Comments on the 1c undercut
This post is a response to a conversation on Clockwork Riot about the 1c undercut. The commenting system there is a closed one (there’s an account requirement), so I’m putting my thoughts in a post instead.
Here’s my 2 copper on the issue.
Over time, my mind has changed re: 1c undercuts.
Once upon a time, I didn’t AH much, and I hated 1c undercutting with a lukewarm passion. Since I didn’t baby my listings, and I wasn’t selling “high volume / variety” goods such as glyphs and gems, a 1c undercut would kill my listings. The 1c undercut also is far smaller than (re)listing fees, so in my mind, the game theory went, such a small undercut was a recipe for disaster for sellers. After all, the “suck it up, just undercut them and stop qqing” would if played out lead to the sellers losing more than the items are worth in very short order. Intuitively, 1c undercuts were destructive.
Markets are different
Now, however, having gained experience with glyphs, I feel differently about some products markets. The 1c undercut makes sense there. Those markets are different, often they’re flat out AH PvP: I can log in to sell glyphs and virtually any time of the day and 75% of the time – perhaps more often – one of my competitors will be on and active. Pricing on glyphs has been good, so I think most sellers do get something per posting cycle, but it’s not great money except for the 20 hours/7 days folks whose listings spend the largest percentage of time at the top.
Here’s the thing. That’s gems and glyphs. For slower moving items (e.g. gear, slow moving mats, etc.), I still think the 1c undercut is a jerk move. If you’re going to undercut, undercut by a little more. Personally, if I see a slower moving item listed at 80g and another at 79g99s (or even 79g), do you know whose I am going to buy? The one listed at 80g. Why? Because it shows proper respect to other sellers. I’m almost certain I hold the minority opinion on this issue.
What’s the difference, you may ask? Well, these are items which from day to day may not sell at all. If I list at 80g and you list at 70g, you’re providing a meaningful customer discount. I could counter, but may not wish to.
However, if you come in at 79g99s, you’re basically inviting me to start a listing fight whose intuitive outcome is that we both piss away listing fees and in all likelihood neither of us gets a sale.
Inquiring minds want to know: does TSM post based on your most recent scan, or based on the up-to-the-second lowest price? With simultaneous active sellers… there might be a benefit to undercutting by several copper instead of 1. If someone is batch listing at the same time as you, and listings are put up based on scans, then you would be able to underlist a competitor in real time since people probably don’t rescan between mailbox runs, but rather just between full relisting cycles. Experts please chime in…