Dealing with big undercutting

[Archaell]

Hey there, as a crafter it is quite easy to see some undercutting being done on day to day basis which is part of the job, I have been pondering about what to do when players are decreasing price of items by 50% and more.

One or two items are not a big problem, but when they are crafting the stuff in higher quatities than demand is it gets almost impossible to keep up the price up by reselling their junk.

What do you do in this case? Do you accept their price? Do you get the item to material costs and wait till they give up crafting it? Do you stop selling the item yourself?

It is kinda difficult to find an effective solution to this problem, so any suggestions are welcomed.

[Squigley]

What do you do in this case?

Rage a bit in FC chat and then craft something else to sell. I usually keep my stockpile of to-be-sold stuff and keep an eye on the market. The undercutting is rarely a permanent thing.

[Cleanse]

Depends on the item honestly. If it's a big piece I know will sell at the higher price, I wait it out. If it's just small ingredients, you can wait to sell your stuff on a better day or turn it into something bigger that sells.

It's annoying, but it's not common.

[LineageRazor]

There is nothing anyone can do, no matter how wealthy they might be, that will make a LASTING change to the markets. Remember that. The markets are controlled by supply and demand, and while a seller can cause ripples by flooding the market with a cheap product, that will last only until that seller runs out of product. At that point, the markets will rebalance according to supply and demand. If, after rebalancing, the price is lower or higher, it is no different a change than would have come about naturally.

There is no "true" price for any item, and reselling with the purpose of trying to keep an item going at the same price you're used to is both silly and doomed to inevitably fail. (Now, taking advantage of the low prices to resell for profit, that's fine - so long as you're savvy enough to recognize when it's time to get out of the market.)

When a seller is flooding the market with cheap product, it generally means that they have a surplus of that product that they're trying to unload. For example, they may have been using that recipe to level up. Or maybe they made the foolish beginner's mistake of seeing a valuable item on the markets, and thought that they'd be able to sell at that price no matter how many items they put up, only to learn the hard way what happens when supply overwhelms demand. In rare cases, you have wealthy individuals who think they can monopolize a market by "starving out the competition", much like how monopolies can form in real life - unfortunately for them, unlike in real life there are no "start-up" costs for a business in this game; folks driven out of a market by cheap product can return to the market instantly once prices become favorable again, meaning the wannabe tycoon has wasted a lot of money for nothing.

In any of these cases, it's best to get out of that market and craft something else until the flooder runs out of merchandise and the prices stabilize again.

Never depend on a single item to be your marketboard "cash cow". Diversify; make a variety of things to sell, and when the market gets bad for any of them, stop selling those items for a while.

[Katlyna]

Lineages post was excellent general advice about how the market behaves and what to think about. Functionally speaking there are a number of things I personally do (and recommend to friends) based off the logistics/behavior which Lineage describes.

First for any market where a large quantity of goods are suddenly dumped you have three obvious choices:
A) Buy up the goods and resell them at your own pace.
B) Undercut the current prices
C) Wait out the undercutter staying at your current price

The question becomes which of these works, and under what circumstance.

When Option A is best: Generally if the item at hand sells at a high selling throughput (lots of sales per day), option A is often ideal. You buy up the goods at the lower price and then sell them at your own pace later in the week. Often times I do this with items which are heavily stocked Mon-Wed and then price jump Friday-Saturday. Many high throughput items behave like this on our server so buying them up is a logical tactic. Note as Lineage mentioned you do have to be careful though, and recognize when the market throughput is dropping or getting unhealthy and consider leaving the market as sales dwindle (without getting caught with left over goods).

When Option B is best: If the item has a lower selling throughput (few sales per day), you have plenty of capitol, and the seller is new to the market I will oftentimes simply match their price at the bottom or undercut them a healthy chunk lower. If you price match or undercut you'll eventually get a sale. If I still make a healthy chunk you can re-enter the market and repeat another sale (matching or undercutting). If you undercut them a healthy amount lower, reprice faster than the other person, and repost the same time you will ultimately discourage them from entering your market (our outright drive them out of the market). Generally I use this if I'm making large percentages of profit in a slow selling market, and believe I can hedge out someone new by swinging my big butt around. Its NOT the nicest thing in the world, but it does drive a certain respect for you in the market (and makes the same people reconsider heavily undercutting you in the future).

When Option C is the best: If the item has a very low selling throughput (few sales per week) often times I'll simply sit on my current price (or what I believe the fair price to be). This generally makes the most sense when the person undercutting is simply putting forward too much energy and poorly pricing their own good. I don't buy up their stock because reselling it is too high of a hassle and the profit margin is too small. Typically these people will burn out of energy after making some money. If they do not then you're simply sitting in a poor market and should match them and exit the market for this good.

[PROBOUND]

Is that player a gillionaire?
Does he continually re-list his items at that low price?
Do you undercut him?
Did you try matching his prices?
Is this item worth the trouble?
Are you rich?
Are you having fun undercutting?


These are all important questions you should ask yourself when trying to calculate profit/opportunity cost. 9/10 if you answered No to the last 3 questions, you should probably considering moving on. If you don't enjoy the thrill of the chase (Market Board PVP) then count your losses and find other items to profit off of.

Speaking from experience, once you become rich enough from crafting, Market Board Wars become the only source of fun we have left. Much like in the real world, theres a point when your business becomes so successfull that its not about making profit anymore, its about how to prevent your competitors from making any. #HarshTruth.

TLDR: Unless you enjoy undercutting and can afford it, Give up now, cuz chances are the person your at war with is getting a kick out of your displeasure.

[StouterTaru]

chances are the person your at war with is getting a kick out of your displeasure.

I must admit, I do enjoy all the people who undercut by 1 gil, then rage when they get undercut by 20% or more.

[Canadane]

I wish more people understood taxes and price matched instead of undercut.
I suppose it's not a big deal on cheap items but...

[FinaSel]

I tend to undercut by a lot because I always seem to have so many items and unless I sell them quickly I won't be able to keep selling. Then my inventory fills up.

If I don't undercut on some items which are not in high demand, they will take too long to sell and I'll run out of space.

If someone undercuts me by a lot, I'll either buy their item and resell it / use it to make something better or I'll remove my item for a while and sell it at another time when the price stabilizes (if it does).

[Alsar]

I tend to undercut by a lot because I always seem to have so many items and unless I sell them quickly I won't be able to keep selling. Then my inventory fills up.

If I don't undercut on some items which are not in high demand, they will take too long to sell and I'll run out of space.

If someone undercuts me by a lot, I'll either buy their item and resell it / use it to make something better or I'll remove my item for a while and sell it at another time when the price stabilizes (if it does).

This. I value thing selling fast over maximising profit. I only have 2 retainers because I don't need the space so my sale slots are limited. There's no point in something sitting on the market for several weeks for me.