Suggestion Box Friday - How to Beat a Goblin

Posted by Markco at 8:00 AM

Suggestion box Friday is your chance to be the blog writer! Anything goes today, but you may use this post for ideas and as a conversation starter.

The following email references several posts I've made on inscription in the past and how to defeat excessive goblins using a combination of selling snowfall inks, selling armor vellum III's, getting farmers for herbs and selling cheap glyphs. Now, understand that you can never technically 'defeat' someone in a marketplace. Sure you can limit their sales or make them increase their prices, but you can never truly defeat them. All you can do is use all the tools in your toolbox to increase sales and not allow someone else's actions to decrease your own. Basically the idea was to diversify your inscription sales and change the way you make profit from the profession. By making glyph sales a smaller percentage of your overall profit margin from milling it is possible to greatly increase your gold intake even with someone who uses extreme goblin-like posting methods on your server. A note on how this went for my server; there really are no goblins left and I make the majority of my money selling glyphs anywhere from 3 gold 50 silver to 60 gold with QA3. The ROI for a 10 gold stack of adder's tongue which I turn into a snowfall ink, 4 glyphs, and 4 armor vellums comes out to around 70 gold on average per stack milled. If I were to go back to my anti-goblin posting I would see around 40 gold ROI, but it's thanks to my anti-goblin methods that other auctioneers had to increase their QA3 thresholds which in turn allowed me to make more gold per glyph. For a better understanding of opportunity costs with inscription, please check out the podcast calltoauction. Unfortunately, because this is such a hot topic, many comments are simply going to flame and ignore the reasoning behind the method.

Here is the email I received from "A B", I left it entirely unedited:

I'm sorry if this is a bit late for this post but I just have to say what needs to be said about this particular subject.  I think the "ney-sayers" do not realize a few things.  They do not really realize the entire scope of what markco plans to do and which is why it will work because most people dont get the concept of it.  First off it is very easy to get the herbs for that kind of gold from farmers.  Farmers want their gold right now and by putting it on the ah or spamming in trade they're wasting one thing they thrive on: time.  Time is what makes the farmers farm well.  They have an abundance more than the rest of us and they use it to spend getting mats for others.  Yes, they could sell it all on the ah but a few things come into play there besides time.  One, other people.  When something gets put on the ah for whatever gold, it can easily be undercut by Mr or Ms. John Q Farmalot and thus making the first farmer not sell his herbs.   Yeah he will still sell alot but it wont be all at once, and it wont be in one day.  Which brings me to why farmers want to sell for less, they can do it more often and EVERYDAY.  How many times have you had things come back to you in the mail cuz it was undercut drastically?  The farmers know that risk and to them it is math.  Anyone can sell it for less than the 10g if they wanted, but if the farmers sell directly no one knows about that 10g price and that leaves the price to be inflated.  I can guarantee that one everyone's server there are more farmers than you know about, selling for less than you consider "market price".  Let me put it another way.  If the farmer sells 100 stacks a day for 10g he makes 1000g.  He puts up the same 100 stacks on the ah for 15g(which im making 'fair market value') and another farmer comes around and undercuts him with his own 50 stacks.  So now there are 50 stacks of something that will be bought before the first farmer even has his stacks looked at, and thats if no one else undercuts before then as well.  So now for him to get the same margin that he would have gotten for 100 stacks for 10g hell have to sell 67 more stacks (at 15g) than the 50 that undercut him which means 117 stacks would have been bought before he could equal the same amount of money he could have made just selling for 10g.  Now let us say that on any day only 100 stacks even sell at all off the auction house, that means that 50 of his stacks would not even sell.  Meaning the next day he would only be able to post half of the stacks he could have already sold. If he collects 100 stacks a day for seven days straight he will guarantee 7000g if he sells it directly to someone like markco.  Now with the other method lets see what could happen.  He collects 100 stacks posts for 15g nother person posts 50 stacks for less and the farmer only sells 50.  So thats just 750g from that one day and 50 stacks that could not sell that will go nowhere.  Next day he goes collects another hundred and posts 15g a stack and gets undercut again with 50 stacks.  Same thing happens, only 50 of his sell so for two day total he has 1500g instead of possible 2000g.  Of course this is not likely to happen but you have to understand just how farmers think.  And its very simple time not farming is time wasted to the true farmers.  Every moment they spend posting things on the ah or selling their wares in trade channel is time they are not farming.  So while they may not be getting full market value for wares that may or may not sell, they all realize that guaranteed money is the safest way to farm.  Which brings up a idea I just had while writing the last sentance, the price on the auction house is only the "percieved" market value.  As with all things, something is only worth what people are willing to pay for it.  You have to realize, the only reason something costs as much as it does on WoW, is because someone made up the price and other people agreed.  Think about Darkmoon Cards or Primordial Saronite.  If no one will buy it for what its "worth" then you have to sell for less than that to not be stuck with a lame duck product, which is something all farmers dont want.

Which leads me into my next bit.  I guarantee Markco does not buy all these mats w/o someone to sell them to.  If there werent tons of people wanting glyphs or armor vellums or inks then he would not sell them.  In fact he prolly had to recrtuit farmers just to keep up with demand.  It seems that alot of people dont realize that you can make the armor vellums and weapon vellums for the exact same amount of inks of the seas as you can the glyphs, and you get twice as much per ink and the only think it will cost you extra is a parchment per vellum.  This right here is a real big reason the strategy will work because while there are more people needing glyphs, there are enchanters that need these vellums for all the people wanting enchants.  So if they can get vellums for less than anyone else THEY make money as well in which Markco becomes just like the farmer in the first situation.  He is gaining masses of money from a generally untapped market, while people fight over percentage points of profit in the glyph game.  Ill use some numbers from my server and show you from Markco's side why it works.  If the goblin buys how many ever stacks of the top 3 herbs (lich, thorn adder) for 15g he will get on average the mats for one snowfall ink and 6 InkotS.  Lets say that they sell their snowfall ink for 10g and the 6 glyphs for 4g apiece.  Thats 34g per stack which is not bad.  Let say another goblin comes along and another and they all get to their glyph bottom of 3g so now with snowfall ink still for 10g thats just 28g per stack (still very profitable).  Now let us watch markco destroy snowfall inks and the price goes down to 5g per snowfall.  Some of you are probably wishing that this was the price of inks on your server and it would definately make darkmoon cards much easier to get when I get to lvl 80 on new toons but I digress.  The reason this has not and will not happen anytime soon goes back to what I said earlier, people think its worth more.  This is where time plays a factor in this side of the market as well.  If people did not account for their time spent then snowfall inks would always equal a stack of whatever and 6 glpyhs would equal a stack of whatever and gems would be the same amount as gem cuts and transmutes would just be worth the mats and so on.  Time is a great commodity in this game.  The more you have the more success you CAN have just because you are there more often.  Just like the person who always can raid because he does not work nights will have better gear than the person who only can play when very few people are on.  So anyway back to my main point, all professions are inflated by time.  Now, let's say that Markco evaluates time exactly as the goblins the only difference would be the price at which he bought the beginning mats.  And since he bought the mats for 2/3 the price, he can price all of his created items at 2/3 everyone elses prices and still see himself profitable.  And the goblins could not compete.  Now you might think that 5g a stack isnt that much of a difference in price, and sure if you do just a few stacks a day it really isn't.  Let me sidetrack a bit and I'll tell you a story.  I first found this blog by watching Marcko's one horribly quiet video when he started out with 5g and made 40g in less than a week. And he did this buy doing simple things, buying stuff for cheap that gave profit and reselling it.  The trick did not work just because that other people were stupid, it worked because of the sheer number of bids he did, and auctions he sold.  So think of that 5 gold per stack difference that way.  Five gold a day a stack is not much but imagine the farmer selling 100 stacks to him for 5g less than anyone else, 1000 stacks a day from multiple farmers.  And that 5gold adds up quickly.  It starts at 5 gold, then becomes 500, then becomes 5000g.  But I will give you something to ponder on, what if you just got those mats for 50s less than anyone else would you still think it worth it.  What if you bought and used 100 stacks a day, 1000 stacks.  You need to realize that just because something dont give you oodles of gold per time you use it, it can still easily be profitable.  It is up to you to realize how to do so.