The auction house is a mini-game in itself. You can use it as a vehicle to sell your finely crafted masterworks, as an up-to-date reference point for item valuations and availability or as a repository for all those bloodied drops you’ve plucked from the still-warm bodies of your fallen enemies.
But first, we shall outline a way of creating profit from the auction house without having to even leave the building.
Speculate to Accumulate.
If, for example, you search your friendly, neighbourhood auction house for epic gear and scan the list of seller’s names you might see that quite a few of these BoE world drops are listed by the same people. Chances are that these people are not lucky enough to have had a multitude of purples drop during their routine daily killing sprees. No, more likely they have seen the epic bits and pieces on the auction house and decided that they could buyout the items and relist them at higher prices and make a profit that way. This technique can work for anything that can be auctioned but things like BoE epics require a beady eye and a large amount of investment capital.
There are usually at least a few people on each server who have already cottoned on to this idea, but not all of them are successful. When I first thought about trying this technique I noticed that a certain player on my server was watching out for low-priced BOE epic gear, buying it out and relisting it at higher prices. I quietly observed his auctions to see if they all sold with regularity and noted that he wasn’t being very successful due to his tendency to relist things at a much-inflated price, and his Prince-like predilection to buy almost anything that was purple, no matter what its use. Unfortunately for him, he serves as a great example of how someone can make things difficult for themselves, despite being on the right track.
He was doing the right thing (in general) but his shotgun approach wasn’t maximising his profits. In fact, by failing to be discerning about the goods he bought and the resale price, he was minimising his profits. But despite this caveat, big rewards can be forthcoming if luck and skill are on your side.
Investment capital is also necessary for top-end crafting sales. The Mechano-Hog (or Mekgineer’s Chopper) requires a vast amount of time input and pricey reagents, but they can reap great rewards. The greater the article’s price tag, the more the profit margin. Big players can even control the price that the entire server pays for certain commodities by maintaining a monopoly on specific goods. For example, stacks of Saronite Ore might sell for 20g each on my server, I decide that I want to sell them for 30g each so I buy out all the ore currently listed for under that price and relist it at 30g. Thus, as long as I keep this up I now control the price of the server’s Saronite Ore. This can be used to maintain a good profit for your miners and as a nice way to temporarily hike up the price of something that has fallen below what would be considered its usual market worth by players who blindly list items at low prices. These blinkered souls are the auction house connoisseur’s arch-enemy and they can destroy the fine balance of any market they poke their bony fingers into.
More Price Maintenance and How to Resuscitate a Dying Market.
Big, bold manoeuvres like establishing monopolies can be risky and time consuming and it is often better practice to drip-feed products onto the auction house a few at a time to keep good profit margins rolling in. Even if you’ve worked hard and made thirty [Scroll of Enchant Weapon – Mongoose]s you should resist the temptation to swamp the market with all your scrolls as this will inevitably cause the price to plummet, and you probably will only sell a couple before you yourself are undercut. However, if you drip in a few each day, undercutting the competition by only a small amount to make sure your listings are the cheapest -but not enough to cause a global devaluation- you will, with patience, see far more return than flooding the marketplace.
Annoyingly though, undercutting is inherent in the World of Warcraft’s auction dynamic. It seems to be the opposite of how real-life auctions work where the price steadily rises through the bidding system. In good ol’ Azeroth, the products slowly become cheaper and cheaper until somebody buys out the entire stock and another seller begins the new list price higher.
If your favoured commodity has taken a nose dive in value recently you can re-inflate the price tag by listing one or two of the items at a much higher price and for at least 24 hours. When the original, cheap ones have been bought out or expired new sellers will, of course, see your inflated price and undercut you. This doesn’t matter though, as your high prices were not designed to sell for the big bucks that they were up at (, if they do it’s a bonus), they were meant to get the average price back up to a better bracket and you should find that even though the new sellers undercut you, their new price will still be much higher than the old, cheap price. This tactic is not something that will work with fast-moving commodities like ores and cloth, but works better with goods that are usually few in number but sell regularly like enchanted scrolls, the slightly rarer potions and elixirs that raiding requires and components for larger crafting recipes.
Advertise Your Wares.
Real-life companies spend billions on global advertising with proven results, so why shouldn’t you take advantage of the city-wide trade channels and throw out the odd message here or there? This is a very useful (and totally free) weapon in the fight to get your sales noticed among thousands of other vendors.
A simple “/2 In the Auction House: [2ron Ore] and [Arcane Dust], cheapest prices!” will suffice. The cardinal rule here is to refrain from spamming, as this will annoy people and, God forbid, might even get your all-important bank character on some players’ ignore lists. A couple of handsomely spaced advertisements is more than enough to let people know that you’ve just listed some bargains, and should only be elaborated upon if you plan to create a ‘public awareness’ of your vendoring identity. Adding a small, creative flourish like “Frank’s Herbalism supplies back on the AH: get the cheapest [Peacebloom] & [Ragveil] before they’re snapped up!” can help your advert stand out in the crowded, ever-scrolling chatbox and if buyer's are happy with your service or prices they will make an effort to check out what you advertise next.
One of the most bothersome aspects of using the auction house as a sales vehicle is the money you can lose. If your auction does not result in a successful sale you can lose the initial deposit, which can often be surprisingly large. Not only that, but there is also a hefty cut taken from the value you sold your products at. While these annoyances are normally modest, they can be significant when trading in very high value commodities. BoE epics and very rare items with ultra-low drop rates that are in high demand often sell for thousands of gold, and so it is often better to be patient and try to sell them through the trade channel first to avoid losing gold in deposit fees and auction house cuts.
Remember you can easily pop a small advert for your extra-special sales on the realm forums that your server might be affiliated with.
Do Your Homework.
In the introductory article I mentioned the importance of research and this is worth reiterating here. Be prepared to spend some time (hours, if necessary) scanning the World of Warcraft forums and auction houses for possible areas of profit, learning what all the reagents are used for and don’t hesitate to dip your toe into other markets, even if that means assigning (and losing) a spot of venture capital. Quite often a great area that you are exploiting now will slowly become less exclusive as more and more players notice and try to grab a share, so you might find that what was once your bread-and-butter is now a white elephant. But, if you’re alert and willing to experiment you will find that as one door closes another one can open.
One of the reasons why many of the markets do not stay static is the evolutionary nature of WoW’s economy. Each patch can herald new achievements, boss tactics and recipes, all creating a ripple effect in the demand for different things here and there and sometimes even rendering existing items redundant. Seasonal holidays are one of the regular occurrences that can bring a small shift in the supply and demand of any related commodities, often having a knock-on effect to other, more everyday areas. When December the 25th comes around, not only will people be start to farm items such as Small Eggs for the holiday quests, in doing so they also neglect their usual farming duties, so auction house becomes slightly less well-stocked with reagents.
This can drive ore and herb prices up somewhat and, coupled with the fact that the seasonal content also requires a great deal of time and many players will choose to expend their playtime engaged in the temporary events, they are more willing to purchase items that they would normally farm themselves. So, there are two reasons why the savvy profiteer should prepare for seasonal events and patch-days in advance.
Lastly, make sure you check the auction house for current prices before you post your sales. In fact, this last point is one of the most important general lessons you can learn and you should adhere to it with every single thing you list. Even if you receive items that you have no idea about, check them out on the auction house and throw them through the Wowhead.com search engine to see what they’re used for before you try to sell them. There are quite a few drops in the game that seem run-of-the-mill or useless but can be actually be sold for thousands. Rare non-combat pets are a very good example of this, and it is not unusual to hear tales of woe from players who have vendored or discarded drops that they have later discovered to be worth hundreds or thousands.
Check out http://www.wowwiki.com/Formulas:Auction_House for specific information about deposit, cancellation fee, and cut percentages.
Join me in the guide’s next instalment where we shall take a look at some of the specific money-makers.
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