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Tuesday 20 December 2011

Why have a high fallback price

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I set my fallback price at 400 gold.


I do this for a number of reasons.

1.   It resets the glyph price to 400 gold when all are sold out – and so starts the undercutting cycles from a high level.


2.   It sends a signal to my competitors that i am willing to sell my glyphs at those prices and hence perhaps they should join me.  I give the impression of being a sensible competitor.  That is key.  A market participant with the reputation as a rogue competitor receives more focus.  Furthermore, other market participants that have lower fallback prices become tempted to reset theirs higher as well.  Should this occur then the profits from the glyph market rise for all.

3.   A customer that comes to the Auction House to buy a glyph that is sitting on my 400 gold fallback price knows that the only way it will come down to its normal price (and lets assume that was 150 gold) is through a few days of undercutting or if another market participant has a lower fallback price.  I normally find that such customers just bite the bullet and buy the glyph.  Glyphs are considered capital items.  i.e. a one off purchase for use in perpetuity and therefore customers are willing to pay more than for say useable items like potions.

8 comments:

  1. A few potential problems with this:
    1.) Many people fire and forget using their addons, and don't truly pay attention to what gets posted for what price
    2.)Too high a price can drive players to seek out a scribe to make it for them for cheaper
    3.)Some people don't auto undercut when it's that high and that price may trigger their fallback values, significantly lower than yours

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  2. How many have you sold at 400g? My fallback is 300g and I might have sold one or two at this price during the last six months or so, lol.

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  3. @Xsinthis: yes, all your points are fair and valid. One can only hope that if all market participants pay attention then there is more gold for everyone!

    @Anon: i sell a few at 400g, and plenty between 400g and 300g. But by posting at a fall back price of 400g and given the average undercut on my server is about 1silver then we have many cycles to go to catch a buyer at over 200g.

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  4. In my server most glyphs are in the range of 10-40g, it's very rare to post at the fallback price.
    People keep putting glyphs way bellow the minimum price I go at about 25g. But maybe its because I do not have all the glyphs yet only the ones a level 31 can make.
    But I think people usually don't care about the price they put their glyphs, some use your way and have high fallback price but most do not, the prefer the quick 10g sell, then wait a week to sell for +100g .

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  5. My fallback price is 500g. I have scribes on two servers. On one server, I sell at least 3 glyphs or more a week at my fallback price. On my other server, I may be lucky to get one sale at the price every three weeks. However, I still firmly believe that it never hurts to ask for the price you want, because you just might get it!

    The only issue I see are the few glyph makers on both servers who insist on selling at the 25 or 30g price. I have tried to explain the 1c undercut to them along with the increased profits and better opportunity costs, but to no avail. Some people just like seeing alot of sales for little profit.

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  6. Hi Croda, I kind of doubted your advice at first, but I decided to try it on a potion market that was forever going below 'cost of Matt's. I apologize for doubting you, I've upped the potion profit margin to above 10% in the couple of days I've be trying this. Rational worked for most potions and elixirs, not so much for flasks. That group of people are bound and determined to sell at any cost. Can you say cut throat? Thanks, again.

    Apics

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  7. My fallback was always 299g and I sold quite a lot at that price. One of my friendly competitors asked me several months ago to up it to 399 and I obliged. Sometimes it feels like I sell less at the higher fallback than I was at the previous one, though could just be the difference in timing in the market of a few months. Plus there is also an annoying competitor who entered the market a while back that likes to keep the prices retardedly low on the ones he sells.

    Also I find all of xsinthis points are pretty true, though on my server not so much on the #2 but I've definitely noticed #3 with new scribes.

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  8. Don't get me wrong I too have a "high" fallback, just not so overly high. I guess I should have accounted for different servers 400g might not be as bad on yours as on mine

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