For long I dismissed 0.01 ISK or 1c undercutters as "punks", considering them something that happens only in MMOs, abusing the fact that it's illegal to use a bot to manage orders and also, since there is no brand or quality in game, the buyers will buy the first item in the list. So I considered them human bots who camp the game all day, updating their orders.
However they have a real world version, the cartel. By undercutting by only 0.00001% of the value of the order, they are matching prices. Their idea is that if we keep the prices all together artificially high, we all make more money. And that part is true, if everyone agrees to a cartel by not making significant undercuts, the group of the sellers as whole is getting off better.
However as competition is eternal, cartel members don't share nicely. Not in game, not in real life. They keep on competing, just not on the price but on marketing. In the game it's done by being on the top of the list, hence the camping.
When you choose to undercut by only a little, you are joining a cartel, like it or not. You give up the chance to compete by having a more efficient production or by working for lower profit rate. You agree with the rest of the cartel members that you'll just compete by marketing aka update frequency. You do it to "not leave money on the table", maximizing the possible profit.
I never joined a cartel, simply because I'm sure that I can beat my competitors and take the market for myself. I undercut deeply to break the cartel and force them to work for much lower profit than they want. So they give up and go to hell. Remember that their scheme requires lot of player hour. Selling for 100K profit at the cost of 1 update in a day (5-10 seconds) is 72M/hour. Update it 20 times and you are at 3.6M/hour, you're better off running missions. Of course they don't want to sell for 100K profit, they want to sell for 5M profit, but I can quickly make that dream pop.
Important: till the 0.01 punks have stocks, you won't sell. No point cutting again and again, you are really leaving money on the table. They must liquidate their stocks. Them giving up means they won't restock, but you can't expect them to just trash their wares. After setting a new price, you must wait until they run out. Then you can sell, or you find that some of them are still there, restocking. Then cut again.
Another thing: if they left, don't get too happy and rise the price, they'll come back (or some new one). Write down your prices and if you find your 11M sell orders empty, with the lowest seller 15M, sell for 11.2-11.5, and not 14.5.
PS: I'm back and moderating comments, 20+ from yesterday processed, feel free to continue the conversations.
However they have a real world version, the cartel. By undercutting by only 0.00001% of the value of the order, they are matching prices. Their idea is that if we keep the prices all together artificially high, we all make more money. And that part is true, if everyone agrees to a cartel by not making significant undercuts, the group of the sellers as whole is getting off better.
However as competition is eternal, cartel members don't share nicely. Not in game, not in real life. They keep on competing, just not on the price but on marketing. In the game it's done by being on the top of the list, hence the camping.
When you choose to undercut by only a little, you are joining a cartel, like it or not. You give up the chance to compete by having a more efficient production or by working for lower profit rate. You agree with the rest of the cartel members that you'll just compete by marketing aka update frequency. You do it to "not leave money on the table", maximizing the possible profit.
I never joined a cartel, simply because I'm sure that I can beat my competitors and take the market for myself. I undercut deeply to break the cartel and force them to work for much lower profit than they want. So they give up and go to hell. Remember that their scheme requires lot of player hour. Selling for 100K profit at the cost of 1 update in a day (5-10 seconds) is 72M/hour. Update it 20 times and you are at 3.6M/hour, you're better off running missions. Of course they don't want to sell for 100K profit, they want to sell for 5M profit, but I can quickly make that dream pop.
Important: till the 0.01 punks have stocks, you won't sell. No point cutting again and again, you are really leaving money on the table. They must liquidate their stocks. Them giving up means they won't restock, but you can't expect them to just trash their wares. After setting a new price, you must wait until they run out. Then you can sell, or you find that some of them are still there, restocking. Then cut again.
Another thing: if they left, don't get too happy and rise the price, they'll come back (or some new one). Write down your prices and if you find your 11M sell orders empty, with the lowest seller 15M, sell for 11.2-11.5, and not 14.5.
PS: I'm back and moderating comments, 20+ from yesterday processed, feel free to continue the conversations.
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