[LVS] Undercutting at the Market

[SneakySkeleton]

Before I begin talking about my opinions on this issue, I just want to note that this will be discussed at the LVS Council Meeting on the 30th of December. I feel this issue is being increasingly discussed by frequent members of the server, so to potentially shorten the time this topic will take at the meeting, I would like to discuss this before, in its seperate topic.

What I deem to be undercutting:
Undercutting is where a player will reduce the price of an item (intentionally or unintentionally) to the point it is stupidly cheap for what it is, therefore it is not worth enough to sell at the market and make some form of profit on.

Why I think undercutting is an issue:
Undercutting is frustrating for anyone who sells stuff at the market. It's obviously not so bad for customers, however this topic is not about buying at the market. Whilst undercutting can just be called 'competing for sales in the market', I feel it does more bad than good.
Undercutting will drive players who wish to sell items away from the market.
With the price of an item being driven down, players won't be encouraged to sell their items, as they will not be making enough profit for selling the items to be worth their time. Undercutting is especially damaging to newer Zedlings, as they will not have such an established set-up compared to long time players.
Undercutting can lead to a market monopoly of a few players.
A market monopoly would not be fair to newer players who want to sell at the market, as a few established players would be receiving most of the sales in the market. Without undercutting, players would have a higher chance of receiving sales, and therefore making the market worth their time and effort.
Undercutting takes away the fun of the market for others.
Some people take to the market as it gives them a fun project to work on. The project will not be continued if the player receives no sales.

If less people sell at the market, I would imagine the market does not get as much usage. The market is one of the precious community areas that make LVS such an amazing server. The market has come on in leaps and bounds since I joined the server. Back when I joined, you weren't able to simply walk to the market, slap a sign down and begin selling items. I don't want the market to head back down the road of it being difficult to sell anything.

I think undercutting, to the point of stupidly cheap prices, is a genuine issue for the market. I don't want to have to come out of the meeting with market scarred by an increased rule board (I'm not saying the rule board is ugly, I don't want more rules/regulations on it ). However, undercutting may just be an issue of morals. I care about the community areas on the server, they make LVS such an amazing server to play on. I believe undercutting will end up destroying the current market if it continues on for too long.

Please, I would like to hear YOUR opinions on the issue.
-Sneaks

[ABParadigm]

I feel that undercutting is a serious issue that must be addressed. I feel in small batches, maybe sales, "rummage bins" and the like are alright, but providing a constant price that is lower than average, or close to the bare minimum of what you could sell it for whilst making a profit, is incredibly ridiculous and wrong.

In the case of an enchanted book, say mending, the minimum cost of a book is 10 emeralds. That places the cost just OVER one diamond each (using current 1d to 9E conversion), hence making the minimum you should sell an individual book for two diamonds. I feel a new player could not compete with someone charging two diamonds for a mending book, three diamonds is more realistic. I can see from a buyer perspective, the two-diamond book is more favorable because it is less diamonds out-of-pocket. That is where the seller perspectives come into play. Once a buyer has all the mending books they would want, they might want to branch out into selling them. At this point they would likely not have a perfect villager for weeks, if not months of trying to procure one. This makes it tricky, because they cannot jump into the market expecting to sell said item if there is no foreseeable market, bar that one particular person selling them. Therefore, this creates a monopoly.

This is where morals, and economics come more into play. In a free market such as the LVS market, you can do whatever you want to peddle your items. However, if it puts other sellers at a complete and utter disadvantage, you have to realize where to draw the line. Yes, you are getting diamonds. However, you are also damaging all the other shop owners, and making them frustrated in the process. Why would you want to make everyone frustrated? What kind of market would there be, if only one shop existed? This would take an interesting, enjoyable, and highly beneficial feature out of the game. Yes, undercutting is that serious of an issue.

At the end of the day, you can decide to attempt to gain competition, and you can attempt to offer your goods at a comparable rate to other people, but when you start to fall into rock bottom sales you need to realize that your sales are not helping the bigger picture, but in fact damaging it.

I think something must be put in place, and Dax23333's forums post regarding the "diamond time standard" is a good jumping-off point to start to understand the value of a diamond. In addition, this forums post discussing your thoughts, opinions, and frustrations is greatly beneficial. Don't let your thoughts go unheard before the meeting.

[Forseth]

It's getting late on Christmas evening so I'll just copy this from the council post:

I have a suggestion, one that probably requires an active Zriend in charge of the market and quite a lot of work.
What I suggest is that we entitle someone into a Head Merchant of sort. One who catalogize every item that can be for sale, and selects a proper bare minimum price. It requires a lot of work and needs to be changed after the server and the game changes. The Head Merchants prize for an item, is the lowest it can cost for players to purchase. Any item that doesn't follow this is either repriced to match the base price or removed from the market (By the active Head Merchant) and returned to the seller. I suppose this could be harsher, to force the baseline prize.

[Raysun]

Let me be the first to say that "undercutting" is not an issue in the market.

New players might not be able to sell their stuff at high prices ? But they still might ! And the prices for the things they need to buy will be as low as possible. Which in turn means they can get their equip and materials as fast as possible. If they want to sell their things - they can and will at their own price , and people will still buy it.
Players don't know which the lowest price is in the market - so if they don't look all around they won't know - usually they just buy the first thing they accept the price for. Setting a minimum price will basically make the market less fun in my opinion.
If the players know the minimum price for the thing they're looking for the players that sell in higher prices will be less desirable in the market because the prices for things will be set in stone. This will lead to monopolizing the prices.

I do not envy the person that will be in charge of setting the minimum price for an item.
When is an item not worth selling ? I say we let all players decide like it always was !

Do we have a set definition for undercutting or is everybody having a different idea for what undercutting is ?

P.S. I am probably one of the richest people on this server. I've made players buy my stuff even at high prices , because I play with them , and I have fun with them - so they prefer buying my stuff. And sometimes because they're cheap ! If we make prices set in stone the only reason people are buying from your shop will be because they know you better. So new players might hardly get any items sold, even on the lowest price that is set. People will stop exploring the market in search for better deals. I end my case.

[ABParadigm]

Raysun, with all due respect, undercutting is a huge issue. For example: I was selling mending books for two diamonds in the end shops for nearly a month. You recently created end shop and put a full-chest buyout price for 45 diamonds, translating to 1.66 diamonds per book. You have barely a profit margin, and in the process undercut me to the point that I wanted to avoid selling mending books entirely. I'm trying to not make this a personal matter because this is not the place for it, but saying there is no undercutting issues in my opinion is totally inaccurate.

I see where you are coming from; there is a lot of instances where undercutting is not an issue, but setting a price standard will certainly ease a lot of frustration with all players, not just new players, as well as possible tension that may be created between individuals. It will also ensure you get more diamonds for that item, increasing your profit margin to a value higher than your current (in the mending book example). I don't see how there is a down side, even if there is no issue with undercutting as you said.

[EmpressBethany]

I think Sneaky stated the issues beautifully and I wholeheartedly agree.

Undercutting is posting prices that are dramatically less than other sellers in an effort to cut other sellers out of the market sales. Having a conversation with someone and offering them lower prices for bulk purchases is not undercutting -- that is a business deal.

Since this is not a PVP server, sellers should probably go around the market and make it a point to determine how much others are selling the items for and price theirs at no less.

The way to draw sales with this general community-style pricing is to:
a) develop relationships with other players and
b) be consistent with your supply so your shop can be counted on to have what buyers are looking for when they are looking for it.

If one person undercuts the price, they draw all the sales, no one else wants to put in the time to haul goods to market for sale, only the undercutter is active at market. In the real world, the undercutter becomes the monopoly, pushes everyone else out of the market. In the Minecraft world, the undercutter will also become a monopoly and everyone else who likes providing items for others at market will just be hoping the undercutter quits so the monopoly is broken. Not a nice community feel for our server. Just think of how awful it is to play the Monopoly board game when someone else gets multiple color sets and starts building houses and hotels and you just aimlessly keep rolling the dice, hoping on your turn you somehow avoid that person's holding altogether or that the game will be over soon. It turns the boardgame into a bored game, and the temptation to flip the table is strong.

Anyone can give new players gifts -- that is great! The caring spirit of LVS is one of its most attractive qualities. However, the market is not the place for actual charity. The market is: "Hey, friendo, I did the grunt work for you, any chance you can swap me for some diamonds? I hope these goods speed along your project. I appreciated that doing a variety of Minecraft chores resulted in a diamond trade because I just wasn't feeling like chasing diamonds in the mines this gaming session. Win-win!"

Let's see, some final points:

1) Oh gosh, let's pleeeeeeeeeeease not talk about this at council. If we do, please put a time limit on it and try not to "resolve" the undercutting/market stability problem in one meeting.

2) There will naturally be some price fluctuation. For instance, when an update suddenly makes a relatively useless item more important (gunpowder on LVS is now like cocaine on Wall Street in the 1980s) or when someone invents an amazing new farm or farming technique, prices on the farm product will go down. A healthy market is not a stale market.

3) It is already less than ideal to have to drag Blues off of whatever skyscraper they are working on to change market signs. They are all wonderfully helpful, but I can't imagine we would keep long any Blue that is placed in charge of policing market prices -- not much a pay off for that thankless job. I am partial to shopkeepers keeping an eye on the prices and buyers in the know to stick to shops that have good reputations for fair market pricing and reliable supply. [Unless you are down to your last diamond, then buy your goods at Wal-Mart. Just know that supporting big box stores makes only the big box store powerful, it eats away at community investment.]

4) If finding the best deal was the only concern at market, then we should all be selling in the general shops and never in individual shops. The individual shops let sellers put a little bit of flair and personality into the sale experience. We are all selling the same goods. EB1 gunpowder doesn't propel you any faster than the gp found in any other shop. But, hopefully, it is easy to find what you need at the EB1 shop and find it consistently stocked so you enjoy doing business with its proprietors. Business that sustains a community is done with people you know and depend on. It is about relationships. Going back to the Wal-Mart analogy, the big box store comes in with cheap items, runs the business owners that were staples of the community out, monopolizes the market, new business owners that try to enter the market never make a living wage because the big box store is selling at prices that can only be sustained by slave labor, and the big box store becomes the largest employer in the region but doesn't pay its workers enough to live on. Yes, the consumers get junk for pennies, but the cost to the community makes the community much poorer.
The point here that it is not the goal to pay the fewest pennies for a thing; the goal is to engage in a healthy community market so there are lasting relationships and everyone prospers.

5) Sustained undercutting is rather rude. Make a verbal deal with a player in the pm's, don't post undercuts as the standard price. New players can't compete with undercut prices because there is no profit margin so they won't enter the market as sellers -- undercutting cuts them out of the fun of becoming a merchant at our lovely market.

[Aravero]

By all means, let's limit all topics to 20 minutes before kicking them to forums.

Allow me to offer perspective untainted by a personal stake in the market.

I strongly doubt that any player has ever decided for or against continuing to play on LVS based solely on competitiveness in the markets. I've seen Ray push out Suzie, I've seen EB1 step into the void left when Ray's was less active, and I suspect this current climate is nothing more than a pendulum swing in the market caused by Ray's re-entry.

If you want to know what a new player's perspective is let's ask Ileua. If memory serves he was asking questions on join that suggested he might have an interest in playing in the market.

Price in a fair market is always determined by the willingness of the buyer to purchase whatever the seller was willing to produce. And while I sympathize with those who work at Wal-mart for less than they can survive on.. .. well, my opinions on that may not belong here.

"What's a fair price for ____" is a common question in chat. I can see Diamond standard time being a valuable reference point.. but I wouldn't want it to become law.

[Spectatre]

About 110 items sold at market have more than one seller at the moment; almost all of them have different prices between their sellers. I would wager the majority of people selling multiple things at the market have undercut something, at some point. Whether that be because the previous market price seemed astronomical, to them, or because it was possible to sell it cheaper, for them...both seem more likely than a grand scheme to corner the market and take all the sales.

What a fair price is, what a reasonable price is, will vary, depending on how you play the game. Someone with a massive villager trader can obtain enchanted books for little cost (after they've set up and acquired good trades). Someone exploring the end can pick up enchanted diamond armour for little cost, past their time and fireworks. This is a more inexpensive method than a player who pitches up in the end farm and hand-enchants stuff. It is what it is.

I think we should encourage new players to pitch at the 'going rate' for an item, where there is one. I would be against forcing that to happen by way of regulations. While no-one has explicitly suggested it yet, I would be entirely against minimum prices for market goods. It's another hurdle for new players entering the market. It would be a living nightmare deciding to fix a minimum price for every item currently being sold at market, never mind for every item in the game. That meeting would literally never end.

Other notions:

-I would also be for a time limit on this discussion, and would also welcome a discussion on topic time limits in general

-If you know you're going to be changing your prices a lot, get a blue to put 'prices in chest' on your sign. Then you can price-change to your heart's content without needing them. A blue should also be able to request this of a player if they are frequently needing amendments.

-If you are a seller and someone else is selling the item at a price you deem to be unfair, going down to match their price does nothing to resolve that issue. Being at a higher price does not necessarily lead to loss of sales - I am at the high end of ink sac prices; it still sells. If you are a buyer and feel someone is underselling, you can generally take your custom elsewhere.

-Putting 'fair offer' in lieu of a price should be dissuaded. What a buyer and seller consider to be fair is subjective and may be completely incompatible. Also not sure about people giving stuff away for free, at the market. The zookie stand is perhaps a place for donations.

[ABParadigm]

[will be copy and pasting the following wall of text on the pre-agenda]

I felt a need to be clear, I have voiced strong opposition for undercutting, but I do not by any means encourage a regulation be passed on this topic, as it would be far more trouble than it is worth. What I would rather have is a format where something such as "[X #] many complaints to a [Zriend or Guardian] is a bit ridiculous, maybe this person ought to know that they are harming the market/annoying other players on [X item], and be told to adjust their price a bit before it becomes a tense issue between players/if it becomes necessary." This would allow the free market to STILL come into play, without a forced change, but let the individual know that they are below the "standard" word-of-mouth price and starting to irritate other players.

As a side note, I think a regulations SHOULD come into play that DOES NOT allow free items to be posted into the market.

Despite my dislike of a regulation on this topic, I feel "free items" should be dealt with in other ways, certainly not as a standard price in the market.

I don't think a regulation should be passed, but certainly a way of anonymously reporting the frustrations, and if the frustrations become all-too-frequent for the [Zriends or Guardians] ears it be noted, and changed if it becomes absolutely necessary. Key word: necessary.

I have been stating through this time the solution of messing up the entire market, adding a minimum price to every item, and letting "one bad apple spoil the bunch" when it doesn't need to come to that. I just thought regulations should be held as a last-resort, and that we regard Dax23333's tests and SneakySkeleton's replies to be as part of the discussion on why it is an issue, and let it be known undercutting is more of an issue than it may seem at the surface.

Please also note that I said Zriend or Guardian, as I was not sure which would be more prevalent in this scenario.

[SneakySkeleton]

Glad to see this issue is being discussed. I've been away, therefore I've not been able to reply. Now I'm back, I would like to address some points people have made, or elaborate on points I've bade before. Yes, I will likely be repeating myself or others, but I will try to elaborate where I can.

[NOTE: If using quotes, I will remove anything I believe is irrelevant to my point]
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I strongly doubt that any player has ever decided for or against continuing to play on LVS based solely on competitiveness in the markets. I've seen Ray push out Suzie, I've seen EB1 step into the void left when Ray's was less active, and I suspect this current climate is nothing more than a pendulum swing in the market caused by Ray's re-entry.
Price in a fair market is always determined by the willingness of the buyer to purchase whatever the seller was willing to produce.

Personally, I don't think the market has ever been a matter of the 'dominant player(s)'. However with undercutting, it will become so. Not everyone is so willing to decrease their prices, as their profit margin will drop along with them. With the market, collecting items will take time and effort, especially for newer players who will not have super quick farms, or easy access to a specific resource. The newer players will become more established over time as they improve their farms, but by that time it might be too late. One or two players may have a stranglehold of market prices, therefore dis-encouraging players from entering the market.

Your second point I completely agree with. I think market vendors will find that most players will pay more than some of the prices in the markets - some of them are dirt cheap compared to what they used to be. I seem to remember the times when Mending books sold for 5 or 6 diamonds, but now they sell for 2 diamonds (or just 1 in some cases). I find it strange that mending books will sell for less than say a Silk Touch book, when Mending is less easily obtained than a Silk Touch book. Hence, Mending is a 'treasure enchantment'. (Same with Frost Walker)
Silk is obtainable through: Enchanting Table, Chest Loot, Villager Trading or Fishing [4 ways]
Mending is obtainable through: Chest Loot, Villager Trading, or Fishing [3 ways]
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New players might not be able to sell their stuff at high prices? But they still might! And the prices for the things they need to buy will be as low as possible. Which in turn means they can get their equip and materials as fast as possible. If they want to sell their things - they can and will at their own price , and people will still buy it.
Players don't know which the lowest price is in the market - so if they don't look all around they won't know - usually they just buy the first thing they accept the price for. Setting a minimum price will basically make the market less fun in my opinion.

If the players know the minimum price for the thing they're looking for the players that sell in higher prices will be less desirable in the market because the prices for things will be set in stone. This will lead to monopolizing the prices.

I disagree, and feel in some ways this contradicts itself.

I have no evidence, so this is an assumption: Diamonds are precious to lots of players, some players don't have as many as others. A player may look around for a low price in the market, that time could be used instead of looking for more diamonds underground. Players often ask in chat where the lowest price for an item is in the market, and when they are told, they think nothing more but to buy from the lowest price. This results in anyone who doesn't set their prices low to receive no sales, making the market unworthy of their time and effort.

I understand that providing cheap items is beneficial towards the customer, however I believe for the market to be fun, you need to take into account both parties, the other obviously being the seller. I say that as both a customer (albeit rather irregular) and a seller myself.

Where I feel this is contradictory is where you mention:
1. "If they want to sell their things - they can and will at their own price , and people will still buy it."
2. "If the players know the minimum price for the thing they're looking for the players that sell in higher prices will be less desirable in the market because the prices for things will be set in stone."
Surely this is also the case when undercutting happens? Decreasing prices makes higher prices less desirable too. (Some may argue more so.)
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About 110 items sold at market have more than one seller at the moment; almost all of them have different prices between their sellers. I would wager the majority of people selling multiple things at the market have undercut something, at some point. Whether that be because the previous market price seemed astronomical, to them, or because it was possible to sell it cheaper, for them...both seem more likely than a grand scheme to corner the market and take all the sales.

I think we should encourage new players to pitch at the 'going rate' for an item, where there is one. I would be against forcing that to happen by way of regulations. While no-one has explicitly suggested it yet, I would be entirely against minimum prices for market goods. It's another hurdle for new players entering the market. It would be a living nightmare deciding to fix a minimum price for every item currently being sold at market, never mind for every item in the game.

I agree with this, unless the issue worsens, and is putting the market on the brink of an oligopoly.
As others have mentioned, undercutting may not just make it harder to sell at the market, but it can be annoying. To combat that, it would just mean having a discussion that goes along the lines of: "What do you think a reasonable price for <item, quantity> is?". This is where methods of pricing such as Dax' 'Diamond Time Standard' will come in handy, or looking for the 'going rate'.

A highly regulated market wouldn't be fun in my opinion. Not only coming up with minimum prices for items (which may change after an update), but enforcing this would be painful for everyone. Whilst I clearly don't like undercutting, I feel adding more regulations is a bit extreme. But, I guess, to get rid of one issue, you sometimes have to make sacrifices.
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I believe undercutting is an issue of benefits for customers vs. keeping the market fun for sellers/all. I have been thinking about this issue for a long time and honestly wish I had started this discussion quite a while ago. I hope the discussion continues on, despite the fact the topic will be raised at council meetings.

I will conclude this essay-long post here.
-Sneaks