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  1. #1
    guberry's Avatar
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    Tactics for dealing with active competition

    I for the most part own my primary markets, but I am starting to branch out, and am running into some stiff competition in some of the other markets. My current strategy is to post auctions for cost just to try to drive these people out of the market, and then hopefully long term i can monetize these markets. Does anyone else have any tips for dealing with people who are extremely active like this (undercut every post i make within minutes).

  2. #2
    Meyer's Avatar
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    It really depends on witch market you are dealing in.

    From time to time I have the same problems, and have to adjust my strategy to the ever changing conditions. In a market like Heirloom enchanting, I tend to drive people out of the market with a deep cost efficiency + deep undercut strategy. Iím very thorough in my daily AH rutines where I pick up any reasonable prices materials for heirloom enchanting. If I wanít to put pressure on the competition I buy at slightly higher prices, and deep undercut on the scrolls making it more of less profitless for any others to stay in the market. Scrolls like the crusader enchant I can sell as low as 70G and still make profit, which you canít if you just look at the materialcost on AH. The competition then goes out of the market for a week or so, and in that time I sell the crusader at 400G. When the competition sees that they come back, and we start undercutting again down to around 225G, where I again takes a deepundercut strategy, and we start over.

    In the Glyphmarket I have a competitor which is A LOT more active then I am, so Iím using a ďtime efficiency strategyĒ here. I have set my threshold pretty high, and only focus on the most expensive glyphs + I have studies my competitions online hours a lot. I donít sell a lot of glyphs anymore, but I do sell some on a regular basis, and at very nice average prices (80-90G/average). By only focusing on the most expensive, and not undercutting several times a day I make sure the prices stay up, and that I donít waste a lot of time reposting hundreds of glyphs just to sell a few.

    The commodity market is all about timing on my server. The prices are very volatile if you look at prices over the week Ė I earn a lot from just buying things Monday Ė Friday 8am Ė 3 pm, and selling in the evening / weekend. Same with flasks I only have auctions up from 7pm -> next morning. If I donít sell I cancel the auctions to keep the supply at low as possible.

  3. #3
    Of course if the market in question is about crafted stuff, the control over the raw material markets is of utmost importance. By controlling the price of the materials/ingredients as much as possible you're also controlling the costs part of the crafting equation. This works if the competition is the least bit concerned over the cost of materials.

  4. #4
    guberry's Avatar
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    The main markets in question are enchanting scrolls and tailoring craftables. Materials on my server are extremely cheap for enchanting. Heavenly shard is 25g essence 20g dust down to 5g. Should i just be buying tons of this stuff?

  5. #5
    Cokeroft's Avatar
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    For tailoring, it depends on what you're making. If you're making bags of all shapes and sizes, then yes you should be trying to control the raw mats for those bags. For enchanting, it's very hard to corner the market for the raw mats, because there are just so many of them up at any given time. You should set a threshold for your mats though, and buy anything you ever see under that threshold, even if you have plenty of it.

    For example, I buy Volatile Fire under 17g a piece (average going price is 18g), I currently have around 1,000 in my storage bank. Last night a guy was selling 600 for 16g per. I bought them all. Will I be using them immediately? Probably not, but it's good to keep your price threshold, and thus the material average price around the same so you can always make a profit.
    "Nothing can happen till you swing the bat."

  6. #6
    Undine's Avatar
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    Edging out competition in markets that you are new to is tough. You're moving in on someone else's specialty and they more than likely have a stockpile of what they need. This will make their thresholds lower than yours and allow them to endure profit cuts for extended periods, so it's not likely you'll be able to move them out quick. You'll need to start a semi-long campaign of attrition, by which you monitor the AH and snipe the cheapest raw goods in your production chains and keep doing so even when, and most importantly, you don't need them. You need to not only think about your stock of resources, but as well your opponents and starving theirs. It's a pretty basic concept, but it's costly as you're typically starting a pricing war to make a market lose appeal to other sellers. You need to understand that you may be losing profits at first and for a while, but if you want the market, you have to play hardball. The main advantage you have of attacking the market is that your competitors do not know when you will stop and that will likely drive a lot of the mediocre traders away fast. Buyers will love you, up until your competition decides the market is dead and thus leave. At which point, you can crank up the prices and start recovering your loses.

    To dominate and cut in to a market it's key that you understand, you're going to have losses, but so will your competitors. It will all fall down to who has the bigger stockpile and that's why I noted, you need to control the raw goods. If they have a pocket farmer that's COD'ing them mats, it will become very tough. The only way to combat this is find one of your own, or even try farm your own mats temporarily to build up your stockpile.


    Above all, war is never pretty, especially when it's between AH goblins! Expect losses and to the victor go the spoils of a controlled market.

  7. #7
    Having played the AH for many years there is one big lesson i learned and that it trying to drive people out, especially if it's a large market, it generally isn't worth it. It can work in very small markets but for large markets one of two results tend to occur...
    1) You manage to drive then out by posting extremely low (note you often have to post so low you either make no profit or worse make a loss) then they see you raising the prices then simply start posting again once you do. If your lucky you may get a day posting at inflated prices before the age old cycle begins again...usually it's a couple of hours.
    2) You manage to drive your main competition out and because the market is so big someone just steps in to replace them. Again you have a minimal amount of time to regain your losses. (note even if you post at cost your making a loss as your spending time and effort for nothing...time is money friend!)


    You also have to consider that prices are often driven down by people who are willing to post at any price as they don't understand the value of an item (see the post "Crafted goods below mats prices... why?" http://consortium.stormspire.net/sea...searchid=51024) and the worst case scenario of another goblin being active in the market. If they are smart then result (1) happens, if they are game for a fight it's down to who is willing to spend the most gold and who has the biggest bank balance and you should be prepared to piss a large amount of gold down the drain for a likely end result of either (1) or (2) as above anyway.

    In short direct conflict/WAR! usually does more harm than good, to everyone...As the saying goes "In war there are no winners".

    Indirect conflict can be very effective.e.g. as some have already mentioned by controlling the material costs. In the case of enchanting, usually you can produce materials much cheaper than they can be bought.e.g. by DEing JC jewelery so your target would be more ore rather than enchanting mats themselves. If you can starve your competition of cheap materials you can post lower than them and still make a profit.
    Recruiting a farmer can be a good way to keep down your costs for materials and this has the bonus of one less farmer for your competition to have in their pocket.
    Another slightly less obvious way is to study the weekly price cycles on the AH. Mats usually follow a pattern where they are cheaper at certain times and more expensive at others. If you can ensure you always snap up all the cheap materials at the cheap end of the cycle you can leave your competition to deal with the more expensive mats (this obviously depends if they rely on the AH for their mats or a farmer...or worse "i farmed it so it's free")

    If there is one main competitor you could try simply talking to them and brokering a deal. This is also a risk as it points you out to them as a threat and can backfire immensely. It's usually best to approach them on an alt and act bit 'new' as this often makes them less defensive and your more likely to get some idea of what type of person/seller they are. You can then test their attitude before actually propositioning them.

    Then ofc there is the age old classic of simply adding them to your friends list(s).Studying their posting methods and then looking for a chink in the market to make your own. A popular tactic for me is usually posting late at night as even the most ardent AH camper doesn't usually camp the AH over night and in fact few people tend to so you get all the night time sales to yourself (i make a lot on night time sales and post at night as standard).
    On the flip side if they are a serious goblin they likely have you on their friends lists so it can be effective to swap posting alts regularly so they find it harder to track your sales and try to always counter you.


    Overall there are a multitude of tactics which can work and it simply depend on who you are dealing with as to which will work [best].
    Last edited by Thefluffyrocker; January 24th, 2011 at 01:33 PM.

  8. #8
    guberry's Avatar
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    I seem to be having success by just posting my stuff so that I make a small profit. I have an inordinate amount of enchanting mats because of doing the JC shuffle so just liquidating them is pretty good for me.

  9. #9
    Quote Originally Posted by guberry View Post
    I seem to be having success by just posting my stuff so that I make a small profit. I have an inordinate amount of enchanting mats because of doing the JC shuffle so just liquidating them is pretty good for me.
    Now that markets are maturing the secret will often become more about quantity rather than quality to generate large profits in many markets. There is always a fine balance in this equation though because you can for example spend more time selling more items but for less profit per hour. As with many things though what is or isn't worth it is down to you to work out and what you deem most worthy of your time.

    Ideally you want to expand into as many markets as possible but you should not see that as meaning you have to deal in them all. The point of having your fingers in as many pies as possible is to provide you with choice so you can cherry pick the most profitable markets at any time rather than being stuck with whatever you can do.
    Don't be afraid to step out...you can always step back in if the market becomes more attractive. If you do step out though you should keep an eye on that market at least so you can spot when/if it becomes more attractive and also simply to keep up to date with all the latest trends.

    I vacillate between various markets depending on their profitability, how much effort they take, what time i have and how much i can be bothered to do. My sole aim is not to make as much gold as possible as such, but to make as much gold as possible in the time i do spend making gold.i.e. i won't sell something just because i can, i will sell it if it is worth my time to do so.

    What it boils down to is the simple equation of gold per hour and you should aim to make that figure as high as possible as that means you will always make as much gold as you possible can.

  10. #10
    Zerohour's Avatar
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    Fluffy has the best point. That's why I am happy with declaring a particular profit margin and working within that. In my calculations I also include the cost of the raw material, regardless if I collected it myself or purchased it off the AH because there is no such thing as free cheese.

    When you work within those margins and know the costs, you can definitely determine if you are against a robo-farmer or if you stand a chance to overtake the market. It's always been my experience to monitor the habits of the sellers so as to figure out what I can expect and set cost requirements.

    I work in a huge market where scanning things like enchanting mats will produce 10-12 pages of results just for one type of mat. The way I fight is not through attrition but through smarter markups.

 

 

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