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dealing with deep undercutters

Author
Dasmallredboat
Viziam
Amarr Empire
#1 - 2014-02-18 01:21:30 UTC
o/

i tend to build a lot of stuff, often with really nice ISK/hr and profit margins

other people in the market usually play the .01 ISK game, sometimes the good old 89899 thing. i can deal with them.

however, there is this one person who has a massive stockpile. he adjusts his sell order two or three times a day and constantly undercuts by a wide marging, usually down to the next full million, sometimes more. he is hardly selling anything and there is no way this is in any way a profitable endeavour. he probably got the minerals for free or something

his stock is too big for me to just buy him out and he is slowly but painfully killing my ISK/hr

any ideas how to deal with that ? the only thing i can think of is to sit it out and i don't really like that idea.
Erik Sokarad
Republic University
Minmatar Republic
#2 - 2014-02-18 01:52:43 UTC
there are a few things to consider-
1- this person may have much lower costs than you.
2- this person may not know or care about the costs. plus if he needs to liquidate his stock, even at a loss, then he can do so fastest by undercutting.
3- the large undercut strategy is a good one for those who cant be online all day to 0.01 snipe, and i have seen blogs that recommend this strategy.

not much you can do. either sell at a loss, or move to another station, or wait him out. but keep an eye on his price drops, and if he lowers enough then reprocessing to minerals may be a valid idea.

remember, some stuff is on the market because the hauling ship got ganked and looted.
Silvetica Dian
Imperial Shipment
Amarr Empire
#3 - 2014-02-18 01:54:59 UTC
You have a few options.

Firstly what is his motive?
He may make a ton of stuff and just doesn't like playing the 0.01 isk game and so drives everyone else away until he is gone. The question you must ask is this.
Why is he making so much of just a few things?
Most likely he is not.
Most likely he is trying to manipulate the market in order to buy stuff cheaply. ie he is a trader and not a manufacturer. As a trader he doesn't care about the manufacturing costs just what did he buy it for and what can he sell it for (and where). Maybe he wants to drive a bunch of manufacturers below a certain price, buy their stuff and then resell either in that market or another.
If he is a trader then he doesn't really want to sell that stuff. He relies on people undercutting so that his stack remains intact. Its very size is what intimidates people into the undercut.
So
a) don't bother undercutting and you have no need to wait it out.
b) Keep your manufacturing diverse so you can wait out market swings on some items and profit from the ones that swing in your favour.

NB there are a ton of manufacturers that just don't play 0.01 isk games. they put up reasonable buy orders and reasonable sell orders knowing that the 0.01 isk crowd will happily wait out their smallish orders. These are different and you won't see them adjust orders very often if at all.
Just try and spot what patterns are going on and who is doing what and why.
Market PVP is pretty complex and i haven't paid enough attention to have much of it worked out so i offer this as a beginners guide rather than an in depth analysis.

Money at its root is a form of rationing. When the richest 85 people have as much wealth as the poorest 3.5 billion (50% of humanity) it is clear where the source of poverty is. http://www.theguardian.com/commentisfree/2014/jan/20/trickle-down-economics-broken-promise-richest-85

Scipio Asanari
Science and Trade Institute
Caldari State
#4 - 2014-02-18 10:06:05 UTC
I've seen people do that before, and while it is annoying, I typically just end up buying out the order and re-listing it for a small profit. This however, does depend on how much below the next sell order it is, also work out the margins and buy it quickly before someone, and someone will, does the 0.01 isk thing
Krixtal Icefluxor
INLAND EMPIRE Galactic
#5 - 2014-02-18 12:44:33 UTC
Also, EVE Trolls come in a wide variety of forms. This is just one of their methods.

"He has mounted his hind-legs, and blown crass vapidities through the bowel of his neck."  - Ambrose Bierce on Oscar Wilde's Lecture in San Francisco 1882

Batelle
Federal Navy Academy
#6 - 2014-02-18 15:28:15 UTC
if he has a lot more stock than you, and he's willing to sell cheaper than you, then you probably shouldn't try to compete.

If he's willing to operate and no profit or slight loss and you can recognize this, then you should have patience and let your stock sit on the market if you can afford to.

"**CCP is changing policy, and has asked that we discontinue the bonus credit program after November 7th. So until then, enjoy a super-bonus of 1B Blink Credit for each 60-day GTC you buy!"**

Never forget.

Krixtal Icefluxor
INLAND EMPIRE Galactic
#7 - 2014-02-18 15:52:22 UTC
Batelle wrote:
if he has a lot more stock than you, and he's willing to sell cheaper than you, then you probably shouldn't try to compete.

If he's willing to operate and no profit or slight loss and you can recognize this, then you should have patience and let your stock sit on the market if you can afford to.



....or just drag the lot to one of the other 3 trade hubs. This sounds like Jita nonsense imho.

"He has mounted his hind-legs, and blown crass vapidities through the bowel of his neck."  - Ambrose Bierce on Oscar Wilde's Lecture in San Francisco 1882

Batelle
Federal Navy Academy
#8 - 2014-02-18 15:56:34 UTC
Krixtal Icefluxor wrote:
Batelle wrote:
if he has a lot more stock than you, and he's willing to sell cheaper than you, then you probably shouldn't try to compete.

If he's willing to operate and no profit or slight loss and you can recognize this, then you should have patience and let your stock sit on the market if you can afford to.


....or just drag the lot to one of the other 3 trade hubs. This sounds like Jita nonsense imho.


Which takes time and costs money. If this guy's order is a blip rather than a market trend, and you can afford to wait, then moving it to a different hub could very well be a waste of time and money.

"**CCP is changing policy, and has asked that we discontinue the bonus credit program after November 7th. So until then, enjoy a super-bonus of 1B Blink Credit for each 60-day GTC you buy!"**

Never forget.

Ginger Barbarella
#9 - 2014-02-18 16:54:51 UTC  |  Edited by: Ginger Barbarella
Krixtal Icefluxor wrote:
Also, EVE Trolls come in a wide variety of forms. This is just one of their methods.


As many have said before, market activities in EveO are pvp, just like shooting ships. Calling someone who's market aggressive a troll is bit much, really.

As long as I can still make an acceptable margin on my T2 stuffs, I will ALWAYS undercut using my own personal formula. If I can't make a profit that's acceptable to me, I shelf it and wait a few weeks or a month. For high meta stuffs from mission drops, I will always price it good enough to sell. Don't care about margins, don't care about anything else but selling it. Sorry, but it's market combat. I really don't care who gets bad feelz over me undercutting someone else who is manufacturing T1 stuff at hair-thin margins.

Edit: I don't play the .01 isk game; it's a waste of my time.

"Blow it all on Quafe and strippers." --- Sorlac

voetius
Grundrisse
#10 - 2014-02-18 17:45:17 UTC

Alot of good advice above and to repeat, it really depends on what the item is, what the build cost is. Also whether the trader bought or built the items before the materials changed in a patch, in which case, he can sell way under the price it costs you to build.

It also depends on how many days, or weeks stock he is sitting on, market history will tell you whether people buy from sell orders, sell to buy orders, or there is some split between the two, so you can work out from that how long it would take to clear his stack, presuming no-one undercuts him.

If it's not a patch speculation item I'd probably be inclined to keep a small stack on the market just to keep the pressure on him and keep his price low while moving the bulk of your stock somewhere else to sell it. Just depends on how much stuff he has, how patient you are, whether you think the market will turn, etc. Many variables involved means there isn't a simple solution or heuristic for you to use.
Dasmallredboat
Viziam
Amarr Empire
#11 - 2014-02-19 01:19:50 UTC  |  Edited by: Dasmallredboat
Quote:


1- this person may have much lower costs than you.
2- this person may not know or care about the costs. plus if he needs to liquidate his stock, even at a loss, then he can do so fastest by undercutting.
3- the large undercut strategy is a good one for those who cant be online all day to 0.01 snipe, and i have seen blogs that recommend this strategy.




1 - that does not explain his behaviour. minerals are not free.
2 - more likely. however, he could just dump into buy orders or undercut much deeper. that would help him sell. right now, he is hardly selling anything.
3 - it makes some sense (gevlon was an advocate back in his wow days), but he is not undercutting deep enough for this, and he could move to a much more volatile market where the .01 isk game is not relevant enough. he could make MUCH more money that way.


Quote:
b) Keep your manufacturing diverse so you can wait out market swings on some items and profit from the ones that swing in your favour.


i am working on that, sadly, BPO research takes time

Ginger Barbarella wrote:

WORDS


your behaviour does not help you sell anything. if you want to sell quick dump into buy orders or find a volatile market. in a slow moving market the lowest sell order sells. you loose money if you are not doing the .01 ISK thing, no matter how often you update your orders.

Quote:
....or just drag the lot to one of the other 3 trade hubs. This sounds like Jita nonsense imho.


for some items the only market that moves enough to justify production is jita

Quote:
Alot of good advice above and to repeat, it really depends on what the item is, what the build cost is. Also whether the trader bought or built the items before the materials changed in a patch, in which case, he can sell way under the price it costs you to build.


i followed Taus advice on ships ;)
SJ Astralana
Syncore
#12 - 2014-02-19 08:41:32 UTC
To directly answer the question of how to deal with a deep undercutter, you should use an adaptive production model that directs your resources toward the items that deliver the best value. You should also have a predetermined per-item minimum markup where you either undercut or stand pat. By all means you should remove the wild-ass-guess and all emotion from the equation. Just as surely as the fastest interceptor gets the tackle, the best set of production management rules gets the highest isk/hour.

Eve Production Manager addresses all of these issues, and provides a competitive advantage that causes your competition to feel like it's trying to fight a machine with no soul. Advanced business rules include slicing the profit out of oversupplied items, holding back for overheated items, and much more.

Hyperdrive your production business: Eve Production Manager

Andromeda Zero
Hedion University
Amarr Empire
#13 - 2014-02-19 15:48:15 UTC  |  Edited by: Andromeda Zero
This topic is amazing to me. I cannot understand any of you, and this topic is in fact about how you cannot understand someone like me.

As a deep undercutter, let me fill you in on my thought process...

1) Manufacture stuff (admittedly boring but at least it's low maintenance).
2) Place on market and adjust prices with wild abandon. Run out of patience and drop prices like crazy just to get stuff to sell.
3) Laugh like a lunatic.
4) Say to the wife "Just playing EVE" when she asks why I'm laughing like a crazy person.
5) Look at the market graph after a week or two, and experience great amusement with how it goes from flat and boring to chaotic and awesome.
6) Repeat!

Through all of this, my wallet just keeps growing, as does my stockpile of raw materials.

Making the best ISK/hr.? ------ Of course not.
Losing ISK? ---- Also NO.
Having fun? -------- HELL YES!!!!!!!!!!

The idea of using some software, like the poster above me suggests, to optimize *YAWN* my production to earn the most ISK per hr. in order to.... *FALLS ASLEEP*.


Have a profitable day and fly safe!
Agondray
Avenger Mercenaries
VOID Intergalactic Forces
#14 - 2014-02-19 18:23:22 UTC
Lol isk per hour on sales..... Sales is done by profit per item/ volume. Welcome to market pvp

"Sarcasm is the Recourse of a weak mind." -Dr. Smith

Ginger Barbarella
#15 - 2014-02-19 19:10:16 UTC
Dasmallredboat wrote:


your behaviour does not help you sell anything. if you want to sell quick dump into buy orders or find a volatile market. in a slow moving market the lowest sell order sells. you loose money if you are not doing the .01 ISK thing, no matter how often you update your orders.


This really just proves you still don't understand it. I price to sell knowing what profit margin is acceptable to me, AND to actually sell the stuff and not waste my time on the .01 isk thing. If I undercut the .01isk'ers by a good chunk of isk, and my stuff sells with an acceptable profit margin, who wins? I sell to sell... I don't sell for the .012 isk or "opportunity cost" epeen. I leave that up to you elite marketeers. Smile

"Blow it all on Quafe and strippers." --- Sorlac

SJ Astralana
Syncore
#16 - 2014-02-19 20:27:58 UTC
Agondray wrote:
Lol isk per hour on sales..... Sales is done by profit per item/ volume. Welcome to market pvp


Isk/hr is precisely where the endgame lies. If I spend 20 minutes per day rather than 10 twitching obsessively over the latest undercut, my isk/hr falls to perhaps 800mil/hr rather than 1.4bil/hr. It's bluntly a waste of time watching a market screen like a coked up day trader. Factory efficiency and capital utilisation of course are factors, but high turnover high isk/hr come more from price/cost ratio volatility than any other factor that I've observed over the past seven years.

Hyperdrive your production business: Eve Production Manager

Rashnu Gorbani
Federal Navy Academy
Gallente Federation
#17 - 2014-02-20 17:32:57 UTC
SJ Astralana wrote:
Eve Production Manager

Is that a tool you're charging for to collect people's entire isk making plans? That's nice.
Destination SkillQueue
Doomheim
#18 - 2014-02-20 21:48:48 UTC
One time bump to fix forum.
SJ Astralana
Syncore
#19 - 2014-02-21 08:58:58 UTC  |  Edited by: SJ Astralana
Rashnu Gorbani wrote:
SJ Astralana wrote:
Eve Production Manager

Is that a tool you're charging for to collect people's entire isk making plans? That's nice.


Mate, an industrialist teaching me anything about T1 production is like a 16yo teaching a gynaecologist about vaginas. Production is an isk-printing machine, and I get a rise out of slicing the technical cost of entry so that any 3-month character can compete from a superior footing. Hell, I've got a beta tester competing against me in my own factory using my own tools. It's like watching two computers play chess against each other.

I'm currently working on a data mining project which will expose all the juicy niches in the top 10 hubs. I know what I'm looking for, and all of the information is freely downloadable. This compiled information isn't available anywhere, and it will come as a free integrated report to EPM subscribers. The germ of this idea was planted by my in-factory tester.

Edit: If you watch my video, my isk making plan is free for all to see. The reason why that doesn't concern me is, well, see the first two sentences of this post.

Hyperdrive your production business: Eve Production Manager

Ginger Barbarella
#20 - 2014-02-21 16:54:58 UTC
SJ Astralana wrote:
Rashnu Gorbani wrote:
SJ Astralana wrote:
Eve Production Manager

Is that a tool you're charging for to collect people's entire isk making plans? That's nice.


Mate, an industrialist teaching me anything about T1 production is like a 16yo teaching a gynaecologist about vaginas. Production is an isk-printing machine, and I get a rise out of slicing the technical cost of entry so that any 3-month character can compete from a superior footing. Hell, I've got a beta tester competing against me in my own factory using my own tools. It's like watching two computers play chess against each other.

I'm currently working on a data mining project which will expose all the juicy niches in the top 10 hubs. I know what I'm looking for, and all of the information is freely downloadable. This compiled information isn't available anywhere, and it will come as a free integrated report to EPM subscribers. The germ of this idea was planted by my in-factory tester.



It's this kind of ingenuity that makes the EveO community ten times better than any other! Keep up the good work!

"Blow it all on Quafe and strippers." --- Sorlac

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