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Concubine Altee
University of Caille
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Posted - 2008.03.19 08:12:00 -
[1]
When I first started trading I thought the constant undercutting of my sell orders by 0.01 ISK was frustrating. But I've since come to realise the importance of the 0.01 game.
I've found an item that I trade regularly and make a tidy profit on. The item's trade volume is low but the profit margin is quite high. The market will pay the marked up price, and it's all just a matter of your order being the lowest sell price when someone comes around looking for that items.
Then along comes some knob with a large quantity of this item and plunks it all on the market at a price only barely above what would be profitable. The item still sells slowly and this knob still updates his prices everyday. The net effect is that no one in the market enjoys the tidy margin anymore. If this other trader would put his prices in line with everyone else's, he'd be making the same number of sales and make ten times more money per sale.
Thus the importance of the 0.01 game. The 0.01 game preserves the prevailing price for items on the market. So long as you can periodically adjust your prices, you will reap the rewards of the high profit margin.
Knob traders, next time you're thinking about undercutting a market, remember the 0.01 game. Competition is unavoidable and if we traders learn to peacefully co-exist then we can all do what we really want to do -- reap mad profits from the toil (and laziness) of other players.
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Dynast
Aliastra
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Posted - 2008.03.19 08:24:00 -
[2]
On the off chance this isn't a troll...
Owned. That knob felt like having an impact on that particular commodity, and the knob succeeded.. and probably continues to do so.
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Karanth
GoonFleet
GoonSwarm
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Posted - 2008.03.19 08:26:00 -
[3]
I'm surprised that a poast about 0.01 undercutting would be interesting, or at least not stupid. Somehow, you pulled it off. Why can't more people not be stupid, and at least show some thought on why people do what they do?
"Current Earth-Destruction Status" |
Ambo
2nd Outcasters
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Posted - 2008.03.19 08:43:00 -
[4]
I agree with you in the vast majority of the areas and items that I deal with. However, there are times when large undercuts are appropriate. I've seen the situation you describe countless times and certainly in that situation, the large reductions benefit no one but the consumer.
The difficulty comes because no one can be 100% sure that someone else will or will not under/over cut them at thier new price level. The person you describe is not stupid, he was just wrong in that someone undercut him when he probably believed they would not.
Either buy out his stock or, if you have plenty of capital available anyway, just wait for the inevitable backlash and ride the wave up again. 
--------------------------------------
Trader? Investor? Just want to track your finances? Check out EMMA |
Concubine Altee
University of Caille
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Posted - 2008.03.19 08:46:00 -
[5]
I've tried constantly undercutting him. I've also tried deliberately not undercutting him so that he'd clue in and raise his prices a bit. Nothing. And it's not like he's just leaving a low order knowing that it will sell eventually; he's monitoring it everyday.
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Roguehalo
RH Ship Brokers
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Posted - 2008.03.19 09:50:00 -
[6]
 Originally by: Concubine Altee
I've tried constantly undercutting him. I've also tried deliberately not undercutting him so that he'd clue in and raise his prices a bit. Nothing. And it's not like he's just leaving a low order knowing that it will sell eventually; he's monitoring it everyday.
Maybe he's trying to persuade you that this 'low volume' item isn't worth your time and effort and that you'll go look for greener pastures elsewhere. Then ofc he'll raise his prices pretty sharpish!!
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Oberon Theros
Star Ocean Trading inc.
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Posted - 2008.03.19 10:11:00 -
[7]
It could simply be that that trader can and is willing to accept a lower margin then you. If you don't like it, leave the market.
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Heikki
Wreckless Abandon
Un-Natural Selection
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Posted - 2008.03.19 11:01:00 -
[8]
0.01 cutting is friendly market/timeslot sharing mechanism.
Simple as that.
If the other party doesn't want to be friendly (or doesn't have time for updates), then you better be accordingly unfriendly, or find some other market niche.
-Lasse
in loot sales with large undercuts
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Oberon Theros
Star Ocean Trading inc.
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Posted - 2008.03.19 11:41:00 -
[9]
Edited by: Oberon Theros on 19/03/2008 11:56:28
... You honestly think that? That people cutting market prices by 0.01 are more "friendly" then cutting by 1000?
People cut by 0.01 to retain the highest margin possible, with the least cost of maintaining your position on top of other sellers. Thus there is no importance in cutting by 0.01, it's merely a function of maximizing profits for those with time on their hands.
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Midas Man
Dzark Asylum
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Posted - 2008.03.19 11:52:00 -
[10]
My god Yawn.
I trade in 300+ items.
If I buy lots of items at 1 mil and sell at market price of 3mil its nice. if someone undercutts me by .01isk allthe time and i don't make a sale why sould i maintain that price. I will reduce the price to 1.02mil if nessecarry to get rid of the permanent 0.01 cutters.
I'm sure most people are like me and as long as across all there trading lines they are making 20% + profit then selling at a low profit in a few items to win the market for themselves is far from "Knob" tactics. Complaining about someone is stupid, you have no idea how much profit they're making they might have bought 1000 of the item in Z-045XY for 50k each and therefore even selling at 2% above your buy price they would still be making 2000% profit. Lots of traders use alsorts of Tactics if there tactic is beating yours then understand that you have failed that encounter of market PvP either try to out smart them and take a victory or leave the market. Moaning about it just highlights your loss and poor trading abilities.
In fact just a thread entitled "Whine" and content "Whine Whine Whine" would have been a more intellegent post from you.
Good luck and please keep trying to maintain rip off prices, and my Wallmart type trader will laugth all the way to the bank selling at nice profit levels with much reduce competition.
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cosmoray
School of Applied Knowledge
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Posted - 2008.03.19 12:26:00 -
[11]
These are my favorite threads on all the forums.
Someone whines because another player has destroyed their favorite little market.
boo-hoo.
If you don't like the sell prices, leave.
Its market PVP, don't whine.
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Heikki
Wreckless Abandon
Un-Natural Selection
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Posted - 2008.03.19 12:45:00 -
[12]
Originally by: Oberon Theros
cutting market prices by 0.01 are more "friendly" then cutting by 1000
Indeed. Although if considering single trade move, it is also the optimized solution for profit margins.
This mechanism needs willing participation from all sellers, hence the term 'friendly'. In optimal situation between two sellers, one would change price 12 hours after the other, thus effectively each having 50% timeslot of the market.
If one of the sellers should feel his slot is too small (i.e. he can't log on often enough to re-modify the price), he wont benefit from the deal, and has option trying to compete with a) ability to retaing margings at low prices, or 2) ability to withstand no-profit/small loss long enough to get market back for himself.
Consequently, if you perceive the market has only one or few other sensible sellers, you might not want to cut the price too soon after his move, in order to retain the uninformal cartel you have..
-Lasse
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Hersheff
Dragon Core Enterprises
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Posted - 2008.03.19 13:05:00 -
[13]
Maybe that "knob" did that on purpose, to lower the value of the item, buy it, and sell in in another hub were the value is a lot higher ...
~~~~~~~~~~~~
If you really want something in this life, you have to work for it. Now, quiet! The're about to announce the lottery numbers... |
Wieting Foyu
Azteca Transportation Unlimited
Gunboat Diplomacy
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Posted - 2008.03.19 13:17:00 -
[14]
OMG someone didn't do .01 is undercut? Seriously why would i spend 100 isk to under cut my 100m item .01 isk every five minutes, when I can undercut a million and still be making my min 20% I set for myself?
Undercutting .01 isk means EVERYONE in that station can undercut you not just a couple... So when you look again you see 8 orders under cut and the difference is a whole dime.
Either way I am the lowest in the market and 10% of the time some noob buyer ends up giving me more money than I ask for anyway just because he doesn't have the market browser set up correctly.
Market Friendly? Yeah I chose trading as a profession because I want to be nice and split my profits with 40k other pilots out there so I am going to only change my price by .00001% every 5 mins.
Again as all traders know if you think its too cheap buy him out relist.. can't afford it. MOVE.
Wieting Foyu
Foyu Investments
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Bobbism
Miner's Investing Group
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Posted - 2008.03.19 14:04:00 -
[15]
Why does no one ever seem to talk about travel time? This upsets me, because I am lazy and I will not travel any farther than 5+jumps for just a few thousand isk. Ya I know I am lazy. Thats just my little rant. Stop putting all the items in one station!!!!!!
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Oberon Theros
Star Ocean Trading inc.
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Posted - 2008.03.19 14:49:00 -
[16]
One should only look at the single trade move. 0.01 isk traders trade that way, not because of friendliness, but motivated self interest. He considers his profit margin only. Same as the heavy undercutting trader. Only, he believes that he can best maximize his profits by being able to be online more then you/babysitting his orders, and the heavy cutter believes he can best maximize his profits by pushing others outside the market and claiming 100% of a much lessened margin.
neither case can be considered friendly, since both traders are trying to destroy your profitability, they are just going about it using different strategies.
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Uretha Minmata
Republic University
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Posted - 2008.03.19 16:17:00 -
[17]
Wow, amazing how people that accuse others of whining spend their time whining in the original poster's post... Without adding any content.
Anyway, that's an interesting point Roguehalo about a trader intentionally trying to scare off competitors by driving the price way down... Then pumping the price back up when others leave. But would only work if others left and no one new came after the price was raised again. Maybe market pvp has dumb players just as regular pvp does. Lol.
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Roguehalo
RH Ship Brokers
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Posted - 2008.03.19 16:24:00 -
[18]
Originally by: Uretha Minmata
Wow, amazing how people that accuse others of whining spend their time whining in the original poster's post... Without adding any content.
Anyway, that's an interesting point Roguehalo about a trader intentionally trying to scare off competitors by driving the price way down... Then pumping the price back up when others leave. But would only work if others left and no one new came after the price was raised again. Maybe market pvp has dumb players just as regular pvp does. Lol.
The important point in the op is that the item is low volume high profit. It's fairly easy to find items like this that have only 1 or even no regional buy orders. I personally have dumped several such items in favour of high volume low profit(relatively) items since it's also quite possible to 'bully' people off these too.
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Shadarle
LI0NS Industries
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Posted - 2008.03.19 16:32:00 -
[19]
Originally by: Uretha Minmata
Wow, amazing how people that accuse others of whining spend their time whining in the original poster's post... Without adding any content.
This topic has been discussed time and time again on these forums. In fact I believe there is another post on the first page discussing this exact topic.
Excuse us for calling the OP a whiner who can't handle trading and being done with it.
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Midas Man
Dzark Asylum
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Posted - 2008.03.19 16:36:00 -
[20]
Originally by: Uretha Minmata
Wow, amazing how people that accuse others of whining spend their time whining in the original poster's post... Without adding any content.
Anyway, that's an interesting point Roguehalo about a trader intentionally trying to scare off competitors by driving the price way down... Then pumping the price back up when others leave. But would only work if others left and no one new came after the price was raised again. Maybe market pvp has dumb players just as regular pvp does. Lol.
No mate Market PvP has lots of very intellegent people the method your talking is a very viable method and i have used it time and time again there are small intricacies that need to be employed to ensure a sucessful operation unfortunately I am not willing to share these and don't think many would next time you see a market cashed in that way check back a week or two later and you will 9/10 see an increase from the original.
There are those in PvP that lose all the time but claim to Know everything about PvP your sir remind me of them.
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Petyr Baelich
Taggart Transdimensional
Virtue of Selfishness
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Posted - 2008.03.19 17:24:00 -
[21]
Why do we have to see these same posts every few days? I can only surmise that the angry 0.01 isk undercutters are so frustrated that they cannot undercut their favorite items that they must come here, and undercut the other undercut post. Seriously... let's just make one of them a sticky and be done with it, that way there's an established thread always available for the latest undercutter to undercut.
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Alexi Stokov
State War Academy
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Posted - 2008.03.19 17:47:00 -
[22]
You know why I love these types of posts? They reaffirm that I am really ****ing off my competition when I don't do the .01 undercutting game.
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Stellarr
State War Academy
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Posted - 2008.03.19 18:43:00 -
[23]
That's why you don't invest heavily into a low volume item with high profit margins. Since it's low volume, you can't buy them out and resell-- it will take forever to sell and you'll be sitting on a stock of those items not making any profit.
So, just buy enaugh of those items to sell them all in a few days, if someone comes in and kills profit margins with a huge stock, it won't be a problem since you can just sell the few items you have left and move on to somethign else while their stock sells.
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Zoe Midoru
Phoenix Aeronautics
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Posted - 2008.03.19 20:05:00 -
[24]
Edited by: Zoe Midoru on 19/03/2008 20:09:44
People saying that I ought to play the 0.01 game are people saying that they want me to pit my weakness (time to spend doing nothing but checking my order status) and their strength (spare time). Yeah, I won't be doing that.
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Prism Roze
Republic University
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Posted - 2008.03.19 21:26:00 -
[25]
Lots of hate in this thread.
There ain't no uber playstyle, no right or wrong way, just winners and losers.
.01 Undercutting's a useful tool, kids, but it's not the end all of trade. It's just one in a big list of strategies. Use the one that's best for the situation.
And don't show hate cause you got beat by someone more clever or more diligent. Its not cause .01 ain't fair -- it just means you failed.
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Kylar Renpurs
Dusk Blade
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Posted - 2008.03.19 21:50:00 -
[26]
Originally by: Alexi Stokov
You know why I love these types of posts? They reaffirm that I am really ****ing off my competition when I don't do the .01 undercutting game.
QFT :)
Improve Market Competition! |
Kwint Sommer
Lothian Quay Industries
Otaku Invasion
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Posted - 2008.03.19 23:22:00 -
[27]
Preserving the profit margin is indeed the point of the .01 game. The 1% game, on the other hand, exists to do the complete opposite, namely depress the market.
If you drop you're price a lot, say 10%, there's a good chance someone will just buy you out and relist it for a decent profit. They make money and the prices stay high. However, if you drop 1% and wait, no reseller will bother buying you out and your fellow sellers will drop their prices to yours. Once a decent volume has shifted to this price you drop another 1% and wait. Rinse and repeat until you reach refine rates. Then buy up everything and relist at a higher price. With any luck people have stopped producing and there will be a shortage making your highly profitable items sell quickly.
Purchasing and Shipping Moon Minerals |
Chiralos
Merchant Princes
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Posted - 2008.03.20 01:14:00 -
[28]
I notice that these 0.01 threads always take the trader's perspective: if someone bids in 1% or 10% increments and closes up any available profit, they have "destroyed the market".
From the perspective of the producer or consumer who wants to immediately buy or sell and get a good price, 0.01 wars are almost irrelevant. A "destroyed market" on the other hand means that he knows he's getting a decent price without having to wait for a buy/sell order.
I have some RPer in my genetic makeup, so when I see the price gap on an item close up in Amarr, I may personally lose a profit opportunity, but I get the satisfaction that the economy of the Empire is ticking over nicely.
Amarr Victor. |
Concubine Altee
University of Caille
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Posted - 2008.03.20 02:02:00 -
[29]
Wow, thanks. Some of these posts have been pretty enlightening. I'll disregard the rest, except to say that I make lots of money even with price undercutters, and the post wasn't so much a "whine" as a "why".
I guess the term "knob" trader isn't entirely appropriate. I think it's fair to say that while there are traders out there making sloppy decisions, there are also traders out there that play market PvP with a high level of sophistication.
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Ulstan
Caldari Provisions
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Posted - 2008.03.20 14:34:00 -
[30]
I don't really mind people undercutting me by .01. I view it as a way to share the market without really affecting the price.
Constant updaters that update by .01 are somewhat annoying, but the issue there is that, for whatever reason, they can stay online longer and update more than I can. It doesn't really matter what they adjust their prices by, they'll always trump my order. In this case I have to seek other solutions like dropping the price so low or raising it so high they bug out, or bug out myself and look for a different market.
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