Tailor Archive
Thread: Under cutting and What do you do about it?
Yes, i agree. I hate when Dell sells computers for less than i can.
I hate that Dealership down the street that sells car to me cheaper.
McDonalds should get rid of its $1 menu dammit!!
Why do I pay so little FOR GAS!!! My gas should be $4/gal by now!! stupid undercutters!!!
It's business. If you don't like the way business works I would suggest switching proffesions. What you are suggesting is price fixing (which is illegal btw) and as this is a game and not RL I would suggest that we setup a price fixing task force that will blow up any crafters buildings susected of price fixing. LOL
I sell my clothes for less than whatever I find anywhere I travel. If I see a cloak selling for 2k somewhere I drop my price to 1900 from then on. I can't afford to keep my prices sky high in the vain hopes that one of those nice exploiters will hand me a large chunk of change for my goods. I need to sell my craft to make money not have it sit on a vendor for weeks at a time.
I charge 8k or 9k for my most expensive master items. As much as 5k seems low but ok, 3k is much too low.
Let's take a robe of honor for example.
It uses hides, which is still hard to find at less than 3 credits per unit, and 3 different kinds of factory materials. Those take room to store, cost money to make (maintenance and power), take some time to make, and require of course a 50k factory. If you fail the combine, you have to use twice the ressources.
Then there is the robe itself, and the time it took 1) to be able to make it, 2) to make it. To get to master I spent 10 days clicking on my mouse 8 hours a day. Plus I spent more than 150k in ressources to grind. During that time I could have made 1 million running missions instead. To make the robe itself, and with the time spent with the customer I could have done another mission and earned 3k instead.
You see, yes in materials selling a robe at 8k is a rip off, but if you take into account the money/time invested to be able to make the robe, there's no way it should sell as low as 3k. Because you know what? When you were grinding to Master your customers were making 3k every 15 minutes just running missions, you really think that all the time you spent working on tailoring for them is only worth15 of their minutes?
I'll let you think about that one, but if lots of people get discouraged by tailoring it's because of people like you who totally devaluate your time but by your actions theirs as well.
All in all it's the market that will set the price. If you can sell your wears for that much you must be doing something right 
I know that a lot of my customers would go some where else if I was charging that much and if I can make a nice profit and they are happly thats all I want. Don't want to get in a flame war, we are on the same team (tailors) we just have different opionons which is a good thing. I have a feeling in a short time with no decay we will all need to pull togeather to keep prices where we can make any profit.
Ygu wrote:
Hmm... doesn't look like anyone read my FAQ I wrote before replying (well a couple people). You guys are still talking about "right" prices and "wrong" prices. I guess I'll just forget about it. Although if anyone wants to expand the FAQ, the information above regarding price fixing is good stuff.
Your post was interesting, but it doesn't completely apply. In SWG, no one will be forced out of the market for pricing too low. They don't really have to turn a profit in their crafting in order to support their business. They can just run missions. A couple of missions a day will support all of their upkeep costs. So they can charge as little as they want, or just constantly give away their clothes for free (as several folks have admitted to in earlier threads)
I think people who are charging less for their clothes than I could get for selling the resources they used to make those clothes are hurting our economy period. You may think it's silly to argue about right and wrong pricing, but I disagree. I think charging less than a resource price (the price it will sell for, not cost), devalues all of our skills and the time we spent working up to them. That makes the superlow price a wrong price to me.
....so Songe, does that mean that us casual players who took a month to get Master should actually charge more? *winks*
I do agree though, for the most part, although I shrink atincluding the factory's cost in the equation -- that will change when factories start to actually decay, and we're replacing them with some regularity, but for now it doesn't quite feel appropriate to me.
The way I look at it is this: True, tailoring isprobably the cheapest and easiest elite crafting profession to master. True, it takes the least amount and variety of resources. But heres where common sense kicks in...15K for an item that is at the top ofa tree is NOT overpricing. Tailoring is not by any means a get rich quick profession (nor is any for that matter) but (uh oh, here comes the infamous comparing to other professions speech...) anything made by a person that spent the time to earn the XP, credits, time, effort, etc. should be able to make a decent profit off their master items. Do you absolutely need a house? No...yet the going rate for a small one on my server is 8K....and thats a schematic you get at the novice level of architect. Do you need clothes?...technically, no. Weapons and armor are a bit different...although you can get away without armor, weapons you do need unless you are a entertainer. When other professions have items that they can sell for over 100K that aren't even mastered items, (don't bother going into the math and economics lessons as I have already done so using the formulas that have been posted on this thread), then 15K...or 10K...or 8K...or whatever price is "too high" for an item from a Master box, that will never decay and does not requie a maintnence feeis NOT gouging. If you don't wanna pay 8K for an exotic leotard fine...go buy a house or something. I just cross my fingers that these people who charge 2K for master items will start getting bored and need to surrender their tailor points for other professions and leave tailoring to those who enjoy it and are looking to make money off it to support other artisans and themselves. Thats just my 2 credits. Flame on...as seems to be the norm around here.
Taimak Aceock
Aspiring Master Tailor 3-3-2-2
Coronet, Corellia : Scylla
I wouldn't make Master Tailor level items for 3k, because it just is not worth the time and effort to make them and sell them that cheaply.
What you're doing by selling MT items at 3,000 credits is really hurting the profession. Everyone can afford 3,000 credit items, so even the people buying them could care less if it's a special top of the line item, they probably turn around and sell them to others for 5,000 credits.
Why not let the people who buy your clothes feel special about getting to the top of their profession and a status symbol for being able to wear MT items. I feel like if a newbie can wear any MT item because it only costs 3k then the tailors are doing a huge unjustice to the population, in that there is no way for them to 'stand out' in their trade and their hard work as a doctor, dancer, smuggler... etc.
It just really devalues clothes, tailors and everyone else who wants a unique set of clothing.
How does it feel to be a master dancer and see newbie dancers wearing fleshwraps???
I just think its STUPID to sell master tailor items for under 8,000 credits. People like to work to afford nice items, it makes it better when they get them.
Since there's lots of folks talking about "basic economic theory," and I have to start TAing for an Applied Microeconomics class on Monday, let's start with a picture:
http://www.boondock.org/swg/SD-curve.png
This is the basic Supply and Demand curve. Q (the x-axis) is the quantity. P (the y-axis) is the price. The green curve labeled D is, not surprisingly, the Demand curve, and the blue one is the Supply curve. Where they cross, at the reddish-orange circle, is the equilibrium point of the economy. P' is the equilibrium price people will pay and suppliers will charge, and Q' is the equilibrium quantity people will buy and suppliers will make.
The Supply curve is mainly generated by the cost to create. If demanded, I'll go into marginal costs and so on, but for now, let's just say that the more people are willing to pay for an item, the more the supplier is willing to provide it. That's why the curve slopes up as price increases and quantity increases.
The Demand curve is generated by people's preferences and income. Even though the factors that go into it are much less correlated to the item itself, generally speaking people will still buy more of items that cost less. That's why the demand curve always slopes down.
Now let's look at the dotted blue line. This is what happens when the price that the suppliers charge goes up. The equilibrium price, P'', also goes up... but the equilibrium quantity, Q'', goes *down*. This messes with the argument that "low prices are bad for new crafters," since obviously, with lower prices, more items are sold... and that is *good* for new crafters.
Now to respond to specific things in this thread since I last posted:
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?
If I'm in business only make money, you're absolutely right. But if I'm in business because I want to become a tailor, then someone buying out my stuff without wanting to wear it is a very bad thing. It breaks the link between me and my customers, it means that I may not get any UXP from those items, and it takes control of my business away from me.
Think about it: is it legal in the real world to buy someone's clothes at retail prices, on sale, for example, and then resell them on Rodeo Drive for a higher price? Usually it's not. Resellers are supposed to identify themselves when buying products for resale.
And here is the fundamental flaw in your logic: Economics 101. Here we have something called 'opportunity cost.' Basically, yes, it costs you 0.42 credits per resource, so you could sell an item that used 100 resources for 42 credits. However, the going rate for resources on most servers seems pretty constant at 3c/unit. Thus, you could have sold those 100 units for 300 credits. In effect, you have 'lost' over 250 credits!
Since I mentioned that I charge about 4 credits/unit for my clothes, no, I haven't. I think that a 400% markup over what it costs me, in credits, to make the item pays adequately for my opportunity cost. But this is the argument against charging "below cost" for items. On the other hand, you have to balance the non-monetary gains from selling clothes... the "opportunity cost" of selling the raw resources instead includes losing the exp to make the item and the UXP generated by someone else wearing it. So if you can place a monetary value on the exp, you change the opportunity cost.
People are WILLING to pay much more for items, so we should charge that much more... though not to the point of gouging.
But look at the supply and demand curve again, particularly the high end of the demand curve. There is a price where no one is willing to buy a thing anymore, but it's very, very high. There will usually be at least one person who will pay that much higher price. It's not whether *anyone* will pay it, but the price where the amount that people are willing to buy coincides with the amount that people are willing to sell, that creates the equilibrium price.
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.
Um, not exactly. For one thing, the idea of what a thing is "worth" is entirely subjective, so anyone who claims to "know" what something is worth is wrong. The same item is worth different things to different people. That's what makes the Demand curve more than a single point. Your statement is completely ambiguous: is "whatever people will pay for it" the lowest price they will pay (which is the only price everyone will pay, and is usually free) or the highest that anyone will pay (which most people won't pay)? Or is it what 50% of the people will pay, or that magical equilibrium price where the number of people who will buy it is equal to the amount that people will make?
The amount of resources used to make an item matters because that is the *minimum* you can charge and break even. If your intention is to make money, you have to charge that amount +1 credit. You also have to take into account overhead; how much your house and vendor maintenance is, for example. Charging less than that is "undercutting" in a sense, though if you assign a monetary value to the UXP you get from someone wearing your clothes, you may still be coming out ahead.
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.
And that's a valid point... though when people talk about the horrible experiences they've had with customers who were unhappy with their prices, I do wonder at the fact that I've never had that happen. So if that's happened to you, that means there are some people who aren't happy with your prices. If you decide to charge high prices, you have to be prepared for those disgruntled people on the low end of the demand curve, and deal with it. It's not somehow wrong for them to have a different idea of how much an item is worth. It's wrong for them to be insulting, of course... but that's another issue. And it's wrong to be insulting to them, too.
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.
Well, not necessarily. I have a different ethic than you do about prices, obviously. For me, it would turn my stomach and make me feel like a heel if I charged the thousands of credits for these items that many of you talk about. There's an "opportunity cost" there, too. If it makes me feel bad to do it, I shouldn't do it. That's not foolishness, that's common sense.
If you have the stomach for arbitrarily charging exhorbitant prices for things you know for a fact cost you nowhere near that much, then you'll probably always have more money than me. So why complain about people like me?
My prices are on the higher side of the middle of the road and yet I get plenty of customers. Never had a real problem with people seeking me out in fact, and I am not even a master tailor yet. I will continue to charge the prices I do, not because I can, but because people are willing to pay them. Now, I have a theory, I think people are willing to pay my prices, not because they have the credits, and not even because they can't find them elsewhere at a more reasonable cost, but simply because I will sit and answer any questions they have and talk with them about various options and what they can look forwards to in the future with new developments.
I don't just sit down and churn out 10 of every item and place it on my vendor, but I do try to maintain at least 2 of every item (with the exception of belts and bandoliers, don't really like them) and keep up a rotating floor display.
But then, I am a capatilist pig Yesterday, I bought things off the bazaar that were priced at 100 credits or lower and in the tailoring tree, not the artisan tree. I didn't resell, them, just destroyed them. Why? Because it's a free market and I can. My prices change as the demand changes and when I sell items with my PA Label, I only use the basic blacks, whites and browns, when I use my personal label, I use the other colors. Why? Because I can. People pay for my name to appear on the clothing. They like that I struggle to put together an entire outfit that looks good as well as being practical in that they can still wear armor under it.
If people continue to charge 100 credits for an item that in my mind (key words there) is worth more, I will continue to buy them off the bazaar and destroy them.
Do undercutters bother me? Yes. Do I send them angry tells or emails? No. I buy their wares. It's a free-world market in this game, it means we can charge whatever we want to, when we want to, and that we can buy our competitors' goods and destroy them, resell them, or just choose to ignore them.
The point is, yes I actually have a point, if you don't like the prices people are charging, fine, do something about it in a market sense, you can't change someone's view if it's working for them. However, there will come a time when people will say, "Yeah, I pay a bit more for my clothing, but then Soandso, always has time for me and makes sure that I am happy with my purchases, so I don't mind."
A-Ti