Undercutting Prices

[Brittaany_Banks]

I'm going to make this REAL simple. The answer is because capitalism

 

http://en.wikipedia.org/wiki/Capitalism

 

If the seller can make the same product, with the same quality or better at a cheaper price than their competition then they can sell it for less than the competition and get more business.

 

Don't like it? Tough. I'm sure the person you undercut doesn't appreciate YOU either.

Edited November 11, 2014 by Brittaany_Banks

[MeNaCe-NZ]

But a wise seller will recognize, "Oh item X did not sell at 1 million, I'll post it at 900k this time." 24 hours later..."Oh item X did not sell at 900k, OK I'll post at 850k" etc etc etc until it sells. Granted, the seller might not be making a sale because another seller is posting at 899,999 and getting the sale, but there is no way to know that unless you spend a LOT of time market watching.

 

The quick sell is not always the best sell either. Of course this gets back to diversity and patience. If I am trying to sell ONLY item X (above) then maybe getting that 500k quickly is a good thing. But if item X is one of a hundred items I am selling (across my legacy) and I sell (on average) 30+ items a day, I can afford keep item X's price high.

 

I agree and it is kind of my point ... in a limited market if you only have say 3 sellers and all they are doing is undercutting by 1c each time it could take a very long time for the sell and thus the profits being made to generate more profits making the 1c undercut ineffective and ideally generate less income than had a reasonable undercut been undertaken to speed up the sale.

 

This only applies in this instance to CM items and other rarities really where I believe the 1c undercut is kind of pointless.

 

In a market where you know things sell fast and have a rough idea of where they sell all the time then yes a 1c can and will work albeit annoying and only used solely to get their name listed first in which case I still undercut my a reasonable amount as previously outlined.

[JouerTue]

And you are the exception, not the rule.

 

A question: what happens when you see pricing at 19950, 19975, 19990, 19995, and 19999? Do you go searching for the 20k 5 pages back?

 

no, but when i notice some price cut for the quick sale i just avoid that vendor, in general i try to give a value to what i need and i can wait patiently for the market to meet my needs

[ScicleX]

On a related note, I often buy items that are more than the vendor price where the vendor price is more than the list price minus the 6% GTN transaction fee and immediately sell them to the vendor.

So you buy stuff like that just to steal credits away from those not smart enough to check the vendor prices, because you're not making a profit off this, just giving the other player slightly less profit than if they sold to a vendor, and sacrificing a few credits of your own without even explaining to that player why they were wrong in listing it that cheap.

Seems Legit...

 

@MeNaCe-NZ,

And why should I as a seller give buyers any sort of deal, by undercutting by a significant percentage? What incentive is there in doing that? 100% of buyers and I will never cross paths (at least not that I am aware of; it is not like I annotate every buyers' character's name in game in the hopes of getting repeat business). That being said, I give all my friends and guildmates stuff I can craft easily for free and they know it.

WASTED potential.

If I post something on the GTN I will ALWAYS search for the item first, sort by lowest cost per unit, and list my items at 1 credit less than the cheapest, because that's how you maximize profits. If you're playing the GTN, what other purpose is there than to make as many credits as possible in the fastest time with the least effort.

 

I also like to give a fairer market to those that wish to find good business practices in other players by standing around on fleet and spamming what I can craft and what my costs/fees are for those items. I offer to trade pre-made items to players face to face for either the materials to craft it, or materials + fee, or materials + tip appreciated. This allows you to get your name out there so people will remember you and give you repeat business, and if you always have pre-made items for sale/trade they don't have to worry about trusting you with their hard earned crafting materials and waiting impatiently to see if you actually give them something back. On the contrary you can also build a good reputation by letting them know you can craft an item even if you don't currently have 1 pre-made, take the materials from a trusting player and deliver to them what you promised in a timely manner, creating a good reputation for yourself by word of mouth, so that when a not so trusting person requires the same deal but says they can't trust whether or not you'll "screw them over" you can tell them to ask around about your reputation before they entrust you with their valuables. I've also had many people give me repeat business from this because they liked how I handled the transactions in the past, and have also had buyers state they have also looked to buy items off the GTN and even though somebody undercut me on an item, they still bought mine because they recognized my name.

 

In summation, you can create a good name for yourself, and in turn create a good market with people that are willing to take the extra time to trade and talk with somebody in person. If you're dealing with the facelessness of the GTN then you should assume 99% of the buyers are only looking to spend as little as possible. So it doesn't matter if you undercut by 1 credit or 50% of the item cost, the only people loosing out are the sellers. The buyer will first and foremost look to buy the cheapest item regardless of how much that item has been undercut. So save the market and YOUR profitability (which will allow you to enjoy more of the game faster) and undercut by 1 credit at a time, and if you have the time and patience feel free to sit around watching the market and throw away your listing fees to cancel a sale, just to re-list it cheaper than the guy that just re-listed his item 1 minute ago.

 

I'm constantly being lowballed by one or two sellers who log on several times a day to check my prices and beat me by a few credits. My response is to drop my price so low that my inventory sells at a rate I'm comfortable with where I can still make a decent profit. If these undercutters would wait their turn like everyone else we could all make money. Now if they continue to undercut me at my lower prices I will have to drive the market so low they lose credits or they cant collect enough resources to keep up. I have 14 alts all crafting so I have the benefit of volume to help sustain me.

So if you were patient and waited your turn to corner the market you could store all of your items that aren't selling as well on your 14 alts until the market gets less competitive. The constant need to get rid of inventory exists only in markets where items are time sensitive, such as food, not video game items. As long as this game is around those items will always have value and a chance to be sold. The exception would be when items are the relevant end-tier gear.

As far as people "waiting their turn", you're saying that if you listed something at 100k at 5pm, and someone else logs in at 6pm and lists for 100k, that when you come back on at 5pm and notice you made a sale, you're going to craft a new one and list it at 100k again, cutting the window that the other seller's item would be the top of the list down to the 1 hour remaining before their listing expires + the time between when your item sold and you re-listed it. So in all actuality by having people "wait their turn" you are monopolizing the time your item is listed as the "cheapest" by being the top listed item for up to 23 hours each day, while the next person who logs in after you could potentially never see more than 1 hour of being top listed.

[MeNaCe-NZ]

If I post something on the GTN I will ALWAYS search for the item first, sort by lowest cost per unit, and list my items at 1 credit less than the cheapest, because that's how you maximize profits. If you're playing the GTN, what other purpose is there than to make as many credits as possible in the fastest time with the least effort.

 

Do you though? Or do you slow down the whole process so much that a sale that may take you 2 days and generate 100% profit you could have done in 2 hours and generated 50% profit and repeated it 10 times over ... yes you maximise your MARGIN your way but I don't think ideally this would be considered maximising profit EXCEPT in the situation where you only have ONE of an item and aren't going to have any more than one of an item.

 

Not to mention people like me who purposely drive the price down just to ruin your profit margin ( because we can ). So you could have sold a 50K item at 45K and I'll probably match or sit on my price seeing that but you list it at 49,999 I'll drop it to 40K, 30K whatever I feel like to steer people away from their "top of the list" strategy.

 

In summation, you can create a good name for yourself, and in turn create a good market with people that are willing to take the extra time to trade and talk with somebody in person

 

This and the above is all very true though somewhat a different topic the the GTN marketing. Where you have people finding items by you and bypassing the lowest price because they recognise your name would be an exception, not a rule, and certainly nothing to market a GTN strategy around.

 

Until at least they maybe one day add in sort by name or add favourite name and also a blacklist. These would be great functions as I could then take a similar tactic to publically advertising as you do though in a different vein. I would love to be able to re-list my 50-100 items when they expire and be able to tell fleet to check GTN for my name for a range of semi rare to rare CM items at the lowest price by a good margin. I know at the point I've finished listing that I am most likely still the lowest and if not someone would tell me and I could offer them a deal anyway. ( lately I mostly deal in items in the range of 100K to 3 million each, tend to sit on the newer cheaper items til they increase in value ).

 

So it doesn't matter if you undercut by 1 credit or 50% of the item cost, the only people loosing out are the sellers. The buyer will first and foremost look to buy the cheapest item regardless of how much that item has been undercut. So save the market and YOUR profitability (which will allow you to enjoy more of the game faster) and undercut by 1 credit at a time,

 

Again, disagree on the profitability point for the above reasons and also the other point I made on how long something may take to sell if it's priced wrong to begin with if everyone is only ever undercutting by 1c.

 

The amount of time I see people listing items for 500K - 1 million or more when I know from experience the paid price is say 200K or less is quite astonishing. If I only undercut those massive prices by 1c and everyone did that then it would lead to a lot of stale GTN slots not generating me profit ( we only get 100 and I only run 2 toons, not nearly enough to handle the stock I have currently but I get by ).

 

The constant need to get rid of inventory exists only in markets where items are time sensitive, such as food, not video game items.

 

Also where space restraints come into play. It wouldn't seem so bad if we could start a toon and get storage as soon as it starts without having to complete the start planet ( or can we? ).

[psandak]

MeNaCe-NZ,

 

Long explanation short...

 

When someone has more credits than they can spend, the time it takes to make a sale no longer really matters. Someone in that situation should be willing to wait out efforts to "ruin profit margins" because they KNOW it won't last; eventually the value of item X will come back to where they feel it is appropriate.

 

That being said, I actually agree that lots of smaller sales generate more profit than fewer larger sales. hence my "quantity over quality" statements across this forum and why I rarely get into the super high end markets (e.g. grade 34/rating 180 item modifications). the highest value items I regularly sell are grade 28 augments.

 

But as an example: the other day I crafted several blue quality aptitude mod 28a. When i went to post them there were a number listed at 10k each and the next lowest was at 18500. I was tempted to buy up the 10k units and re-post, but i did not. I posted mine at 18495 and sold them within 24 hours.

[MeNaCe-NZ]

When someone has more credits than they can spend, the time it takes to make a sale no longer really matters.

 

Yes and no since it's really about the reasoning of why that person might be playing in the first place. In my case it is solely for GTN/Marketing/Credits currently and the lottery of the CM packs.

 

I rarely run content - I login a few times a day to queue crew skills, check mail, relist items or list new items and buy packs as I end up with enough space for new items etc. ( oh and support my guild with always at least getting my weekly conquest via crafting ). I would run content as I still find it fun but currently have so many other games I'm trying to finish before 3.0 that it takes a backseat. I still definitely enjoy making credits and the whole market side of things though and thus the more the better since that's the challenge after all.

 

In saying that I don't really actively monitor my sales daily, I do wait for them to expire but I will re-list with an undercut which size will depend on what people are listed when I search and what sort of prices they went in against me with to have my item not sell and wasting my time re-listing. A decent undercut I think "fair enough", even a riddiculous undercut I still think "fair enough, it's their item and credits" and if it's too silly I can always buy them out and re-list as I often do. However 1c undercuts just plain annoy me and those are the ones I will hit hard with bigger undercuts.

 

As I initially pointed out I don't even really need to have a valid strategy or reason for this, just that it annoys me so that is what I'll do. Also to see the majority of 1c undercutters in this thread jsutify it as "profit maximising" or something of that ilk it just further to motivates me to drive their profit down.

 

I used to actively monitor sales when listing crafted items that don't stack and would cancel and re-list to suit the market but again it 's always been those 1c under cutters that I enjoy driving down.

 

I don't always undercut either. Quite often if there is a big gap in the market prices e.g. 2 items at 30-40K then the next at 150K and I know they sell o.k. and will get over 100K I'll put mine at 100K allowing those willing to drop to 30-40K to have their sales at wait for mine to sell at the higher rate ( or not at all ) and also as a means of not wanting to active drive a market down even further away from a good sell price.

[psandak]

@MeNaCe-NZ (but anyone can answer):

 

would you significantly undercut a market that is already barely profitable just because a number of players have posted at minimal undercuts.

 

just as an example: this morning most of the augment markets are depressed and barely profitable (TRs are at the 9,800 mark and augments are posted at ~42k each).

 

Would you undercut by several hundred or thousand guaranteeing yourself a loss just because you are annoyed at the 1-5 credit undercutters?

[tortcat]

@MeNaCe-NZ (but anyone can answer):

 

would you significantly undercut a market that is already barely profitable just because a number of players have posted at minimal undercuts.

 

just as an example: this morning most of the augment markets are depressed and barely profitable (TRs are at the 9,800 mark and augments are posted at ~42k each).

 

Would you undercut by several hundred or thousand guaranteeing yourself a loss just because you are annoyed at the 1-5 credit undercutters?

 

Sometimes yes. If someone wants to follow suit and then undercut me I'll be happy to try it a few times and see who follows suit. I will then buy up each and every one of the items and relist everything for a much higher price.

 

I have virtually unlimited ingame funds at this point and I can afford to take a loss of hundreds of thousands of credits as often "any" sale is pure profit as I make out by the crit success's on gaining extra items.

 

I myself have no idea of course what money others have, but I have hundred's of millions, mostly from crafting the past years and there are times it seems Ill control the market for a given item or items. ( not always on purpose but sometimes, yes) It's a game and it works that way in real life economics also.

 

On the other hand though, and this is not something I often do, but if I get into a "war" of undercutting i'll be happy to see who follows along and then buy them out aand relist. As I said I have deep pockets.

 

At the same time though, I am , as my husband says, a kind soul I guess lol. I will indeed buy something up like a high end item that someone makes a mistake on listing ( like a 1 million item and they list it by mistake for 100,000 with a zero left off etc.) and Ill send it to the person via mail with a message that I assumed it was a mistake as I know for quite a few that losing a million would be a very unhappy mistake. ( Ive done it myself).

 

But to me the GTN is a big part of the game so if IM feeling cantankerous you best have really deep pockets lol if you wnat to get into a pricing war.

 

I often though won't buy from the lowest lister if its by 1 credit .Ill buy several up further the list, even if thousands more but as I said at this point I could probably buy a planet if they sold one ingame . I keep wondering if its possible to hit a billion credits.

 

Now if I only had that kind of wealth in real life.....

Edited November 13, 2014 by tortcat
spelling

[MeNaCe-NZ]

Would you undercut by several hundred or thousand guaranteeing yourself a loss just because you are annoyed at the 1-5 credit undercutters?

 

Certainly not in a market that ceased to be profitable. I think ( at some stage somewhere ) I've pointed out I would only undercut to the point it was still reasonably profitable. If it stopped being so and my undercutting of those annoying 1c undercutters had in some manner caused that then oh well, they annoyed me, I decided to do something and thus it resulted in them getting less to no profit.

 

Generally in your example I would bow out of the market, store mats etc. and re-enter when there is a profit to be made again.

[Grayseven]

What's truly awesome is that unless you are in a hurry to get a lot of credits fast and there aren't a ton of people offering what you are, you can post at a higher price and still make the sale. It just might take a little longer.

[JonnyRay]

I tend to vary. If I'm selling something that I'm familiar with (say my 28 Mods or something), I usually know what I can sell it for. Let's say I typically sell a given item at 45k per unit.

 

If I do the search and the whole first page is selling at 20k per unit, then I'll just sit on my inventory and wait it out. If there are 3 or 4 units selling at 40k and they have less than 2 days left, then I'll just list mine at my standard rate and let the market come to me.

 

If I'm selling something that I sell more rarely (say companion gifts), then I'll just undercut the current bottom rate by a bit.

 

I try to be smart about it, though. If I see the bottom two items are both from the same person and they're selling for the default amount (e.g. 2430 credits), and everyone else is over 10k, then I'll probably just by the two cheap ones and list theirs along with mine at the "real" market rate.

 

I've found that trying to have a "hard and fast" rule about pricing can back you into a corner or make you do some foolish things.

 

One thing I try not to do (because I personally find it annoying) is to underbid by one credit. If I'm going under, it will be 5-10%. I try not to be too drastic and drag the overall price down, but I don't like looking like all I'm doing is trying to manipulate the sorting order. But that's just me.

[psandak]

I tend to vary. If I'm selling something that I'm familiar with (say my 28 Mods or something), I usually know what I can sell it for. Let's say I typically sell a given item at 45k per unit.

 

If I do the search and the whole first page is selling at 20k per unit, then I'll just sit on my inventory and wait it out. If there are 3 or 4 units selling at 40k and they have less than 2 days left, then I'll just list mine at my standard rate and let the market come to me.

 

If I'm selling something that I sell more rarely (say companion gifts), then I'll just undercut the current bottom rate by a bit.

 

I try to be smart about it, though. If I see the bottom two items are both from the same person and they're selling for the default amount (e.g. 2430 credits), and everyone else is over 10k, then I'll probably just by the two cheap ones and list theirs along with mine at the "real" market rate.

 

I've found that trying to have a "hard and fast" rule about pricing can back you into a corner or make you do some foolish things.

 

One thing I try not to do (because I personally find it annoying) is to underbid by one credit. If I'm going under, it will be 5-10%. I try not to be too drastic and drag the overall price down, but I don't like looking like all I'm doing is trying to manipulate the sorting order. But that's just me.

 

Other than the last paragraph, you and I do things EXACTLY the same.

 

As to the last paragraph, let me just say that I started out like that. I would undercut by 5% to 10%. I then realized I was shortchanging myself and started undercutting by less and less until I got where I am now: I undercut to the nearest 5 credit mark (i.e. if an item is 20,000 my price is 19,995; if an item is 19,996 my price is 19,995). Totally arbitrary I know, but it is what I do.

[Kulyok]

1-credit undercutters are annoying, but then again, there are undercutters who would just post their items and come back in 2 days, and there are undercutters who'd outbid you with twelve items fifteen minutes after you post yours. I confess I don't like the second kind.

 

In which case I just do the following: lower the prices to the lowest possible level(so I don't lose much) and overflow the market until everyone goes away.

Edited November 18, 2014 by Kulyok

[ScarletBlaze]

The 1 c undercutters don't bother me that much as much as the ones that drop from saying 1000 to 5c and I have seen that happening quite a bit lately though I do take a look at how long their listing is for since I always list my items for 2 days.

[Distracted]

So we've all seen the prices on the GTN. When someone sells something for say 20,000 credits you see another seller post theirs up for 19,999 just to get a quicker sale. Let me just say the second seller doing this is a douche. Why not just post your item for the SAME price as the last seller that way both of you have an equal opportunity for a quick sale without driving the prices down to almost nothing. If anything I try to keep my prices reasonable and most of the time I don't bother to check the going GTN prices because I know by now what my items should be going for, but it really ticks me off when some items I post don't sell for DAYS just because some douche decides to post their for a few credits less than mine. Which cause me to lower my prices lower than theirs because I have WAY too much inventory. Which then causes the same douche to try to undercut me again. Which then causes the prices to fall and everyone loses. If you see a low price MATCH IT. Don't try to be sneaky and try to be the lowest. You're only hurting yourself in the end by causing prices to drop below what the items can reasonably go for. And then don't go whispering me later asking me why I lowered my price so low.

 

I do it because people get angry & people being angry over a computer game is amusing.

[ImmortalLowlife]

Yep....I do it quite often. If I see something posted at 20,000 credits....I'm posting mine at $19,995. Cause just like you op, I wanna sell my stuff to. It's always business.....never personal.

[ChicksDigHarleys]

I'll start caring about how much I make on the GTN when I can extend my sub with credits like in EVE. Sometimes, I buy the 20,000 credit item instead of the 19,999 credit item, especially if the guy selling the 19,999 credit item is a prolific seller, and the other guy is low volume, because I figure he needs the credits more.

 

I don't bother to check the going GTN prices

So...you're lazy?

Edited November 18, 2014 by ChicksDigHarleys

[captpickles]

If can profit, I will sell it under other posters by as much as 20%. once my profit margin hits % I won't go under that.

 

once I saturate 1 market item, I go onto another and rinse and repeat. I focus on about 5 items so when I cycle item 5... item 1 is back up to previous inflated prices and I go back and hit them again... sure I could make profit 'per item' but I would sell infinitely less numbers. for me volume makes up per item credit difference.

Edited November 18, 2014 by captpickles

[chosonman]

To follow up. I posted up my good for rock bottom prices for the past couple of weeks and it seems to have driven some of the sellers out of the market for the time being as I currently have free reign over the market. The seller in particular that continued to undercut me tried to buy all my inventory in a vein attempt to drive me out and sell the goods for a substantial mark up but the strategy back fired since I was able to keep up with demand and slowly raised my prices to account for the lack of competition.

[MeNaCe-NZ]

Always love it when that happens.

 

It's even funnier if you are struggling to keep up so you get guildies to lend a hand.

[captpickles]

To follow up. I posted up my good for rock bottom prices for the past couple of weeks and it seems to have driven some of the sellers out of the market for the time being as I currently have free reign over the market. The seller in particular that continued to undercut me tried to buy all my inventory in a vein attempt to drive me out and sell the goods for a substantial mark up but the strategy back fired since I was able to keep up with demand and slowly raised my prices to account for the lack of competition.

 

GJ .. but seriously though, if your focusing most or all your profits one item or category that's the issue. you need to have 4 or more items that you can sell into for your 'reasonable profit' margin you seek. when one item goes under your profit limit start hammering the next item. has worked for me for years to just glut 1 item, then the next, then the next then the next then the next and go back to item 1 after item 5 bottoms out. works like a charm because there is always that guy that wants to buy you out to repost and they have deeeeep pockets that I or you can take advantage of.

Edited November 19, 2014 by captpickles

[chosonman]

Oh this is only my 3rd best money maker. I have 2 other crafts which make way more credits, but this particular market is very exclusive to long time players who have the resources to get in. So the price wars are a little more intimate. Edited November 19, 2014 by chosonman

[Sinisa]

U people are crazy i really hate to read msgs like ''buy cheapest credit only x usd'' what i do hate the most is that you make real money doing notthing but cheating other people with controlling crafting market and SPAM

[MeNaCe-NZ]

Huh? What on earth are you on about? Fairly certain this isn't a gold spammers discussion.