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Why does everyone look down on undercutters?
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Post by
Axehilt
I undercut to make money, and 20g on one glyph is profit, therefore I do not hurt myself, and if by default I cause those selling at 200g to get a little butt hurt, oh well I'll deal with it.
Undercutting is fine, if you are prepared to take less of a profit margin then good for you, if not then I'll call you a Waaaaaambulance.
Edit:-
others may not subscribe to your perceived value, I've often had morons in trade troll me because I was advertising a transmog item, and yeah sure it's not worth it if you want it on pure stats, but if it's a 0.1% drop rate from a rare set.. well lets just say I've sold those for a lot.
Eh, the guy you replied to was actually correct: If the current market price is 200g, and the item would sell at a 150g undercut, then selling at 20g obviously leaves 130g on the table that you could've had.
So if your goal is to make money, you're doing it worse than if you priced things better. If your goal is simply to dump inventory fast, then sure maybe the 20g price point causes you to make the sale twice as fast. Whether you feel that's worth it is related to whether your primary goal is actually money or inventory-dumping.
You're right that a seller's perceived value is meaningless (because it's the buyer's perceived value that ends up making the sale.)
Post by
Huludicidal
I don't play the AH as a means for my income. So after reading through some of these posts, I have to wonder....
Why don't the guys who play the AH buyout the items that are undercutting you and relist them at the "normal" price?
Post by
Garasumi
Before you can buy them out you have to figure out what kind of person is undercutting you. If it's just someone looking to quickly sell a few items it's in your best interest to buy and resell. However, if someone has determined they are fine making less profit than you and they are prepared to keep selling at the lower price, buying them out will just leave you with a bunch of things you can't sell.
Post by
ElhonnaDS
Actual cost includes opportunity cost.
Example:
A
Jim is a lawyer- he makes $45 an hour at his law office.
His friend Joe digs ditches for $18 an hour.
If Joe asks Jim to take a day off work to dig ditches with him for the same $18 an hour, did Jim profit from that decision?
B
Bob owns a restaurant, and wants to pay his workers $5/hour.
Every other restaurant in town pays its workers $10 an hour.
Bob can't understand why no good waitstaff want to work for him.
If you go by the argument of some of these posters, Jim has an additional $144 at the end of the day that he didn't at the beginning, so he turned a profit. Bob's workers would have $40 at the end of their day they didn't have before, so it is an opportunity to earn money, right?
If you look at the overall picture, if Jim hadn't decided to dig for the day, he would have worked the same amount of time but would have made $360. So in reality, his decision to work somewhere else that day
cost
him the opportunity to make an additional $216, for no extra work. If restaurant workers work any place other than Bob's, they will make an additional $40 for the same work, so working there actually costs them money. Now there are people who can't work as a lawyer, or who can't get into nicer restaurant jobs, and so for them these jobs may be worth taking. But for people who have the ability to earn more for the same time invested, it effectively costs them the wage difference to take the lower paying job.
The prices set on the AH by supply and demand generally indicate the average value that the population of the server puts on the time necessary to get that item, or to learn how to make and get the materials for that item. Usually this is a direct result of how much gold a player can earn in another way in the same amount of time, or how much worth they place on bypassing waiting periods like daily cooldowns, raid lockouts and daily heroic lockouts.
Those prices tend to be self-regulating. When the price is high, then there will be more people willing to supply, but less buyers, so the items just won't sell. When the price is low, less people will take the time to farm the item to sell, but there will be plenty of people willing to buy, and so you end up with a shortage of the item. The price tends to even out over time at the level where the number of buyers and sellers are equal.
If someone undercuts close to the leveled out price, they are pricing according to what people are willing to pay, and they are making the optimal amount of gold for their work. If they price too high, they won't sell. If they price very low, they will sell quickly, but have then worked the same hour or two hours for a fraction of the money their work would have been worth on the open market. Yes, they have more gold than when they started, but they worked a 75g an hour job for 20g.
The effect this has on the market, is that people who already invested time in creating or acquiring items to sell, valuing the time based on the market price, are stuck in a situation where in order to sell they have to meet the deflated pricing. These same people would have spent those two hours doing something else if they knew that they weren't getting paid for their time in a way that makes it worth the effort. They then either have to hold onto their items, or sell low- either way, they end up doing the work and not getting paid for it the way they anticipated when they started.
If someone has two job offers, and one will pay $20 per hour, and one will pay $15 per hour, they take the $20 (all other things being equal) because that's the smart decision. If they work a full week at their $20, and then find out that someone else will do their job for $4 an hour, so that's all they are going to be paid after they already put in the time, then it cost them the $11 per hour difference between what they got, and what they would have gotten taking the other job.
If someone is choosing between farming enchanting mats in old instances all day, or herbing all day, because they are saving for something, then they usually check the price differences and see where they can make the most money. If they see that for weeks they can sell an hour worth of herbs for 100g, and an hour worth of enchanting mats for 200g, then they farm those. If they come back, and those same mats are undercut to 10g, then they wasted the last several hours when they could have been herbing, doing dailies, or anything else to make money for the mount or pet or whatever they want the money for. That can be pretty discouraging.
At the same time, the person who is doing the undercutting isn't doing themselves any favors, and is probably hindering themselves more than anyone else.. They still will have to work 10-20 times as long to get the same result as they would if they were pricing according to the market. Any mount or pet they want will take 10-20 times as long to earn. Most other people will either buy you out and re-post, or (if you are consistently supplying the item) just change up what they farm to avoid the items you artificially deflated the price on, and continue to make gold at around the same rate as they were. You, on the other hand, will still be working ten times as long for anything you want to buy.
By all means, if someone has way outpriced the market then undercut them to the market value- that's just smart. But if you start artificially deflating the market you're annoying the other people in the economy, and you're shooting yourself in the foot in terms of earning gold yourself.(##RESPBREAK##)8##DELIM##ElhonnaDS##DELIM##
Post by
Shadoed
I don't play the AH as a means for my income. So after reading through some of these posts, I have to wonder....
Why don't the guys who play the AH buyout the items that are undercutting you and relist them at the "normal" price?
Because they end up with someone who spots what they are doing and floods the market just to get them to buy it up, it is ultimately self defeating. I made a fortune on pets that way a while back from a guy who was trying to corner the market and refused to back down until he ran out of cash and had bags, banks and vaults full of pets he couldn't sell.
Post by
Shadoed
By all means, if someone has way outpriced the market then undercut them to the market value- that's just smart. But if you start artificially deflating the market you're annoying the other people in the economy, and you're shooting yourself in the foot in terms of earning gold yourself.
Sorry to say, but you are way over thinking this, there is no 'economy' as such on wow, all there is, is a bunch of people who decide what something is worth to them and sell it for that price. If others decide to hover around that price point, it isn't a set market price it is just that they are hoping to hitch a ride on that gravy train.
People will value their time and effort in retrieving items differently and to that point will perceive their 'profit' differently as well, so what you may see as a loss is just more cash in their pocket as far as they are concerned.
Post by
SoCalWoWGal
Interestingly enough, there are educators out there who actually use WoW to teach children, here is what
World of Warcraft in School
has to say about
Economics
:
Economics - students will study a particular item or group of items on the in-world auction house learning how supply and demand are affected by the actions of the player-citizens in the game. Students may also take part in that economy. Helga Brown has contributed an Economics lesson plan (WoW E-conomics.doc) that requires students to use gathering and creating professions to run a small business. Students group to form a virtual store front, participate in market analysis, create a business plan, apply for a start up loan, and run a small business through the in-game Auction House.
Post by
Monday
Sorry to say, but you are way over thinking this, there is no 'economy' as such on wow, all there is, is a bunch of people who decide what something is worth to them and sell it for that price.
Funny story, but that's the exact definition of an economy.
Post by
ElhonnaDS
Sorry to say, but you are way over thinking this, there is no 'economy' as such on wow, all there is, is a bunch of people who decide what something is worth to them and sell it for that price.
Funny story, but that's the exact definition of an economy.
Quoted for truth. As a side note, Blizzard cites "abuse of the economy" as something that is against the TOS/EULA, so "economy" is the official word they designate for their system of barter, exchange and in-game currency.
https://us.battle.net/support/en/article/exploitation-policy
But beyond that technicality, any system where goods and/or services are exchanged within a population is an economy. In-game economies are much more basic that a real-world model, but they still operate on many of the same principles. People who understand economic principles are able to predict a lot about what will happen to the market in response to various game announcements, changes and events. They're able to see where they'll be able to make fast money when a new market opens up, and know when to stop trying to compete on specific items because the price is no longer worth the time invested. I didn't study economics specifically for mmo's, but the fact that I did study economics means I make a KILLING in whatever game I am playing at the time that has any kind of AH. I have probably spent around 1 million gold on pets, mounts and transmog over the course of this expansion, all of it earned by knowing how the AH works. And I don't farm all that much- knowing what items have the best time-to-profit ratio and concentrating your efforts there lets you earn quite a bit without slogging around spending 6 hours mining or skinning for marginal returns.
On a second side note, I don't personally care all that much about under-cutters. I tend to make a lot of gold off the ones who are casual about it, and when someone decides they are resetting the price in a certain market, I just pull out and spend my time where it make more sense. But in my experience the same people who sell cheap because it's quick are often the ones who complain that they can't afford flying for their alt, can't afford to gem and enchant their gear properly and worry about repair costs when raiding. I was just trying to demonstrate how they are actually costing themselves gold when they do it, in the hopes of helping them out.(##RESPBREAK##)8##DELIM##ElhonnaDS##DELIM##
Post by
itascagasman
just looking out for myself. Kill or be killed,dog eat dog and the like.
This is why you are a jackhole....
Why should I let stuff sit for days on the AH when I can almost guarantee I'll sell it in almost no time at all
This is why you are an idiot. That 100g flask you posted for 50g will sell just as fast at 95g.
We don't need to take this where you're taking it...and on that note can a moderator please lock this before I reply with something that will likely get me banned at the very least, as I don't have patience with people that want to respond in this way, so I'm going to take the high road and just not bother. I'd hate for my typing to land me in jail....
Post by
kemppy
Off topic but why should this thread be banned for you when there is a harty conversation going on.
On topic. As many people have said sure you can undercut. But why. You miss out on more gold which you can turn into my gear/vanity stuff and more enjoyment from the game.
Post by
Monday
and on that note can a moderator please lock this before I reply with something that will likely get me banned at the very least, as I don't have patience with people that want to respond in this way, so I'm going to take the high road and just not bother.
>lock this so I don't get out of control
>I'm just leaving so I don't get out of control
Well, which is it?
Post by
V3ks
I don't see the problem with what the OP is saying.
If someone undercuts by a huge amount, just buy everything and re-list. If you end up with a ton of items and are unable to sell them (at the higher price), the undercutter probably knows the market better than yourself.
Post by
Garasumi
Most of this discussion may become irrelevant soon. Blizzard has noticed the high prices. Especially for things they think new players need. Glyphs are a good example. How many brand new level 25 players could go to your realms auction house and purchase all the glyphs they need? Sounds like their solution is to automatically give players glyphs while leveling.
Post by
354646
This post was from a user who has deleted their account.
Post by
ElhonnaDS
Actually, since they were my scenarios, no he wasn't taking a sick day and no they didn't split tips at one place and not the other. The point was to illustrate opportunity cost, not evaluate the actual practices of various workplaces, so it was a simplified model. Hence, for the purpose of the exercise, it was not necessary to take into account likely real world factors.
A person who wants cloth to sell at 300g a stack would have to buy every stack of cloth that goes up. Since cloth is fairly easy to acquire, and the number of people posting it will far exceed the number of people willing to buy it for 300g a stack, the person doing so would end up with a huge supply that he couldn't sell at that price. Opportunity cost also comes into play when evaluating what the market value ends up being. If someone would have to spend 30 minutes farming cloth, including flying time, to get a stack, and they need an hour to farm 300g, they will farm the cloth instead in most cases. If they make 20g in 10 min, and the cloth still takes 30 min to farm, then at 20g the price of the cloth is cheaper than the time invested, and they are much more likely to buy it.
Unlike a real world model, everyone in the game has access to the same means of production, and no one starts out at an education or monetary deficit- we all start out exactly the same. Also, there is not a limited supply on any item, other than perhaps drops from non-instanced rare spawns (which is a really small percentage of what people sell). Therefor there is no way to create a true monopoly on an item unless it has a really low drop chance- other people will always come up with more to sell.
In terms of the corporation who sells potatoes cheaper, they do so because each potato represents less cost to them, because they are able to invest less time per potato thanks to mass production and industrial machinery. In wow, no one has that kind of advantage- everyone who crafts has to farm the same materials in the same places. Everyone farming rare drops has to run the same dungeons. Everyone has the same means of production, so everyone has the same capacity to make money on each item. (unless you don't have a max level toon, but that's a temporary situation that all of us went through at some point).
In game models actually have a cleaner supply and demand process, because there are no life necessities that push people past what they could actually afford like in real life. There are no areas of the market that are off limits to people because they were born into a family that couldn't afford school or who couldn't invest in a business. There are no big machines that can do the work of multiple people (not taking into account bots, who we're excluding for the sake of this conversation as both sides are real players atm), so everyone invests pretty much the same man hours for each item. There are no government subsidies or price controls. It's precisely because it isn't the real world that the only forces at work are supply and demand, and the opportunity cost is pretty standard across the board for max level players.
Also, what makes you so sure that the people who make money on the AH DON'T already make money elsewhere using the same skills? Being good at an aspect of wow =/= never doing anything in real life. If anything, it would imply to me that the people have had previous real world experience with similar systems.(##RESPBREAK##)8##DELIM##ElhonnaDS##DELIM##
Post by
Adamsm
Most of this discussion may become irrelevant soon. Blizzard has noticed the high prices. Especially for things they think new players need. Glyphs are a good example. How many brand new level 25 players could go to your realms auction house and purchase all the glyphs they need? Sounds like their solution is to automatically give players glyphs while leveling.
I have a feeling that not all of the glyphs will be available; I think they only said that some of the glyphs will be auto learned, and others will not be.
Post by
Shadoed
Sorry to say, but you are way over thinking this, there is no 'economy' as such on wow, all there is, is a bunch of people who decide what something is worth to them and sell it for that price.
Funny story, but that's the exact definition of an economy.
Well, not really, economy suggests a structured management of production and pricing, which this is not really anywhere near that.
My point being that if the price of something that is currently selling for 40g per stack was to drop to 10s per stack tomorrow because someone decided it would be a fun thing to do, the wow world would not be brought to it's knees.
Post by
ElhonnaDS
Structured management of production and pricing happens in communist and fascist economies. In free market economies, the prices settle naturally based on supply and demand. The US government does not set the prices or regulate the production (beyond enforcing safety, minimum wage and nutritional standards) on Oreos, Legos, Seesaws, blue sweaters, etc. There are certain arenas where they step in- healthcare, education, infrastructure, basic utilities, civil works, law enforcement, etc.- based on the importance of those items to basic quality of life. But the majority of non-essential products- which everything in wow is- do not have a government controlled pricing or production structure. Each supplier makes independent decisions, and the prices settle within a rage that enough people are willing to pay that supply and demand equal out.
Also, as I stated above, Blizzard calls it the economy, so it's the official word for the system.
And I LOVE people who sell cloth at 10s a stack- I make so much money from those people. When you price that low, it's easy to buy and relist. And no one is going to continually flood the market at that price, because it'd be a massive time sink with no real reward. One quest gives me 20g, and takes 5 minutes. Why would anyone farm 200 stacks of cloth to make the same money on a regular basis?(##RESPBREAK##)8##DELIM##ElhonnaDS##DELIM##
Post by
Adamsm
My point being that if the price of something that is currently selling for 40g per stack was to drop to 10s per stack tomorrow because someone decided it would be a fun thing to do, the wow world would not be brought to it's knees.
Kinda of would, if a large number of players had been using that item to make their gold; to suddenly have it drop like that, would affect the player base.
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