Pretty sure it goes by price. So it tries to sell the item that is listed cheaper.

Eg.- you place an item on AH for 50k four days ago, someone else places same item for 49k two days ago, the 49k will sell first even if the buyer bids 50k. At least, I think that’s how it works.

So I put an item up for 50k 3 days ago that sells very quickly (500+ every 15 days) and it still hasn't sold even though there are only a handful up for sale right now (less than 20)

I'm a big boy and can handle waiting a few days to get paid but what really bothers me is that when I check the AH history of it, I see at least 20 people who have sold theirs for 50k and the time it was on the AH was less than a few hours for each of them!?

I thought whoever puts up the item first gets the sale, so what gives?

I would appreciate some insights as to why this might be.

If an item is placed on that AH for 50,000g and then another at 49,998g and someone bids 50,000g then the item listed at 49,998g will be sold first. The items are sorted first by lowest price, then by date posted.

Effectively it allows people to cut in front of you.

This. It's a bit of a gamble, because I've seen items that sell at a steady price until someone comes along and put up an item for 999 fewer gil to try and snag a quick sale. Then a buyer who pinches their gil so hard they scream and cry tears of blood comes along and tries to get an item cheaper by lowballing and bumping the price up 1 gil at a time until they get it for less than last listed price. Now there's a new low in history, and people try to undercut that and things just spiral downward from there. Can take weeks for a formerly profitable item to come back up in price.

But such is the fun of playing with the AH.

It’s idiotic that it works that way but it is what it is.