so you want things to sell ASAP. Then, someone else starts undercutting you, probably doing the same thing as you. You need to sell quickly before the price totally tanks, so you undercut by more, and more, until you're undercutting from 500,000 to 200,000.

Remember, if you make 10x items and 1 item sells at 500,000 and 9 sit there until the price tanks to 100,000, but you could have sold 10x at 300,000 in the same time, and the item cost you about ~30,000 each to make, you've just gained 1,350,000 instead of 2,985,000, and that's assuming you even managed to sell the 9x at 100k when others have figured things out and the market is saturated. For FC3s, the market price stabilized (for now) at 70k, when they were selling for 500k when the patch hit. If I had left all my FC3s at pre-patch prices just to avoid undercutting people, I'd be a lot poorer right now.


Also, consider more common examples, which have all happened to me.

A retainer brings you back a semi-valuable item you have no use for. You are constantly selling things on your retainers and rarely have enough sale spots for everything you want to sell. The item is selling for only 15k, but you want to sell some materia for 100k-500k in that spot. If the cheaper item sits there too long, you lose profit. So, you can either vendor the 15k item, or put it up for like, 10k and have it sell super fast so you can get back to selling what you wanted to.

You've made tons of equipment for Spiritbonding. Then, the market shifts and now the most valuable materia is of a different class (DoH instead of DoL for instance). You have two sets of the old equipment that you haven't started bonding yet, and you want to make room in your inv for the new SB equipment. The old stuff is selling for about 20k each. You have ~22 items to sell, since you had two full sets of it, so you want it to move fast. So, you put it up for 10k-15k each to get them out of your inventory quickly. Sure, you could have just discarded the items, but selling 22 items for 15k each is a good 330k, which is hardly nothing.

Or, let's say an item is up for 2m. The last sale was 2.5m, but that was weeks ago. It's been sitting at 2m for a long time. You get one. Do you put it up at 2m just to avoid undercutting, and let two sit there forever, unbought? In that case, I would put it up for 1.5m, undercutting by 500k. If it didn't sell in a reasonable time, I'd drop it further, possibly as far as 1m. Chances are higher of new market influx dropping the value way below that than the chance that someone will buy yours at the higher price, where it's sat for weeks unbought.

There are tons of other situations too. You made the wrong item and want to get rid of it asap because you're annoyed, and you just want to get back the cost you spent to make it. You made a bunch of items for desynth and then realized there was a cheaper way, so you wanted to get the gil back that the materials cost for the items, or at least soften the blow to your wallet. You need initial capital to get started and buy bulk materials. You were given the items as payment for services rendered in lieu of gil (yes, that has happened to me before). You need an HQ mat and get an NQ one instead, so you put up the NQ mat at cost hoping to quickly make the money back you spent. You want to clear inventory space on your retainers, so you want things to move quickly, so you undercut by a lot to facilitate that. You're about to go on vacation and won't be able to log on for a few days, but you want things to sell while you're gone that are currently depreciating in value, so you undercut a lot hoping the others selling them will hesitate before lowering their prices to match.


So, in short, there are plenty of reasons that are, to me, totally legitimate for undercutting. I used to stay in a fairly small market and got pissed when people broke into it with seemingly unreasonable undercuts. Then, I stopped whining and learned to live with the flow, constantly changing markets as holding items when the sale value gets low but I think it'll go up.

Just because something has a specific value to you doesn't mean it has the same value to them. To me, the difference between an item selling at 20k with the others and not having it sell, and undercutting the others by putting the item up at 15k and having it sell, the difference is one way gets you 15k, one gets you nothing.

[Meshico]

I am fully prepared to get shot down in this thread by the undercutters themselves but I just don't understand these people and it's driving me insane.

TLDR

Undercutting is fine, its how you make your sale, being the top of that list.. but do it by sensible ammounts and stop ruining the economy.

and I am not interested in any trolly comments they won't be read or responded to, I put this up because I believe its valid and the sensible people here will agree

Undercutting by one gil, really infuriates me more than someone undercutting by 175k, for the reasons already stated.

In this very specific instance...I'm ok with what has happened. (for reasons already stated.

The moral of the story is, don't undercut by 1 FRIGGIN GIL.

Good luck in the future and read these posts carefully to learn something...or just reinforce something that you have forgotten.

-Tari