Market Discussions

That's right, and their order gets filled at the higher price you selected (if it's a sell order). Quite often I see some of my items sold for much higher than I put the order up for.

I undercut sometimes to encourage somebody to just buy me out to stop the bleeding. It usually works without depressing the price significantly.

Not sure if trolling.

You're not showing a loss, you're showing less profits. You don't lose money by making less than a fictional number. All goods only have a price when they sell. In your example, the people with 42000 units to sell would most likely just wait out 4 items if it's that drastic of an undercut. But please, keep making up totally random examples to try and fit your argument. It's not like if the guy with 4 items had simply undercut by 0.01 he wouldn't have sold his first anyways, right? Oh yeah, he would have, and had made extra profit.

I'm jumping in a little late in this conversation, but I did want to add my 0.02 ISK (no pun intended).

For starters, I think both method are valid. The 0.01 ISK game works in certain circumstances, the big price changes work in others. Just like any other PVP activity, which tactic you use is situational. I'll use some of the points in this thread as examples.

As others have pointed out, in certain markets, large cuts can drive out competitors. This is especially true in medium volume markets with spikes in margins. When this happens, new traders may jump in thinking they've found a niche. By undercutting heavily, you will reduce the margins a bit, but you will drive out those competitors back into their zone of comfort. The margins may or may not spike again, but either way they've been driven out.

This is a long-term strategy, however. You wouldn't do deep cuts in a high-volume, low margin business like ammo.


This is true for many items, but not all. Large, expensive items are only bought by people with lots of ISK, and generally, they have lots of ISK because they're patient and willing to wait for good deals. For low volume, high price items, deep undercuts can mean the difference between "Oh, great deal, I'll buy now" and "I'll wait a bit" to the seller.


Not necessarily. If you have to babysit your orders in order to always be at the top of the list, then you're not out there working on other deals that could be more profitable. So really, you're costing every other industrialist money. Again, it depends on the item being sold.


Fast sales are good, really good, because it means you now have freed-up capital to be used in other sales.

One concept traders don't usually consider is that of turn over. If your inventory sits in escrow while you're playing the 0.01 ISK game, it's not working very hard. I'd much rather have 2-3% margin daily than 10% margin weekly.


I love people like you (and bots), who blindly make 0.01 ISK changes, because that can actually be used offensively.

If I know I'm dealing with someone who will 0.01 ISK at any cost, I'll drive the price of the item down to almost 0 margin. Then I'll scoop up my competitor's entire inventory and resell it at a higher price.

I've been thinking about doing the reverse as well. But up a buy order, drive the price up fighting with the 0.01 ISKers, then offload my entire inventory of that item on them.


Again, this can be used to your advantage. If a price war breaks out between a 0.01 ISKer and a deep under cutter, prices can drop significantly and more importantly, quickly. But that's usually limited to a single region. If you see something like this, then get an alt in another trading hub, and see what the price of the item is there. You may be able to buy at retail and make huge profits.

Case in point, a price war broke out in Jita on Hulks a while back, and the price dropped to 310M. However, price in other hubs hadn't caught up yet, so Hulks were still selling at the 350M range. I bought two, hauled them, and made 70M in about 15 mins. By the time I made it back to Jita, cheap Hulks were gone.

TL;DR: Both tactics are valid. You just have to do a bit of analysis to determine which one will be more profitable in the trade situation you're in.

A couple of points I wanted to talk about from previous posters.

On driving out competition: Yes you can drive out competition but competition will come back and usually some of the same competators will return. I for one wait till margins improve then get back into trading the item. Why cut your profit by millions or more to drive out competator for a few weeks and make minimal isk then have to deal with them again when margins improve? Making 465,000 per hurricane only works if you sell tons of hurricanes a week. If you only have 10 or so, you are better off with more competition but selling a few a week for a few mil profit each.

On undercutting sales big: Don't do it unless driving someone elses prices down to buy them out and relist for higher or you are working on high volume sales and lower margin returns trading plan. If you undercut huge for low volume sales you just hurt yourself and everyone else.

On .01 isking: If buy and sell orders are moving well at their prices, don't do drastic cuts or over pay. Others will keep bidding until you ruin the market for yourself and them. The guy that stockpiled supplies will capitalize on you, market will crash and someone will buy up everything for cheap.

When to pay higher than highest bid order: If buying items and want to fill your order fast then this is an effective way of doing it. I do this if I am moving items to another region to sell for a lot more. Another thing to look at is if product is moving sales wise. If no one is filling buy orders, placing a buy order that you can relist for a profit and people will actually sell to you works too.

People that truly mess market up with no plan: New traders and people that make most their money else where cause the biggest issue here. OP sounds like he is new to trading in eve and thinks undercutting big is real trading. While it is aggressive, it fails if it isn't part of a strategy. The biggest problem traders are those that mine and produce items themselves but forget to calculate time spent+mineral value+manufacturing cost+bpc/bpo value invested+tax/brokers fees. Minerals are always worth what they can be sold at not what you bought them at also. if you would make more selling minerals at their current price compared to making an item and selling it, you are better off selling the minerals. The next big issue people are those that made money missioning or some other way that tried market pvp, failed and are now liquidating their supplies since they are done trying the market.

Investing lots of money for little returns: This will depend on your wallet size but why invest billions to make 50 or so million isk when you can find another product and invest billions but make hundreds of millions off it? Basically the amount you invest in one item should give you worthwhile gains. If more money can be made in another item for same amount invested. Go for the one that makes you more isk. All these decisions should be based off market trends and how often you can update orders or what your trading plan plays best to.

Just my .02 isk and then some.

Now, THIS is wisdom.
I undercut by hundreds of thousand or millions if/when I need to unload a few items.
People that are in the market with huge piles (days of jita consumption) really really should let my order ride below theirs until mine clears.

@ mars(the above post)

Who's "They"?
You keep refering to "them" and how "they" ruined your market in arnon.

There is no THEM, It's tons of people just like you. some with more patience, some without.
I'm still trading in systems people think are useless. Good isk to be made.

You sound like you're sad they took away your isk fountain of no competition.
That's how it works in every market.
You think it would be better if everyone would undercut by 100K?
Markets would heal MUCH faster, keeping people with LOTS of sales, at 0% margins. How is this good?

You are both right and wrong.

Prices in stores aren't lowered and feverishly fought over. For many reasons, but mainly a few:

1)Even with high margins, Updating prices in a store costs alot of money, time and effort.
2)traveling costs money, so if i need to buy something at 1$ extra because it's 20 minutes closer, i'd buy it here. thus my close store has no need to lower prices, they're already selling.
3)perfect information - Most stores don't *know* the exact price of every item in every store, they calculate their own margins based on volume moved.
4)Stores know that if they battle it out to 0% margins, they'll just end with the same market-share but with much less profit. Which in theory is the basis of all economic activity, in reality people don't like that.

There are many more, but let's stick to those. And let's see how eve addresses them

1)Updating prices is cheap to almost 0, and can be done from anywhere in the region.
2)Traveling in eve is free, most people consider their traveling time to be free aswell(wrong, but still they do).
even if time was money, traveling in a region doesn't take TOO much time, and is still free.
3)In eve you know the exact price of all the other sellers and buyers in the region, Combine 1+2 and game mechanics and you get an incentive to be the top order. RL stores can't act like that, because even if updating information was free, they wouldn't know which price to pick.
4)this is a tricky one, as it's the reason why some people don't fight big undercutters. I much rather let you sell your 4 items and move along than forcing me to bring down my prices. If i see that you bring 4 items at a time all the time, I'll fight you, else i'll ignore you.

Now as to people underselling you below mineral/value price. This is easy to explain:
1) Some people have no idea what their items are worth and are willing to sell at all costs(or profit).
2)some people bought their items somewhere else for ALOT less, they can afford to lose an extra % margin.
a price that would make you lose, would still bring THEM a profit.(the big evil THEM).

The reason i say there is no "them" is because while they are annonymos, They are not coordinated. "Them" sounds like an organization, when it's actually just the public being public.


WALL O TEXT, sorry.
Johnny

I'm a 00.1 isker.

I don't chop off 100k because it's ridiculous, it ruins the margins and EVERYONE loses out. Atleast with the isk game there's some competition and higher profit yields. EIther way your competition simply MUST sell the stock you're also selling so they'll only match your price too, particulary when their build and buy cost was probably very similar to yours anyway.

Sometimes you can see an item yield 5M then some fool wants to make a quick profit and slashes it by 500k and before you know it that you force 10 other people to do the same thing and the profit potential is gone and the item reverts back to a standard price.

I've been doing this for years casually and made endless billions, I know for a fact I'd be worse off slashing prices by 100k each time. I would have to compensate by building and selling at a faster rate which I wouldn't be able to do.