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I’m no goblin…


.. but this forum post just makes me shake my head.

The idiots that undercut by 1s..
What the hell is with that!? I’ve started to get annoyed at the people that think it’s acceptable to undercut an AH price by ONE silver…

Now, I’m not talking about the little low level items! Im talking about gems, epic items, etc.

If you’re going to undercut someone at least make it by lets say at least a few gold or something!

Seriously? Not only is it acceptable, I can’t really fathom why you -wouldn’t- undercut by 1s.

Let’s say.. that in real life, I manufacture Widgets. I’m very proud of my Widgets. They’re prime specimens. Let’s say also, that you manufacture Widgets. I want to sell my Widgets, you want to sell your Widgets. We compete.

(features) My Widget is red, your widget is blue. People prefer red Widgets. I sell more Widgets.
(branding) My Widget has the “Nibble-licious” brand name emblazoned on it.. yours are generic poo-dunk Widgets. My Widgets are superior and -worth- the extra price just so my customers can display “Nibble-licious” brand and make all their friends jealous.
(bundling) My Widget comes with a free subscription to my online social Widget Network (WidgeNet.com ™) and allows the customer to get a very prestigious login name so they can hobnob with celebrity Widget owners.
(quantity) If you buy 1,000 Widgets I’ll sell them to you at a reduced rate. I can reduce the rate because the shipping cost on one order of 1,000 is less than it would be on 1,000 orders of one.
(price) -IF- all Widgets are created equal, then the lowest cost Widget will be the Widget that sells. BUT it’s real life. So not all Widgets are created equally.

All of these options are available to me outside the game. I can compete on many different levels. In the game my options for competition are much more limited.

I want to sell my [Netherweave Bag] and you want to sell yours.
(features) The bags are identical. So we can’t compete on cosmetic features of the items.
(branding) There -is- a “maker’s mark” but the game doesn’t facilitate the building of brand awareness. So my maker’s mark is of the same value as yours.
(bundling) Both bags will be offered on the AH side-by-side. If I sell if off-AH through the Trade channel then I can bundle it with other things.. but that is a high effort investment.
(quantity) Netherweave bags are placed on AH as single items. (Now, in the case of items that stack ~250 I may be able to compete on volume… but that’s a limited proposition)
(price) Your bag is 12g my bag is 11g 98s. I win.

So really.. on the generic items, the only way to compete in the game is to compete on price. A customer will buy my Netherweave Bag if it is the least expensive option available.

-If- I know that the demand exceeds the supply then I actually -shouldn’t- undercut the current AH. If there are 10 bags on AH and if I -KNEW- they would all sell and there would still be people wanting to buy bags, then it would be in my best interest to actually list my bags at a price slightly higher than the going AH rate. Unfortunately there isn’t an easy way to track demand that closely.

So, instead, assuming that only the lowest priced bags will sell, I will list my bags for less than the lowest listed ones on the AH. In order to maximize my revenue I will undercut by the least amount I can. So if the lowest bags on the AH are listed for 12g, I will probably list for 11g 98s.

The only reason I can see to undercut by “several gold” would be if I was desperate to sell my items -now- and I wanted to dissuade others from undercutting me. I would be hoping that I could drop the market to the point where others would hold onto their items for 24/48 hours instead of posting them to compete with me. But.. I happen to know we’re in a market with a bunch of 12-year-olds.. so that kind of drastic price cutting would just depress the market and cause the 12-year olds to list at a silver or two below my new “drastically reduced” price. Makes no sense.

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12 comments to I’m no goblin…

  • Ego

    I don’t know what widgets are, but now I want some. Red ones.

  • Stupid Mage

    The AH has convinced me that I play with a bunch of economic retards.

    I list something for 100/150gBO, then some fool lists the same thing with 100gBO.

    I agree, that his item might sell but it would also sell at 140+gBO. Seriously, wtf.

  • I saw that post this morning and it made me scratch my head a bit…

    I be the OP really hates it when people like me undercut by a copper :D

  • Honestly, that’s a WoW economic lesson that you learn as soon as you start to regularly post things on AH. If this you’r undercutting people by 2-3gold regularly, thats a hell of a lot of gold your losing.

  • Figworth

    WTB purple widgets?

  • I agree that the least you can undercut the better. If you can get away with 1c go for it. However, if you are listing anything other then say enchanting mats (which have no listing cost), then I feel it is best to list things at a price the will allow them to sell either the first or second time listing. This is especially true if the list cost is a couple of gold. Again, my opinion, but it doesn’t make sense to me to undercut by 1s if there is a good chance that it is going to come back to your mail box the next day.

    However, I completely agree with you, getting worked up over the amount the someone undercuts you is dumb.

  • Econ 101: Know it, live it, love it.

    It should be a prerequisite to playing WoW (or at least for listing more than 100g worth of stuff).

    Gahhh…good rant, Nibs! :)

    Kestrels last blog post..Getting My (Blogging) Groove On

  • Anon

    Only undercuting by 1s or 1c slows the rate at which an item reaches it’s proper supply/demand price point to a crawl. This is good for sellers letting them milk that particular item market, but is bad for buyers who get gouged until the price finally drops to stable levels.

    If I see people undercut something by only 1s or 1c, I’ll just buy the slightly more expensive one to spite them, I’m not losing hardly anything for doing so becasue they didn’t create a strong enough incentive to buy their item instead.

  • Tarana

    I think there are certain auction addons that you select undercut. That might be what is doing the 1s thing.

  • Aside from the whole maximizing your profit angle, which should really be enough, there’s also the fact that many people use the “cheapest price first” sorting with the AH. By going just 1s below that guy’s price, not only are you more likely to sell from having a cheaper product, you’ll also be the first on the list for everyone looking for that item. You’ll also have the business of the lazy people (i.e. me looking for small eggs during Winter Veil) who grab the first one on the list with a buyout.

    Ragars last blog post..Slight Differences in Tanking: Pre-Pull Procedure

  • noxiousdog

    Augh. Nothing gets me madder than when regular AH sellers undercut each other for a gold or more. I’m fine with undercutting, but don’t destroy your own market. In fact, it’s even better to list it with the same price, but a lower bid. It will show up higher on the AH listing so it will probably be bought first, but it doesn’t depress the BO market.

  • Cassini

    I’m with “Anon” when (s)he said “If I see people undercut something by only 1s or 1c, I’ll just buy the slightly more expensive one to spite them, I’m not losing hardly anything for doing so becasue they didn’t create a strong enough incentive to buy their item instead.”