I’d like to talk about a mistake I see on the market and wrote this guide to help beginner traders and people who just want to sell loot how to make their sales.
Let’s say you check the market data of item X and see that the lowest sell order is for 100.0 ISK. The mistake is listing for 99.9. The thinking behind this is that the lowest sell order will sell, no matter how high it is, so let’s make it as high as possible, which is the minimum amount below the old top sell order.
The problem with this is that the seller at 100.0, along with the one at 100.1 and the guy who will list his item half an hour later will set/modify their order to 99.8, so you won’t sell.
If you try to combat this by babysitting the order, then you have a chance to sell, as yours will be the lowest for a few minutes, until undercut again. Babysitting needs you to be there and waste your time. Also broker fees.
The unavoidable fact is that if there is 1 buyer for approximately 100, and there are 5 sellers who want to sell around 100, only one will sell. So you have 20% chance to sell. The next day another buyer will come, but also more sellers. There is no guarantee you’ll ever sell.
The solution is listing your item for 97. Half a day later look at it and if it’s still there, undercut to 3% below the top order! Half a day later, again. You can be more aggressive if the distance between buy and sell orders is big or the current sell price is 50% higher than regional average.
Why does it work? Because for lower price, there will be more buyers and less sellers. Some people who rather bought an alternative item when X was 100 might pay 90 for it. Some sellers who transported or produced this item for profit will stop when it stops being profitable. When the price is at equilibrium, the number of daily sellers and buys match, so everyone - including you - will sell.
What happens if you bought this item for 80 and the price keeps coming down, below 80? Then you made a bad investment, eat this loss and leave this item. Leaving up a listing in the vain hope to sell is wastefully locked capital and market slot. Sure, if you have reason to believe that the price will rise, go for it!
When you see the buy and sell orders far away or the sell order in another hub far away from Jita sell, you see an empty niche candidate. Then you can keep undercutting until you and all the 0.1-ers sell. If this equilibrium price is still profitable, congratulation, you found an ISK printing item, enjoy being rich! If the equilibrium price is below your profit expectation, well, we don’t win every day. At least you helped others buying their item cheaper.
Yes, there are exceptions when setting 0.1 below makes sense, like when the top order is several days old, so its a possible equilibrium. But unless you are sure it’s an exception, undercut 3% minimum!
Fly safe around Uedama!
