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7-22-2010 @ 2:28AM
Just a quick but important note about undercutting. Don't do it. No really, please don't undecut others on the AH. This is pretty obvious but most people seem to miss the point, but each time a seller undercuts the rest, the market price drops. I've seen the price on some gems drop by 50-100 G in a week, making them non-profitable and ultimately all the sellers lose out as result.If there are only a few existing items of what you are selling there is no need to undercut, your item will likely be sold anyway. If there are lots of the item already on sale, see how quickly they are being purchased and consider selling something else instead.Ironically, the greed that makes people undercut means they make less money in the long run, so please look at the big picture and think before you sell :)
7-22-2010 @ 3:16AM
I don't agree at all the undercutting ruins the market. As someone who has been working in the glyph market for awhile now undercutting is just part of the game. The thing is to not be obnoxious about how much you undercut by.I've found on my server there are about 2 or 3 major players in the glyph market and a handful of smaller players. We undercut and get undercut numerous times each day (5 or 6 or even more) on hundeds of auction at a time. The trick to undercutting (and keeping a healthy market) is to undercut by a very small amount. In the glyph market I undercut by 73c. The thing you want is to be on the top of the list (lowest price). If I'm 73c lower then people will by mine. If I keep the undercut amount small (and so do my competitors) then the market value drop happens at a much slower rate. all of us in the glyph market are in it to make money and it's in out best interest to keep the prices at a higher (but reasonable) level all around.That said even in the "regular" market I undercut by only 1s. No reason to go higher than that. The normal person searching the auction house only cares which item it at the top (cheapest) not how much cheaper it is.
7-22-2010 @ 3:43AM
That certainly helps reduce the problem. What I did not make clear in my first post is that I was referring to the buyout price not the bid price, since most sales tend to come from buyouts. Lowering the bid price will put you top of the list, but as you say you only need do this by a small amount.The problem arises when people undercut the buyout prices - like I said, I've seen market prices plummet because of this.
7-22-2010 @ 6:01AM
On that note, I don't particularly care if my competition don't sell anything because I undercut them, what I care about is whether I sell my goods.If I don't undercut, then I don't sell. The solution? Undercut my competitors. (http://www.wow.com/2010/03/17/the-art-of-pricing/)Or to put it another way, what is more profitable?:1) To put something on the AH, not selling it and having wasted the AH fee2) Put something on the AH, undercut your competition adn sell it for a profit.I'm reasonably certain that it's 2).In some rare cases you can get away with overcutting (http://www.wow.com/2010/03/22/time-is-money-overcutting-in-times-of-scarcity/) but as a geenral rule, that's not a way to make money.I am active both in the large and active markets, such as glyphs, and the slightly more highend craftables, ilvl 245 items) and I can promise you that if I didn't undercut, I wouldn't have been able to afford epic flying on every toon + Cold weather flying + BoE epics the moment they hit 80...
7-22-2010 @ 6:18AM
*sigh* You have missed the point.I saved up 16K for the Tundra Mammoth in just a few weeks. Most of the money came from selling gems and I didn't undercut anyone (on buyout prices). However, I did make less money toward the end as market prices dropped BECAUSE people were undercutting.Not caring about your competitors means that you are doing yourself out of money as I explained in my previous posts. The only time you won't sell something is if the AH is flooded with that particular item, in which case sell something else. The more people that undercut, the quicker the prices drop.I used to sell the epic rings & neck items (way back when) but within a month or so the price dropped from around 2k to 1k - all the sellers lost out here because some people are greedy, there was no need to undercut as the market was not exactly flooded with them at the time.My point is that you will make more money at a quickler rate by not undercutting the buyout price. I've done it, it works.
7-22-2010 @ 11:30AM
@Ghost DancerYou seem to think there is a right and wrong price that you know and others are screwing up. You've got it completely backwards. No one is ruining the market. They're just making a profit by moving their goods. Maybe they could maximize their profits better, but so could you. Either take advantage of them or find a more efficient way to make gold. You don't have any special right to make gold at the AH without facing competition.
7-22-2010 @ 11:42AM
@jrizutko You have made a lot of assumptions about me & what I said, and all of them are wrong :-p Perhaps my meaning was not clear but I was making a suggestion, based on my experience, that can help everyone to make more money. I never set the price of anything, I just sell things for the SAME price as everyone else.Maybe some people have had different experiences, but on my realm at least, everything I have said holds true.
7-22-2010 @ 12:45PM
You'll have to forgive us, then, because you sound an awful lot like the folk who come around to complain that their personal fiefdom in the marketplace is DOOMED because Basil mentioned it.The fact is that undercutting can make the difference between making a sale or having to relist later. It's also true that more people are likely to buy if the price is lower. And that while lower prices for finished goods makes life a little more difficult for the people providing them, their customers rejoice. Finally, if the undercutting bugs you that much, and costs you that much, and you think the market will support a higher price... why aren't you scooping up the bargains yourself and relisting them at the correct price? Seems like easy money.
7-22-2010 @ 1:08PM
@BoobahNope, that was not my intent. I have made a lot of money on the AH (without undercutting), and when prices drop too much due to other sellers, I just sell something else instead. In fact I have made enough money for everything I want and more, so I don't bother selling anythign anymore as there is simply no need for me to do so.At the end of the day people will do what they do, I was just offering a suggestion, based on experience, for a way to increase profit for all concerned.
7-22-2010 @ 8:30PM
Remember that undercutting works both ways. It is detrimental when you are trying to sell something and make a profit, but it is very helpful when you are trying to buy something on the cheap. And yes, I am guilty of complaining at both ends of the spectrum.
7-22-2010 @ 10:57PM
@Ghost Dancer:The Law of Supply and Demand states that, in any given market, the maximum revenue is to be found by balancing the price such that Supply is as close as possible to Demand. If you list your items too high, you'll make more money per sale, but less sales overall, and thus lose money. If you list your items too low, then you will make more sales overall, but won't make enough overall to meet the demand. The key is to map out your demand curve and supply curve, find the point where they meet, and establish your price there. This is how economics works, whether you're talking about real markets or in-game markets.How can we accomplish this? Market experimentation. If you list to begin with at your maximum price without even examining current prices, you may find yourself way above market prices, and you're out your listing fee when nobody buys it. If you sell at your minimum price without examining current prices, then you'll screw yourself out of money you may have made. The easiest route to getting a decent price is to examine current market prices, then undercut by a slight amount. Over time, you'll find that you can adjust a little bit to determine at what price people will generally buy - ramp up the price a little at a time until you miss a sale, then you'll know the range people are looking for. As far as extreme undercutting goes, it's a simple matter to buy up all the low-priced auctions and essentially reset the market by listing it all yourself for a "proper" price.
7-23-2010 @ 3:13AM
Imploring people not to undercut hasn't stopped them for the past five years.
7-23-2010 @ 12:57PM
I hate to say this - but most people just don't care. You're living in a world where most people are not interested in treating this like an economics simulation, and only really go to the AH to sell items they don't want.Especially on a high population server like the one I'm on - there's really no controlling the price. Most people who are selling are not interested in doing a lot of work to make a profit.. . . and sometimes volume IS more important than price. A lot of real life industries thrive on mass production, which allows you to sell huge volumes - at a low price!It's not a bad thing to get more profit by volume rather than by individual profit margin.In fact, I would argue that a lot of items in the AH will actually get you *more* profit from volume sales rather than from high prices. A lot of profession based items are easy to turn into large volume businesses.If you price things TOO high, you risk having your customers move towards making the items themselves, rather than buying at the AH. Then you're left with items you'll never sell because customers will never buy them.You have to look at supply AND demand - you can't just look at one and ignore the other. Demand is elastic in this game - it can change, and change easily.
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