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  1. #1
    US-Stormrage(A)
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    Overcutting - How to Maximize Profits and Influence Market Prices

    Overcutting:

    *What is it? The simplest definition I can give is posting an auction at a HIGHER price than some or all of your competitors.

    *Why do it? Overcutting can be beneficial in a number of ways, the most obvious of which is simply getting you more money for your listing. It can raise the market price of an item you are looking to sell, can prevent you from having to buyout the competition yourself, and can CREATE the kind of competition you want.

    *When should I do it? That's what this guide will cover.



    GETTING STARTED


    The main reason I wanted to talk about the concept of overcutting is it seems to me that the vast majority of people who use the AH simply always undercut. Even when it means taking a loss on their item. There are occasions when you don't have to undercut to get your item to sell. To really be able to spot these occasions there are a few things you need to know:

    *Supply and demand of your item
    *Average market price of your item
    *How many copies does one player usually need


    *Supply and demand of your item
    - Understanding supply and demand on an item is absolutely key to decide whether or not you should overcut rather than undercut. One example I can give is a Cataclysm world drop epic like [Dorian's Lost Necklace]. On my server you will usually never see more than one of this item on the AH at a time, if you see one at all(low supply). It sells quite fast once listed. But let's say I do have a competitor and he lists his for 1850g. Well I normally list mine for 2500g and it sells no problem(high demand), but I have a few options here. I can buyout my competitor, undercut him, or overcut him. Since this guide is about overcutting I would absolutely tell you that in this case I would overcut my competitor and list mine for 2500g as I always do. In your case maybe you'd be fine buying out his item at 1850g, this is definitely personal preference, but I simply want to show that there is an option besides undercutting or buying them out. Knowing the supply and demand on your server should help immensely when you decide to overcut or not. I would be completely confident in my decision to overcut in this case because I know that in a short time my necklace would still sell due to high demand and short supply.

    *Average market price of your item - This is another key piece of information you need to decide when to overcut. Persistent use of the AH, using AH scan add-ons, and most importantly using http://theunderminejournal.com will go a long way toward helping you get a feel for the market value of your item on your server. Another example I can give is an item like [The Night Blade]. On most servers, including mine, this item has a high value due to transmog and simply how rare it is. Let's say that you acquired a copy of this item and the average market price on your server is 12k. However, when you check the AH a competitor already has one up for 6k. In this situation once again you have the same options; buy out, undercut, or overcut. In my case I would most definitely overcut and post for AT LEAST 12k(*). Knowing the market price in this case helps you make a crucial decision because otherwise you might be settling for half of market value without realizing it. Another cool thing is that your competitor may even see your listing and realize he underpriced his and bingo he decides to raise his price closer to market value.
    The reason I chose [The Night Blade] is that this is a highly valued item but not a highly demanded item. Mostly only one class wants this for transmog(rogues). Those who do want it want it badly, but there aren't alot of shoppers for it. Knowing this helps me because I won't buyout my competitor if I know I'll be stuck with a 2nd copy for a long time.

    *How many copies does one player usually need - There are so many high demand items that a player will buy several copies of at a time if and when they buy them. Knowing which items and how many players tend to buy up at once will help you immensely when deciding whether or not to overcut. Examples of items players buy several of at a time are ore, herbs, volatiles, bars, dusts, essences, and crafting mats in general. [Essence of Destruction] is an example of a crafting material that we can guess at how many a player will need. Let's say you have 2 copies of this item but there are only 2 others up on the AH. To craft any of the Dragon Soul pattern bracers a player needs a total of 4 [Essence of Destruction]. Rather than undercutting your competitor you can consider that a player may very well buy all 4 copies either way, so in this case you can consider overcutting them. There are many examples like this so understanding how many copies of your item a player needs should greatly influence your decision on whether or not to overcut.
    In the case of things like ore, herbs, dust etc if you find that these things fluctuate in price consistently you should most definitely try overcutting. Why post your herbs at 40g a stack when they consistenly fluctuate as high as 70g a stack. Find a nice middle ground you think they'll still sell at and overcut!



    The Overcut Effect


    Overcutting when done right can do some pretty amazing things. My absolute favorite result when overcutting is raising or resetting the market value on something. Most people reset or raise market prices by buying out all of the competition. This happens quite frequently with some items(see Ebonsteel Belt Buckle). Overcutting can do the same thing without requiring you to risk any of your hard earned gold. I find the best time to overcut for the purpose of encouraging a market reset is when the supply of a high demand item begins to dwindle on the AH. Here's an example:

    Let's say that you have some [Ebonsteel Belt Buckle] you'd like to sell. When you check the AH you notice there are only 5 buckles left at 100g each. Here's a great opportunity to try out overcutting. Let's say for the purposes of this example you go ahead and post 5 of your own buckles, but for 225g each. There are a few different things that can happen here. Worst case scenario is more competition comes in undercutting/flooding the market with more buckles and yours simply don't sell before they expire. But there are a few other GREAT things that can happen:

    - Your competition's items all sell and then so do yours!

    - Your competition sees your example and decides to reset his items up to your price range

    - Someone ELSE buys out the competition and posts them in your price range

    I love it when these things happen and they can happen pretty frequently when you properly execute the overcut.




    General Tips and Tricks

    (*)Overcut well above market price - This trick isn't something you can always use, but there are examples when it can work to great effect. When I mentioned [The Night Blade] earlier in this post I gave a theoretical market value on the item of 12k. In that example I mentioned overcutting to AT LEAST 12k...but you can go higher! If your competition has the item up for half of the market value(6k in this case) and you don't want to buy them out, you could even try overcutting as high as say...20k! Realistically your item probably won't sell at 8k above market value but now you have created an interesting scenario for your competitor and other players viewing the AH. Creating a gap this big often encourages the following:

    - Your competitor will raise the price of his listing considerably

    - Another player sees this gap in price and decides to buyout your competitor

    Both scenarios are great, but when the latter happens it is a very very good thing. Your original competitor may have simply gotten the item from a lucky drop, but you have now created competition that has a monetary investment in the item and wants to turn a profit. This kind of competition is less likley to do extreme undercuts and will work "with" you to keep the market price nice and profitable.


    *Overcut with different stack sizes - It is amazing how much more money you can make by selling things in different stack sizes. So many times I've sold things in stacks of 20 for a much higher price per item than all the little nitnoid stacks of 4, 8, 3 etc because people like the convenience of buying things in a full or conveniently sized stack. Different items have different stack sizes that sell well so you need to get to know your product and test the waters. Sometimes you can sell things in stacks of 1 for two or three times the price per item that it is selling in stacks of 20 because people only want a few copies of the item.




    Final Thoughts

    Overcutting isn't a real word, but it is a really great strategy that any goblin should have in his repertoire. It oftentimes requires patience, and definitely requires practice but the results when it works are well worth it. I'd love to hear any of your thoughts and feedback on the matter, and if implementing any of these strategies work for you.

    Thank you for reading and have fun making WoW goldz!


    TL;DR - Price thing higher, get more money.











    Last edited by Argalin; May 22nd, 2012 at 10:00 AM.
    "A buyer has been found..." - The most beautiful words in the World...of Warcraft.

    Check out my Goblineering Guides:

    Overcutting
    | The Art of the Offer | Flipping MoP 80-85 Blues | Smelting Success

  2. #2
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    Great post!

  3. #3
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    Good post.

    I find that this strategy works really well with [Inferno Ruby] cuts. On a Tuesday and Wednesday evening, they sell like hotcakes. So, rather than undercut my competitors at the usual 150g, I'll list a wall for around 250g. They pretty much all sell.

    Same works for [Heavenly Shard] and [Greater Celestial Essence].

    A bit dirty but this works surprisingly often: I like to list a cut on my main for, say, 400g when the market price is around 150g. On my AH toon, I'll post a small wall (around 10 or so) for around 250g. Someone usually has the idea to reset the market to the overinflated price and will buy my 'overcut' 250g gems even though, by morning (or as soon as someone sees the high prices!), the market will have reverted to 150g.

    Also, I've been experimenting somewhat with hybrid gems. For example, [Etched Demonseye] sells for 30g on my server. So, I've been overcutting and listing them for 100g. BUT, with a bid of 20g. I find that these markets don't reset because it's so saturated but I sell quite a few at my higher prices - presumably because my bid price is the lowest and, if the buyer is not using an AH add-on, my item is sorted first.

  4. #4
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    like to list a cut on my main for, say, 400g when the market price is around 150g. On my AH toon, I'll post a small wall (around 10 or so) for around 250g. Someone usually has the idea to reset the market to the overinflated price and will buy my 'overcut' 250g gems even though, by morning (or as soon as someone sees the high prices!), the market will have reverted to 150g.
    Can't believe I haven't thought of this.. You, sir, are brilliant.

  5. #5
    EU-Vek'Nilash
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    This also works on large-volume markets like herbs around the time of the Darkmoon Faire.
    You can actually count on people to buyout all those low selling auctions and cut through yours just as fast.
    Great Post

  6. #6
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    Quote Originally Posted by Riryoku View Post
    This also works on large-volume markets like herbs around the time of the Darkmoon Faire.
    You can actually count on people to buyout all those low selling auctions and cut through yours just as fast.
    Great Post
    Now that you've mentioned DMF…

    [A Treatise on Strategy] is a great item to overcut on. On my server, despite being relatively rare (you'd be pushed to find more than 3 of these listed at any time), the prices have dropped from 5000 to less than 1000. So now I tend to post between 2500 and 3000 and they always sell.

    Actually, just did a quick scan for them and they're 125g (never ever seen them that low), so bit of a score. Always good to flip.

  7. #7
    US-Stormrage(A)
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    Quote Originally Posted by Peaches View Post
    Now that you've mentioned DMF…

    [A Treatise on Strategy] is a great item to overcut on. On my server, despite being relatively rare (you'd be pushed to find more than 3 of these listed at any time), the prices have dropped from 5000 to less than 1000. So now I tend to post between 2500 and 3000 and they always sell.

    Actually, just did a quick scan for them and they're 125g (never ever seen them that low), so bit of a score. Always good to flip.
    I just want to say, the prices on your server are a little insane to me. Stuff doesn't sell for anywhere near the numbers you have been quoting on mine, lol.
    "A buyer has been found..." - The most beautiful words in the World...of Warcraft.

    Check out my Goblineering Guides:

    Overcutting
    | The Art of the Offer | Flipping MoP 80-85 Blues | Smelting Success

  8. #8
    US-Moon Guard (H)
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    Quote Originally Posted by Argalin View Post
    I just want to say, the prices on your server are a little insane to me. Stuff doesn't sell for anywhere near the numbers you have been quoting on mine, lol.
    I was thinking the same thing. Brilliant inferno's on my realm are currently high at the moment, and are going for 129g... Just a week or so ago they were at 80g...

  9. #9
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    Quote Originally Posted by jerry48038 View Post
    I was thinking the same thing. Brilliant inferno's on my realm are currently high at the moment, and are going for 129g... Just a week or so ago they were at 80g...
    Jeebus. Pre-patch, a Brilliant would sell for 120-150 gold max. Post-patch, with very very minimal ore, they were 200g+. Prices dropped to 150g about 3 weeks ago - the camping got way out of hand and I've kept them at that price since then. MS stats show that since October (I *thought* that I reset it in January, bad girl) I've sold 16282 Brilliants for an average price of 181g 36s 23c.

    Servers obviously differ. We may have stronger prices in JC but our glyphs don't sell for more than 20g right now (and haven't done in, well, months). That's just how it rolls.
    Last edited by Peaches; May 23rd, 2012 at 04:00 PM.

  10. #10
    US-Stormrage(A)
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    We're getting about 90-100g for Inferno ruby CUTS. Elementium Ore hit 30-40g a stack overnight a few weeks back and drove the ruby prices down since, seems to be alot of shufflers on my server.
    "A buyer has been found..." - The most beautiful words in the World...of Warcraft.

    Check out my Goblineering Guides:

    Overcutting
    | The Art of the Offer | Flipping MoP 80-85 Blues | Smelting Success

 

 
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