Author: Aleithia
Last time we looked at diversifying our investments for short-term churn and 2-3 week investments.
Now it’s on to the longer term investments, including the next expansion!
Patch-Time Stock
Prices tend to decline over the life-cycle of a patch. They are strong in the beginning as people gear
up and need new enchants. There are fewer sellers as casuals go back to more time playing than gold-
making, coupled with more people buying: Auctioneer Win! I like to start stocking up on these items
when it feels like we’re 6-8 weeks away from a patch. This might include some of those same items in
our short-term churn category, but they might also include finished goods.
As we were nearing the end of 4.1, I stocked up on already cut Inferno Rubies from my competitors who were selling too low. The bump in price with 4.2 allowed me to turn a profit with almost no work. Nearly all base-line materials were affected when 4.2 came out. As they say on Battlestar Galactica: “All of this has happened before. All of this will happen again.”
This category is a little more risky. You might hit it big (Infernos), or you might miss big (Volatile Fire/Earth anyone?). This is not quite throw-away money, but it’s certainly not anything I’m counting
on getting back completely. Don’t invest too much here if you can’t sustain the earlier investment
categories. Don’t cripple your business investing here.
Long-Term Speculation
While some items only go down in value with time (Maelstrom Crystals), other items start low and build in value. When Cataclysm launched, I immediately started leveling my professions. Guess what? Others had the same idea. Scrolls, flasks and potions were going for dirt cheap on the Auction House as people tried to make back some of their investment. I picked up several copies of enchanting scrolls I’d need on my characters during Cataclysm. Barring new enchants being released, or stats getting re-balanced, I’m largely set on enchantments. And most of them cost only a few gold.
I’m wishing I had purchased more as the prices on those enchants are well above the few gold mark
right now. Next expansion, I’ll definitely be purchasing as many as I can. Sure, there’s some risk involved, but it’s a relatively small amount capital, so it’s well worth the risk.
Stocking Up For Patch 5.0
News Flash: Another expansion is coming! With a new expansion comes shiny new enhancements. We’ll see an exodus of sellers from the previous one. Case in point: Wrath gems and enchants are still going strong. I regularly sell Cut Scarlet Rubies for a 30-50g mark-up. The same is true for enchants from the
Wrath era. Thanks to the new iLevel requirements in Cataclysm (Gems/Enchants often require iLevel
300 gear or better, meaning they can’t go in older gear), sales are strong for Wrath enhancements. I
expect they’ll keep this system for the new expansion as well, meaning Cataclysm-level enhancements
will continue to sell, but there will be less competition.
So I’ve already started stocking up on inventory. I’m choosing to focus mostly on enchanting mats and
gems. It’s a small investment now, but will build with time as prices crash near the end of the expansion and people dump all their “worthless” Cataclysm materials.
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4 comments: on "Diversify Wow Gold (Part 2)"
Skorpsy said... August 2, 2011 at 8:42 AM
Now, is too early to be stocking for the next expansion.
I'm not even sure I read your last paragraph correctly. I shall go have my morning smoke and coffee and re-read it.
Aleithia said... August 2, 2011 at 11:05 AM
@Skorpsy: At the end of Wrath, the price of common raw materials (Saronite Ore, Infinite Dust, Abyss Crystals, Herbs, etc.) were crashing as people began selling off their supply fearing a complete devaluation with the release of Cataclysm. The same will happen for the materials from this expansion.
But sometimes it happens mid-expansion as people leave, thinking they'll come back and wishing to "close up shop" for a while by moving their existing inventory into gold for when they come back.
Now, this is admittedly the highest risk investment category I wrote about because there's a good chance you could be wrong on an item. I'm constantly having to mitigate the risk by evaluating whether the cheap materials I picked up a month or more ago should continue to be stockpiled for the future, or whether they should be sold because of an increase in price. Some of the questions I consider:
Will I make more holding this until the next expansion or processing it for sale/selling it raw now? (Spikes in demand make be burn through this stock for immediate profit.)
What opportunity cost am I missing by holding this and clogging bag/bank space up? Is it worth the storage space? (If I'm maxed or space is a premium for regular business, I'm less likely to hold it.)
Sometimes, if I can pick up a large supply of something and make double profit on the raw item, I'll process half and save half for the future. That future could be patch 4.3, but it could also be 5.0.
I don't commit a large portion of resources here, but it's fun to dabble in. It will definitely pick up in pace as we near the end of the xpac, but at that point it's more like saving for the next patch anyway.
Dicci said... August 3, 2011 at 1:25 AM
Where did you find this information about the next expansion? There was a rumour of one recently which was squashed quickly. So far all i've seen is speculation and no definite facts about the next expansion (like when it'll be out, what it'll involve. If it's anything like wrath we have another year ahead of us before the next expansion!)
No one wants to hold items for another year!
Aleithia said... August 3, 2011 at 8:47 AM
@Dicci: I had no knowledge of the next expansion when I wrote it. But based on their own pattern, it's coming in mid- to late-2012. They'll announce at Blizcon and release between August-November window.
Since then, there's actually word that new patch could be "Mists of Pandaria" according to MMO-Champ.
As for holding items for over a year, I have lots of them in my bank/gbank that have gone that long. This is just trying to be intentional about what might be worth money in the future.
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