Labels

Thursday 13 October 2011

Floors and Ceilings vs Solid Walls

Sidebar: Yesterday there was a myriad of great comments which has provided Critical with around 3 months ideas worth of non-stop daily posts. Thanks Foo, Al and Mox for contributing. I don't know what Critical would do without Readers like u guys. Ok enuff sniffling, on with the show!

There are two distinct methods Critical has used in the past during his Glyph Market Leader times: floors and ceilings, and solid walls. Click the heading links below for more details. This is an advance discussion. No cheap cat pics here.

Today Critical is going to briefly discuss why to use them, for new Critical Readers who have only started reading today. In both methods you completely ignore the market/current selling prices and use your cost price as your basis for setting glyph prices. You also post all glyphs in game (or at least the top 316 glyphs). Remember this is a Why post, not What or How (see links for more info).

1. Floors and Ceilings (aka original "Critical Method")

The first time you post using this method you will have some glyphs posted at your floor price, some posted at mid and some posted at your ceiling. The second time you post (preferably wait half a day or a day later), the glyphs that you are undercut on will be posted by you chopping price to somewhere between mid to floor prices. The third time if undercut again, that glyph will be posted at floor prices. If you have aggressive competitors eventually all glyphs will be sitting at your floor price.

This is what your competition sees:
- there is a maximum price on all glyphs (your ceiling)
- undercutting is serious and within 2 undercut cycles the price of a glyph drops all the way down to a really low price (your floor)

He either thinks:
- what a jerk this is not worth it or;
- ok let's see how long this can go for

The advantage of this method is that it is very powerful psychologically in squashing out weak glyphers. Crashing prices very quickly makes casuals go wtf ok fine i will lurk and wait for rainbows and sunshine then "I'll be back". Goodluck.

2. Solid Walls

A solid wall example is: for each glyph you post up 4 x 30g, 4 x 60g, 4 x 90g

The competition sees:
- there is a maximum price (the highest wall)
- there is a lowest price he has to sell below if he wishes to sell (the lowest wall)
- to reset he has to buy out all your 12 plus anyone else's glyphs

Advantage:
- you can leave all your glyphs up for 48hrs and they are safe from your competitors ie wont be bought out for a reset
- even if u get undercut, when that glyph sells, yours is still there and gets bought out as well
- you dont have to get into undercut wars for a whole 2 days and you can spend that time (previously allocated to Selling) on Buying cheaper stuffs and Making stuffs more efficiently (reducing costs and increasing productivity both increase your bottom line)

Disadvantage:
- you need to leave your Sellers afk for 1 hour each, unloading everything
- you can only do this after auctions have ended
- if you cant wait and want to cancel instead, cancelling takes a long time
- the afk time is not a big deal if u can time it right ie just before dinner or shower or [insert 1 hr activity here] but it has to be done again for the second char = (

Both methods have excellent flexibility. 

With the solid wall method you can try:
3 x 30g (this is to set a low price so that competition start posting below here)
8 x 60g (once the cheap 30g ones get bought out, the 60g ones are there and also get bought out)
3 x 90g (if its a really popular glyph and the 30 and 60 ones are gone, 90g ones are there to be bought out too)
Or some sort of variant.

The same way with floors and ceilings you have flexibility too. One example is you could lower your floor by 1g per day (this requires strong will to only reduce 1g a day) to find out your competitors true floor (the lowest lowest he will go) eg:
Day 1 set floor (aka threshold) as 15g, competitor undercuts to 14g90s
Day 2 set floor as 14g, competitor undercuts to 13g90s
Day 3 set floor as 13g, competitor undercuts to 12g90s
Day 4 set floor as 12g, competitor stops posting (hes online but chooses not to post)

Bam, now u know his true floor, 13g. So what, some of you may be asking. Know your enemy, understand as much about him/her as you can. Only then will options of attack become clear. Ommmmmmmm.

Food for thought? More like feast for thought. Critical says you're welcome.

7 comments:

  1. Morning Critical, thank you for having such a nice place to host our discussion!

    With yesterday and today's post, I realize that I have been wielding your scalpel more like a machete in my enthusiasm to re-takeover my glyph market. Right now I am regrouping and fine tuning before I resume my attack, so I have a few more questions for you.

    In yesterdays discussion you said 25g whiptail stacks come out to 5.19g a glyph, and I have absolutely no idea how you got to that number. At first I thought you meant 5.19g an ink and I'm still not sure you didn't mean ink but either way I'm a little confused. In fact I'm a bit lost on the DMC cost also, I worked the number backwards to 15.6g for Inferno ink but I don't see how that fits into whiptail prices.

    After I get these numbers sorted out and settle on a new base cost, I am going to use the floors/ceilings method to stamp out the smaller guys, then settle into a long term walling routine and slowly grind down the remaining big guys.

    ReplyDelete
  2. Well Bottomless has taken notice, talked to me about the crazy change in prices and I let it be known that this is nothing personal but definitely a long term effort to get rid of competitors.

    He is not very pleased with the turn of events and hopes Im just having some short term fun with the market, however he is committed to sticking it out, atleast for now. Also discussed a White-list compromise wich I politely declined.

    ReplyDelete
  3. Hmm do Critical a favor please. Mill 100 whiptails (5 stacks x 20) and tell me your results. How many of pigment x and y etc.

    ReplyDelete
  4. I'll do you better since the prices are so good and im going to buy it anyway :P

    50 stacks of whiptail purchased at 21g a stack (1050g total).

    600 Ashen Pigment exactly, 300 BFI.

    116 Burning Embers, 58 II.

    At this point I would usually say "I am buying purely to restock glyphs, so I just paid 3.5g per ink, or 10.5g for a glyph. parchment is of no consequence, and II are pure profit when used in trinkets later."

    ReplyDelete
  5. Alot of assumptions involved below, pro glyphers will spot em. Anyway just some quick glyph cost calcs based on your figures (put your pro algebra hat on please):

    1000 whiptails = 600ap + 116be
    1000w = 600ap + 1160ap
    1000w = 1760ap
    1w = 1.76ap
    1w = 0.88bi

    @21g per stack:
    1w = 1.05g
    1.05g = 0.88bi
    1bi = 1.19g

    1 glyph = 3 x 1.19g + 0.5g
    1 glyph = 3.57g + 0.5g
    1 glyph = 4.07g

    Hope I havnt made any silly mistakes. Line 2 will be the major point of contention, with the assumption that 1 inferno = 10 bf. /shrug watefs. Ok Critical needs to get back to flipping his burgers!

    ReplyDelete
  6. HoHO, that IS an interesting way of looking at things...

    (Disclaimer about people set in their ways and yadda yadda)

    I don't with you in counting a BE as 10AP. The math you did works out fine but I don't count up my inks that way, and I really am surprised that any other glypher would do it.

    1 BE does equal the opportunity cost of 10AP because you didnt have to trade in 10AP to get it (I just got an inferno ink and didnt have to give up 10BFI for it, therefore I "gained" 10 BFI).

    The problem I have with this setup is that I never would consider trading in BFI in the first place. I didn't really gain ten inks by not trading them in, and I can't suddenly make 3 more glyphs because of it either. Those 160be contributed zero to my glyph business, which is why I use the Pure Profit Byproduct method.


    I'm especially curious why Critical would do this, since he gives away his inferno!

    ReplyDelete
  7. Interesting methods on the price per glyph. I use a very basic calculation, assuming a fire sale of Inferno Ink. Using Big Al's # above, here is what I would have said:

    1050g = 1000w
    1000w = 600 ap + 116be
    1000w = 300BF + 58 II (basic production)

    BF
    1 glyph = 3 BF (parchment price not used)
    300BF = 100 glyphs

    II
    (assuming a firesale of inferno inks at 50 - 75% current market) fyi - on your server that would be about 10g each

    58 II = 580g

    1000w = 1050g

    1050g-580g(proceeds from firesale) = 470g

    100 glyphs = 470g
    1g = 4.7g

    Again, this is very basic and makes several key assumptions (1) you can sell all of your Infernos at firesale, for that price (2) does not consider parchment costs or AH fees.

    ReplyDelete

Popular Posts