Explaining the Market
- by Arby
For a long time, I’ve been trying to figure out patterns in the market by reading gold-capped blogs, only to be disappointed time and again when expectations don’t face up to reality. There are a few guides on the Consortium that are very, very useful (thanks Acry!), but the vast majority of them point out the painfully obvious, or require you to spend so much time into gold making such that you cannot find time to enjoy the bulk of the game itself (i.e. raiding, questing, PvP).
I’ve been playing on a very highly populated server, and it’s quite likely that you are too. You’re probably in a top 20 server. Such servers present a unique challenge because there are many other goblins besides you trying to make gold. Long story short, making gold on such a server is many times more difficult than on a small server where you can squash the competition rather easily. However, large servers are better for the overall game experience, so that’s presumably why you’re playing on one.
Here I will present a collection of my hypotheses that will aim to make you a smarter, more efficient goblin. If you’re looking for “real” advice in the current market, this is it. This really is it.
What kind of player are you?
Are you a wind trader with 5 alts and lots of time, a casual gold maker, or a raider just trying to build up a comfortable nest egg so you can take gold worries off your mind? My hypotheses are mostly aimed towards the casual gold maker, who wants to hit the gold cap but are struggling to, but already have sizeable capital. But maybe the latter type of player could also find it useful.
I personally play with only one alt, and 4 professions. I hate leveling, I really do. I also hate grinding rep for recipes but I’m forced to. I’ve about 2 hours to spend a day having fun, and that’s it. There’s absolutely no reason why I should “play” (work?) in a game which I don’t enjoy.
Well, if that sounds like you, then read on!
Part I. The Rules of the AH Game
1. Other people are richer than you
This is the #1 fact you have to live with. Unless you’re a player who has been playing for ages, there’s likely to be someone richer trying to sell the same things you are.
2. Other people have more time than you
Obvious fact #2. But it’s okay.
3. Don’t wall
Walling is 99% of the time a bad idea if you’re trying to get rid of competition. They’re not going away if there’s profit to be made. Only wall if you’re willing to dump. Major markets, such as glyphs, gems, enchants, potions and so on move far too quickly and have far too many people trying to bring prices down through undercutting. The fact is you’re never going to corner the market for “current” goods. It’s a viable option, however, for previous x-pac stuff such as transmogrifiables, twink enchants etc.
4. Bots exist
Many people bot the AH on high pop realms, undercutting you every 5 minutes or less. Just look for the level 1 orcs with gibberish names and no achieves whatsoever. I’ve come to the conclusion that the same gold sellers who perpetually spam trade chat also engage in botting and so on. That is to say, it’s unlikely you’ll ever get rid of them by reporting. Don’t get me wrong – from experience reports do work! But they have so many hacked accounts that it just doesn’t matter, and they’ll be back tomorrow.
Blizzard is sluggardly in handling this, but eventually they do their job. By doing mass banwaves, they get to the root of the problem and extinguish it – at least for a few weeks, until new botting software is created.
5. Don’t fight the bots
It’s like trying to beat a computer at math.
6. Use bots to your advantage
In the same vein, while bots throttle your sales, they’re great to buy raw materials from. A server that is heavily botted has tons of cheap ore and common herbs. Eventually, prices of rare raw mats will also drop steadily, but not as precipitously as say, ghost iron ore. So buy lots of them while they’re cheap.
What kind of market is it?
This is the number one, most important, essential, indispensible thing you have to learn if you want to make gold.
- Is it a buyers market?
- Is it a sellers market?
A buyers market is a market where demand controls the price of the goods. There is simply more stuff on the AH than people wanting to buy it. A sellers market is where supply controls the price of the goods.
I’ll be frank with you – it’s a buyers market 95% of the time. The 5% when it is a sellers market occurs right after a patch and a large banwave hits, such that demand greatly outstrips supply for 2-3 weeks.
This is when you rake in the dough. Try to plan for these weeks, such as taking a holiday off work etc. so you can invest more time in the game.
Use the time in a buyer’s market to prepare for the sellers market
Quite simply, you want to be the buyer when it is a buyer’s market. Aim for around mid patch where there is just so much raw materials lying around that you can buy huge amounts for very low prices because nobody wants them.
READ PATCH PREVIEWS so you know what to stock up on. For example, if living steel is going to be used to make high-level raid quality items, then stock up on them, as we all know the market has since crashed and is likely to crash further.
If A can be turned into B easily, then B will be priced accordingly
If something can be made into something else without limits such as a one-day cooldown, then the rule of the thumb is that it is not going to make much profit before long. Powerful epic items (such as Relic of <Chinese God>) are exempt from this rule early on in the patch, but are quickly subject to it as time wears on. But I assume that you’re primarily dealing in the major markets, so…
Let’s take the Cataclysm example of the carnelian. If 3 carnelians can be transmuted into an inferno ruby (the best gem in Cata) with a cheap, common herb, then it is very unlikely that you will make much profit through buying carnelians and doing just that, because the price of 3 carnelians is likely to be = 1 inferno ruby, or very slightly less.
Long story short, people aren’t dumb.
But if A can become B which becomes C which can be disenchanted into D…
Aha! Now we’re talking!
The more “steps” you introduce along the way into the crafting process, the more profitable it becomes, because the majority of players are likely to ignore the fact that these steps exist when pricing their goods. That’s the basis of the elementium shuffle.
Sometimes it is useful to hedge on the fact that some of the materials used in the chain to turn A into D are going to take a tumble as demand falls throughout the expansion, or drop rates are adjusted.
For example, trillium bars (B), which can be turned into living steel (C), which is essential in creating epic craftables (D), is likely going to be less important once guilds have bosses on farm and do not need to “max-out” their toons for progression. Expect prices to fall hard.
The lesson is to always look for indirect, unobvious ways to turn As into Bs, as less people are likely to be aware of it. Have a think about it and see what you can come up with!
Part II. Making the most of your time
I hope I have already explained how to theoretically make gold in a seller’s market. That’s the easy part. Now we will move onto actually SELLING them, and day-to-day operations in a buyer’s market (the other 95% of the time).
First of all, in a seller’s market, you ideally want to camp the AH for 4 hours prime-time on end so that you can sell stuff while demand is highest. Here are some tips:
- Always wait for the first raiding weekend to see how prices fluctuate
- Always be on the lookout for goods with only a few listings so that you can reset the market
- Don’t spend a fortune resetting the market as prices drop to “appropriate levels” very quickly. It’s hard to put a finger on “appropriate” but with experience you will learn
Don’t diversify too much!!!!!
I think this is the most common mistake most people make. It’s okay to diversify into slow moving markets but it’s NOT okay to diversify into fast moving markets when it is a seller’s market.
For every item you diversify into, you spend more time checking Auctionator or TSM if it has been undercut. If you’re selling 200 different items, then you’re going to spend god-derping ages scanning the market every time. That’s dumb.
What you should be doing is to concentrate heavily into the most popular markets such that you are scanning through 20-30 different items MAX. What you want to do is to scan your sales every 5 minutes or less and relist so yours is always cheapest.
Do 2 things at once
Have lots of stacks of your goods in your bags you can immediately undercut once you’re no longer cheapest. You want to cancel as seldom as possible, and do it all in one go, and retrieve them from the mailbox.
Also, you can do stuff like transmute or craft while scanning the AH – so do 2 things at once for maximum efficiency.
Day to day sales
This is when it’s hardest. Generally, the best thing to do day-to-day is to flip big ticket goods such as mounts, pets and so on instead of getting into undercutting wars with 3 other human competitors and 2 bots. Then you and the other 3 humans are the losers.
When sales are slow, diversifying also helps. For example Netherstorm pets are a small but steady source of income and every little bit helps. I also like bottlenecking people from leveling professions, especially enchanting, JC and BS. But chances are that whatever market you may find, other people have already found it first. You take what you can get.
Else, log on during prime-times (generally evenings) and sell what you can, but don’t expect to make much from small ticket items. I always find prices are highest mid week and drop somewhat on weekends. Ultimately a normal person will not be able to “beat” a basement dweller with a 10 hour heat map every day, but you can make up for that during demand spikes.
Using trade chat as an alternative channel
It’s not very efficient to sell in trade chat, but it helps when markets are slow. While on the AH, also try to advertise in chat – it doesn’t hurt.
Lastly, know the limits of the Undermine Journal
TUJ scans once per hour. That means that market prices can actually be significantly lower than listed, only it just doesn’t appear because cheap items are bought so quickly. Take this into consideration and try to figure out the times when bots post their daily stock, so you can jump right in on the cheapest goods.
This article is by no means complete, and I will likely add to it in the future. I hope it has been useful to you. All comments are welcome, and a big Thank You for reading it.