Guides

[center][img]https://i.imgur.com/OrcUcBw.png[/img][/center] [size=5][font=Century Gothic]Be Advised:[/size][/font] [indent]This guide was originally written in 2014, when the market was more volatile due to fewer players and unclear item values. While I have updated this thread in 2023 to be as relevant as possible, the market is going to be in constant flux and there are nuances that I may have missed. As always on the internet, use your best judgment. These are my subjective guidelines, and you don't have to agree with them! :) Decide what you think best applies.[/indent] [size=5][font=Century Gothic]What This Guide Isn't:[/size][/font] [indent][emoji=block size=1] A guide on how to make your items sell quickly. [emoji=block size=1] An exhaustive economics course. [emoji=block size=1] A guide on dragon pricing (which is far too subjective!)[/indent] [size=5][font=Century Gothic]What This Guide Is:[/size][/font] [indent][emoji=treasure size=1] A guide to explain how to [img]https://orig11.deviantart.net/9eda/f/2014/013/0/0/pastel_star_bullet_by_ponnui-d720otu.gif[/img][u][b]undercut[/b][/u][img]https://orig11.deviantart.net/9eda/f/2014/013/0/0/pastel_star_bullet_by_ponnui-d720otu.gif[/img] in ways has your item listed first while also maintaining a [b]stable market value[/b] for your item. If you don't care about maintaining an item's value and you just want to sell your item as fast possible, you don't really need to read this guide! Feel free to continue undercutting in the way you prefer.[/indent] [size=5][font=Century Gothic]Good Undercutting Habits:[/size][/font] [indent] [img]https://orig11.deviantart.net/9eda/f/2014/013/0/0/pastel_star_bullet_by_ponnui-d720otu.gif[/img] [b]Most Important #1: [/b]Decide if you even need to undercut at all! Fast moving items like stacks of 99 food probably don't need to be undercut [i]at all[/i]. They will sell quickly even if there are 20 stacks at the same price (assuming those 20 stacks are at normal market value). [img]https://orig11.deviantart.net/9eda/f/2014/013/0/0/pastel_star_bullet_by_ponnui-d720otu.gif[/img] [b]Most Important #2:[/b] Do not undercut by more than what you need to for your item to sell in a reasonable amount of time. 10% cheaper might sound like a nice round number, a fun number, a calm number, to undercut by. But when you're selling lots of things and undercutting by 10% or more when you don't need to, you will be taking a significant cut to your profits over the long haul. [img]https://orig11.deviantart.net/9eda/f/2014/013/0/0/pastel_star_bullet_by_ponnui-d720otu.gif[/img] Cheap items or fast selling items: Undercut as little as possible. Undercut by 1 treasure. Trust. There is a very very small population of people that will be annoyed with you for undercutting by 1 treasure and buy the 5k treasure just to spite you. Its fine! Your stuff will still get bought [img]https://orig11.deviantart.net/9eda/f/2014/013/0/0/pastel_star_bullet_by_ponnui-d720otu.gif[/img] Midrange and/or slow-selling items: Undercut by a couple hundred or a couple thousand treasure, depending on how expensive it is. As always, consider whether or not people are going to continue undercutting you and each other before your item sells. Undercutting by 15% when 3 other people might undercut you is setting yourself up for a significant profit loss if you have to relist. For slow items, you want to undercut in a way that keeps things as profitable as possible for you, but appealing to the buyer. Trick them into thinking it's a chance they might not get again, even though you aren't even undercutting by that much. BE RUTHLESS we love a market queen. [b]Expensive Items = Exceptions to the Rule![/b] The more expensive the item is, the more you can undercut. This is important! Take a big chunk off the price to make your item more appealing. However, there are a few things to consider. I won't walk you through the answer to all of these questions, because this isn't an economics course, but think about these as you practice playing the market. 1) How likely is it that someone else is going to undercut you before your auction expires? 2) How long is it going to take to sell this item? 3) How many more of the item do you have to sell? 4) If I have more of this item to sell and only want to list one at a time, is it really worth sitting on these items to wait for the price to go back up if it is only down by a little bit? [b]Why it's OK to undercut [u]rare[/u] items by larger amounts:[/b] [indent]Doing this is OK with the very rare items because you are not going to have people constantly undercutting you and constantly lowering the value of the item. Chances are your item will sell before many people can undercut you, which means the item value is only going to fluctuate slightly. But why undercut a significant chunk at all? Well, if you're waiting to sell an item for 5 weeks at a high price because it won't sell, that is money sitting that you can't invest elsewhere. If you're not a spender/investor, its definitely OK to keep an item sitting on the AH until it sells at the price that you want it to sell at. Otherwise, keep your treasure flow moving. [/indent][/indent] [size=5][font=Century Gothic]What about gems?:[/size][/font] [indent]In general, you don't want to undercut with gems for cheap items. If its listed for 5 gems, list your item for 5 gems. If you are listing for 4 gems, you're losing 20% of what you would otherwise get. Try not to undercut anything listed at lower than 10 gems, otherwise you are forced to do undercuts more than 10%. [/indent] [size=5][font=Century Gothic]Other Ways to Maintain Market Value:[/size][/font] [indent]Item flipping is one way to both maintain value stability AND make a profit. Item flipping is buying up the items that have been undercut [b]below[/b] their value and reselling them at a proper price. If you're rich, you could also buy up everything below and [i]at[/i] its proper value and raise the price - though this maneuver is always a risk.[/indent]

Hmm, does undercutting by 1 treasure actually increase your chances of a sell by that much? As a buyer, if I see two items priced for say 2900 and 3000, I'll buy the 2900, because I actually care about the 100t difference - but if I see 2999 and 3000, if anything I'm more likely to buy the 3000, because 1 treasure makes no difference from the buyer's perspective, and only annoys me the same way that $9.99 prices at the supermarket do.
But I don't know if that's just me, or if other people do the same.

Another point: not undercutting can be a good thing to do. If a few people are selling the same thing, just sticking with the same price can work out better than continuing to re-post at lower and lower prices.

[quote name="nika" date="2014-04-20 11:57:21"]Hmm, does undercutting by 1 treasure actually increase your chances of a sell by that much? As a buyer, if I see two items priced for say 2900 and 3000, I'll buy the 2900, because I actually care about the 100t difference - but if I see 2999 and 3000, if anything I'm more likely to buy the 3000, because 1 treasure makes no difference from the buyer's perspective, and only annoys me the same way that $9.99 prices at the supermarket do. But I don't know if that's just me, or if other people do the same.[/quote] Not just you. Agree with the OP about the rare items, though. Usually people who undercut on those are doing it because they know the economy. For example, let’s say that every Brush Dodo in the AH sells, and the next seller comes along and prices theirs at 1 mil. That’s not going to sell. If I get a Brush Dodo from Harpy’s Roost, I’m going to price it at something like 200k, because I know from previous sales that that’s about the max price I can get. It’ll look like I’m undercutting the other seller by 800k, but in reality, my Brush Dodo would never sell for even close to a mil. And my general thought about undercutting is: If someone’s undercutting by a big amount, buy their item and relist it for what you think the item’s actually worth. If it sells, then bravo! You just made a profit. If it doesn’t, then the undercutter was simply pricing it at what it’s really worth, probably because they often deal in that item and know the general going rate.

[quote name="Cranberry" date="2014-04-20 12:30:15"] ... And my general thought about undercutting is: If someone’s undercutting by a big amount, buy their item and relist it for what you think the item’s actually worth. If it sells, then bravo! You just made a profit. If it doesn’t, then the undercutter was simply pricing it at what it’s really worth, probably because they often deal in that item and know the general going rate.[/quote] So much this. I managed to get three Bumbles yesterday via coli drops and when i went to put them up on the AH, most were selling ~7000T while there was one up for 1200T (which is actually LESS than what you get when selling it via the hoard lol). I immediately bought that one and put them all up and all of em are out of my hands now I think. Profit.

[quote name="nika" date="2014-04-20 11:57:21"]Hmm, does undercutting by 1 treasure actually increase your chances of a sell by that much? As a buyer, if I see two items priced for say 2900 and 3000, I'll buy the 2900, because I actually care about the 100t difference - but if I see 2999 and 3000, if anything I'm more likely to buy the 3000, because 1 treasure makes no difference from the buyer's perspective, and only annoys me the same way that $9.99 prices at the supermarket do. But I don't know if that's just me, or if other people do the same. Another point: [i]not[/i] undercutting can be a good thing to do. If a few people are selling the same thing, just sticking with the same price can work out better than continuing to re-post at lower and lower prices.[/quote] The goal of undercutting by 1 treasure isnt to increase your chances of sale - people are going to buy what they need regardless of if its 100 treasure or less or 1 treasure. The main goal of undercutting 1 treasure is: a) having your item listed first (which increases chances of it being sold while you haven't been undercut) b) maintaining value stability so that you are getting your money's worth when you have to sell something And yes! I definitely agree w/ sometimes not undercutting at all! I tend not to bother undercutting if there is less than a page of the item at its lowest price. I totally understand where you are coming from with the $9.99 thing. It's super annoying, but I feel like if people are still doing it, the [url=http://www.livescience.com/33045-why-do-most-prices-end-in-99-cents-.html]psychological tactic[/url] behind it is still working. Undercutting, though it has a similar goal (the seller getting their money's worth), is more about item stability than "Hey, brain, you know you want this!" [quote name="Cranberry" date="2014-04-20 12:30:15"] And my general thought about undercutting is: If someone’s undercutting by a big amount, buy their item and relist it for what you think the item’s actually worth. If it sells, then bravo! You just made a profit. If it doesn’t, then the undercutter was simply pricing it at what it’s really worth, probably because they often deal in that item and know the general going rate. [/quote] This this this! Item flipping is way to maintain value stability if people have the money to buy up items selling for cheap. Also, profit. Profit is good.

[quote name="Maki" date="2014-04-21 03:06:10"]Personally, I find the 1 treasure price difference disrespectful to the buyers, I always list relatively common items (1k-20k range) at 50-500 treasure less. For gem prices this is not a problem, since 1 gem is already 500 treasure.[/quote] Why would it be disrespectful to buyers? I've never known anyone to look at an item undercut by one treasure (for example) and go, "Omg, what an insult!" If someone is upset by that undercut, they should reevaluate their buying perspective. By undercutting correctly we are maintaining the value of that item should they ever want to sell it.