Tailor Archive
Thread: Under cutting and What do you do about it?
Maybe my initial concerns were off-base.
I was VERY busy last night, and had a ton of tells like the early days. Maybe players were NOT buying items on Monday, Tuesday and Wednesday.
I also went to her shop, and there was hardly anything on her vendor. My shop has much more selection. Some of my prices were 'lower' than hers and some higher. I also noted some of the less expensive items on her vendor were 'ugly' colors, so perhaps she marked them down just to 'move' them. I do that sometimes with items that get kicked back in 2 weeks.
Also had alot of vendor sales last night, went from 100 items on one vendor to 72, and from 93 on one vendor to about 80.
I even sold a coupe MT items at my 8000 price, but again she didn't have many MT items in stock... and my items in stock were better colors anyways.
So, I suppose selection and making nice clothes sells better than an empty vendor with lower prices.
I am gonna stock more tonight, and see what happens. It just may be sales are slower during the week days and because many people have alot of clothing anyways.
I also went into the cantina and gave away some clothes, because I was feeling very generous.
Chiana
I know it is a pain to do but I keep track of everyone who buys my products - even furniture - If I see the same name over & over & over buying - then I know it is a reseller.
I look for the items on the baazar and if I find them there under their name then - that is on added to the ban list on my vendor.
Unfortunately undercutting is what some will do to try and power game their way up the business tree or merchant tree XP just working at a loss in exchange for the XP.
I also try and work out custom orders only - (can't wait until I can hire NPC's and place them in city's cantina's etc to advertise my shop)
If people like this FAQ then I'll probably repost it and try to get it stickied somewhere. If not I'll just crawl back into my little hole...
---- Q: My neighbor is charging half as much as I am for the same product. Isn't this undercutting? Isn't this wrong?
A: It might be undercutting (I'm not sure about the definition), but no, it's probably not wrong, in the sense of harming the market. Assuming you two are selling the exact same item under the exact same conditions, there are two scenarios.
The first is that YOUR prices are too high. If you scaled your prices down to his level, you might even see the increased profits that he is hypothetically getting (assuming you have the time to handle the increase volume). If your neighbor just opened his business, then he probably has legitimately driven prices down simply by increasing supply.
The second is that he has indeed priced his items too low. You shouldn't worry about it too much, though. In this case, he is going to sell himself out of the market, due to suboptimal profits. The best you can do is tell him your prices and how well your business is doing. If he is indeed struggling, he might raise his prices and even thank you for the tip. But if he's actually making money faster than you, expect him to laugh at your overpriced wares. In this case, don't get hostile... just see the first scenario above.
---- Q: That doesn't make any sense. LOTS of people are ALWAYS underpricing their items, and they're not going out of business as you said they would.
A: Read that last answer again. If LOTS of people are ALWAYS selling below your price, and they are doing well enough that they aren't going out of business, then perhaps you're the one who needs to adjust prices to see higher profits.
---- Q: That still doesn't make any sense. If what you're saying is correct, then the fair market price is below what it costs to make the item.
A: That's entirely possible, and there's nothing wrong with that. See the question about prices being below costs below.
---- Q: My neighbor is charging twice as much as I am for the same product. Isn't this price gouging? Isn't this wrong?
A: No, it's probably not price gouging. Price gouging is when the SOLE SUPPLIER of a market takes advantage of that position by aggressively raising prices. Otherwise, it's just an overpriced item. And it's not wrong.
In fact, it might not even be an overpriced item at all, just like in the underpriced neighbor scenario above. Perhaps YOUR prices are too low. If your neighbor's prices are too high, they will eventually drop from the market due to depressed sales. Even better, unlike the previous case, you probably won't notice a difference how well your own business is doing, since all your customers who are accustomed to your prices won't be tripping over themselves to pay MORE at their store.
---- Q: My neighbor is buying my items and reselling them at higher prices to make a profit. Isn't this wrong?
A: Not necessarily, especially if you believe in free markets. If your neighbor is doing that successfully, that means your prices are too low. The demand is sufficient enough that you could charge what your neighbor is charging and keep the profits to yourself.
---- Q: I don't believe in free markets. I think my items should be available to everyone at this low price, even though I know it's below the theoretical market value, which is way too high! Why are there all these evil rich people buying them up and keeping them out of the hands of those who really need them and use them?
A: The best answer I can give you is that no matter what you believe in, any time you try to control the price at a level other than the fair market price, you will create a black market as a result of that discrepancy.
One suggestion to fight this black market is to personally control all sales, instead of dumping your products onto the public market. This way, you can enforce your own rules and ensure that only those you feel deserving of your business gets it. But this is definitely a lot more work. And the ever creeping force of this black market will hound you everywhere you go.
---- Q: Someone is selling the such-and-such item at below cost (or giving it away for free). Isn't this wrong?
A: Not necessarily. There are many legitimate reasons for selling below cost. Perhaps the the supply has increased dramatically, or the demand has dropped. Or perhaps they just want to clear inventory. Actually, forget that. The cost of production should have little to nothing to do with pricing. And don't forget there are "profits" beyond monetary gain. For example, a artisan might be willing to lose money on each sale for the sake of earning experience in the craft.
However, if a fellow merchant is in the business for pure profit, and he's unknowingly selling below cost, there's nothing wrong with a friendly tip to make him aware of his losing situation, which will help both of you out.
It's really hard to put a finger on cost anyway. It's hard to put a price on labor, for example, and for some crafters this is the main input resource.
---- Q: So, let me get this straight. You basically think there's no such thing as an unfair price?
A: I think that most times that people complain about other's prices, the reality is that they are just being beat by a better business. However, I acknowledge that there are times when certain pricing schemes DO damage the market. For example, someone could try to corner the market or drive competitors out of business. But these schemes are extremely difficult to pull off, especially in a MMORPG, and require a lot of coordination among multiple forces. I don't think people have any reason to worry about them.
---- Q: Ok, ok, I've been doing a lot of thinking. If everything you say is true, then everyone who sells above costs can be knocked out of business by someone selling at cost, and you don't think this is wrong. How is anyone supposed to make a stable profit?
A: Unfortunately, when an open market is at equilibrium, no one profits... that's just the cold truth. If there is profit to be made, new crafters will jump in and increase supply until the prices come back down. There's nothing to be done about that.
However, markets fluctuate, and they take time to adjust. Some professions have VERY high entry costs, and it takes a LONG time for new players to join the fray... and if it takes long enough, it's conceivable that a person could sit pretty and get rich just milking that one sweet spot in the market without ever realizing how dynamic the market is. Unfortunately most of us aren't that lucky. A smart merchant makes his money by filling in the gaps between supply and demand whenever there is a fluctuation. The faster you can adapt to fill new demands, the more money you can make.
---- Q: Alright, Mr. Smarty Pants. Enough of this mumbo jumbo. How do I price my items?
A: First of all, it's Smartypants (one word).
You've asked a good question. If you know someone who won't sit through this whole FAQ, just tell them to read this one entry. The easiest and best way that I've heard as to how to price your items is the following:1) Pick a price. It doesn't really matter what price you pick. If you want to conserve money, go high. If you want to get it over with, go low.
2) Sell some items and watch them. If they sell more quickly that you'd like, raise the prices. If they sell more slowly than you'd like, lower them. Your goal is to sell your items at about the same rate that you feel like crafting them.
3) Repeat. If your prices drop to zero (you can't give them away), or too low for you to bear, then start making and selling something else... you're in the wrong business.
That's all you have to do. You don't even have to worry about the merchant next door. Everything you ever need to worry about is taken care of by this method.
Good luck and happy crafting!
- Ygu Olpho / Gorath
Well, just because reselling is such an interesting (And easily observable) topic. I'll throw my 2 cents in.
First of all, it's important to remember that when a reseller purchases your goods, you get the money you wanted to make off the item and have basically eliminated the risk (You sold it, no more questions about whether or not it will sell, that's the reseller's problem now.)
Now, let's look at the way the economy works IRL (Not exactly the best example, but it will suffice). When you buy a product, say a pair of shoes, where do you buy it from? A shoe store. Lets say Payless. Now what brand did you buy? How about Nike. Now to fill in the example. Nike shoes are made in several parts, a shoe sole, the leather/cloth part, and then final assembly. The first two happen at manufacturing plants which get their materials from resource gatherers, who buy them from the people with macines/people out in nature getting the stuff. The final assembly can't happen until someone buys/ships the soles/covers from the manufacturer (often not actually the same company that assembles the shoes, but part of the same corporation.) Then the shoe is assembled, sold to a retailer, who hires a shipping company (Frequently owned by the assembly firm's parent company) to move the shoes to the store where it is sold.
This is simplified to:
Harvesters - Middlemen - Shippers - Manufacturing - Shippers - Manufacturing - Shippers - Retail.
Because the SWG economy is much simpler than that it bouls down to (if you include the resalers): Harvesters - Manufacturing - Retail. Without the resellers, basically everything is being sold wholesale...
So the question is what is it about resellers that makes everyone so mad? As a tailor, if I see the same guy buy 5 packs in a row, I send 'em a tell and say, "I can get you a much better inventory, and maybe some varation if you want." Then I can profit by not having to worry about wether or not anyone buys the stupid packs, that's his problem. I get my money either way... So I see it as being a monster plus to my business...
people that undercut my sales ? i hope they choke on their cloth 
thats how i feel.
but i dont get mad, or send them angry tells
TripleDES wrote:
What I did against undercutting? Change my way of income. I sell resources now.
This is probably the way I am going to go.
There are so many tailors everywhere now. It's tough to compete.I loved it the first 6 weeks I was doing it, but now I am getting frustrated. "make me a good suit for 700cr."
The undercutting has driven the market down as well as the amount of tailors competing. A lot of tailors are also getting frustrated and surrendering their skills.
I will keep crafting, but I will probably close my shop and just sell stuff on teh bazaar. Anything over 3k I will do by special order. When I need the skill points, then I will craft a ton of stuff to stock up to keep selling on the bazaar. Then I will just sell resources. I mostly did that when I was in domestic arts. I made more money then than I do now.
I still have 6 boxes to go before i hit master (if I even get that far).When someone needs an itemor color that I can't make, I send themto the top tailors on my server. Especially since I don't plan on doing much more than bazaar selling and I am always off planet, I want them to have a tailor who is dedicated and puts all their heart into their clothing and has respect for the profession.
I have yet to see an undercutter with a decent selection on his vendors. If they sell too cheap in the end they can't keep up and customer will almost never find what they want.
As a customer, I like going to a shop and have lots of choice without bothering the owner. So as a shop keeper I just make sure to have lots of choice on my vendors, 1000 items so far and going up. If an undercutter decides to come live close it will bother me, but I will keep maintaining my shop until prices go so low it's not worth the troubleanymore. Not like I need the money anyway.
That of course is hoping that maintenance fees for vendors will be reasonable, otherwise I will prolly think it's not worththe troubleanymore faster than I thought.
Who exactly set the price of Master Tailor items at 15k? That's freekin outrageous. I wouldn't pay that and I don't expect my customers too either. Surrender the fantasy..Tailoring isn't the end all, be all craft. In fact it's the EASIESTcraft there is. Resource stats mean nothing, there's no decay, and you only needPolymer, Fiberplast, Steel and Hides plus a few others for special items. Please, this is difficult? Do we have to scour the galaxy looking for the best resources? NO. Do we have to constantly experiment to find the best product? NO. Our biggest "crafting" dilema is color choice for petes sake. I've been playing since day one. I have over 600,000 credits from tailoring alone. I have so many resources and factory parts that I don't even have my factories up anymore. My master items go for 5000 credits. That is PLENTY.
If you're just starting out as a tailor, my advice is to pick something else. Really. The tailoring field is a dead horse. Maybe the BE tissue fix thats coming will breathe some new life into it. I hope so. I feel like I'm not even a crafter. I don't make anything special, I don't make anything unique. My clothes are just likewhat every tailor can make. It's very disheartening actually. I've surrenderedmost my merchant skills(another pointless waste) and am getting combat and exploration skills so I can actually play this game instead of sitting in my house babysitting a vendor and a crafting staion, thinking I'm a crafter. Cause I'm not.
Just a few things to say here...
The prices Master Tailors charge for their clothing is NOT justified when it doesn't take a lot of resources to make. Charging8k for a Revealing Fleshwrap when charging 3-4k for it will net you a profit is absurb!
I'm glad players are finally waking up to tailors overcharging for their clothing & I'm glad other tailors are lowering their prices.
Afterall, isn't this a "player" generated market?
Aphrael Do'Urden - Master Tailor
you're entitle to think that 8k is overcharging, just as i'm entitled to think that 8k is the price that makes it worth my time. if people don't like my prices, i refer them to another tailor. however, most people that purchase from me *want* to pay 4-10k for a master item. they don't mind spending extra moneyto come tomy shop, and most of them even tip me extra, or buy a few extra items after a custom order.
i'm sure your customer appreciate you too, prehaps it's not only for your prices... but why call meor anyone that charges more than you doabsurb? (goodness i charge 9.5k for them, i must be a criminal...) yes, i actually sell them at that price. if my customers are happy and i'm happy, why not?
The main cost of Tailoring is not resources. It is time. Time to become a tailor, time to discuss options with customers, and time to hand-craft the finished product.
What is your time worth?
For me, the value of my time puts Master-level items at about 10k. Nobody complains about my prices, I sell plenty, and most people are surprised at how inexpensive their orders are. My customers set my prices by buying my goods. If they find the prices reasonable, it's ridiculous for anyone else to say otherwise.
Trying to judge the value of any item strictly by the cost of the resources that go into it is silly. People have a LOT of money in this game - it's easy to get. When they want something, they'll spend to get it. When they come to a tailor, they don't want 200 fiberplast, they want clothes. Nice clothes are worth more than their components. According to the customer, A LOT more.
Ygu wrote:
---- Q: My neighbor is charging twice as much as I am for the same product. Isn't this price gouging? Isn't this wrong?
A: No, it's probably not price gouging. Price gouging is when the SOLE SUPPLIER of a market takes advantage of that position by aggressively raising prices. Otherwise, it's just an overpriced item. And it's not wrong.
Thank you for a good, accurate definition of price-gouging.. *grins* It's an important distinction to make, not the least because (for the purposes of this debate) one could argue that the very first Master Tailors were price-gouging when they charged 15k for Master items, and that the undercutters of today are just trying to provide a more reasonable service.
I'm not saying this is necessarily so, mind, but someone's got to play devil's advocate here.. *grins*