Wednesday, October 21, 2009

Money Makes the World Go 'Round, and with the Auction House, WoW is no exception

As I mentioned before, I plan on making instructional “WoW 101” types of posts on occasion. This is one of them.

I’m going to be talking about some basic banking & auction house (AH) tips for someone new(ish) to the game. I’ve seen bits & pieces of my “method” in various places, but I think it’s worth putting down in one place…

The Pre-fundamental Basics

Some of these are obvious why they are in a post about banking & AH use, and other bits may not be so, but they are all needed…

Vendors are the folks you buy your supplies from, and these are the folks you need to sell you grey & white (common/”worthless”) items as well as any items that are soulbound that you don’t wish to keep.

Banks allow storage of personal items and offer limited, free to use storage space. They can be expanded for a price. They are located in many major cities, (per faction) AND in most neutral towns. They almost always have mailboxes located right outside their doors.

Mailboxes are the way you receive payments from items you sold on the AH, as well as the way you receive items you bought/won on the AH. They are also the means by which you can exchange items & money between your own multiple characters, as well as between you & other players. They are located in ALL major cities and medium cities, and are often found in many smaller villages as well. Items sent between your own characters are delivered instantly, but items sent between different players takes about 60 minutes. There is a nominal charge for mail, starting at 30 copper for each letter, and goes up depending on how many items are being sent. (up to a couple silver at the most expensive)

The Auction House is where the WoW economy is at work. This is where most items of value (both reward/dropss & crafted items) are bought and sold, as well as the raw materials (aka “mats”) that are used in crafting various items. This is where the vast majority of WoW money changes hands. It is a rabbit hole of complexity: it can be extremely easy to use, but there are extremely complicated methods that can be used to squeeze every last copper of profit, and it is its own “meta-game” within that is “played” by many folks who have zero interest in questing, raiding or PvP.

And now to the Fundamentals

Step 1 – create a “bank alt”. You should have one, even if "playing the AHis not your intent. They just make things a LOT easier. A bank alt is a second (or third/fourth, etc) character whose primary function is to handle ALL financial/item transactions for you. They live between a mailbox, the AH and a bank. It's not uncommon for them to NEVER do any questing. Their purpose is to save you time, (no need to hike back to a major city, just mail it) Save money (flight paths cost money too) and they also give you access to a LOT more storage (the bank alt’s bags and bank account PLUS the mail can act a free temporary storage)

The only real suggestion I can make here is to start with race that starts out CLOSE to a major city. This is because (in theory) you will need to get a completely unused (level1) character all the way from the start area all the way to a large, AH containing city. For Alliance, I would suggest Human, since it’s a relatively short (AND SAFE) hike from the starting area to Stormwind. I think Undead is similar with Undercity being fairly close to Brill. I would NOT suggest Tauren, Draenei, Dwarf, NELF or BELF (night or blood elf) because the hike is too long, and there are too many opportunities for bad guys to kill a lowly level 1.

If you are questing on your “main” (the one toon you usually play) and you get low on bag space, just mail the excess loot to you bank alt. It can sit in the bank for 29 days to “store” it, or you can return it for easy pick-up, or you bank alt can simply put it in the bank or sell it at a later time. Meanwhile, you bags are cleaned out so you can keep collecting loot.

Step 2 – decide how you want to make money: Farm (run around collecting) and then sell mats? Use a crafting skill to sell crafted items? Buy & sell stuff on the AH, with no other “input/work”. The first & 3rd options can make money from level 1 to level 80 (or skill level 1 through skill 450) The second option, really won’t make you money for a while. You can make some items for your own characters, but they are rarely worth enough at low levels to make any real money.

Once you have an idea what items you will be working with, you need to use step 3 (or you can go to step 3 to help you pick what you want to do…)

Step 3 – watch the AH and “take notes”. There are daily and weekly cycles, long term trends as well as some other weird things. Do certain items get more pricey on the weekends? Or do the prices drop? Do some items get real common in the afternoon, but are “out of stock” by the late evening? Do some items have big price swings, and others stay stable? Do some items ALWAYS sell well, and others always last for the full 48 hours? Lastly, if you are looking at particular items or types of items, do you always see the same person posting the same items over & over?

Step 4 – Make your play. Regardless of how you get your items to sell, there are two fundamental things to remember:

Buy low - This applies to any mats you need to do you crafting or any things you buy with the intent of re-selling. Make sure you try to time your buying so that you only buy when things are cheap.

Sell high (* and **)– Obviously, you don’t want to sell you stacks of copper ore at the same time some other farmers are selling theirs. Watch the AH, and only list your items when the other prices are relatively high.

  • * NOTE – this only really works for mats or other items that are used in large
    quantities (healing potions and other heavily used items) Trying to play the AH
    with green item drops/quest rewards is tough, since it’s rare to get the same
    item multiple times.

    ** NOTE - there are other, more “cutthroat” people
    in WoW that will drop their prices to the point that no one else will even
    bother trying to sell a particular item. They make their profits by sheer volume
    and the fact that they can own the entire market. This method has some benefits
    and some problems.

    The benefits:

    - If you chose your product well, you will always have a steady stream of buyers, and you will be the only supplier. You control the market.
-If step 1 is true, then you have a steady stream of profit. You are pretty much
always in control.

-If you enjoy getting under peoples’ skin, this method works wonders for others trying to do the same business. There is a multi-server community that works this way and they can be welcoming to like minded folks.

There are also some things that are less than ideal:

Most of these methods involve crafting a large number of a particular item. This in turn requires a large, steady supply of relatively cheap mats. More than one person could easily farm themselves, which means they must be bought off the AH. This is a point of weakness that can be attacked/manipulated by other equally dedicated players.

Profit for effort is not being maximized. The profit margin has to be kept as small as possible to keep others out of the business. This means that for every gold spent (in mats) you relative profit is relatively small (also known as “ROI” – return on
investment) It is often quite possible to earn the same net profit by using your competitors to nudge the price higher, and increase everyone’s profits.

You will create enemies. Possibly a lot of them. Even though this is only a game, this can still have (in game) consequences. There is a reason many of the people that do this via “anonymous alts” that are completely dis-asscoiated from their main toon, or guilds. It is entirely possible that you might kicked out of a guild if you were “found out”, mainly if other guild members are being negatively affected by your tactics, etc.

Some basic tactics & tips to make some spare gold in spare time

I watch the ore/bars on my server pretty regularly, so for each item type, I have learned what the top end prices and low end prices are for most of them. (I also dabble in mageweave, runecloth and netherweave cloth) Since that’s the type of item I know, I will be describing my methods using them. The basics will work, regardless of what you bailiwick is…

*note, I usually look at the lowest priced auction item that has a buyout price. Bid only auctions aren’t good benchmarks. Also, if there are a large number of items at a given price, and maybe one or two a good bit cheaper, I will only record the price for the group. To me, one or two items aren’t “setting the market price”. The large groups of items at the higher price are the ones setting the price. The low ones are just spurious under-cutters.

- Use Auctioneer or some similar addon that color codes prices and gives
relative percent, versus “average” costs.
- Look for other peoples’ mistakes and buy them. If copper normally sells for 4-6 gold a stack of 20, and someone lists a few stacks for 1 gold (or less!) BUY ALL OF IT.

- Undercut the current prices, but don’t lose out on profit by undercutting too much. (there is an exception to this, see below) Usually a 1% undercut is enough.

- Don’t flood the market with your item. More than 4-6 (stacks) of an item will take longer to sell, and is more likely to be undercut by someone else. Simply wait until the first group sell, THEN post more.

-If you just bought 20 stacks of Netherweave cloth for 40 silver each (?!?!? Yep it happens) and don’t want to waste the storage space and want to sell it ASAP, you CAN flood the market, BUT you will need to undercut it by 20-25% or more. This ensures that 1) it will sell fast and 2) that anyone that wants to post the same item will be less likely to try to undercut.

- After watching an item for a week or more, and see an item’s normal price range, set a “buy” price near the bottom, so that when you see them at that price, you know it’s a good time to buy them.

- Similarly, set a “sell” price, such that when you see the items reach this price, you know it’s time to sell. Note, this is not the price YOU will sell for, since you will want to undercut slightly.

- Remember that all servers close down at a given time every Tuesday. During this time, no bids will be received, and any auctions that close during this time will go the last, highest bidder. Great deals on all types of items can be had if you happen to be awake an hour or less before the servers shut down and do some bidding.

- If you receive some loot that you want to sell on the AH, there’s a pretty good way to appraise it (assuming you don’t have any addons, and even if you do, this is more accurate) 1) go into the auction house and open the “Browse” window. 2) Select the item type you want to sell (ie, mail, waist, armor) 3) In the “level range” boxes, input numbers slightly above & blow this item’s user level (user level, NOT “ilevel”) 4) Hit the “search” button. 5) Look for items with similar specs (like another green belt, not a blue one, etc) and price them accordingly.

- Lastly, beware that there is a cost for unsuccessful auctions. The “deposit” you put
down to list an item will be kept by the AH if the item doesn’t sell. This isn’t usually an issue with mats and such, but it can be a HUGE deal when you try to sell items you find during questing. Often times some items will only auction for 5 gold, but the deposit could be 2 or 3 gold. As long as the item sells the first time, it’s not an issue. BUT, there is the (large) risk that items won’t sell on the first attempt, in which case any profit you COULD have made will have been eaten up by paying the deposit. Oh, and the 5% fee that the AH charges when your item DOES sell. You just need to realize that sometimes you should just take the smaller “vendor” amount. (or, if you know someone that will dis-enchant it for you, that will often be the best result – but that’s a topic for a later day)

In closing, I would like to let you know that this isn’t a get rich quick scheme. I can easily make 100 - 300 gold a week with a bare minimal “casual” effort. 500 – 1000 gold is easily doable, but you need to put some effort in to get larger amounts. I make about 30-50 gold a day, and that’s without doing any “buy now, sell later”. With that method, I can make 200 gold in a day, when the items are on the “sell” cycle. It just takes time, storage and patience to do.

For better or worse there isn’t an “EASY” or “I WIN” or “I’M RICH” button in the game.

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