Undercutting

[Rolks]

So I had a conversation today with someone in my hunt party, and he brought up undercutting. When he said that you should undercut by only one gil, I told him that if someone does that to me, I drop my price by 1k. And he didn't like that. He said, that if you do that, the price drops, and all sellers lose money, but if you only undercut by 1 gil, then the price remains high for everyone.

No it doesn't. It remains high for you! Not for me, mine doesn't sell. If you like my price, then match it, don't undercut it. If you undercut by 1 gil, you're saying, "Hey, I like you're price, so I'm going to steal your sale." And I get screwed cause mine doesn't sell.

If you're going to undercut, then I'm going to go to a price war with you because I want mine to sell too. And I'm going to make it painful for you to do it. If the price gets to low, I'm going to pull my item and wait for price to go back up, and only you are screwed with the low price. If you don't want a price war, just match my price. If you undercut by too much, maybe I'll just pull my item and not compete. But you undercut by 1 gil, and it's on. Don't give me some bull garbage about undercutting by only one gil is good for everyone ... undercutting is only good for the you. Matching the price is good for everyone.

And mind you, I'm not against people undercutting. But don't make it some moral argument saying there is a proper way to do it. There is no way in which undercutting benefits everyone. It only benefits you. So don't get upset if you set off a price war by undercutting.

[AmiableApkallu]

If an item hasn't sold by the next time I check on my retainers (which is once, maybe twice a day, at best), and I've been undercut or matched, then I'm dropping the price by way more than 1 gil. There isn't enough demand to justify the price, and I want these things out of my inventory sooner rather than later.

[Rolks]

If an item hasn't sold by the next time I check on my retainers (which is once, maybe twice a day, at best), and I've been undercut or matched, then I'm dropping the price by way more than 1 gil. There isn't enough demand to justify the price, and I want these things out of my inventory sooner rather than later.

And I'm fine with that too. My main point is that people should not get upset that they set off a price war by undercutting, even if it's by only 1 gil. We all want our item to sell. There is no "proper" way to undercut. It's all supply and demand. If I'm willing to supply it at a lower price to get the sale ahead of you, don't get upset that I dropped it by 1k instead of your measly 1 gil.

[NegativeS]

Supply/demand.

If demand is high enough, people will buy the lower listings for an item until they get to the point where they don't think it's worth the price anymore, and boom, you have the value of the item.

If demand is so low that one person undercutting by 1k is enough to tank the price, then the price should have been 10x lower to begin with.

[Exmo]

I'm with OP. If someone undercuts me by an insultingly small amount, I'm happy to sell my crap for 100 gil both to spite them and clear out my inventory.

[Bad_Luck]

It's your money or your product, do what you want. But please, undercut the market board 1k on the stuff I want to buy kthnxbai

[dspguy]

So I had a conversation today with someone in my hunt party, and he brought up undercutting. When he said that you should undercut by only one gil, I told him that if someone does that to me, I drop my price by 1k. And he didn't like that. He said, that if you do that, the price drops, and all sellers lose money, but if you only undercut by 1 gil, then the price remains high for everyone.

The marketboard doesn't work like the real-world economy.

Normal people walk into a store (or go online) and make a decision to purchase a product for various reasons (emotional and financial). Players in FFXIV likely make the decision to purchase the item before they even see the price. Which means, it doesn't matter what the price history is. And it doesn't matter if the offers listed are 99996, 99997,99998, etc. Most players don't shop around.

So by undercutting by 1000 gil, you drop the market for everyone for absolutely no benefit to anyone. It isn't like if I drop the price of an item listed for 100,000 to 50,000 that there's a server wide message that shows up to everyone: "Attention: The Electrope Barding's price on the Marketboard has been reduced by 50,000! Report to the nearest Marketboard to check it out."

The discount you offer by undercutting is done in a vacuum. No one knows about it unless someone just happens to check the marketboard for that item at the time that they made the decision to buy that item and before the next seller comes in 1 gil lower than you.

A few expansions ago, I started completing all my crafting logs. I'd HQ everything I needed to complete the logs, then fill up all of my retainers with this stuff. On Day 1, I'd list it all and undercut by 1 gil. Let's say I had 100 items to sell. Given that ARR/HW stuff isn't the most popular, I wasn't expecting it to sell immediately. There was very little undercutting competition on this stuff, but there was some. I kept on top of it. I was the lowest seller on all of this. I sold about 40 of these items at highly inflated prices. I'm talking stuff like a Yew Longbow HQ for 50k when it costs about 300 gil to make it. By Day 7, I dropped price by 50% on everything left. No sales for another week on almost all of the remaining items.

I then got curious - and I dropped the price to about 10-20 gil over the vendor sale price. I probably sold about 3 of the remaining 50 items at that price. And I left it there for another week. Then I vendored it all.

My conclusion? No one was buying because no one was looking. It didn't matter how much I undercut (by 1 gil, by 1000 gil by 10% or by 99%). The decision to buy is made before the buyer checks the marketboard. It wouldn't matter if I was selling a level 30 craft that takes seconds to craft for 100x more than the cost of materials or whatever I was selling it for 1 gil more than the cost of materials. All that matters is that you have the lowest price at the very moment demand is present - specifically, when someone checks the marketboard to buy it.

Edit: Are they special cases to this? Of course - higher cost items, some players might just "check" to see if there's a deal. You know, like a 15M gil mount that someone listed for 1.5M by accident. But generally speaking, for the vast majority of what's on the marketboard, I'd say the above applies. Undercutting by more than 1 gil is fairly pointless and benefits no one.

[UkcsAlias]

So by undercutting by 1000 gil, you drop the market for everyone for absolutely no benefit to anyone.

The seller sells faster
The buyer gets it cheaper

2 people that benefit.

And by selling faster, you can often enough also sell more.
10 sales of 10k (with 1k investment) vs 4 sales of 20k still makes 90k for the 10 sales, and 80k for the 4 sales.

The only thing that could be worse is the time investment if you need to spend more time crafting/gathering. But with retainer brought stuff... who cares?

[Rolks]

I think you completely missed my argument. In my last paragraph, I specifically said, I'm not against undercutting. I said, "But don't make it some moral argument saying there is a proper way to do it. There is no way in which undercutting (by 1 gil) benefits everyone. It only benefits you. So don't get upset if you set off a price war by undercutting (by 1 gil)."

Again, undercutting only benefits the person who undercuts. So if you undercut by one gil ... that helps YOU. That keeps the price high for only you. It does nothing for me. You are the one that got the sale.

So my goal now is to be the lowest price. If we all just drop by 1 gil, then I just have to hope to be the lucky one at the top when the buyer shows up. "Keeping the price high" is pointless if I'm not the one getting the sale. I don't care how much you make if you sell. It's not my goal to ensure you make money. I only care if I make money, and I can only do that if it is my item that sells.

So if I can get you to stop undercutting me, it guarantees that I'm at the top when the buyer shows up. So by undercutting me, you've already instituted a price war, or as Archeron pointed out, "Marketboard PvP". This now has absolutely nothing to do with the buyer and everything to do with other sellers. I now want to make it as painful as possible for you to try and undercut me so that you stop doing it. If I stay dropping the price by 1 gil, it gives you no incentive to stop undercutting me. But if I finally drop the price so low that you don't like the price point, but I'm still fine with it, now I get the sale. And if it drops too low for my liking, I pull my item, and now you're screwed with the low price and lost profit. Either way, I don't care. It's not my responsibility to make sure you get a high price. My goal is to sell my items at prices I want.

If you actually wanted to "keep the price high" then don't undercut in the first place. You can't have it both ways, either you keep the price high by matching my price, or you undercut and start a price war that drops the price.

In sum, I wasn't the one upset. I find the 1 gil undercut annoying because it's not really an undercut, it's just stealing a sale. He was the one upset that I'd drop it by 1k. But that is the point of my dropping by 1k. I want him to be upset. Because I want him to stop competing with me for the sale. I want him to give up.

(and as a side note, most of the stuff I sell IS ridiculously overpriced. I would never pay the prices for the things I sell. It's why I craft, so I don't have to. But other people are willing to pay those prices, so I take advantage of that. But because I think my stuff is ridiculously overpriced is also why I'm willing to undercut by so much each time. The actual price I'm willing to go down to is far lower than what I initially listed it at. So I see no reason to "keep the price high". As long as *I* am the one getting the sale at a price at or above what I'm willing to sell for, that is all I care about.)

[Jojoya]

Normal people walk into a store (or go online) and make a decision to purchase a product for various reasons (emotional and financial). Players in FFXIV likely make the decision to purchase the item before they even see the price. Which means, it doesn't matter what the price history is. And it doesn't matter if the offers listed are 99996, 99997,99998, etc. Most players don't shop around.

You're making a dangerous assumption that the decision to purchase the item was made before the visit to the market board. Much will depend on what the player is shopping for.

Crafting materials? You're probably correct. Recipes require very specific materials so the player is going to the market to get exactly what is needed for the recipe they want to make. Very few would be going to the market board to see what materials are cheap and then figure out what they should make after the purchase.

Same is mostly true for raiders looking for end game consumables. They know what specific consumables are right for the job they will be using.

But I'd say that's where the certainty ends. Players may go to the market board with the intent to buy something but that doesn't mean they will buy something. There are other factors involved. Is it a need or a want? Are there multiple items that could potentially fill the player's desire? Are there other things they also want to be buying so they have to balance the possible costs of those against the one item they're looking at that you happen to be selling? How much is market board convenience worth to them if they have the ability to obtain the item (or similar) in other ways?

How wealthy is the player? How much do they think the item is worth?

Not every player is rich. The higher the price, the smaller the buyer pool. The smaller the buyer pool, the longer it's likely to take for the item to be sold.

Someone undercutting by 1 gil isn't going to increase the potential buyer pool. Someone undercutting by 10k might (depending on the item) and get a sale where higher priced listings would be ignored as the buyer decides to look at other similar items instead because they didn't feel the item was worth the extra 10k. The sellers at the higher price aren't losing out if they weren't going to get a sale at their price in the first place. They're also not losing out if they hold to their price and another buyer comes along that is willing to pay the higher price after the undercut listing is gone.

It's really something that needs to be considered on a case by case basis. Some items are worth undercutting significantly. Others aren't. It's up to the seller to decide what amount they want to get to make the item worth selling. It's up to the buyer to decide if that amount is appropriate for the item they want to purchase.

Personally, I would never undercut by a gil. I'll price match if I'm not going to undercut significantly and take my chances on whether the buyer picks my listing or the listing that was already there. I don't worry about others undercutting me unless my item is still sitting there after a few days, in which case my original price was probably too high in the first place. I don't need to have mine sold first. I just want it sold within a reasonable amount of time.