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Crafters: Undercutting GTN pricing, I get it...but I don't!


Beerswiller

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The GTN is a also a negative-sum game: every win comes from someone else's slightly larger loss, ultimately the outcome of the game is -6% of the credits spent.

The GTN doesn't have to be a negative-sum game. Commodities tend to have a "perceived value"

 

Someone has excess materials, but is short on money. Another has money, but is short on materials. To one, the materials are valuable. To the other, they're not. Money and raw materials are exchanged. Each player's perceived overall value has gone up.

 

One may not like group content, but wants high level gear. Another has learned a high-end schematic, and desires money. First player runs solo content (e.g. dailies) and makes credits. Exchanges it with end-game crafter, gets new high level gear. Each player's perceived overall value has gone up.

 

This is not to say that it is always this way. Some people corner the market, overcharge, and do other "PvP" like things that result in one person losing while the other person wins.

 

But to insist that's all that the GTN is? One person winning while another loses? That's just silly.

Edited by Khevar
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Sure, there's undercutting (I always post mine for xxx995 so that I'm five credits below the lowest price,) but I don't get why I post something for a million (just like everyone else did,) and somebody undercuts to like 100K. It's like people are racing to drive the prices down, from the wrong end of the deal!
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Sure, there's undercutting (I always post mine for xxx995 so that I'm five credits below the lowest price,) but I don't get why I post something for a million (just like everyone else did,) and somebody undercuts to like 100K. It's like people are racing to drive the prices down, from the wrong end of the deal!

It all depends.

 

1. If the other person can sell it for 100k and still make a profit, than you are absurdly overcharging at a million.

2. If the other person sells it for 100k at a loss, than just wait it out -- they won't be able to keep it up.

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Comparison to the free market is silly at best and idiotic at worst.

Undercutting to the point where the crafted item is worth less then its parts (something I've encountered numerous times on my server) wouldn't be sustainable for a longer period of time. But clearly it is sustainable in TOR, since we can acquire both resources and credits at (almost) no cost.

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But clearly it is sustainable in TOR, since we can acquire both resources and credits at (almost) no cost.

It sounds as if you're assuming that "time spent playing the game" has no value.

 

Sure, I could run around gathering nodes for "free", but I'm spending time doing it. That time has actual value to different people, which is why some are fine on purchasing mats on the GTN, rather than gathering it themselves (or running crew missions).

 

Crafting that sells at a loss is not sustainable. Eventually, the other party gets tired of converting excess time into credits.

Edited by Khevar
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Sure, there's undercutting (I always post mine for xxx995 so that I'm five credits below the lowest price,) but I don't get why I post something for a million (just like everyone else did,) and somebody undercuts to like 100K. It's like people are racing to drive the prices down, from the wrong end of the deal!

 

If one person undercuts you by a ridiculous amount, do what I do, and buy the items and relist them at your price. They get their money, and assuming you're right, and it will sell at your price, then you make a good profit too.

 

Of course there's a risk involved, since if you are wrong, and it won't sell unless you list it at his price, then you lose money, but that's the nature of the game.

 

Also, if you are consistently undercut enough that your goods never sell, then you just have to accept the fact that your price assumption is incorrect, and that the market won't support your price at all. At that point you need to either accept the markets price or stop selling like you outlined.

 

On another note: Personally I expect MK-10 augment kits to stabilize around 60k in a few weeks. So everything over that I get today is just bonus money. :)

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I have to agree with those that say if you feel you are being under cut then buy them up and resale them. People seem to think that the seller is in the demand position, but that is only the case if you're dealing it rarities. People can go out and get all the mats required spending only time. The value of the item is then the value of their times. Or you have instances, as someone else said, where the value isn't in the selling but the reason you crafted in the first place. Whether that is to just get to the higher tier or if that is so you can equip lackey/alt.

 

I got stuck selling an item piece by piece when people were undercutting by thousands. It was my choice to buy up the cheap ones and resell. If even only one sells I'll still make a profit greater than if I priced them to match. At the same time I'm not pricing them so ridiculously that the people that want them have to sell a kidney to buy them. In other cases I'm still making a huge profit and under cutting others still trying to sell at too high prices.

 

Either way I win because for me winning is getting the credits at what I feel the items worth is.

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Sure, there's undercutting (I always post mine for xxx995 so that I'm five credits below the lowest price,) but I don't get why I post something for a million (just like everyone else did,) and somebody undercuts to like 100K. It's like people are racing to drive the prices down, from the wrong end of the deal!

 

sometimes you can even see the history of stupid undercutting on GTN.

Initial price 300k. next person 295k. Next person 294900, next person 290k, next person (and I cant understand the moron) 200k, next person 199k, next person 198k, next person (and I still don't get it) 140k etc, etc...

 

sometimes it takes just one or two morons, and the prices go down. I bet these are the same that whine about repair costs, or training cost being too high.

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Competitive Pricing .

Works for the Buyers more than the Sellers .

 

Just how it is .

 

 

A lot of stupid over pricing on the GTN too , I choose not to buy it , and wait for someone to undercut to a reasonable price .

 

There was a Body Piece I wanted , it was 900k at the least price but the Box it came in was 400k which comes with the gloves and the body .

So I offered 300k on the General chat , got flamed but eventually someone sold me the Box for that price .

 

Edited by mefit
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A rich gathering mission produces 0, 8 or 10 mats each and costs 3890. So that's 486 per green mat.

A rich crew skill mission produces 0, 8 or 10 mats each and costs 3890. So that's 486 per blue mat.

The rich crew skill missions are criting about 25% of the time for me and producing 3 purple mats. Assuming the blue mats are over-saturated and worthless, that's at most 5186 per purple mat.

 

So ideally:

A green item is 4*486+2*800 = 3,544 each.

A blue item is 8*486+4*800+2*486 = 8,060 each.

A purple item is 8*486+4*800+2*486+4*5186 = 28,804 each.

An aug kit requires ~10 green items = 35,440 each.

This of course varies some for different missions/items and some mats like scavenging are ridiculously easy to gather by hand on Rishi/Yavin 4.

 

I usually want at least 100% profit for my time (and I don't only run rich missions) and the purple items are in really high demand right now so they get marked up a bit extra.

 

So when I see aug kits for 100k+, yes I will under cut you to something more reasonable because I don't have all day to work down from 100k to 70k one credit at a time.

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The only time that i really laugh about it is when someone undercuts so much that you can actually can sell it to a vendor for more credits

 

I love doing that with crafting materials. Sometimes I'll buy the stuff and use it, or relist it, but half the time I see this I'll just vendor it and make the easy money.

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A rich gathering mission produces 0, 8 or 10 mats each and costs 3890. So that's 486 per green mat.

A rich crew skill mission produces 0, 8 or 10 mats each and costs 3890. So that's 486 per blue mat.

The rich crew skill missions are criting about 25% of the time for me and producing 3 purple mats. Assuming the blue mats are over-saturated and worthless, that's at most 5186 per purple mat.

 

So ideally:

A green item is 4*486+2*800 = 3,544 each.

A blue item is 8*486+4*800+2*486 = 8,060 each.

A purple item is 8*486+4*800+2*486+4*5186 = 28,804 each.

An aug kit requires ~10 green items = 35,440 each.

This of course varies some for different missions/items and some mats like scavenging are ridiculously easy to gather by hand on Rishi/Yavin 4.

 

I usually want at least 100% profit for my time (and I don't only run rich missions) and the purple items are in really high demand right now so they get marked up a bit extra.

 

So when I see aug kits for 100k+, yes I will under cut you to something more reasonable because I don't have all day to work down from 100k to 70k one credit at a time.

 

your math is wrong and you don't even realize it. Tip: look more carefully into aug kits. Where and how do you get aug slots ? Do your homework.

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It sounds as if you're assuming that "time spent playing the game" has no value.

 

Sure, I could run around gathering nodes for "free", but I'm spending time doing it. That time has actual value to different people, which is why some are fine on purchasing mats on the GTN, rather than gathering it themselves (or running crew missions).

 

Crafting that sells at a loss is not sustainable. Eventually, the other party gets tired of converting excess time into credits.

 

You are working under the assumption that they realize they are making a loss on the GTN. I really don't think many people keep books on it.

As long as the amount of credits they have increases I'm willing to venture a guess that most people wouldn't realize that one of their activities is costing them credits if the amount of credits at the end of the week is higher then it was at the beginning, thus making undercutting on the GTN sustainable.

Edited by GuruVII
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oh look. This asinine topic again where someone with "holier-than-thou" syndrome thinks their idea of buying and selling is the only way.

 

heads up buttercups..there is no "right" price. There is no "wrong" price. If you sell something for 1mil and I turn around and put it up for 100k..neither of us is wrong and neither of us is "stupid" for doing so.

 

get over yourselves.

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RE'ing a green item gets you 1-2 mats and 1 aug kit component. It requires 10 components 6 green mats and 2 blue mats. So about 10 green items. 10x3,544 = 35k each.

 

If I'm making a mistake, you need to give me a hint.

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Doing some quick math, I can make my own slice tech purple 11 at around 10k per piece after doing missions. The GTN sells them for 80k. I can use my price reduction and create the augment at a lower price than someone who has to buy some or all the mats on the gtn to make the same augment.

 

That is why the price difference and undercutting exists.

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RE'ing a green item gets you 1-2 mats and 1 aug kit component. It requires 10 components 6 green mats and 2 blue mats. So about 10 green items. 10x3,544 = 35k each.

 

If I'm making a mistake, you need to give me a hint.

 

 

Here's a hint, the green mats only cost me time.

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I'm sure each server's GTN market responds a little differently. And depends on what time of day you do etc. etc. etc..

 

Yes people may undercut themselves without knowing it. But like some others have shown, you can buy those dirt cheap prices, get them off he GTN, then relist them. It's Pawn Stars SWTOR style...

 

On the other hand if I'm undercutting by a decent but not huge amount, then it's because my calculations tell me that I can sell Item A for x amount of creds and someone may be desperate enough to pay the higher price. On the other hand if I list several items on the GTN for much cheaper and sell all the items quickly, I will then actually come out a head. 3 smaller profit sales will sometimes lead to more $$ than one larger profit.

 

As someone who sells a lot of stuff, it's much better for me to go with the smaller profit % but larger volume, than larger profit with less volume.

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You are working under the assumption that they realize they are making a loss on the GTN. I really don't think many people keep books on it.

Well, my actual assumption is this:

 

1. Joe Doaks has a lot of mats in this bag.

2. Learns how to make stuff with it.

3. He makes it, lists it for super cheap on the GTN, and makes credits.

4. He runs out of mats and goes to get more.

5. Eventually he realizes he's spending a lot of time doing this and raises his prices to match what the market will stand.

 

This is mainly based off of observations. Whenever I see a market take a dive below costs, I just move onto a different market and wait it out. To date (over almost 3 years now in BG), it has always recovered. Sometimes in a few days, sometimes in a few weeks, once it took 3 months.

Edited by Khevar
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RE'ing a green item gets you 1-2 mats and 1 aug kit component. It requires 10 components 6 green mats and 2 blue mats. So about 10 green items. 10x3,544 = 35k each.

 

If I'm making a mistake, you need to give me a hint.

 

Oh, I'm sorry, didn't read your post carefully enough.

Still, you're losing your money, as greens sell for 1-4k each on GTN. Selling them raw would make you more credits then crafting your kits.

To really make profit you should compare your income to what you can achieve if you sold raw mats. Or act as if you'd be buying all your mats on the GTN.

If you see greens for average 2k each (archeology mats- crystals for 1k, artifacts for 3k),

then one green item (needed for aug slot) is worth 4x2000+2x800=around 10k.

You need 10 of those, so your kit is worth more or less 100k. And I didn't bother to check the price for aug slots, which you get extra during the process.

If you sold your mats and aug slots on the GTN you would make much more then your precious 70k.

Not to mention time involved.

Slots don't crit, so they are not worth it anyway.

Edited by jstankaroslo
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All of that is true... but early on it is colored by the fact that crafting greens to RE them actually might well teach you a new "something".

 

Sure, once you know them all, it is just a math process, but at some point early on (such as right now), there is more to it than math.

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All of that is true... but early on it is colored by the fact that crafting greens to RE them actually might well teach you a new "something".

 

Sure, once you know them all, it is just a math process, but at some point early on (such as right now), there is more to it than math.

 

of course. Now is the time to make really good credits

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Just wanted to add my 2 cents here:

 

All these crafters putting Basic level enhancements up for 350k are pretty much just taking advantage of others stupidity. Before the xpac, Ultimate level modifications could be bought from a crafter for anywhere from 0-200k with mats. Asking people to pay 350k for Basic level stuff is highway robbery.

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Before the xpac, Ultimate level modifications could be bought from a crafter for anywhere from 0-200k with mats. Asking people to pay 350k for Basic level stuff is highway robbery.

Now figure out the cost of mats.

100k per purple, takes 2.

5k per green or blue, takes 10.

Whites at just under 1k.

 

Learning the schem takes 5x green (4x green=22k), 5x blue (10x green-blue=54k) = 110+270 = 380k average.

For any weapons, implants, earpieces most of the schems are trash.

 

Consider the opportunity cost of crafting these greens and blues. Missions return 2-3 purples per 5 missions, about 10k worth of blues, cost is 4k/mission, so 5 missions = 260k-20k=230k, about 46k net per mission. Five greens is 1 lost mission, five blues is 2-3 lost missions. That's 46*3.5=161k in opportunity cost.

540k total cost to learn schematic.

 

The marginal cost of crafting a purple is 254k in mats plus 1 lost mission = 300k total.

Selling at 350k gives 50k, we ignore GTN tax in both cases.

And you've spent 540k to learn it, so it will take 11 sales just to break even. Only after do you get net gain over the risk-free alternative of running missions and selling mats.

 

Still highway robbery?

 

 

It gets better with crafting crits, though. Then the cost to craft is 250k, profit 100k per, takes 6 sales to break even. Over selling 30 items, that's a profit margin of about 30%. This implies own mats, however. With own mats, producing the purples alone to make 30 items will take about 100 missions (!!), a whole day of launching them sharp on the clock.

 

With GTN mats, you have to count the GTN tax, bringing the profit down to 80k per. The margin over 30 items is then 25%. Which is high, but I'm pretty sure the profit margin on highway robbery in its heyday was considerably higher.

Edited by Heal-To-Full
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Right now it seems the biggest contenders for undercutting are all flooded with supply. Grade 11 purple slicing mats, Advanced 36 Augments, MK-10's, and Advanced Stims are all super cheap for being as time consuming the get as they are. Supply and Demand?

 

Right now if you really want to make some cash... try Arch. The green grade 11 fragments and power crystals are going for 4-6k each on JC.

 

I can't even turn my Biochem mats into MK-10's as fast as I am gathering the mats. Yet I can barely get enough Arch mats to make basic things like hilts and relics.

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