Tailor Archive
Thread: Under cutting and What do you do about it?
BrainBlood wrote:
I love how anyone that charges less than someone else is all of a sudden an "undercutter", like its something evil.
I think from now on, I'm goin to call anyone that charges more than me, an Overpricer, seems fair.
It's not so hard to understand.. if someone opens a shop next to you and charges half theprice you do, it will most likely either cause you to have to lower your prices, or your sales will go down (or you can try to make up the difference with selection, customer service, etc). If someone opens a shop next to you charging 2x your prices, it will most likely have no effect on your sales, or perhaps even generate more. Or you may realize you were underpriced and raise your prices.
I honestly don't care if people are charging more than me.. but if someone sticks a vendor next door to me charging 1/2 my prices, I'm gonna be a tad upset (this did happen). The building it was in just about touches my shop (no open lot space between). Now this tailor has opened up a shop ~300m from mine, and her prices seem to be higher than before (although still less than mine). I don't expect it to affect my business, and I'm not going to lose sleep over it.
Another example - one of the other Keren based tailors has prices slightly higher than mine. I know this because she lists items for sale on the bazaar. Rather than "compete" with her, I generally just choose other items to list. Our prices are close enough it probably wouldn't matter anyhow.
Now yet another Keren tailor (we got 'em coming out of the woodwork!) is selling paramilitary camos at 1/2 the price I am. I'm certainly not going to lower my price, because mine sell just fine at the higher price.
So yeah, selling at significantly lower prices will have a negative effect on other tailors.. hence the negative "undercutter" label. If anything, people selling at a higher price is a good thing. /shrug
"" Ri'a Ocoli"" Master Tailor, Kettemoor
"" Fine Attire by Ri'a is 1km north of Keren at 1190, 3770
"" .. my door is always open, stop by any time!
I love how anyone that charges less than someone else is all of a sudden an "undercutter", like its something evil.
I think from now on, I'm goin to call anyone that charges more than me, an Overpricer, seems fair.
Ordinary price competition is a Good Thing for the economy in general; selling at or below cost is a Bad Thing. (Of course, part of the problem is that even if you agree with the premise, not everybody can agree on where the dividing line between "aggressive pricing" and "dumping" is.)
It can be kind of irritating, especially comparing to real-world industries. For example, Henry Ford didn't give away Model T's for free until he grinded enough of them to learn how to make a Ford Mustang, which he could afford to do because he spent a few hours every day hunting bears in the Michigan wilderness and making big money doing so. But in SWG, that's a perfectly viable business model....
People get these magical numbers in their head of what things should cost. Then complain when people sell for less then what they believe the items should sell for. The biggest annoyance I get is when people compair Master Tailor things to Master Armorsmiths, or Architects, etc... That the prices should be the same. Tailoring takes les resources then other crafts. So obviouslly the prices should be lower.
The only static price we have is that of maintance on harvestors. From there you get the cost of resources. On my server the Resources are 1:3. I unit for 3 credits. You then take the amount of resources to make your item. 1 Cloak 110 resources x 3 = 330 credits. That's how much it's going to cost you to break even.
I sell my Cloaks for 1000 credits. that's still more then 100% profit on the items. Because I can make such a high profit on items like Cloaks, I'll sell shirts and other items for less.
Master Tailored Item: Exotic Leotard. Total Resources 355 x 3 = 1065. So a person selling their items at 4K is still making a 300% profit. In the Real World, clothing does make usually atleast a 100% profit, but 300%? Or if your selling at 10K a 900% profit, that's rediculous.
Don't complain about undercutters when they are still making a 300% profit on the clothes. Complain about people selling at cost or below. Because the prices will get there at this rate.
Anneke Rose (Tailor of Naritus)
I've actually been fighting back this last week a lot more than ever. Buying up the clothing that I consider "rediculously (under)priced" and reselling it, or in some cases destroying it. EmperoressPalpatine mentions 1k for a cloak, that's an example of such a thing. I actually bought some cloaks for 1.2k and resold them for 2.5k this week. They sold hours after hitting the bazar. Also bought a bounty hunter pack for 1k, resold for 3k, some parliamentary cammos for 1k, resold for 3k, and some sports wrap drops I bought for 50cr (don't laugh) and have them on the bazar now for 2k. The only thing above that didn't sell immediately were the sports wraps, but those I've found are not that popular to begin with, but at 50cr/ea that is certainly worth the risk. There were also some thin striped pants in ugly colors on the bazar for I think it was 200cr, that I bought and just destroyed, and replaced with mine, selling for 1k.
As far as someone pulling up a store close to yours and selling for less... owch! Not sure what to recommend there. I would almost say to move, but if you've been there a while it's unlikely you'd be able to find an equally good location given the population density around big cities these days. Maybe temporarily lowering your prices significantly below his/hers would drive the new competitor away, especially if they are less established. Dunno, it's a really tough call.
I don't know how many of you have sat down and used a good harvester or factory calculator to figure out what resources *actually* cost. If you don't harvest your own, then your cost is whatever you paid, but if you do get your own, as I do...
- Fiberplast & Polymer cost me .42 cr/unit (77% density using Radioactives for power)
- Synthetic Cloth cost me 11 cr/ea to make in my factory
- Reinforced Fiber Panels cost me 16 cr/ea to make in my factory
I haven't done the math on Metal Fasteners, but needless to say they're less resource intensive than Synthetic cloth. So let's say 6 cr/unit.
This means that a Pleated Dress costs me about 63 credits to make. Now, with my massively undercutting price formula (which is about 4 cr/unit with weighting for subcomponents), I charge 505 for them. I'm marking up my stuff over 700%. Sure, there's also vendor and house maintenance, but by the time you spread it out over all the stuff I'm selling it's maybe adding 30 cr to the cost of a given item. That means my markup is only 450%.
It's ridiculous to suggest that for some reason, you've hit the magical "right price." I set my prices as I do, and I make some money, but not super fast... certainly not fast enough to justify raising my prices.
It does sound like something's broken, but it's not your fellow tailors if they're charging a several hundred percent markup over cost to make items. Sure, people moving in next door and dividing all your prices by two is rude. But on the other hand, it would be just as rude to find a "cheap" tailor and move in next door, then buy out their stuff and sell it for double the price. Competition is one thing, but those are both anticompetitive practices. But we need to differentiate between those things and just people having a different ethic about pricing. Me, I'd feel like I was robbing people if I charged the prices you guys are talking about.
See, this is what I don't understand...you're in business to make money...and you're trying to sell clothing...but you get upset when the person who buys your clothing does not wear it, but instead resells it to people who will in fact wear it.
If you're happy with your price, then you should be happy with the money you're getting. And it may seem like the person who is buying from you is making money for nothing, but really he's taking a risk that people won't pay higher prices than you're charging for your items. It's investing, like someone running harvesters on a resource and then waiting until it is extinct and trying to sell it, rather than harvesting stuff he actually needs.
As I said before, I would be very happy if someone was buying all my clothing and reselling it, because I would be making a lot of money. I just don't understand some of you people.
Xelene wrote:
It does sound like something's broken, but it's not your fellow tailors if they're charging a several hundred percent markup over cost to make items. Sure, people moving in next door and dividing all your prices by two is rude. But on the other hand, it would be just as rude to find a "cheap" tailor and move in next door, then buy out their stuff and sell it for double the price. Competition is one thing, but those are both anticompetitive practices. But we need to differentiate between those things and just people having a different ethic about pricing. Me, I'd feel like I was robbing people if I charged the prices you guys are talking about.
I agree that it's rude to move right in next to anyone without talking to them first, no matter what your pricing is. But there's a difference between moving in and charging more and moving in and charging less. If people see two tailor shops right next to each other, they're likely to price shop both before buying. So the lower priced person will probably sell more. Some people will still go to the higher priced place, either because it's the first one they went in and they don't care about prices, or because they've shopped with that tailor before and want to support them. But the lower price place will probably get most of the business if it's stocked decently and if the tailor isn't super rude to customers. So a high priced person would be pretty stupid to move next to a cheap place, most of their customers would definately check out the competition. While it's a deliberate tactic for a rude lower priced tailor to move next to a higher priced shop to try and drain sales from it. (Before people get upset, I am not trying to say all low price tailors are like this. I know there are jerks at every pricing level. But a rude lower priced tailor has much more to gain in moving next to a high priced place than the other way around.)
Personally I don't understand why you'd be upset if someone bought from your vendor then resold. You got the price you wanted out of your item. The tailor got stock without having to spend time crafting the item. Isn't that a win-win situation? The only reason I'd see it as rude was if they cleaned out your vendor and left nothing for your customers. That's jerky, and anyone doing it repeatedly is basically just griefing you and deserves to be banned from your store. But if you're providing things at lower prices, why is it a bad thing if higher priced tailors want to sell your wares? You could try contacting them to see if you could supply them by you selling to their vendors instead of them shopping yours.It's good for them because their shop gets alarger selection, you have a guaranteed income from them, you can also maintain your own shop at your lower prices (and since it's cheaper it would probably be more popular than the higher priced store), and you'd be making more credits.
I guess I don't see how buying and reselling can be equated to undercutting. You say they're both anticompetative, but I just don't see it. In the case of buying and reselling, the other person is giving you money. The reseller is giving you business, giving you exactly the lower profit margin you want for your clothes. On the other hand, an undercutter, moving right next door to a higher priced shop, is deliberately trying to deny the higher priced tailor sales.
So a reseller is giving the competition extra sales. An undercutter is trying to steal the competition's sales. How exactly are they similar?
The undercutting is way out of hand, on Bria Naboo. There is a tailor, who shall remain nameless selling Grand Ball Gowns on the bazaar for 1350.
I sent her a tell stating,'Man, you are really cutting the professions throat, selling Master items on the bazaar for 1350'. And of course I got no response.
Although, My ranger received 2 master tailor items as drops just this week, so who is doing the cutting of our throats.
Clear and simple, It's the dev's. There lack of concern for the other 30 professions that don't carry heavy weapons or pull a Rancor out of their pocket.
This Tailor I speak of, certainly is not helping, but the main threat is no dev action to our profession. Clear and simple.
The only thing that matters is supply and demand.
If you can make clothes for any price, and they sell out faster than you can stock them, your prices are TOO LOW.
People with super-low prices tell me one of three things is going on:
1) They have a ton of free time, and like spending hours a day cranking out clothing like an assembly line.
2) They have a very hard time finding customers, and are lowering prices in order to sell anything.
3) They have absolutely no interest in, or understanding of, economics.
1 & 2 are just extreme versions of how most of us operate... supply and demand. If you can supply a lot, you can afford to charge less. If demand is high, you can charge more. Nothing bothersome there.
#3 is the one that can be a pain. People who claim that Tailors charging high prices are evil, or that charging more than (x per resource) is morally wrong, fall into this category.
When they say "A Gunman's Duster is worth X, because it has Y resources"... they are WRONG.
A Gunman's Duster (or any item) is worth WHATEVER PEOPLE WILL PAY FOR IT. Early on in the game, the first Master Tailors probably could have sold them for 10k each easily. Would that have been "eeeevil"? NO. Was I overcharging by selling them for 5k when I hit Master? The many dozens of people that bought them and were very happy to spend the money sure didn't think so. People wanted them so badly they travelled across the galaxy and would have sold their combat gear for them (people did try that w/ me).
If you want to sell items for 3cr a resource because you like making 100s of items a day, or are trying to increase business, that makes sense. But if you're doing it out of a sense of "fairness" or "right and wrong", then you're just being foolish.
While it's true that an item is worth what people will pay, I even think a lot of master items are too high. I've sold many an item at full price too, but I want to re-evaluate my prices. There are so many dang tailors now that if your item is 9000 and someone else's is 8000, it's kinda a no brainer. This excludes people with established customers who are return shoppers. Early on there were no masters, then a handful and they could charge whatever they wanted.
I don't think that's the case anymore. Unless every single tailor has a mutual agreement, like a "Tailor Code of Ethics" to follow, you're going to get price variances. The market gets flooded and prices go down. I'm not rich by far and it's not really a concern to me. While I am in game I am having fun. I don't purposely undercut either though I sell items a bit less than the norm.
I keep saying this but if you can't hang with the competition it's time to move along.