Dealing with big undercutting

[panderin]

I don't mind the 1 gil b/c depending on where you are buying from you will either get a whole 1 gil price break or you will get to pay taxes w/e you wanna do consumer just use the ole noggin!

Also....what I would like to say above all else, DIVERSIFY DIVERSIFY DIVERSIFY people. You don't play the price game you play the diversity game and all you do is WIN WIN WIN!

[LineageRazor]

Hahahaha, well I can't argue against that. We all have our pet peeves and I'd be lying if I said that I couldn't exactly see where you were coming from. In some sense it can be perceived as "disrespectful" almost. I know I used to see it that way before I got into crafting myself and realised that I appreciated when people undercut me by as much.

The trouble with undercutting by one gil is that it creates the "illusion" of a competitive market without actually being competitive at all. A crafter has two sometimes competing goals: They want to sell for a good price, and they want to sell fast and often. Large undercuts satisfy the latter desire at the expense of the former. Crafters pricing to compete with other crafters are what keeps the market healthy and fluid; crafters undercut one another until customers are buying product fast enough that undercutting is no longer necessary, at which point prices start to rise again.

Undercutting by small amounts, though, gives a crafter the benefit of fast sales without paying the penalty of reduced cost (well, meaningful reduced cost). You're not participating in the market, but instead leeching off the efforts of those who do. They've taken the effort of finding a good price to sell at - and then you've taken that good price, shaved off a piddly amount to put yourself at the top of the seller list, and stolen the fruits of their labors.

Don't get me wrong - all's fair on the markets, so there's nothing WRONG with this kind of pricing, persay. But anyone that claims there's some kind of moral superiority in undercutting by one gil is fooling themselves! It's the lazy alternative to competitive marketing. Thankfully, there's plenty of sellers out there willing to take REAL action which ends up leaving the 1-gil undercutters in the dust. Well, at least until the 1-gil undercutters start piggybacking on them, as well...

[Knahli]

The trouble with undercutting by one gil is that it creates the "illusion" of a competitive market without actually being competitive at all. A crafter has two sometimes competing goals: They want to sell for a good price, and they want to sell fast and often. Large undercuts satisfy the latter desire at the expense of the former. Crafters pricing to compete with other crafters are what keeps the market healthy and fluid; crafters undercut one another until customers are buying product fast enough that undercutting is no longer necessary, at which point prices start to rise again.

Undercutting by small amounts, though, gives a crafter the benefit of fast sales without paying the penalty of reduced cost (well, meaningful reduced cost). You're not participating in the market, but instead leeching off the efforts of those who do. They've taken the effort of finding a good price to sell at - and then you've taken that good price, shaved off a piddly amount to put yourself at the top of the seller list, and stolen the fruits of their labors.

Don't get me wrong - all's fair on the markets, so there's nothing WRONG with this kind of pricing, persay. But anyone that claims there's some kind of moral superiority in undercutting by one gil is fooling themselves! It's the lazy alternative to competitive marketing. Thankfully, there's plenty of sellers out there willing to take REAL action which ends up leaving the 1-gil undercutters in the dust. Well, at least until the 1-gil undercutters start piggybacking on them, as well...

I'm sorry but that kind of logic sounds absolutely bizarre to me. You're trying to qualify someone who undercuts by an arbitrary amount of gil as someone who is putting in immense thought and effort into the process or marketing as though there were some magic number that entices people into buying a product. That may be the case for rare, expensive items and even new items, but not for products that sell regularly on a daily basis and suffer no reduced sales rate whether or not the price is 20k higher or 20k lower than the current, cheapest listing. Undercutting isn't just about reducing the price of an item until people start buying, it's to stay at the front of the line so long as you are paying attention. If you're busy, disinterested or simply offline then you are not actively making an effort and that's where other people take their turn to advertise their item above yours. If you listed an item for X price, checked on some others and then realised that your first item was undercut before you even left the retainer/marketing area, are you really going to leave it as is? In most cases, the answer will be "no" because you want to take the chance to push yourself to the front again. So what do you do? Do you choose to take another chunk out of the item value to make yourself the cheapest listing just to satisfy some illusion of playing courteous to your fellow salesman? You can, but that's your choice. Alternatively you can drop the value marginally and meet your same objective without sacrificing anything at all, and then, if the other person happens to notice that you undercut them in the same fashion you did, they can return the favour. In both cases, both parties fairly made their own attempts at being at the front of the listings without needlessly reducing the overall value of the product.

If someone lists an item for a price that is way above what an item normally sells for and experience tells you that it won't sell, then by all means undercut to the point that item falls within a reasonable price-range, but if every single person cut items by thousands of gil at a time because it satisfied some sense of "politeness" then everyone would be profiting a lot less overall and that is not in the best interests of a recurring marketer.

Now, if you want to talk to me about listing multiple listing of a non-stackable item in the market then I will agree with you there. While I undercut by marginal amounts, I don't list more than two items at a time because that would feel selfish to me. If both my items sell while I am away then I feel it's only fair to let other listing have a chance at selling their items until I actually return and bother with checking on my retainer. The price, however, is completely irrelevant in my mind. If you're going to undercut then you're going to undercut. The amount is meaningless to the other sellers because their item still won't sell before yours at the end of the day. If I sacrifice some extra profits just to appear polite then I am only risking steeper reductions on the market board sooner rather than later when the big undercutters come around and make their rounds and take their turn pushing ahead in front of me while I am not watching the markets.

[LineageRazor]

*snip*

If a product is shifting enough that the only way to stay in the biz is to check in hourly and bump down the price by one gil, then that market is oversaturated with product. It is time to either get out of the market, or start making with the REAL undercuts. That, or resign yourself to checking in hourly, just like the others trying to force too much supply into a market with not enough demand.

If the product is NOT in an oversaturated market, there's still no point in playing the one-gil game. Remember to check the daily sale logs. If an item sells ten per day, and you have five buyers frantically gil-dinging each other to stay in the top five slots - there's simply no point in competing with them. Their products will sell, and yours will, too, by the end of the day. Unless those same frantic sellers are pushing new product onto the boards as fast as they sell - and if that's happening, and you don't have the leisure to do the same, then it's not a market you can compete in.

[Archaell]

Lowering the price exactly by 1 gil seems like taunting, but it is much better than halving prices in my opinion.

When there is certain demand for the item which is not highly affacted by the price, lowering the price too much is not good for the crafters. It is great for the buyers of course.

If item sells for 4x times the production costs and then someone sells it for 2x times the production costs. Guess what happens? You have to actually sell 3x times more items for the same amount of profit.

Now if the price stays at the 4x two crafters can sell an item each and be happy. If it gets to 2x then both have to sell 3x items at the new prices while risking that the price is going to catch on for longer period of time, basically decreasing the gil gain of all the people involved. Again, it is great for the buyers. Not so much for the sellers.

So in my opinion it is better to cooperate a bit. Especially when it comes to star items which can end up NQ.

[StouterTaru]

Now if the price stays at the 4x two crafters can sell an item each and be happy. If it gets to 2x then both have to sell 3x items at the new prices while risking that the price is going to catch on for longer period of time, basically decreasing the gil gain of all the people involved. Again, it is great for the buyers. Not so much for the sellers.

So in my opinion it is better to cooperate a bit. Especially when it comes to star items which can end up NQ.

That's assuming the buyers have no recourse but to be gouged at the marketboard. When expensive stuff is 4x production cost, it tends to not sell at all.

[Chyro]

That's assuming the buyers have no recourse but to be gouged at the marketboard. When expensive stuff is 4x production cost, it tends to not sell at all.

You'd be surprised. People that are lazy and have lots of money don't really care how much cheaper the production is, if they can just get it quickly from market board for 'cheap' in their eyes.

Silly example: Bronze Rivets! Production Cost (if buying the ingot from npc): 9 Gil! ...sells for 50-100 gil (might differ between servers). That's like 5-10x the production cost. And people buy a bunch of them each day.
(...like I said, silly example. Though there's plenty like that even with bigger numbers.)

[Archaell]

What Chyro said. People pay for their laziness - otherwise they would level up their own crafters :3

It also depends on your ability to secure the mats. An item can cost 500k to make and then it sells for 600k which seems reasonable, but if you make all the mats yourself the production costs drop to something like 150k etc. In case of the gathering even lower. This also sometimes leads to the point where the final items cost less than the mats needed to make said items.

The above made me slightly sad when I started crafting. I got to lvl 60 on my BSM just to discover that I would lose money making the i170 tools... so I just sat there questioning what was the point of all the grind while making easy money on the leveling items.

[Hanmerreborn]

You'd be surprised. People that are lazy and have lots of money don't really care how much cheaper the production is, if they can just get it quickly from market board for 'cheap' in their eyes.

Silly example: Bronze Rivets! Production Cost (if buying the ingot from npc): 9 Gil! ...sells for 50-100 gil (might differ between servers). That's like 5-10x the production cost. And people buy a bunch of them each day.
(...like I said, silly example. Though there's plenty like that even with bigger numbers.)

You also forget the shard cost, which while still technically cheap definitely puts it over the 9 gil range.

[FinaSel]

When I go to buy something and I see that someone has undercut someone else by 1 gil, I always buy the more expensive item.