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Should You Undercut the Highest Buy Order or Lowest Sales Order?

So, when you finish your farming session and have goods to place on the trading post, you probably already know that your best bet is to undercut the current prices. But how do you determine which price to undercut? Is it the Highest Buy Order (instantly sold to a prepaid buyer) or Lowest Sales Order (needs to wait to be actively purchased by someone)?

The answer, in almost all cases, is to undercut the lowest sales order. Although this isn't an instant sale, you will often make 30% or more going this route.

This small change in the way you sell items on the trading post makes a huge difference in the amount of gold you get, and it's something I've been saying on this blog for a long time.

If you take this idea and apply it to say crafting or flipping, you open up new tiers for gold making that others cannot reach.

5 comments:

  1. Insomniac said...:

    Hi Markco, interesting this post came in a day after there was craziness going on with fangs in the trading post yesterday. I gather that there was a buy-off of some magnitude that sent prices rocketing. I fortunately had almost a full stack I was wanting to unload but the market was so chaotic (I was putting only lots of 5 up at a time) undercutting was occurring instantly.

    The question is, in a chaotic but very profitable situation, should you just unload to the highest buy order (still profitable because of the jump), try to get small lots filled at higher profit with a chance of being undercut, or just wait until the dust settles and sell at prices that are slightly elevated?

    BTW, I was alerted to this from the GoldWars2 site (great site).

  1. Krinkles said...:

    Hey i need some advice i always find im doing well in a market and then someone comes and destroys the market dropping the sell price by 1-25%. Im not the most patient flipper and i tend to look for the quick buy and sells maybe this is my problem but with the listing that have been undercut drastically should i just wait for the items to sell?

    also am i better of buying in small amounts considering im looking for the quick flips?

    The reason i ask these questions is i have the materials for eternity sorted i just need the damn precursors

  1. Anonymous said...:

    Krinkles, I tend to play the same kind of markets (quick flip, low volume). Occasionally, I will see the dropped sell price you have described. I'll stop and think for a moment when I see this before buying/selling. If it is only one or two offenders, I'll tend proceed as follows:

    If I have a feel for the market and know the demand is high, I will list to sell at the "normal" price "behind" the dropped sell price. My intuition of the market knows it will bounce back and sell relatively soon. If I'm not sure, I wait a while and come back, use a scraper site to monitor or sometimes check the price history.

    I'm not always in a huge hurry to flip if I know I can earn more by letting it sit for a week. Remember Markco's 7 day rule. Prices go all over the place during the weekend and it provides a good opportunity to make a killer profit.

  1. Babs Seed said...:

    @Krinkles
    Depends on what you mean by "drastically undercut". I could name a half a dozen items right now I'm buying for 10c higher than the next buy order and selling for 10c lower than the next sell order because the market supports those prices and they all but lock out would-be competitors. I build huge walls and if I've got anything to say about it, no one will ever buy above or sell below the prices I've set, except for people who aren't trying to flip anyway (insignificant to me)

    I am the "someone" who will happily come along and steal your market for half the margin you were enjoying, and there's a lot more like me. Unfortunately, you can't just wish us away. Plan to deal with us by not only selling lower, but buying higher. You can either cut your own margins, or wait for someone to come along and do it for you.

    If you see a wall of a thousand items selling below your sell order you should check on it periodically to see if those items are being depleted. If they're not (because the market is slow or they're being refilled) then you'll be in for a long wait to sell. Look up the item on gw2spidy and use that to gauge how long you might have to wait for your price level to be achieved again. If it looks like a day, leave it. If it looks like a month, pull it.

    If quick flips is what you're after, then I would stick with smaller amounts and higher margins. You *can* make more money faster if you do the day trading bit and weave between markets with higher margins, but you know the risk with that is that someone like me who likes to dig in for a long time at a lower rate of return will come and pooch your orders. So, be waaaaaarned!

  1. Krinkles said...:

    atm ive changed tactics and am relying on salvaging for ecto's its a pain in the ass though since i think they have dr since this morning i was getting atleast 1/1 not i seam to be getting 5/8 what is a tiny margin and even some losses.

    With the quick sales im mianly doing gathered materials and rare scrafting materials in stacks ok 100ish

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