Understanding Item prices on the market

[Mamillius]

So, for the last couple weeks I have been crafting Sparkling Pentagonal Gem Pouches from the radiant ring and selling the unopened pouches on the market as a semi-stable source of income. until about three days ago the price of the pouches were around 6g 20s or so, but over the last few days the price has been sailing downward at a somewhat concerning rate (today it was down to about 4g 50s) . Now I understand that economies on RPG's like blade and soul supposedly run on the principle of supply and demand (most of the time, thank-you bots), but as an inquisitive individual, I was wondering if anyone had any theories on what causes a sudden drop (or sudden rise), in market prices for items like this. 

One possibility I have been pondering with this item was that since if you make the refiner yourself the cost of making the pouches is the gem fragments, and for 20 of them it costs approximately 2g, plus the price of the materials for the refiners etc, the margin of profit on this item was parhaps unsustainably high, since people will gouge prices on an item so long as it still makes a profit, and leapfrogging each other eventually causes the overall price of the item to decrease, regardless of the actual value of the item considering that it essentially is a random chance of getting the attack power diamond which sells for several times the price of the pouch itself.

to wrap up, if anyone has any theories, ideas, or input of the driving forces on the economy that causes price changes, I would be highly interested to hear them :)

[Taiu]

One or two people are impatient, need gold immediately for an upgrade, and have the item on hand so they make a drastic undercut to the normal price, and it of course sells right away.

 

The next person who goes to sell the item checks the sale chart and sees that the lowest price it recently sold for was x, and wanting to make sure their item sells, they undercut that price, and so on and so forth, until there are more of that item on the market at the new price than there are people needing that item in that moment.

 

The next time someone opens the market to buy or sell the item, they see almost a full page of that item at the new low price and assume it is the stable price of the item. This happens mainly with items which cost a decent amount, not something that is being gobbled up by the hundreds right away, that way there is eventually a point in time where the item sits without being sold right away and disappearing off of the front page.

 

A HUGE factor in this, which NCsoft messed up on, is that items which have already been sold remain on the front page of the market for ~15 min (maybe more) which definitely gives the illusion that that is the "going price" for the item, when in fact it may have just been one person trying to make a very quick dollar for immediate gratification, followed by a slew of undercutters determined not to have to eat another market listing fee if their item doesn't sell.

 

 

TL;DR if NCsoft would remove sold items from the market listing right away and not show a few outliers of people who sold it super-cheap on the recommended sale graph, this issue would not occur nearly as much

[Astrohawke]

If you really want to know why pouch prices plummeted, it's for 2 reasons. Firstly due to the end of the valentines event. During the event, the price of pentagonal and hexagonal gem fragments and pouches went up because people were buying them to make the event gem. The diamond pouches went up from 4g to a peak of 7g during the event as a result. With the event over, fragment prices dropped again and so did pouches back to 4g. Second reason is the announcement of the new 35ap diamond. With the new BiS diamond coming on the 2nd, less people want to buy the 25ap diamond so demand for the diamond and the pouches containing them have dropped and will continue to drop.

[Tamarisk]

I don't deal with gems much, and can't even remember what the ingredients are. So can't comment on pouches specifically.

 

But in general what happens is: there is always a downwards trend of impatient sellers undercutting each other and driving the price of items down until it reaches a point of saturation determined by demand.

Then, there are the patient merchanters that know the proper value of an item, they will start buying from the saturated deflated market until it is at an inflated cost (sometimes referred to as flipping a market) then they will start selling their goods at inflated price for profit.

It can get a bit confusing when both of these situations start to happen at the same or overlapping times, which can cause what appears to be sudden drops or rises in price.

 

It's important to remember that even when the market is saturated with a particular item at a certain price, eventually even if there is no demand, those listings will expire and the lister will have to put them back up. This effect is more noticible in low-cost, High-quantity markets, because it costs more to list very high quantities for a long duration.

 

For example: even when the average cost of dumplings is 19copper, I can still put a listing selling them for 40copper up for 48h and expect it to be sold before the listing expires, even if it does take a good while longer than selling at a lower price.