Sunday, September 16, 2007

Fun and Profit at the Auction House

Introduction

This guide was written to help players enjoy the time they spend at the Auction House (AH). Every player of WoW will visit the AH many, many times during their gaming career. Why not get the most out of it? Spend a little less gold for the items that you need and get a little more gold for the items that you are selling. Do that often enough and those expensive materials for that high level enchantment will now be affordable. The advanced section is for those gamers that want to become traders on the AH and make some serious gold.

The basics of selling on the AH

In this guide I will be using examples of AH prices. A notation of 12/20 (17) means opening price of 12g, a buyout of 20g and an expected selling price of 17g. The expected selling price is your own personal opinion of what you think that item will sell for on that day. That number will become easier to predict as your experience grows. If you find yourself in a situation where you don’t know what something is worth then talk to a trusted group mate or guildee. If your friend from school plays on a different server his/her advice may be wrong as prices can vary considerably from server to server.

Never create an auction like 1/50 (40). Nobody will buy it out at 50, they will bid 1g and hope for a windfall. It takes many, many bids to move a 1g starting price up to around a fair price of 40g. You will likely end up selling that 40g item for 5g. You would be much better off listing it as 35/50 (40) particularly if the initial fee is high. The 35g initial price should attract some bids and then you can hope for either continued bidding or a buyout by some player with more gold than brains. Even an auction like 1/30 (40) can backfire on you. Buying a 40g item for 30g is attractive to players but a lot of them will try to bid the 1g and hope for the big score.

Try to bracket the estimated selling price when you set the initial and buyout prices. The example of 35/50 (40) is smart. The initial bid price is a little below what you think the item will sell for. The buyout is about 25% higher than the expected sell price. Always set a buyout since many players simply refuse to bid and will only buy items. If they need something now they buy it now. Not a smart way to buy but their loss is your gain.

You can see if other identical items are for sale on the AH by browsing. Many players just undercut the lowest price currently on the AH when they create an auction. Simple, but effective. The problem is that you may be entering a price war. You can often maximize your selling price by waiting until there is less competition for your item (More on this in the advanced section.).

The AH charges a fee for every item that you try to sell. You will see the fee listed when you place the item in the auction box. It varies, from nothing on nexus crystals to multiple gold for a weapon. Also the longer the item will be listed, the greater the fee. You will pay this fee immediately when you create the auction. If the item sells, the AH will charge you a 5% commission, and you will then get the initial fee back. That is why the item you sold on the AH for 100g shows up as 97g in your mailbox. Think of it as 100 – 5g (5% commission) + 2g initial fee = 97g. It is important to note that you only netted 95g even though 97g was in the mailbox. You paid the initial 2g fee when the auction was created. If the item doesn’t sell then it will show up in your mailbox when the time expires and you will have lost the 2g initial fee.

You can set the length of the auction as 2, 8 or 24 hours. A lot of items are best sold on the 24 hour basis. This gives you the best chance of finding a customer. The 24 hour fee is negligible if you are fairly certain of selling the item in that time period. Some items like player equipment have very high initial fees and are best sold on an 8 hour basis during a busy time on your server. It can be brutal to list an item for multiple 24 hour periods and end up paying more in fees than the item was worth. This is the situation for Darkmoon Faire cards on my server. I laugh every time I see a time limit of very long on a card that has a 2g buyout. Somebody is just giving his or her gold back to Blizzard. Be mindful of the time when your auction expires. Starting an 8 hour auction at 7pm means it expires at 3am. If you have a low minimum bid compared to the buyout then it may sell at minimum price.

It is an old saying in business that the secret to success is to “buy low and sell high”. That is very true for the AH. Most players make the mistake as thinking of the AH as just another NPC vendor in the game. It is not. The difference is that vendor prices are static and AH prices change over time. Recognizing those price cycles is very important. Some price cycles are predictable and you need to take them into account.

Each server has a varying number of players online at any given time. I will use North American servers as an example as they are the most common. In the early morning (2am to 8am server), the players are at a minimum. During the day the number of players is increasing. A lot of players start logging on around 4pm and the numbers peak from 6pm to 11pm. Why is this important? Say you were lucky enough to win a lifestone by rolling 100. When should you sell it? If you rush to the AH at 1am and try and sell it you will only have a few potential buyers online. You’d be far better off waiting until 5pm the next day and trying to sell it then. If everyone is off on guild raids from 7pm to 11pm on your server then you might try to list the item at around 5pm on a 2 hour basis. Seeing a short or medium time limit on an auction does tend to attract more bids.

Server load also varies on a weekly basis. Some players have a life and Friday and Saturday evenings are generally lighter load than other evenings. However, Saturday and Sunday morning and afternoons are busier than weekdays. Generally, it is better for selling when you have more potential customers online.

The basics of buying on the AH

Buying items on the AH for resale will be covered in the advanced section. In this section, I will be discussing buying items for personal use. Items that fall into this category are materials for enchantments, potions and equipment purchases. If you have no gold then you are at the mercy of the sellers in the AH. Without some gold on hand you are unable to take advantage of bargains that you find in the AH. Go farm some herbs, minerals, cloth or leather until you have made some gold.

Mats and potions are commodity items. They will have dozens or hundreds of that item for sale at any given time. The key to getting the items that you need cheaply, is to buy over time. If you are looking to buy 3 x nexus crystals for that uber enchantment then start looking at nexus crystal prices at least a week in advance. Why pay 60g each on Thursday when they are selling for 42g each on Saturday? If you know what nexus crystals are selling for on your server then you can spot the bargains and snap them up.

Potions are the same except you probably want to maintain a stockpile. If you are using 2 stacks of major mana pots a week then you should try to have (say) 8 stacks in the bank. This allows you to avoid buying them at high prices and stock up when a price war is ongoing.

You can sometimes spot bargains by looking at the quantity for sale. If the quantities of illusion dust for sale are 1, 1, 3, 4, 8, 5, 5, 7, 10 (when listed in order by price) then take a closer look at the 8 quantity. Its current bid is lower than the 5’s that follow. If the 5’s are fair priced then the 8’s minimum bid is a deal, it might be worth a bid or even a buyout if the buyout price is also a deal. Be aware that if the 5’s are overpriced then the 8 may not be a bargain. Even if you only need 6 illusion dust, it may still be cheaper to buy the 8 set and sell the 2 leftover.

Equipment purchases are different because they are unique and often expensive items. You will only be buying one in your lifetime. If you are leveling up your character and want a certain item then start browsing for it in advance. That way you will be able to spot the bargain when you see it. If you buy it at a good price and haven’t equipped it yet then you can still resell it if a BoP item comes to you while leveling. An expensive rare item for sale in the AH for 100/200 (150) may be an opportunity to make a deal. If the seller is online and close to you then you might send him a tell offering him 125g. If he takes the item out of auction he doesn’t have to pay the 5% AH fee. So a 125g selling price to him is roughly equal to 131g at auction. A certain 125g may be just what he wants at the time. Yes, you can hope for getting a deal if you bid 100g but low bids like that don’t often end up the winning bid.

You can see if an item already has a bid on it or not. If you click on the item you will see the amount that you will bid on the bottom of the screen. If that is the same as the current bid price then nobody has bid on that item yet. Some sharp player will have an alt place a bid on their items just to make you think that you should buy it out now instead of bidding. If you want to bump a bid up faster than the small increments the AH goes by then you can fill in your bid amount in the same box.

It is harder to find the right time to buy something than to sell something. Basically, you want to find the time when the AH has lots of items for sale but players haven’t snapped up the bargains yet. On my server that seems to be about 5pm, but I am sure that it will vary from server to server. At 5pm a lot of the prior day’s 24 hour auctions are close to expiring and you can buy at minimum bid instead of buyout. Also, the sellers will be creating their new auctions and an occasional deal can be found.

Advanced AH

Think of the AH as a mini game within WoW with gold as the scorecard. To many players, that game would be boring but to a few of us it is worth playing. The benefits are that your character will have the very best enchantments available at all times. You can use pots and oils to enhance your effectiveness. You can help your guild and your guildees with donations. You and your alts will be sporting epics and enchantments and using pots and oils and be wicked solo and very popular in groups.

What does it cost to win the AH game? You need a starting fund of about 200 gold and about 30 minutes a day of time spent in the AH. You have to be willing to take some risks. By spreading your risks around you lower your total risk. Over a few months you will see a solid return on your investment.

The skills you need to sharpen in the AH are knowing what the fair price at the moment for a particular item is and predicting where the price is headed. Once you reach that point you can easily spot the bargains and know when to buy and when to sell. It may take a week or a month of watching the pricing before you have the confidence to invest your hard earned gold. That is not time wasted.

The timing cycles discussed earlier are still applicable but now you have some larger timing cycles to track. You have to watch out for major holidays like Thanksgiving, Christmas, March break etc as they break up the raiding schedule. Less raiding means fewer consumables used but the farming continues steadily. School summer holidays means more farming. These all influence pricing as it is based on supply and demand at the AH. The Darkmoon Faire also can affect pricing of certain items when it is active.

Other larger changes in your server are also important. On a server that is just reaching Molten Core raiding, you can expect the prices on fire resist gear and pots to rise along with the mats to make them. A mature server with many high level players may have a strong market for items that appeal to alts. As I write this I am anticipating the changes from new instances and the importance of nature resistance. A trader in the stock market pays attention to the business cycle and the news. An AH trader has to think ahead as well.

It is almost impossible to be an expert in pricing of every item at all times. It would take hours each day just to track the market. You need to specialize. I specialized in herbs and alchemy, but any category of items will work. Every day or two, I take the time to look at pricing of key herbs and potions to see how they are doing. If I spot any bargains I bid on or buy them out. I have no idea about equipment, leatherworking, tailoring, mining, enchanting, fishing or cooking pricing. I only pay attention to some herbs and some alchemy.

As stated before the key is to buy low and to sell high. It works even better if you provide a service like turning herbs into potions but it can work with just buying and selling. You have to be much sharper on your pricing when you are reselling as the AH fees will wipe out your profits very quickly. I used to sell on AH with pricing like 9/16 (13?) and now I sell at 12/14 (13) because I know the 13 much more accurately.

The initial fee that the AH charges for listing an item can get expensive if a lot of your items fail to sell. You should be targeting a sell through rate of over 50%. At that level, more than 50% of your listed items are selling in 24 hours. If you sell through rate approaches 80% then your prices are too low. Some items like nexus crystals have no initial fee. Players go a little crazy with pricing in those cases. They have nothing to lose.

You also have to understand the quantity of each item that is being used each day. If you know that roughly 8 stacks of major mana pots are being bought each evening then it allows you to get a better price as a supplier of major mana pots. You no longer have to sell at the lowest price. Say that 13g is the fair price for major mana and it is busy time in the AH just before major raiding starts. Say I saw a price listing in AH of 7, 9, 9, 10, 10, 15, 15, 15. There is no need to undercut the lowest price. I would buy the 7g stack and offer 3 stacks at 13g and probably sell them. The 9g is not worth buying and reselling as major mana cost 45s a stack to put in the AH for 24 hours. Too risky to buy and sell for thin margin. If the pricing in the AH was 11, 15, 15, 17, 17, 17 then I might put 5 stacks up for sale at 14g. If the listing were 10, 10, 11, 11, 11, 12, 12, 12, 18, 18 then I would not try to sell that day. The key is knowing that roughly 8 stacks are what your server is selling an evening at this time.

You have to know your market. If the market only buys 2 of an item a day on average then it is pointless to offer 10 of those items for sale at one time. In fact, if you offer 10 on the market a lot of buyers will stop buying as they anticipate a drop in market price with such an oversupply in existence.

With few exceptions, items that are listed for sale by your competition will eventually be sold. Maybe they won’t sell today or this week, but eventually the owner will drop the price and dump them. If they get tired of paying 45s to list their major mana pots at 18g then they may dump 20 stacks on the market at one time at 10g a stack. Such are the ups and downs of the market place. If they are desperate enough in their selling prices then an opportunity may be available to you to buy and resell.

It costs about 20g to create an alt with 12 or 14 slot bags, bank and a couple of bags in the bank. That can hold about 100 slots. I highly recommend creating a selling alt. My main manufactures potions for resale and mails them to my alt. The only things my alt does is sell items on the AH and mail gold back to my main. It keeps things simple and reduces the storage load on my main.

You can also invest in a stockpile alt that holds stuff for the long term. Investing in a stockpile of an item can be risky. If the price crashes or even just stagnates then you lose. If artha’s tears or elemental air ever skyrocket then I am going to make a killing. Early in my career I stockpiled a lot of elemental items and did well on fire and earth but other items were dogs. Since then I learned to specialize more. The biggest risk I ever took was stockpiling 200 stacks of dreamfoil. Yes 4,000 dreamfoil or enough to fill two alts bags and their banks. I did well but sold out long before dreamfoil reached its current silly price on my server. I had so much gold invested in dreamfoil I had to delay the purchase of an epic mount for over a month. Sorry, I wont tell you what I am stockpiling at the moment but it wouldn’t help you very much anyways as each server is unique.

Stockpiling allows you to ride out the price fluctuations of day-to-day and week-to-week. If the price of dreamfoil skyrockets then I just use my stockpile to continue to offer major mana pots in the AH. When the price of dreamfoil crashes then I refill my stockpile. In a sense stockpiles is provide server stability on prices.

Mods

There are some popular mods out there for AH trading. I know some players swear by them but they never worked well for me. They also take away the fun factor. The thrill of finding a great deal on the AH is gone. If many people are using the same mod then your profits from running that mod will be minimal. As mods are constantly changing my comments here may be quickly out of date.

Auctioneer tracks pricing history. It finds deals on the AH for you. The problem is that it fails if prices are declining. In the early days of WoW prices were rising steadily. Auctioneer tells you that a particular item is a good buy but it turns out that it only looks cheap compared to what it was selling for a month ago. It is also very slow on a laggy server. As far as I know every server is laggy. When Auctioneer was creating error messages on my screen deep inside BWL I removed it.

I am currently using Auctionit. It has some interesting features and does speed up things a bit. It helps you offer multiple items for sale at the same price by filling in the pricing details for you after the first auction is created. Unfortunately, it is out of date and doesn’t save its settings very well because of a conflict. It has no ability to find deals for you on the AH. That is fine as I am capable of finding my own deals.

Conclusion

An average of thirty minutes a day can yield you thousands of gold in profit after a few months. Yes, you could kill mobs and sell the loot but you are probably pretty tired of that. If you think of the AH as a mini-game within WoW, then why not play the game to win? Some of the skills you acquire at the AH may benefit you in real life. Good luck and good profits.

12 comments:

Samownall said...

Straight from a guide you shouldnt be reprinting?

Samownall Wow blog

Marc said...

I did provide a link to the article right at the beginning.

If requested to from wow.warcry.com, I will be happy to remove this.

Anonymous said...

either way, it's sitll a nice article on how to use the Auction House to make a profit.

Xeralan Seventh Tavern

Anonymous said...
This comment has been removed by a blog administrator.
Rick Hughes said...

Very nice article on how to use the AH effectively. I'll be checking out wowcry.com now as well, if anything they should thank you for redirecting traffic to their site, IMO.

Aelist,
topwowstrategies.com

timhair said...
This comment has been removed by a blog administrator.
wow level guides said...

Thanks for that info. I've totally missed using the AH to earn gold.

Thanks man!

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I've only been playing Warcraft for about a month now, (10 day trial plus 15+ days into my first subscribed month) I tried the free 10 day trial first and instantly fell in love with the game. The Druid was the first class I've ever tried, and seeing all the things they can do seriously pumped me up to try and get my Tauren to lv 70. And I find the gold is so hard to make, I only get free 100 gold at www.vivogame.com , I don’t know should I buy some gold with real money? Hmm, it’s no time to farm gold…. What’s your opinion?
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Nice to meet you all~

saltcy said...

DO NOT tell your password to others.





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Rivera WoW said...
This comment has been removed by a blog administrator.
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