Get a Grip On Your Pricing

Posted by J.E. Douglas at 8:46 AM

0 comments View Comments

Mommar here.

So here is a scenario that I see played out many times as I'm cruising along the Auction House.

Player thought:   Ooo,   there is no Adept Vermilion Onyx on the Auction House.   Look,  I have a Vermilion Onyx Blank.  So I can Craft one for sale.

(We are good up to now.   See a need,  sell a need)

Players thought:   Okay,  So how do I price this.   I see the value on my handy dandy marketing tool says 125g.

(Again,  we are good with this.   It is nice to be the first in line so you can add a little bit more to the listing)

Players thought:  I shall price it at 540g

(WHAT?????   Umm,   I think you missed the boat on this one.)

Pricing a relatively easily crafted item for an exhorbant amount of gold is just begging someone to come along and undercut you.    There is the small chance that you would get the sale.   A very small chance,   along the lines of the chance that Ed McMahon will deliver my bucket full of gold nuggets personally.

Placing that 540g price is nice to watch the first time.   Maybe even the second time it's nice to think of the possibilities that someone will come along and really really REALLY need that gem.   The third time that it arrives in your mailbox unsold it loses its luster and its interest.   Especially with the blanks being much cheaper than the cut.  25g and a little patience can save someone a lot of gold.     And many players aren't willing to part with that much gold for a gem that they will replace in two to three weeks.

Always manage your pricing based on what someone will pay for it.   Not what looks good in your hopes and dreams of selling.   By the time that 540g gem sells,   another player will have sold 10 at a lesser price.  And you are still stuck holding your 540g imaginary sale.

Good Luck and Good Hunting


Want to get in contact with me? . Email me at Dragonbearjoe @ gmail. dOT com or find me on twitter at "@JMTCMommar" You can find me hanging out on the Shandris Server, chat me up and I will buy you a glass of juice. 

Previous Entries

Just the Tip Please
Patch 5.2:  Prepping for the rush
How Do You Effect The Market?
He's So Great He's A Fivefather
Patch 5.2:   Farming For Rep.. With A Farm?
Archealogy:   Digging up stuff for gold
Phoning It In....
Daily Quota Buying
Who Are You Feeding Sales Too?
Taking Advantage of 5.2 PVP Gear Changes
Patch 5.2 Prep:   Will players be returning?
Sales Triage
Lost In The Guild Traffic
Finally the end of Cataclysm
Preparing For the Future:   Alts 101
Anonymous Gold Goblin 

Market Manipulation

Posted by Markco at 9:00 AM

6 comments View Comments

Hi guys, today's Guest Post is brought to you by Bozzor, the Gold Multimillionaire all the way from Romania!

Prices.

They go up and down, up and down...but why?Most of the times because the demand and offer are also going up and down.

The vast majority of items available in AH are raw materials and craftables.Most of the times, craftable item prices are speculative while raw material prices are generally based on offer and demand.

Almost nobody will sell a crafted item under material cost.There are exceptions, ofc, but those are... exceptions, and not the rule.

All traders wants one thing only : to buy as cheap and sell as expensive as posible.But how to be sure that what they buy is as cheap as possible? Well, there are two choices : wait until the prices go down as much as possible (reaction) or make the prices as low as possible (action).

Since craflable item prices are largely speculative, traders usually undercut each other until they reach their minimum profit mark.Once that mark is reached, they stop posting.Now, they have different profit marks, and the ones that bought the cheapest raw materials sell first.And if they manage to sell their stuff before the demand stops...all other traders (well, most of them) will get a mail filled with expired auctions.

So, buying is much more important than selling.And buying as cheap as possible is the key for large profits.Back to reaction and action.Most of the traders are reacting, waiting for a natural price drop of raw materials.Few traders act, forcing artificially the prices to drop...or go high, depending on what they actually wants.

What they do is Market Manipulation.

Now, to successfully manipulate a market, one need to know his server economy very good : how many farmers are active, how much they sell on daily basis, how many big buyers are for that market.

If you didn't know by now (but i think you know), ore market is the most active market in game.From ores we have : raw gems, cuted gems, bars, enchanting materials, items that requires gems or bars to craft.

The next active market is herb market.From herbs we have : flasks, potions, glyphs, inks, dust of disappearance.Herbs are also used in gem transmutes.

Leather market is aslo very active...not as much as herbs, but certainly more profitable (LW leg enchants mostly).

After this very short coverage of raw materials, lets see how can we manipulate a market to reach our goals.

What we need to do, its easy : post large quantities of raw materials at certain prices, to force farmers post cheaper than us, starting a undercuting chain reaction on that market.What is hard is to know the price we will post for and how much we will post...

Well, if you know your server farmers, the answer is easy : post in stacks of 1 (ore, herb, leather,cloth) and below medium price (but not to much under) and post before farmers are posting.They will undercut the cheapest price in AH, no matter if its per stack or per ore.

If you think that someone will buy what you posted and will repost at higher price or just buy because its cheap for them...worry not.Most people REACT, so they will wait for a better price, because you already flooded the AH and anyone will know that a large offer will make prices go lower.

Now, the hard part comes when farmers start to sell...They will undercut you, and they will post in stacks of 20 providing large quantities of materials at prices closer and closer to what you want. Now, what if someone else buys before you do?Well, if you know the main sellers, you should already know when are they online, so you can buy before they do.

Ok, the above it is for lowering prices.But sometimes (well, most of the times for a serious trader) you want a certain price to go up, limiting the competition to have cheaper materials.This also can be done, and most of the times, shortly after you droped the price.

The cycle is like this : you post materials to force prices go down, farmers come and post cheaper, you buy their stuff, than you cancel your auctions and repost for high price, but this time in stacks of 20.The window of opportunity is generally small in weekends (1-2 hours max) and generally big on weekdays (up to 4-5 hours).

What you really want with this market manipulation is to craft items as cheap as possible, with a high profit mark, so you can sell them at profit EVEN if the price for raw materials is HIGHER than your crafted item. If you managed to buy, lets say, elementium ores for 30g / stack and crafted bars for 3g each, then you forced a price increase to 40g / stack...everyone who buy at 40g will not sell elementium bars under 4g each. But you can.And you will make profit by selling UNDER the current material price.

I hope you understand that Market Manipulation is not for everyone, but only for those who have great knowledge of their server economy.If you are not one of them...what you waiting for ? Add on your friends list the main farmers and buyers, watch their activity for couple weeks and then, start making more gold than you did before.

Acting is better then reacting. So...start acting.

Bozzor,
Gold Multimillionaire.

http://www.auctionhousegoldstrategies.wordpress.com

Manipulating Auction House Prices

Posted by Aleithia at 8:00 AM

6 comments View Comments

For many people, perception is often times reality, even when it's not accurate.

Two people can go to a movie together and walk out with completely different opinions about the movie. One might argue that it's the greatest movie ever, while the other might come away thinking it was all a bunch of fluff and poor acting. Which one of these people is "right"? The obvious answer is they both are (Though not really, because who wouldn't say that was the greatest movie ever!?) because their perception of the movie is their reality.

In the World of Warcraft economy, perception is often reality also. Don't believe me? Nearly every time you spot a killer deal on the Auction House, it's usually the result of a skewed reality. Is it possible to foster a skewed reality for people and thus take advantage of the pricing? I believe so.

"Old" Items Aren't Worth Much

One of the great mysteries to me is that people perceive "old" things to be worthless. Whether they are old patterns, gems from a previous expansion or Bind-on-Equip drops from a previous tier. Maybe they think everyone else plays like them. Maybe they think people don't have gold to spend on vanity or "old" items. Maybe they don't see how the old item could possibly be useful. Whatever it is, they give us an opportunity to profit.

Case Study 1: Bind-on-Equip Epics

I recently purchased a Soul Blade from trade chat. When I asked how much the seller wanted, he told me to make an offer. I offered every gold piece I had on my currently online toon: roughly 4800 gold. He took pity on me and gave it to me for 4500 gold instead so I'd have some gold left in my pocket. I believe he walked away from the sale thinking he got a good price, even with the discount. But why would he think that? Clearly he didn't know that Soul Blades are worth much more than 4500 gold, despite the fact that they are easily replaced with crafted weapons from patch 4.2.

After mailing the Soul Blade to my banker for posting, I discovered why the person thought he'd made a good deal. There were no Soul Blades listed on the Auction House. He had no way of knowing that they go for 10-12k on my realm because none were currently listed. He perceived the item to be outdated and was happy to get 4500 gold, when a little research and patience could have led to double the gold in his pocket.

Case Study 2: Scarlet Rubies

Cataclysm has brought insane amounts of gold into the economy. People have more gold than ever and are happy to spend some of that gold to speed up the grind of leveling alts. I was experimenting with a return to old gold-making tactics when I stumbled upon this old goldmine turned new. I found there is strong demand for the Scarlet Rubies, so I routinely bought out the raw ones, cut them and posted for sale, selling out pretty quickly each time I posted.

The largest problem with Scarlet Rubies is supply of raw materials. Finding enough raws to keep a healthy stock available for purchase was becoming problematic because the old Saronite Shuffle is not exactly standard gold-making practice these days. In my search for cheap rubies, though, I learned a few tricks for manipulating the market to get better prices.

Controlling Information to Reduce Prices

If you're running Auctioneer, Auctionator, TradeSkillMaster or some other addon for pricing information, you'll always know what something is worth. But many people don't bother, or don't keep their information current. If we control information about a market, we can actually control the price to a degree. Here's what I learned from the Scarlet Ruby experiment that can be applied to other markets:

• With no comparison point, Scarlet Rubies are near worthless. When there are no raw or cut rubies listed on the Auction House, the price point is around 10-15 gold. Consistently buying out the raws or cuts below a certain price point will keep prices low because people perceive them to be worthless as none are listed on the Auction House.
• Cut Rubies on the Auction House increase the price of raw ones. If there were no raws listed, but I had lots of cuts up, raw prices would hover around 50-70% of my cut price. People saw there was at least one person willing to try making a profit, so they price the raws at a level they think I'll purchase them in the hopes of flipping it for a profit.
• People will go with the group consensus on pricing if possible. No matter the price of the cut rubies, once raw rubies are posted, that becomes the market price for the rubies and the normal undercutting rules kick in. If it looks like a good undercutting war is going to be waged, I sit tight and wait for them to drop in price before buying everything out.

Controlling market information works best in small, niche markets, but can be done in larger ones as well. However, the larger the market, the more risk and potential loss is involved. For the rubies, I'll often go a week without posting cut rubies and buy up all the raws that appear. This allows me to build a steady supply and then unload them in cut form over a week or two, then start again from the beginning.

A more competitive market like Cataclysm raw materials is much harder to control because of increased players (your fellow AH competition, farmers, etc.) but it's certainly possible. You'll need larger gold reserves to make it happen, and you need to clean the Auction House of lower priced items much more regularly for the strategy to work.

How else do you manipulate prices on the Auction House? When has it backfired? Share your stories in the comments!

I consider myself a somewhat casual auctioneer. I can be found via Twitter @Aleithia3. I also like getting email at Aleithia AT jasonthedce DOT com. Send me your questions and I'll try to write about them on the site.