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The Undercutting Paradox

Lyn has a great question that I'd like to share with you all:
"Hi Marcko :D
My name is Lyn and i have been reading you guides and newsletters.
I have been trying to follow your advice and so far... my trouble is there's always someone building a (let's say) thick wall, selling (quite a lot) cheaper than the rest.
For example, i have been trying to sell a type of item that people won't buy in bulk or in a stack of 250..
Let's say the current selling price are 1g 50s-ish, 1g 51-ish, 1g 52-ishh (but no wall is built). Then comes that one seller who make a wall by selling 1g 40s-ish in large quantity like 40 or 50 of them.
Seeing the thick wall built, the others try to sell cheaper like foe 1g 39-ish.. 
This kind of seller kinda making the flipping harder, so any advice regarding this matter would be appreciated :D

Thanks. Keep writing amazing trading post related tips :D

p.s.: i attached the screencaps of my trade profit, so... umm... motivation, anyone? XD"

Congrats on the nice profits Lyn. Here's my advice for you:

This person who created a nasty wall in your market is playing by all the same rules as you are, but the only difference is that they are OK with losing some profit in order to create their wall. If you'd like to fight fire with fire, save the items you get from buy orders for like a week and then place them just 1 copper more than what's profitable. You win for two reasons:

1. Anyone who undercuts you will either be farming the items by hand or losing money.
2. If the wall's creator cancels all their auctions, then they will take the 5% sellers fee and be unable to compete with your price.

The best way to deal with walls is to make the market completely unplayable for a short period of time. If you can't beat them, join them, or, just be happy with the profit you can make by undercutting the wall.

I call this the undercutting paradox because you can't seem to win short term regardless of what you choose to do. You're selling for less than optimal profit because of that wall or you start cutting into your profits further by seriously undercutting the wall with your own. It's nasty business, but it can also be a lot of fun to mess with people!


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