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.