I want to preface by saying I'm just one of MANY MANY omni-crafters out there, and an active seller in the MBs (The MANY MANY is key), and I can use undercutting tactics that vary wildly. Whether that's 1G, 1K, 10K, or 100K at a time.
This has been bothering me recently as there seem to be great masses of crafter/sellers out there who just don't seem to get it.
What makes matters worse, some of these people go beyond and demean and harass other competing sellers due to this fallacy in their views.
I'm making it a point to share my views because I was actually confronted by one of these sellers in game, for these very wrong reasons.
Lot of what I'm about to say are very basic concepts but I still see many fail to understand them.
If you're in the camp of any of these thoughts below, this post applies to you.
1) "UNDERCUTTING BY MORE THAN X GILS TANKS THE MARKET & RUINS THE ECONOMY." HARDLY.
I don't get this popular notion that undercutting products on MB in excess of 1G or 100G at a time is effectively "Tanking the markets", or even "Ruining the economy". Crafters/Sellers seem to throw these phrases around VERY loosely as if a single person or a few groups of people can "crash" a market or "tank" an economy. No matter how one tries to "tank" the price of an item, the market price will ALWAYS bounce back very quickly when those few goods listed at unsustainable prices are gone, provided that SE has not intervened (e.g. intro to new & better gears). Nobody, I mean nobody has the time nor the will to sustain selling products at a unworthy profit margins, or even at losses to artificially keep the prices low. Those are just few blips on a radar. That's it. No need to panic.
2) PURPOSE OF UNDERCUTTING.
Many seem the believe that the SOLE purpose of undercutting is to get ahead in the line. So they ask, "Why undercut for more than 1G and hurt everybody in the process???" This thought process is flat out wrong. There is more to it than that. Try to ask yourself, "Why is that person undercutting at those levels?" Their purpose can also depends on what the current competing prices are. Please understand the basic, really basic concept of supply & demand before getting upset at these sellers.
If you listed an item for 100k, and I come in and list an item for 70k, don't just get pissed off at me with irrational thoughts, but ask yourself, "Why did he/she list it at 70k?" Perhaps it's because the cost of producing that said item was only 10K. Perhaps, the barrier to entry being low (low crafter lv. requirement). The combination of aforementioned possibilities may lead me to desire selling mine quickly at a normal profit margin and get the hell out of that market before it gets flooded with other sellers. Last thing I want is to risk sitting on an inventory trying to make as much as possible on this sale and risk competing against 50 other listings very shortly.
Some of you to my surprise, seem to not understand that the price you list your items at impacts the buyer's demand, which also impacts the sellers' ability to sell. So no, undercutting by 1G is not always the right answer.
3) WHY THERE IS NO "ONE SIZE FITS ALL" METHOD OF UNDERCUTTING (1G, 100G, 1K, 10K, 100K).
Here's why you cannot judge other sellers based on the way they undercut their competition. The method you should look at when undercutting other competition is dictated by the situation in its entirety, and one size does not fit all. Look, it's a total waste of time to CONTINOUSLY undercut by 1G, when the markup on current price is 100%+ above cost of materials (Especially, trying to compete against MB botters 1G at a time). If, for example, the cost of materials are 60K to synth an Exarchic gear, and I see the said gear listed at 250k, you're damn right I'm not wasting my time playing the pennies game with other botters/sellers (battle not worth fighting) once they see an opportunity and flood this market. You bet the supply of that item will very quickly be flooded. Many times with botters' listings, whom so many of you vehemently want to get rid of. You're actually encouraging botting by prolonging these inefficient markets.
4) WHEN UNDERCUTTING BY 1G COULD MAKES SENSE.
Undercutting by 1G may make sense when the current markup of items is already at a healthy margin above cost of materials. This is the point of price equilibrium where the seller's desire to produce/craft/synth more of those items equals the rate of buyers looking to purchase that item. This is also the point where botters are not nearly as interested in monitoring that item, as they flock to more lucrative markets.
5) TIMES OF MARKET INEFFICIENCIES (OVERPRICED GOODS) ARE SHORT LIVED.
When products are being listed (Notice, I didn't say "sold") at unhealthy high price levels (e.g. listing calfskin caps/shoes at 2M when a calf leathers are selling for 1M), we're far from that point of price equilibrium and it's now an inefficient market. It's a waste of time for everyone to compete against botters for 1G undercut in those markets because those botters are heavily monitoring those items now. You're not going to win the undercut by 1G battles without a lot of luck and timing.
6) HOW TO DISCOURAGE BOTTING?
Counterintuitive to what some of you may think, I believe that the most effective way to drive out MB botters is to discourage them from abuse of an inefficient market (overpriced goods). They do that by diverting their resources to maximize profits by capitalizing on these overpriced listings with an unfair competitive advantage (with bots obviously). The way to counter the rise of botting is to keep the prices at efficient levels, and sometimes artificially lowering it to drive out the botters, at least temporarily.
7) MOST MMORPG MISSES ONE KEY PRINCIPLE ELEMENT OF ECONOMICS, AND THAT'S SCARCITY.
Unlike many RL markets, there is no prolonged scarcity in most MMORPG, including FFXIV (Except housing market, but that's another matter). This is a key factor everyone should understand. Scarcity in items in game discourages player masses from playing and kills many hopes, and developers are keenly aware of that to avoid it. With that said, the materials that supply the crafting of goods is not finite, therefore the weapons/gears crafters can supply in theory, is infinite.
Subconsciously, all players in the game will know this, and many buyers in the market are smarter than what some sellers think. Unless some buyer is in the minority of being ultra-wealthy, I can almost guarantee that most buyers look up the price of materials to have friend craft for them before splurging on weapons/armors from MB. Scarcity leads to irrational purchases, but because we don't have that in FFXIV markets, buyers are more rational. For that reason, heavy markups are not sustainable for a long period of time.
What this means, is that you & I really don't have a whole lot of competitive advantage against other MANY MANY max/omni/crafters with pentamelds on all slots. What this means is, don't expect to keep your listing at crazy markups in the MB for a long time and not expect to be met fiercely with competition very soon.
8) THINK BEFORE YOU GET PISSED AT UNDERCUTTERS.
To the crafters/sellers who get pissed at other sellers for undercutting by larger increments (10k-100k), try to understand the entire picture. At the end of the day, the only thing that determines price is supply & demand. Simple as that. I'm not talking about one-off sales from an unusual seller. Ask yourself if the current price is at an unhealthy high point. I'd personally rather sell something at 30% profit margin 10 times a day, then to sell one at 80% margin once every 5 days.
NOBODY is going to be able to sustainably tank the markets. Please stop spreading this nonsense. Prices can rise just as easily as it can fall. The direction of the price is just a byproduct of that supply & demand levels. As long as there is a demand for that item (which only SE can eliminate), no one person, or a few is going to effectively change that market.
Occasionally, sellers get lucky with timing and sell at large profit, but over a long course, it's healthier to set realistic expectations of your margins. That leads to a more rational understanding towards your competition and their undercutting tactics.
9) FINAL THOUGHTS
At the end of the day, all sellers use their own experiences and expertise to play in the market that they deem most profitable for themselves. You may take what I say with a grain of salt, or possibly have a bit of takeaway from anything I've said. I just want to shed some light on my views and hopefully I'm not in the heavy minority to have this though process.
I'm not looking for a lengthy back and forth argument with anyone here at this point because I don't think I have much more to add to what I've already said. Ultimately, we can agree to disagree but**, unless you have absolute proof of someone else's tactics as being against SE's ToS, do not confront or harass other sellers in game.**
submitted by /u/akang224
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Continue reading...
This has been bothering me recently as there seem to be great masses of crafter/sellers out there who just don't seem to get it.
What makes matters worse, some of these people go beyond and demean and harass other competing sellers due to this fallacy in their views.
I'm making it a point to share my views because I was actually confronted by one of these sellers in game, for these very wrong reasons.
Lot of what I'm about to say are very basic concepts but I still see many fail to understand them.
If you're in the camp of any of these thoughts below, this post applies to you.
- "Undercutting by more than 1g is a path to tanking/crashing the markets."
- "You have nothing to gain by undercutting more than 1g because your only purpose is to be on top of the seller list."
- "I hate undercutters who tank the market. It ruins the economy."
- "It's easy for prices to fall, but takes a very long time for prices to rise. Be patient in undercutting!"
- "I'm going to act on my hate and belittle/harass these undercutters, whether in game, or in message boards."
- "Majority of undercutters must be botters."
1) "UNDERCUTTING BY MORE THAN X GILS TANKS THE MARKET & RUINS THE ECONOMY." HARDLY.
I don't get this popular notion that undercutting products on MB in excess of 1G or 100G at a time is effectively "Tanking the markets", or even "Ruining the economy". Crafters/Sellers seem to throw these phrases around VERY loosely as if a single person or a few groups of people can "crash" a market or "tank" an economy. No matter how one tries to "tank" the price of an item, the market price will ALWAYS bounce back very quickly when those few goods listed at unsustainable prices are gone, provided that SE has not intervened (e.g. intro to new & better gears). Nobody, I mean nobody has the time nor the will to sustain selling products at a unworthy profit margins, or even at losses to artificially keep the prices low. Those are just few blips on a radar. That's it. No need to panic.
2) PURPOSE OF UNDERCUTTING.
Many seem the believe that the SOLE purpose of undercutting is to get ahead in the line. So they ask, "Why undercut for more than 1G and hurt everybody in the process???" This thought process is flat out wrong. There is more to it than that. Try to ask yourself, "Why is that person undercutting at those levels?" Their purpose can also depends on what the current competing prices are. Please understand the basic, really basic concept of supply & demand before getting upset at these sellers.
If you listed an item for 100k, and I come in and list an item for 70k, don't just get pissed off at me with irrational thoughts, but ask yourself, "Why did he/she list it at 70k?" Perhaps it's because the cost of producing that said item was only 10K. Perhaps, the barrier to entry being low (low crafter lv. requirement). The combination of aforementioned possibilities may lead me to desire selling mine quickly at a normal profit margin and get the hell out of that market before it gets flooded with other sellers. Last thing I want is to risk sitting on an inventory trying to make as much as possible on this sale and risk competing against 50 other listings very shortly.
Some of you to my surprise, seem to not understand that the price you list your items at impacts the buyer's demand, which also impacts the sellers' ability to sell. So no, undercutting by 1G is not always the right answer.
3) WHY THERE IS NO "ONE SIZE FITS ALL" METHOD OF UNDERCUTTING (1G, 100G, 1K, 10K, 100K).
Here's why you cannot judge other sellers based on the way they undercut their competition. The method you should look at when undercutting other competition is dictated by the situation in its entirety, and one size does not fit all. Look, it's a total waste of time to CONTINOUSLY undercut by 1G, when the markup on current price is 100%+ above cost of materials (Especially, trying to compete against MB botters 1G at a time). If, for example, the cost of materials are 60K to synth an Exarchic gear, and I see the said gear listed at 250k, you're damn right I'm not wasting my time playing the pennies game with other botters/sellers (battle not worth fighting) once they see an opportunity and flood this market. You bet the supply of that item will very quickly be flooded. Many times with botters' listings, whom so many of you vehemently want to get rid of. You're actually encouraging botting by prolonging these inefficient markets.
4) WHEN UNDERCUTTING BY 1G COULD MAKES SENSE.
Undercutting by 1G may make sense when the current markup of items is already at a healthy margin above cost of materials. This is the point of price equilibrium where the seller's desire to produce/craft/synth more of those items equals the rate of buyers looking to purchase that item. This is also the point where botters are not nearly as interested in monitoring that item, as they flock to more lucrative markets.
5) TIMES OF MARKET INEFFICIENCIES (OVERPRICED GOODS) ARE SHORT LIVED.
When products are being listed (Notice, I didn't say "sold") at unhealthy high price levels (e.g. listing calfskin caps/shoes at 2M when a calf leathers are selling for 1M), we're far from that point of price equilibrium and it's now an inefficient market. It's a waste of time for everyone to compete against botters for 1G undercut in those markets because those botters are heavily monitoring those items now. You're not going to win the undercut by 1G battles without a lot of luck and timing.
6) HOW TO DISCOURAGE BOTTING?
Counterintuitive to what some of you may think, I believe that the most effective way to drive out MB botters is to discourage them from abuse of an inefficient market (overpriced goods). They do that by diverting their resources to maximize profits by capitalizing on these overpriced listings with an unfair competitive advantage (with bots obviously). The way to counter the rise of botting is to keep the prices at efficient levels, and sometimes artificially lowering it to drive out the botters, at least temporarily.
7) MOST MMORPG MISSES ONE KEY PRINCIPLE ELEMENT OF ECONOMICS, AND THAT'S SCARCITY.
Unlike many RL markets, there is no prolonged scarcity in most MMORPG, including FFXIV (Except housing market, but that's another matter). This is a key factor everyone should understand. Scarcity in items in game discourages player masses from playing and kills many hopes, and developers are keenly aware of that to avoid it. With that said, the materials that supply the crafting of goods is not finite, therefore the weapons/gears crafters can supply in theory, is infinite.
Subconsciously, all players in the game will know this, and many buyers in the market are smarter than what some sellers think. Unless some buyer is in the minority of being ultra-wealthy, I can almost guarantee that most buyers look up the price of materials to have friend craft for them before splurging on weapons/armors from MB. Scarcity leads to irrational purchases, but because we don't have that in FFXIV markets, buyers are more rational. For that reason, heavy markups are not sustainable for a long period of time.
What this means, is that you & I really don't have a whole lot of competitive advantage against other MANY MANY max/omni/crafters with pentamelds on all slots. What this means is, don't expect to keep your listing at crazy markups in the MB for a long time and not expect to be met fiercely with competition very soon.
8) THINK BEFORE YOU GET PISSED AT UNDERCUTTERS.
To the crafters/sellers who get pissed at other sellers for undercutting by larger increments (10k-100k), try to understand the entire picture. At the end of the day, the only thing that determines price is supply & demand. Simple as that. I'm not talking about one-off sales from an unusual seller. Ask yourself if the current price is at an unhealthy high point. I'd personally rather sell something at 30% profit margin 10 times a day, then to sell one at 80% margin once every 5 days.
NOBODY is going to be able to sustainably tank the markets. Please stop spreading this nonsense. Prices can rise just as easily as it can fall. The direction of the price is just a byproduct of that supply & demand levels. As long as there is a demand for that item (which only SE can eliminate), no one person, or a few is going to effectively change that market.
Occasionally, sellers get lucky with timing and sell at large profit, but over a long course, it's healthier to set realistic expectations of your margins. That leads to a more rational understanding towards your competition and their undercutting tactics.
9) FINAL THOUGHTS
At the end of the day, all sellers use their own experiences and expertise to play in the market that they deem most profitable for themselves. You may take what I say with a grain of salt, or possibly have a bit of takeaway from anything I've said. I just want to shed some light on my views and hopefully I'm not in the heavy minority to have this though process.
I'm not looking for a lengthy back and forth argument with anyone here at this point because I don't think I have much more to add to what I've already said. Ultimately, we can agree to disagree but**, unless you have absolute proof of someone else's tactics as being against SE's ToS, do not confront or harass other sellers in game.**
submitted by /u/akang224
[link] [comments]
Continue reading...