Undercutting Prevention

January 17th 2019 Feature

"Undercutting" is the process of pricing your item a meaningless amount -- say, $0.01 -- below the current lowest price on an item, which causes your item to be displayed and added to a user's cart first. While this is not against the rules, and we do not have a problem with competition amongst sellers, this is the wrong kind of competition.

This sort of "competition" is centered around pleasing the Marketplace.tf service, not customers. A $0.01 difference is all that is needed to prioritize an item for the code, but to a customer a single penny is likely negligible. This is not meaningful or healthy competition; this actively degrades our service.

Round-Robin

Before we continue, a quick note on our current round-robin sales system. This system ensures that, within the scope of a single order, as many possible sellers are represented.

For example, let's say someone buys 10 of item X at $5.00, and there are 4 sellers providing this item at that price point. Each seller is guaranteed to sell two items in such a scenario, and two sellers will sell 1 additional item each.

Matching the current lowest price ensures you have an equal chance to sell an item as every other seller.

 

Undercutting Prevention

Back to undercutting, we've made a simple change to pricing items. Now, if you attempt to price an item below the current lowest price offered by other sellers, your new price must be 1% (or $5, whichever is lower) lower than the other price. (However, you can match their price just fine). 

This does not apply to items priced below $2.50.

For example, if you're selling item Y at $55.00 and someone else wants to undercut you, they'll need to price their item at $54.45 or lower (or $55.00 or higher). 

 

This change ensures that if someone undercuts your price, it's because they've offered a meaningful price decrease to customers, as opposed to because they made a negligible change that nobody cares about.

Comments
1555266488
This is communism.
1554716962
Neat.
1553886080
nice work!
1553263097
I support this, because higher tier things have color code painted on them, which makes an object worth different prices with different color code
Nora:
1549863308
Im round?
1549822113
Neat.
1549533100
I'm not sure this was really necessary. I had an item priced at 4.45 for a bit and people wanted to sell their item so they still undercut me to sell their item. My item was 4.45 bucks and is now worth 3.70 at lowest price. I think what might be a nice idea (that would need testing as I have no proof it would work) that after 2-5 undercuts you get a 5 day undercuting ban where you are no longer able to undercut other people during that time. This person would still be able to deposit items and sell them for the price most common sold like normal.
The Round Robin System is such a smart solution to this! Don't really know whether the 1% thing is necessary but it completely makes sense with the dominance of bots however
1548677345
undercutting should just be a bannable offense if done too many times even at under 2.50 usd.
1548671557
communism at it worst
Pan:
1548555670
I wish this was implemented years ago.
1548478873
Ever heard of the term "If it ain't broke don't fix it" this is a really bad way to fix something that isn't broken, freedom to price however we want is vital for the seller but even better for the customer. Some people wait it out on a long sell some people want a quick sale. This just seems like a bad move that won't fix the "problem" of undercutting.
These are some of my thoughts. I didn't mean for my first two comments at the bottom to be separate comments. I hit shit+enter thinking it would skip a line. Couldn't edit or delete my comment after as the option doesn't seem to be available. Also, if you read my comments from bottom to top it would proly make more sense.
With forced 1% decrements it seems like items would never really be accurately priced, based on supply and demand. Instead, it would almost always be over or underpriced, sometimes by a little and sometimes by a lot. One could argue ads are bad as well. Someone who is willing to pay for ads could list their item for higher than market rate, and still get a sale. This is good for the seller and bad for the customer/buyer. Should we remove ads now? A seller who undercuts by 1 cent is spending his time and very little money to get a sale. Why is it okay for someone to pay $1.99 for a better chance of getting a sale, at the expense of the buyer who pays more and other sellers who had the item listed cheaper who missed the sale? But it's not okay for a seller who spends TIME, ENERGY, and very little money (1 cent) to get a better shot of selling his item, at no expense to the buyer and other sellers who he is in competition with anyway?
When multiple sellers compete in 1 cent undercuts for an item, the end result will still be a meaningful price decrease to the the customer/buyer. I highly doubt this update is about the customer/buyer tho. I'm pretty sure the motivating factor that pushed this update wasn't buyers/customers complaining they weren't getting good prices or meaningful decrease in prices from sellers. It came from sellers who weren't updating their prices frequently enough to be the cheapest, and as a result, they failed to sell their item or it took to long to sell it. If they felt 1 cent was meaningless and was tired to compete that way, or felt it wasn't worth their time, they could have decreased their item by 1%, or $1, or list it at their absolute lowest price and see if anyone else is willing to compete with that. Even before the update there were sellers who did that and undercutters just wouldn't compete and waited for the guy to sell his item. Freedom of pricing is important.
1 cent is still money. It may be insignificant to some, but maybe it's significant to others? The website has users from many different countries. 1 US cent could be worth 5 cents or 10 cents in another country. Is that also insignificant or meaningless?
Agree with $3.50.
Mark:
1548228283
Now if you could do the same in the buy orders too that would be great
1548202900
The fact that there exist multiple sellers, profit margins are severely dropped for high-tier sellers. For instance, say two sellers want to list a high-tier item. One lists theirs for 30 dollars but would be willing to sell it for 27 dollars. The second seller lists theirs for 29.70 dollars and is also willing to sell it for 27 dollars. As the sellers keep undercutting each other, they will face a situation where one seller will not be able to list their item for 27 dollars due to the 1% rule, and thus will not be able to offer the lowest price he's willing to offer. In this case, the consumer is actually WORSE off, because instead of two items listed at 27 dollars, you have one listed at about 27 and the other greater than 27. This effect just gets worse the higher the item value.
1548193217
Its something that'll do somethin
1548148804
Interesting...I feel like this could backfire. Particularly since it won't affect keys, I'm not sure I see the point of it. I get that it's intended to push people into matching the lowest seller instead of giving up $0.01 to gain an advantage, but people who are actually determined to undercut will now be forced to undercut by more, and that will be more damaging to your bottom line than those $0.01 undercuts. ex. some jerk comes along and undercuts you by 1%, now you have to lower your item's price by that 1% and then a further 1% to beat him. It'll probably cut down on the annoying undercutting wars, but I would point out that everyone already had the option to beat the other sellers by 1% or more, and chose not to, even if they also complained about the situation. So taking away that choice is actually removing the option that people tended to prefer. Maybe it'll work out well in practice, but in theory I don't like it at all.
1548102332
This seems like a really nice idea, thanks!
1548095315
1cnt is 1cnt though id rather keep my 1cnt than giving it away
God:
1548064099
The bots are going to have to step up their games now. No more undercuts, yippie!
1548060983
Boo
iRED:
1548050610
nice
Alec:
1548046727
I support this change. Pricing items is kind of less fun now (I used to either "undercut someone back" or just match depending on my mood) but it definitely requires less time now.
1548045040
send help
1548044806
firstn't
Nick:
1548044775
hello world
Geel:
1548044580
Test post