Undercutting: What do you think about that ?

[Profyrion]

Sometimes I undercut market prices significantly, precisely because I know it will deflate the market. Farmers and auctioneers are always trying to game the system and control (artificially inflate) the markets. Occasionally it gets a little out of hand and somebody has to come in and poke it.

Otherwise I could really give a crap. Whatever gets me the quick sale is where I'm going. If somebody wants to buy that auction and flip it for whatever he thinks it should have been listed at... I still win.

[andremello]

Every time I see a < 1% undercut I buy the more expensive item.

[Idoru]

I always undercut, and always by at least 10%. Because I don't play this game as a business simulation, and I don't care about maximizing my virtual gold stash.

Despise me or not.. i dont care.

So you see, this works both ways.

[Deleted]

I can live with selling stuff at one copper cheaper.
this means that anyone listing by price will see my stuff first, i.e buy my stuff first.

that's life, deal with it.

[Deleted]

i always undercut by 1 silver or smething, i hate people that undercut by more then 1 gold, unless its someone selling linnen cloth for 100g/stack

[Feyrzhuk]

I don't understand why you'd ever undercut by 500g when you can undercut by 1c instead and still have your item listed before the rest.

[Darnash]

I like it when people undercut me by a few silver or copper. Why? Because the item doesn't lose too much value. Regardless of how much the person undercuts me, I'm going to have to re-list my item and undercut them. Some people say I should wait until the other person's auction sells, because then mine will be next in line, or to simply buy their item if it's a significant undercut, but in actuality if I were to wait then more people would undercut the undercutter, and if I were to buy it would be counter-intuitive to my goal of exchanging my goods for gold. I'm not here to play the auction house, I'm here for a simple exchange of goods for currency.

I do not like it when people single-handedly kill a market. You may think, "It's only my goods, I just want to get rid of them quickly", but in doing so you are creating a new benchmark. Eventually, the market will stabilize itself (if the equilibrium price falls too much, less people will be willing to supply it and they will not be able to match demand, therefore the price will have to raise to compensate, economics 101), but for a few days or even a few weeks a single undercutter can significantly reduce the price of goods. If you undercut by only a few copper/silver, and the AH price is already at equilibrium between supply and demand, your item will still sell the fastest unless you see some vindictive person who doesn't buy (x-g, 99-s, 99c) for some illogical spite decides to buy the next item up. In this case, I find that it's actually best not to undercut the Buyout price AT ALL, and simply undercut the bid price. Most people search by lowest bid, and your item will, again, appear first and for the same price. It will still sell, and for more money than you would get for undercutting. And if someone else undercuts you, well, you're going to have to re-list your item again whether they undercut you by 99 silver or 99 gold.

The only advantage to large undercutting is that it sometimes attracts buyers who would not otherwise pay the current AH price. These hold-outs are pretty smart in their own regard, because they are able to turn a huge profit on others work. So yes, you may find that you will instantly find a buyer, and you may be happy with the price. But in the majority of cases, the AH equilibrium price is actually the fair one, and had you listed your item for a small undercut, it would still sell.

[Profyrion]

People are driven by more than one motivation (profit), Darnash.

[Feyrzhuk]

Couple of minutes later, i get a wisper from someone who is known to be an "Auction house player" on my server. He told me i was killing the economy by dooing that.

It's weird that he didn't just buy all of your ink and double his money re-selling it at his own price.

[Gamer4Gamer]

I like it when people undercut me by a few silver or copper. Why? Because the item doesn't lose too much value. Regardless of how much the person undercuts me, I'm going to have to re-list my item and undercut them. Some people say I should wait until the other person's auction sells, because then mine will be next in line, or to simply buy their item if it's a significant undercut, but in actuality if I were to wait then more people would undercut the undercutter, and if I were to buy it would be counter-intuitive to my goal of exchanging my goods for gold. I'm not here to play the auction house, I'm here for a simple exchange of goods for currency.

I do not like it when people single-handedly kill a market. You may think, "It's only my goods, I just want to get rid of them quickly", but in doing so you are creating a new benchmark. Eventually, the market will stabilize itself (if the equilibrium price falls too much, less people will be willing to supply it and they will not be able to match demand, therefore the price will have to raise to compensate, economics 101), but for a few days or even a few weeks a single undercutter can significantly reduce the price of goods. If you undercut by only a few copper/silver, and the AH price is already at equilibrium between supply and demand, your item will still sell the fastest unless you see some vindictive person who doesn't buy (x-g, 99-s, 99c) for some illogical spite decides to buy the next item up. In this case, I find that it's actually best not to undercut the Buyout price AT ALL, and simply undercut the bid price. Most people search by lowest bid, and your item will, again, appear first and for the same price. It will still sell, and for more money than you would get for undercutting. And if someone else undercuts you, well, you're going to have to re-list your item again whether they undercut you by 99 silver or 99 gold.

The only advantage to large undercutting is that it sometimes attracts buyers who would not otherwise pay the current AH price. These hold-outs are pretty smart in their own regard, because they are able to turn a huge profit on others work. So yes, you may find that you will instantly find a buyer, and you may be happy with the price. But in the majority of cases, the AH equilibrium price is actually the fair one, and had you listed your item for a small undercut, it would still sell.

Regardless you are not in control of the other person. Your only hope is to know how to respond to the situation at hand. There is no right or wrong way to look at this situation. If someone has a way of getting a product cheaper they will sell cheaper until they either lose money or lose product and no longer sell.

[Mad_Murdock]

I price to move. If it doesn't sell, I''ll drop the price by 10-20%. Those that have time to sit at teh AH can do the 1copper undercut, I'll drop it enough so that I don't have to monitor it. Most of the 1copper guys tend to not undercut my 1-3 items and stick to other AH players post

[RageasaurusRex]

Hello


For my part, i think it is acceptable, but only if it's done by a fair amount. Let me explain:

Not so long ago, i looked at the AH to know the prices of the enchanting scroll that grant +20 stats to chest (peerless stats). There was 2 of them at 1999g each. I made a scroll, and listed it for 1499g. 2 hours later, someone else listed 2 of these scroll for 1299g. This is what i call "fair and acceptable" because they are actualy willing to sell it cheaper than mine. No problem with that.

Another case now. I looked at "delicate inferno ruby", and the lowest ones listed was at 149g. I list 6 of them for 139g 99s 99c. 30 minutes ago, someone else list 10 of them at 139g 98s 99c. I personaly find it very irritating. Should i be that much irritated ?

Hypocrite?

He did the same thing you did..

[Ventashar]

It's fine to undercut because everyone has to make money, but don't undercut by a large amount. For example, someone has an item for 50k and it gets undercut to 40k, that's a no no.

[Kokiron]

If you undercut by more than 1c then you're just losing money. Sure there's the handful of white knights who won't buy it if you undercut by 1c (Because how DARE you want to make gold just like everybody else!) but the majority of people buying shit off the AH just buy whatever is cheapest.

[rboa]

economy lesson
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

if the player bought everything off the auction house it's only a 1200 gold profit, and if they farmed it all themself its a pure profit of 3 grand at the cost of their personal time to farm

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Economy Lesson Error
You need to learn about "Opportunity Costs". You have to take into account the time required for the different cases. For example:
-if the player bought everything off the auction house it's only a 1200 gold profit. This process may only take 10 minutes of player time.
-if they farmed it all themself its a pure profit of 3 grand at the cost of their personal time to farm. This process may take 10 hours of the players time. The profit of 3000 may have cost him much more by not doing other more profitable activities.

To put it in a real world context, let's say you are a lawyer that makes $100/hour for each hour worked. You can hire someone to cut your lawn for $50 or you can spend 3 hours and cut it yourself. So by saving $50 you lost $300. Of course you may just want to work outside and cut the grass yourself but you should know how much riding that cool john deere is costing you

[Reyn]

I'm on the "pro-undercutting" side. For those that want to argue about the economics just remember that we are talking PURE commodity products. There is absolutely NO product differentiation between a gem/glyph/herb whatever selling at 1000g or 1g. It's the same product. And on the AH the only service differentiation is pricing. By undercutting by any amount I am providing a service to those who buy my products versus the other guy's more expensive items. That's the buyer side.

On the seller side, undercutting by very small amounts helps keep prices and profits high. This can go too far and hurt the market since if the prices are unreasonably high, buyers will choose to do without. On my server the glyph market can get like this. I keep a list of glyphs found from the books and if they are either not on the AH at all or listed over 100g I make 1 and throw it up until it either sells or the price falls below 40-50g. (Then I just keep it until prices go back up a bit.)

[RyanRetnolds]

I don't see what the problem is here.

You list an item for 50g.
Person A lists the same item for 40g
Person B lists the same item for 49g 99s 99c

A's and B's item will both sell before your's, so who cares if they only undercut by 1c? The people undercutting by vast ammounts are simply bad at playing the AH and won't earn nearly as much as they could.

I usually don't even undercut, unless it's a pattern/rare item that doesn't sell often. I'm in no rush to sell the items, so I hang onto them until they hit a high price. This is why I make lots of money in less time than you, and why you spend all day farming to make what I can in an hour. If you're undercutting by more than a few silver, you're just wasting time and money. I cannot fathom the urgency people have with selling items, but these people shouldn't ever get involved in the stock market / any business related field.

[Deleted]

If you undercut by 500g, you virtually lose 500g.. Why would you do that. Because you feel sorry for the people who buy from you?

Don't be silly

[Hampen]

paragon /10chars

[Wilderness]

If you undercut by 500g, you virtually lose 500g.. Why would you do that. Because you feel sorry for the people who buy from you?

Don't be silly

That's not true at all.