Friday, April 6, 2012

From the Vault: 1c Undercuts

From the Vault:  Every Tuesday and Friday we'll be shining a spotlight on some of the most popular and timeless posts from Nerf Faids here on ClockworkRiot. Folks who missed them the first time around can enjoy some of the best pieces and folks who have seen them can maybe be reminded of a trick or two that they'd forgotten.

I'm not sure what's caused this to come up so often all of a sudden but I've heard about 1c undercuts one way or another nearly every day for the past week or so. 

On the one hand I hear competitors yelling at me about  my 1c undercuts or guild members saying that 1c undercuts piss them off.  On the other I've got people complaining about how stupid it is for people to undercut by 10g+ and just cut everyone's profits down.

I don't pretend to know what's "right" in the realm of economic theory. I always just sort of assumed that this was a personal preference and everyone thinks that their way is right.  Well, let me tell you what my way is and why I think it's right.

The Supposed Case for >1c Undercuts
I've heard a few reasons for undercutting by more than 1c, or to put it another way, why undercutting by only 1c is not a smart decision.  Usually it's one of these beliefs:

● My item will sell faster if I undercut more because people will see that they're getting a better deal.
If there is an item that is usually 20,000g and I see it for 10,000g I have to admit I would be getting a deal and I may buy this item to flip it.  However, that is usually not the case.  Usually the 1c undercutting is happening in markets like gems or glyphs when the price tag is often under 100g.  When I look at discounts I look at them as a part of the entire cost of the item. Getting 10g knocked off a 20,000g item is a lot less of an appealing discount than getting 10g knocked off a 20g item, you see?

I will dare to say that most buyers are similar to me: We don't care if you're cheaper by 1g or 1c, if your item is at the top of my list (aka cheapest per unit) I'll buy yours.  Why? Because it's at the top.  Hell, with TSM_Shopping I don't even usually see a price comparison on many commodities, the items are just queued up by cheapest automatically.

● My item will sell faster if I undercut by a larger number.
Yes, I just rehashed the previous belief so I can discuss it from a different angle.  I want to discuss more from the speed angle here.  I am not a patient person.  Most people I know aren't particularly patient when it comes to buying things off the AH.

Understand that in WoW there really isn't a lot of window shopping and impulse buys, particularly for trade goods and consumables. Rarely are people going to stumble upon your great deal on flasks just on accident.  If people are looking at your item on the AH they probably went to the AH and typed in that item in particular.

I just powerleveled Jewlcrafting today.  There's this hellish area in JC when you need Large Opals, Azerothian Diamonds, and Blue Sapphires.  There were about 20 Large Opals on the AH, some were at 3g and the others were at 15g.  You know what? I bought all of them.  I didn't care that the 15g Opals were five times the rate of Mr. Undercut. I wanted opals so I bought opals.  Don't get me wrong, I love cheaper goods, but Mr. Undercut could have easily recieved 15g for his Opals as well had he not undercut so aggressively.

Remember that if your item is popping up in a search most people are specifically searching for that item. They already want it, you don't need to sell them on it by kicking sand in your competitor's face.

● Undercutting by 1c is a dick move.
This one's certainly opinion based so difficult to argue against.  To those who hold this belief I merely must ask you to look at it like this:  I can undercut you by 1c. You can then choose to undercut me by 1c. You've lost, at most, 2c of value off your original sale price and will still be selling it for Original Asking Price Minus 2c.  Or I can instead undercut you by 50g.  You can then undercut me if you want, and given your opinions on 1c undercut you'll probably undercut me by at least 1g.  So now you can, at most, sell your item for Original Asking Price Minus 51g just because you didn't like 1c undercuts. Who's the dick now?

The Upstanding Individual Who Fights 1c Undercuts
A phenomenon in all of this is the buyer who will buy a more expensive item if they see someone's been undercut by 1c.  For example, if you're selling a Glyph of Innervate for 50g and I post mine for 49.99.99 this "Upstanding Individual" will buy your glyph just because they don't like 1c undercuts. I know a few of these people.

But you know what?  For every one of these people I know I know about ten people who don't even look at the others on the AH, they buy the top if it's within their price range.  If you want to "fight the man and his 1c undercuts" by buying more expensive items that's fine; I'm sure the sellers appreciate it.  However, decreeing your moral strength in Trade is rarely a deterrent for us 1c undercutters. The 1c Undercutters are still swimming in gold without needing yours. No skin off my back!

At  the end of the day there are multiple stances you can take on the issue. I don't particularly mind if someone takes one over the other. As you can see here I clearly am in support of 1c undercuts but I don't mind if my competition wants to rob themselves of potential profit. 


  1. in markets with heavy competition (such as glyphs), wouldnt it be better to undercut by 10s? so that someone who posts his glyphs at the same time with only 1c undercut is still more expensive?

  2. ottoman try that one again? what is the possibility you are scanning and posting the same item at the same time in the same order as your competitor...and yes i was one of the "1c is a dick move" people until i started posting large amounts and seeing how fast an entire market segment can be decimated by just a handful of misguided i want to bother and go back and fix 50k in mistakes everyday...not after i wasted 2 million gold doing it...never again

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  4. I've used 1c Undercuts from the beginning, its set as my default.
    I'm a Goblin, so I try to make maximum profits.
    Many of my glyphs sell for 300-400G, what do I care if costs are only 15-30?
    Undercutting by more than 1c is simply leaving gold on the table.

  5. I am not a camper. To me - it doesn't matter if you undercut by 1 copper, or 85% - I still won't get the sale.

    So, I either abandon hope of a sale untill yours are sold, or I prevent you from selling.

    Sometimes I don't mind not getting the sale until yours are sold. If I think demand is good enough, then I will just wait for your stuff to sell, and then sell mine at the higher price.

    Sometimes I am sick of the constant sniping - and I will find out where your floor price is. Maybe my floor price is lower than yours - and I will start getting sales. Maybe your floor price is lower than mine. I might test your floor price over weeks or months. If this is the case you are probably going to make less profit than allowing some competitor sales.

    By single copper undercut - all I am doing is encouraging you to undercut me in return.

    By a 5% (or 50%) undercut, I am sending you a message. Every time you undercut me and I respond - your profits go down.

    I lose nothing by my undercuts - I am being camped so am not making any sales regardless. My undercutting is merely my asking you not to camp me.

  6. Love this article! I have for years undercut by 1c myself. I don't mind the competition as I share the market I'm in and still make gold but it is because my main competitor and I won't undercut each other by more than 1c. We lose profits when someone new tries their hand and undercuts by a very large gold amount and takes the profit right out as you mentioned. Good article, glad you are bringing awareness!

  7. To me, undercutting by 1c is threatening my intellect trying to trick me to buy something without thinking just because as you say, it's at the top of the list. As you said, you can see many people blindly buying the top, but smart people and I say analytic people, hate this, of course, the world is filled with dumb people, so you win Faid. Even so, I'm not buying for 1c less ever, regardless of how anyone want to make me feel, and as i said, you still win haha. Of course i agree undercutting for so much is obviously annoying and dumb, but really, selling transmog pieces for 2000-4000 g nowadays with so much competitions seems also dumb to me, so /wave to those people and bringing them down on that market to make it fair for anyone. Salutes.

    1. You've misspelled "donkey dung in my head" as "my intellect".

  8. I am not greedy and I hate 1c under cut. For me the reason i've been in market is simple
    1)I don't want to buy gold. My wife is killing me;)
    2) since I've been lvling alot of profession I know how player feel abt lvling profession so I want them to get item with as cheap as possible. Last week I even help enchanter to finish their last level.
    For me I will spend my time for finding cheapest possible way to get item. Selling with lowest possible after I get my profit. Call me crazy but I am happy and hope 1c under cutter will happy as me after camping whole day infront of AH lol

  9. I didn't used to do 1c undercuts. Since I've started using TSM, I've just gone with 1c undercuts. I have yet to have anyone complain to me about it and my items are the first ones to sell. Seriously, the only thing I was getting with larger undercuts was less gold.

  10. Anyone who resorts to complaining to you about undercutting them either 1.) isn't a serious competitor, or 2.) was a serious competitor but now you've put them on "tilt". Either way, once they've bitched you out, you know you've already won.

  11. Trust me on my realm I've been spat on, raged at, and even had threats of being reported to Blizzard for being a "bot".

    Its just unfortunate that, there is, and always will be childish idiots in the game. If they've held the market on a certain profession for a while they see it as a threat when someone else comes along.

    Pay them no attention, stick them on ignore. That way they can't argue with themselves!!

  12. When Going against several players who are online 18-20hrs a day, 1c undercutting is not an option. You have to cut deep and try to win by having cheaper raw mats/being in several markets. Cutting Deep may result in them buying you out/moving to another market/reposting at high fallback. 1c undercuts and no sales vs 10-20% undercuts and lot of sales with low profit margin.