Friday, February 11, 2011

Sometimes Undercutting Isn't Always A Good Idea

     Okay, first off this is no longer The Reality of Dan, but Making Gold With Dan. If you couldn't tell by the new title this is becoming a WoW gold blog. Now you may of noticed that I started posting about making gold a week or two age,but never changed my name. The reason for this was that I was waiting for Cold's Gold Factory to have their blogging carnival. So now that has been published,  I went ahead with the name change, Sorry in advance Cold for pulling changing but this name seems better.

     Now onto what this post is about. Sure, undercutting is the way we get our Auctions to be the cheapest auctions around, but sometimes it comes with a price.
When Mysterious Fortune Cards were still the "new" thing they would go for 25g each on my server. This was when there were only three people who would make them. Now the market is flooded with 10+ people trying to strive for the lowest price on these cards. With all the undercutting that was going on nobody noticed that the price that they were posting for actually started to get lower than the cost to make one. This screen capture of my servers Mysterious Fortune Cards (taken from The Undermine Journal) shows what this massive amount of undercutting has done. Just to put this in scale the highest point on here is 25g, and is bottoms out at 10g. This is not that very profitable.

    When you look at the price of these cards you will notice that there are some random spikes up, the biggest one of which is right at the beginning. All of these spikes were my trying to buy out the market and posting that at a higher price. I would get whispers from people saying that I'm ruining the market on these things and I'm a robber baron. But there were a few people who whispered me with thanks, saying how we shouldn't be undercutting each other and just let the market stay at one price. That is what happened, we all kept the price the same for all of us, no undercutting, no backstabbing. We would all be selling cards and no one would have to become and AH slave.

     But why did the price keep going down? People who didn't like this idea decided to undercut by 5's of gold. With Mysterious Fortune Cards, that is a lot.  Now the market has bottomed out and it will be like that for a while.


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