it’s all-out war — we go to the mattresses!
 – Sonny (The Godfather)

This is a quick update to yesterday’s post.

I have a fairly simple game-plan for dealing with my new competitor which, so far, is working.

  • Firstly, I’m buying up all the ore I can get my hands on below a certain price threshold leaving only the most expensive stacks left.
  • Secondly, I’m buying out any uncut gems that are cheap.
  • Thirdly, I’m buying up Heartblossom.
  • Finally, I’m posting with deep undercuts.

The first two actions serve a dual purpose; they increase my stock while pushing up my competitor’s costs. The third action reduces his capacity to transmute Carnelians in to more profitable Inferno Rubies. Lastly, since I have a lower cost, I have no qualms about driving prices down in the short term. What I loose in single-transaction profit I’ll recoup in volume.

Yesterday I dropped a chunk of gold to set my plan in motion and there was an immediate reaction from my competitor. Here’s an example that played out last night; My established floor price for Inferno Rubies yesterday was 125g, my competitor was listing around 175g. My first round of postings went up at 160g and were immediately undercut with 159g 99s 99c. I pulled most of my first round and relisted at 150g and again got undercut by 1c (I’m only listing a few gems at a time so relisting doesn’t cost me the earth). Third round I went deep and listed at 130g, another 1c undercut ensued. So I went for broke and listed at my floor price of 125g each… Nothing, no reaction, he didn’t relist his again.

I sat in the AH for about an hour last night before I decided to call it a day. A couple of times I noticed that my competitor was buying out of my auctions and relisting them himself. Poor guy, this is the worst thing you can do, especially when the person you’re buying from is online and clearly has stock available. When he did this, I immediately undercut him again meaning he either had to sell the gems he’d just bought from me at a loss or give me more of his gold to try and run my stock out (which is unlikely to happen for a while). Before I logged I threw up a couple of small walls of Inferno Rubies and when I checked this morning they’d all sold.

All in all I’m actually rather pleased with the results so far. My gross sales were up on recent days and I actually made a net profit despite having invested in a lot of stock which I wouldn’t have bought on a normal day. I may even continue with this sort of strategy in the longer term if it continues to be profitable.