Undercutting: What do you think about that ?

[Maelstrom51]

Opportunity cost is basically the difference in gains between two options.
Example: you get an item that sells for 5k. You decide to sell it for 3k. By selling it for 2k less than what you could have, the opportunity cost is 2k, which you lose.
As for "high prices never sell," all I have to say is this:



Do note that I've spent about 70k on BoEs for my characters, which is the majority of the spent category.

[dexx]

Looking again at cut gems as an example: pre-4.2 an uncut Inferno Ruby was on the AH for 80g. That price was steady for a long time. Cut IR like Brilliant IR sold for about 95g. Take the AH cut and you make a modest 10g per gem. Now on my server you cant post a hundred of these a day as there is not enough market for them. If i post 5 a day, maybe 3 will sell. After 4.2 the price went up to 160g. Now my cut IFs are a good earner. I can sell a dozen a day. If i price mine at a couple of gold under the lowest i'll make even more.

Then someone comes along and puts 40 brilliant IR on for 100g each. In hindsight i should have just bought them out before the market expectation changed. The "boom", although it was always going to be temporary, was cut short by the actions of a few over eager JCs.

[Asozeras]

Hello

I'd just like to know what you think about undercutting. Many peoples says it's bad, many others says it's acceptable. What about you ?

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 ?

So, what is your opinion about undercutting ? Is this acceptable to undercut by a fair amount ? and if it is, what is the threshold between a "fair" amount and a "not-fair" amount ?

Another thing: 2 weeks ago, i had about 400x inferno ink sleeping on my bank. I looked at the AH: 30g each. I listed all of them for 15g each, just to get rid of these. 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. I asked him why he didn't just buy all of them and relist it for more, and his answer was some kind of wall of text about how the economy is working.. and well, i didn't understand half of what he meant.. (i know very little about economy, and i'm still trying to understand why the gasoline prices is gooing up these years.. lol).

Take it from someone who gets half their fun outta WoW from the AH: Undercutting by 1cp is preferred.

Now, allow me to elaborate. When you have something like a gem cut, an enchant, or something like that that you are able to mass produce and sell on a daily basis, you want that item to be able to sell for as much as possible. Let's take Delicate Inferno Ruby as an example (and for the purpose of easy figuring let's say uncut Inferno Rubies are worth about 50g/ea.)

In our first scenario person A posts 10 of them at 100g each for a nice profit margin of 50g per sale; 3 of them sell before person B comes along and posts 10 at 75g each. Person B is still turning a decent profit of 25g per sale and manages to sell 4 before he's undercut person C who posts them at 55g each for a quick sale. Person C posted them very cheap so he sells 7 of them before person A comes back the next day and recuts / reposts his auctions. Now person A sees that he sold 3 DIRs and made a 150g profit but is very upset that they're down to 55g each now and that he has to undercut that basically down to base cost to even post them, but he does, sells all 10, but only makes a 30g profit out of all 10.

In our second scenario player A posts them at 100g, sells 3, player B posts them at 99.99g, sells 3, player C posts them at 99.98g, sells 3, then player A comes back and reposts his at 99.97g and sells 3 again.

In the first scenario player A made 150g, player B made 100g, and player C only made 35g even though he sold the most rubies. After the first day, player A only makes 30g / day because of all the undercutting, and players B and C are in the same boat or just get out of the business because no one wants to pay 100g for DIRs after they were just posted at 50g for a week straight.

See how that works? Big undercuts ruin the market and no one can make money.. if everyone just cooperates, works together, and only undercuts by 1cp or 1sp, then the market can stay strong and every manufacturer can get their piece of the pie (profit.)

Hope this helps .

[JeKv]

I don't understand how any rational person who understands how this stuff works could see undercutting as a problem.

You have supply, you can afford to offer a lower price than your competitors, so you do it. If possible, you undercut by as little as possible in order to maximize your profits while still being the cheapest available. Is there really any further discussion to be had? This is how it works people.

[xile]

I agree with you, undecutting by 1c to be top of the list is cheap but most people do it. Personally when buying items I will scroll past the 1c undercutters and buy from someone who has posted a round number.

Assuming the listed price is reasonable you should never really ever undercut by less than 1g. There are several issues with doing so, the first of which is utterly tanking the price of an item, which sadly is why you will see items upon release drop significantly lower and quicker than they should ever do so. What people don't realize is that if the listed item is 1500g, whether you post it as 1499,99,99 or 100. it will still sell just as quickly (short of the person buying out the second one to resell and post it at 1500.) Undercutting by too much is not only bad for the market but dumb of yourself because youre willingly taking a hit. The difference between WoW and a normal economy is that while supply and demand works out pretty well, alot of people just want to make as much money as quickly as possible, and more often than not those people are the same ones who don't think about the fact that undercutting by 1c will result in just as quick of a sale. They then cause the price to drop WAYY below what it should be, exceptionally quick, and in turn ruin the market for everyone. When i played i HATED people like that would undercut my BoEs b something like 2k gold, because i would have to wait a solid day or so for someone to either buy it, or it to fall off the AH so that i could repost the BoE at the original selling point so i wouldn't take a huge loss.

[Commander]

Assuming the listed price is reasonable you should never really ever undercut by less than 1g

Problem is, in WoW you never know if the price is reasonable or not. There can only be very rough estimates.

[venie]

Smart people use addons that undercut.

[Stevoman]

I'll start off by saying that I do have to undercut heavily on some items. I work a normal job, and can't camp the AH from 8-5, so my only chance at selling things like BOEs is to undercut by a VERY healthy (but still profitable) margin during the day. There is a bot on our realm that camps the BOE market 24/7 and will immediately undercut you again if you don't undercut to the point of putting him in the red. However I undercut all my consumables by 1c and camp it for roughly an hour before and after raids. Those are the most profitable times of day anyways, so that's when most of the money is made.

White Knight undercutters used to annoy me a lot, but since I have switched to better addons, it doesn't bother me at all. My addon does all sorts of statistical analysis to determine when to ignore a specific market and hold onto my stock (or hold off on crafting that item) until it returns to normal. I don't even notice any more when a specific cut crashes for a day or two, and I still collect 10kg+ from my mailbox every day. It also has modules to analyze and assist in buying up heavy undercuts to take control of a market, but that's something I'm too lazy to get into and don't want to spend the up front cash for.

[brirrspliff]

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 ?

as a matter of fact, yes, you should be that much irritated. it has somehting to do with understanding, logic and common sense, which you seem to lack all.

facts so far:

- you checked the ah for gems
- you undercut all sellers by amount "x"
- you are now the seller wit the cheapest gems
- some other person checks the ah for gems
- some other person undercuts you by amount "y"
- he is now the cheapest seller
- you are irritated

[Homsel]

I think it's not about a question of fairness in general, it's just how a free market works in a capitalistic society. It's just sometimes annoying to see someone else beats you by only 1s or similar .

PS: gas price tend to go up, because a) the remaining resources are shrinking b) OPEC are used to acquire less than the markets demand c) some ingenious goverments invent more and more "cool" taxes on gas...

[Deleted]

1c or GTFO noob, in my humble opinion.

[Deleted]

I think everyone SHOULD undercut by one copper, all the time.
The fact that you undercut someone by 500g I find horrible, why would anyone do that?

[Deleted]

personally, it depends on the items. if it's a low value item, low 1c,1s etc undercuts don't bother me much. of course, as the price rises i'd like to see bigger uncuts to fall in line with the increase. i saw three firelands BoEs earlier on the AH for 70k, 69,999 and 69,998. now that style of undercutting just annoys me off. if you haven't got anything to offer with your price, just don't bother listing the item at all. if i HAD to buy one i'd of course go for the even number, just because it's easier to keep track of.

just my two cents.

[Crummy]

If you undercut smartm and in the right way. I have no problem with it.
If you do it wrong, I'll put you on ignore for sucking at using the AH

[haaskilbas]

I would much rather see people undercut by slim margins as it keep the retail value of the item up. I can't count the number of times ive seen truegold drop from realm avg of 525 to the low 100's. When a lot of the people who don't know how to use the market or just use the auto price function of say auctioneer the values just plummet.

[Thetalisker]

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" ...

I don't. Undercutting with 2-digit percentages is plain dumb and ruins things for people without time to play the auction house.

The only reason why you'd want to undercut someone is so that your item is the cheapest on sale. You can do that by undercutting by 1g, or even 1c, instead of a whopping 500g.

[Vulpei]

Assuming the listed price is reasonable you should never really ever undercut by less than 1g. There are several issues with doing so, the first of which is utterly tanking the price of an item, which sadly is why you will see items upon release drop significantly lower and quicker than they should ever do so. What people don't realize is that if the listed item is 1500g, whether you post it as 1499,99,99 or 100. it will still sell just as quickly (short of the person buying out the second one to resell and post it at 1500.) Undercutting by too much is not only bad for the market but dumb of yourself because youre willingly taking a hit. The difference between WoW and a normal economy is that while supply and demand works out pretty well, alot of people just want to make as much money as quickly as possible, and more often than not those people are the same ones who don't think about the fact that undercutting by 1c will result in just as quick of a sale. They then cause the price to drop WAYY below what it should be, exceptionally quick, and in turn ruin the market for everyone. When i played i HATED people like that would undercut my BoEs b something like 2k gold, because i would have to wait a solid day or so for someone to either buy it, or it to fall off the AH so that i could repost the BoE at the original selling point so i wouldn't take a huge loss.

You're assuming that the person undercutting is just going to stand at the AH watching the prices like you do. By undercutting by a signifigant amount, you can generally sell your item faster because the people who sit around the AH all day instead of doing something I think is fun won't drop their stock off the AH and relist it just under yours. This is especially valid for Enchanting scrolls that have like a 2s list price. I used to pop a couple up before raid at 1g under the current list price and by the time I finished raid there would be 5 under that and none above, because AH watchers just relist. Now I take the loss of a couple of hundred gold to sell it at all because I find sitting in the AH with a window so big I can berely read guild chat open boring as hell.

[Caesium]

Undercutting by anything over 1g generally kills the market for something (at least for a short time). If I undercut someone by 1c, then I am getting the most I can out of the item and the person who comes along and undercuts me can also get more out of the same item.

If people are undercutting by 10g or so, then eventually you get from cut red gems selling for 200g (just an example, haven't actually checked the gem market recently) down to 100g in no time and then it becomes almost pointless to bother trying to sell one. Simply put, I would much rather be undercut by 1c than by 100g, 10g, or even 1g.

[Darsithis]

I will undercut, sometimes by huge amounts, if I get very frustrated:

I made a landslide enchant and saw the AH had two up, for 1999g each. I put mine up for 1998. Within minutes, I was undercut by a few copper. Being a busy man, I don't have time to monitor the AH all day, but I'd check in every few hours to find the other two undercutting me again and again. I reposted dozens of times over the course of a week, always to be cut before I could sell. The price steadily dropped lower...and lower...

Until I gave the enchant away for free to some rogue in a fit of anger (who cried about how awesome I was). I don't care if undercutting is "good" business practices...I wanted to get rid of a stupid enchant and make a little gold in the process. Instead I got annoyed, then angry and stressed out over what is just a video game and a bunch of pixels.

I thought I'd try again this week. Made a few +75 Greater Stamina enchants for the chest, selling for 800g on my server. Within minutes of putting mine up, I'd get undercut by extremely small margins. So this time, I started undercutting them by huge ones...799...599...399. Finally I put all of mine up for 29.99.99 and watched everyone else undercut me...but mine sold. They threw away the costs of the Maelstrom Crystals in a ridiculous attempt to continue undercutting me with no concept of ROI (I farmed the mats and spent no gold to acquire them).

Screw the AH. Unless you've got 24/7 monitoring or a very niche product that can't be easily made in bulk (like crafted gear), f**k it. The undercutting is ridiculous. Just 1 copper puts you out of the running and sitting on your stock for weeks is just lost income. If I want gold from now on, I'll just solo some old 80 heroics. It's more fun, at least.

[Stevoman]

I thought I'd try again this week. Made a few +75 Greater Stamina enchants for the chest, selling for 800g on my server. Within minutes of putting mine up, I'd get undercut by extremely small margins. So this time, I started undercutting them by huge ones...799...599...399. Finally I put all of mine up for 29.99.99 and watched everyone else undercut me...but mine sold. They threw away the costs of the Maelstrom Crystals in a ridiculous attempt to continue undercutting me with no concept of ROI (I farmed the mats and spent no gold to acquire them).

That was a bot, and a badly configured one with no minimum threshold set. You should find all its auctions, post a dupe for 1g, then buy out its items when it undercuts to 99s.

Alternatively, you could report them. Personally I'd ride the gravy train until the idiot running it figures out what you're doing.