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Take advantage of market fees to not undercut like an idiot.Follow

#52 Dec 07 2013 at 9:05 AM Rating: Excellent
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dustinfoley wrote:
Well u make the assumption that if you arent making money (in your words, the max possible money) while you are playing, you are wasting time/ being inefficent

If you run a dungeon, you arent making the max possible money, ergo you are wasting time and money right?

If you are doing a quest you arent making the max ammount of money, ergo you are wasting time/mony right?

Opportunity cost only means anything in a business, and your character isn't a business (unless you are a RMT).

If you choose to run a dungeon or do a quest, you are choosing to spend your time doing something other than making gil (or perhaps making less gil since you might get some drops you can sell from it). If the dungeon or quest is blocking progression, it may be an investment in your ability to make more gil in the future.

If you choose to sit around at an Aetheryte and watch the /shouts go by and not do anything at all, then you are choosing to waste your time.

Whether you choose to spend your time doing other things than making gil, or choose to waste your time, it doesn't negate the fact that your time has intrinsic value. Just like you could choose to spend your gil in a way that's not the most efficient way, but that doesn't change or negate your gil's intrinsic value.
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#53 Dec 07 2013 at 1:00 PM Rating: Default
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Hairspray wrote:
MMO economies are so complex that they actually use them to study real economics... in fact several people have done so.

My point is that the object you are selling is ultimately worth what someone is willing to pay for it, nothing more.

If you feel that it's worth 1 million gil, and nobody is willing to buy it for that much, then it's really not worth that much and you need to adjust your views.

That's the truth of economics.

Undercutting is just the natural flow of supply and demand, if there are too many Earth Crystals on the AH, and nobody is buying them for 160 gil each for stacks of 1000, then perhaps there's not enough demand for that price to make sense...

If I'm a crafter and I know that the price of said crystals fluctuates, and I can buy them cheaper at another point, or just farm them myself, often I will do just that. So your crystals are not worth the price if I'm not buying them.

Same thing goes for any item really... buyers set the price, not the sellers... you may think the seller is setting the price, but that's just who is placing it for sale at a certain price, the buyers ultimately control the price in a free market.

The taxes on the AH are a whole different story, Most people are unaware that the tax is only paid by the buyer if they buy from a retainer in a city other than the one they are located in. Calling them stupid for not having been aware of a fact such as this is not fair.

I wouldn't call you stupid for thinking that undercutting was bad, or that sellers control the price. I'll simply try to help you understand it better.

A better topic would have been "FYI - Taxes are only paid by the buyer if they buy from a retainer in another city."

You probably would have gotten a ton of thank you's and been rated up through the roof for that... but instead you decided to call people stupid for not being aware...


Yea, sorry to say but you're wrong...

If you're dealing with a high priced item that sells rarely where people will hold off on purchasing because they're hoping for a price drop... yea... that's a buyers market where they decide what something is worth...

BUT for just about every single other item in the game the price is dependent on the seller, not the buyer. When it comes to things like consumables there is a steady amount of demand associated with the sales. People know they're expected to have a certain consumable for their coil run etc so they're picking up their end of the slack and the price of those items retain a generally stable price due to the demand.

The buyer is not setting the price here, the seller is. The buyer needs that consumable and was going to pay whatever the going rate was anyway. They're not going to look at a consumable listed at the same price they paid two days ago and have been paying for every week and decide to sit on their hands waiting for the price to drop. The buyers act in reaction to the price dictated by the seller. If the price is stable they buy enough to sustain them for the moment and when someone with no idea how the market works tosses their entire inventory up for a fraction of its price then the buyer simply takes advantage and buys up what they can for the future on the assumption that if the market rebounds they've made a deal and saved on future purchases.

Undercutting only works when someone has the slightest clue what they are doing. For example take Mega Potions of Strength on my server. They had been selling at a steady 3000g between a handful of steady and stable sellers. As the number of sellers grew the market spread out people undercut based on how many potions they were selling at once. You have sellers with just 5 potions at a time that keep their price close to 3000g while others else selling 30 at a time drop their prices to around 2900g. There is a balance between buyers who want to take advantage of the discount and are willing to sit on a stock of potions and those who would rather simply buy enough to get them through their next run at the higher price.

Then an idiot that doesn't know how to read the market shows up and puts up half a dozen stacks of 5 potions for 2500g each. They've flooded the market without caring about the current balance of stock and price and simultaneously ***** over not just those selling small stacks but also those selling large stacks. The next idiot shows up and seeing the mess of prices tosses theirs up for lower than the previous idiot and the market either begins to stagnate while the existing sellers wait and hope for a rebound or collapses as they freak out and try to empty their stock before someone else drops the price even more.
#54 Dec 07 2013 at 11:42 PM Rating: Good
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Catwho wrote:

Now, the folks who undercut to the point where they're selling items for the same or less than what they would sell to NPCs? Those people are idiots.


THIS^

I facepalm a white puppy to oblivion every time I see that.
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#55 Dec 08 2013 at 12:04 AM Rating: Good
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PlanckZero wrote:
Hairspray wrote:
MMO economies are so complex that they actually use them to study real economics... in fact several people have done so.

My point is that the object you are selling is ultimately worth what someone is willing to pay for it, nothing more.

If you feel that it's worth 1 million gil, and nobody is willing to buy it for that much, then it's really not worth that much and you need to adjust your views.

That's the truth of economics.

Undercutting is just the natural flow of supply and demand, if there are too many Earth Crystals on the AH, and nobody is buying them for 160 gil each for stacks of 1000, then perhaps there's not enough demand for that price to make sense...

If I'm a crafter and I know that the price of said crystals fluctuates, and I can buy them cheaper at another point, or just farm them myself, often I will do just that. So your crystals are not worth the price if I'm not buying them.

Same thing goes for any item really... buyers set the price, not the sellers... you may think the seller is setting the price, but that's just who is placing it for sale at a certain price, the buyers ultimately control the price in a free market.

The taxes on the AH are a whole different story, Most people are unaware that the tax is only paid by the buyer if they buy from a retainer in a city other than the one they are located in. Calling them stupid for not having been aware of a fact such as this is not fair.

I wouldn't call you stupid for thinking that undercutting was bad, or that sellers control the price. I'll simply try to help you understand it better.

A better topic would have been "FYI - Taxes are only paid by the buyer if they buy from a retainer in another city."

You probably would have gotten a ton of thank you's and been rated up through the roof for that... but instead you decided to call people stupid for not being aware...


Yea, sorry to say but you're wrong...

If you're dealing with a high priced item that sells rarely where people will hold off on purchasing because they're hoping for a price drop... yea... that's a buyers market where they decide what something is worth...

BUT for just about every single other item in the game the price is dependent on the seller, not the buyer. When it comes to things like consumables there is a steady amount of demand associated with the sales. People know they're expected to have a certain consumable for their coil run etc so they're picking up their end of the slack and the price of those items retain a generally stable price due to the demand.

The buyer is not setting the price here, the seller is. The buyer needs that consumable and was going to pay whatever the going rate was anyway. They're not going to look at a consumable listed at the same price they paid two days ago and have been paying for every week and decide to sit on their hands waiting for the price to drop. The buyers act in reaction to the price dictated by the seller. If the price is stable they buy enough to sustain them for the moment and when someone with no idea how the market works tosses their entire inventory up for a fraction of its price then the buyer simply takes advantage and buys up what they can for the future on the assumption that if the market rebounds they've made a deal and saved on future purchases.

Undercutting only works when someone has the slightest clue what they are doing. For example take Mega Potions of Strength on my server. They had been selling at a steady 3000g between a handful of steady and stable sellers. As the number of sellers grew the market spread out people undercut based on how many potions they were selling at once. You have sellers with just 5 potions at a time that keep their price close to 3000g while others else selling 30 at a time drop their prices to around 2900g. There is a balance between buyers who want to take advantage of the discount and are willing to sit on a stock of potions and those who would rather simply buy enough to get them through their next run at the higher price.

Then an idiot that doesn't know how to read the market shows up and puts up half a dozen stacks of 5 potions for 2500g each. They've flooded the market without caring about the current balance of stock and price and simultaneously ***** over not just those selling small stacks but also those selling large stacks. The next idiot shows up and seeing the mess of prices tosses theirs up for lower than the previous idiot and the market either begins to stagnate while the existing sellers wait and hope for a rebound or collapses as they freak out and try to empty their stock before someone else drops the price even more.


What you are describing is basic economics. When there are profits to be made, someone will jump in and will lower the price until 0 profits are made. That is until the cost of producing that same item is more than what it is being sold for. This marginal cost varies for everyone depending on if they farmed all the mats themselves, bought everything from the market or a combination of both.

Mats are almost free. The only associated costs are the repair and time (which everyone has a different value for. ie, time it took to level the class up to be able to farm for the item. Time it took to farm and craft the mats.)

What frustrates everyone is that each individual wants to become a monopoly. That is you, aka the firm, setting and controlling the price. Unfortunately, in this MMO, we are price takers not price setters. Since there are low barriers to entry (anyone and everyone can become level 50 and craft the same items) and we are selling identical products, the person that has the lowest price will get the sale.

What is even more frustrating is how fast the price drops. How much the price drops depends on how much profits that person is willing to take in for that item and how quickly they want those profits. So as the profit lowers, the less likely individuals will stay in the market which is usually at the point when profits are lower than expected and better profits can be made elsewhere. People will start exiting the market until there is only 1 person left. When you become the last person selling the item, you can raise the price up substantially hoping to get some sales before the cycle repeats.

Edited, Dec 8th 2013 2:23am by ASpaceman
#56 Dec 08 2013 at 3:32 PM Rating: Good
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Threx wrote:
Catwho wrote:

Now, the folks who undercut to the point where they're selling items for the same or less than what they would sell to NPCs? Those people are idiots.


THIS^

I facepalm a white puppy to oblivion every time I see that.


I think some of it is newbies who don't realize you can adjust the asking price in the little window.

Tends to only happen on under performing items, anyway.
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