GOING GREEN
Allow me to be frank at the commencement. You will not like me. The gentlemen will be envious and the ladies will be repelled. You will not like me now and you will like me a good deal less as we go on. That is it. That is my prologue, nothing in rhyme, no protestations of modesty, you were not expecting that I hope. I am Madof, Trade Prince of Bloodscalp and I do not want you to like me…
INTRODUCING THE AUCTION HOUSE
Welcome to the fast paced world of buy/sell (and sell some more) that is the life of the Trade Prince. It’s a brutal, but potentially rewarding existence. A day on the Auction House floor is a day in the slaughterhouse: you come out of it with other people’s blood and sweetmeats spattered on your shirt, and that’s if you’ve done okay. If you’ve fucked up, it’s your own. So how do you make it without losing your shirt? First thing’s first, you gotta know the basics.
First, let’s talk about the Auction House itself, these exist across the world. Each major city holds multiple AH NPCs. On a server with a healthy population one can find a variety of goods to buy and sell throughout the day. Additionally there are Neutral Auction Houses, these are generally found in Steamwheedle Cartel locations such as Booty Bay, Gadgetzan, and Area 52. The Neutral AH allows players to trade with players of the opposing faction, which can be critical on servers where one faction grossly outnumbers the other. Additionally there is the trade chat channel, an invaluable source of information and avenue to possible business contacts as well as customers. We will discuss this particular topic in more detail later in the guide.
■ Pro Tip: Everytime you list an item on the Auction House you have to pay a deposit, additionally when an item sells the Auction House takes a cut of your profits. To find out more about these fees see this Wowpedia entry.
Trade basically revolves around supply and demand of commodities. There are two types of commodities, basic and complex commodities. Basic commodities are raw and refined materials such as Ore and Bars. Complex commodities are those created with basic commodities such as Bags and Consumables. When becoming involved in a market it’s absolutely paramount that you never forget the basic commodities costs, these form a solid basis for the asking price of the finished product, which essentially effects your profit.
FINDING A MARKET AND MAKING YOUR FIRST SALE
Let’s start with something easy, one of my favorites and a classic: Netherweave Bag. Each bag requires 4 Bolt of Netherweave and 1 Rune Thread. Conversely, each bolt requires 5 Netherweave Cloth. This makes finding the cost of bags quite easy. Let’s assume that the cloth is selling on your factions AH for 7g 50s per stack of 20. That means that your cost per bag is 8g, figuring in the 50s per thread.
Anytime you go into a new market there’s risk involved. The ability to calculate that risk and show profit at the end of the day is what separates the Goblins from the general public. My own rule is that I never fully commit to a new market without an absolute minimum of seven days research and development time, this allows me an opportunity to study the market trend on my server. I’ll select or create an alternate character and give them the means to plumb the depths of that market for a week. Meanwhile, I run my calculations and if it looks worthwhile I’m all in. Learning to assess the potential risks and rewards of markets is key, and one easy way to do that is by using the Goblin Index Rating a system authored by Kathroman of Break the Bank. This index offers an easy form of analysis, particularly useful at comparing multiple markets when deciding how best to invest your energies across them.
Now, let’s go back to the bags and assume that this is your first time dealing with these bags and there are no other bags for sale in the AH currently. How do you price it? My general rule is an 80% markup from material cost if no others are listed, this helps me establish a baseline with a fair margin of profit. I’ll list several (stacks or individual items depending on the item) afterward I can adjust the price according to how quickly they sell. But what if someone already has the item you’re looking to sell listed on the Auction House?
UNDERCUTTING
Undercutting is the practice of listing commodities on the AH for less than the competition. This is a logical attempt to sell your items before the competition can sell theirs. But by how much should one undercut? There is a real philosophical debate in and of it’s own. There are two major schools of thought here: deep undercutting and marginal undercutting.
■ Deep Undercutting is often someone calculating for profit based solely off of their cost. This method works best on smaller cost items, and particularly well on items that players may want multiples of (consumables for example).
■ Marginal Undercutting likely the most common method, one simply lists their items at an amount that is marginally lower than the competition (1c for example). The theory behind this is that the item will show in a sorted search as the cheapest on the AH, and thereby sell faster than that of the competition. This method is also cause for much back and forth amongst competitors.
As stated earlier, which method to employ is largely a philosophical question, and a matter of some debate. But it is ultimately up to you to decide which is the best method for you. It should be noted however, that when demand outpaces supply the deep undercutter will find himself with less competition as time wears on. The majority of competition will move on when margins become too narrow for their liking. So, how do I know how much an item is worth?
REAL VALUE™
Often are the times where one hears someone talk about the value of an item, as if a particular item had an inherent value: this is wrong. There is no “real value” to anything. Every item in the game, no matter where it comes from is only worth as much as you can convince someone else to pay for it. Real Value or Market Value are logical fallacies perpetrated by people that don’t know what they’re talking about (or someone who’s trying to sell you something). If you didn’t craft the item and you’re not very familiar with it, you may be at a loss for how much you want to sell it. This can be tricky, you may want to hold onto it until you see one listed in the Auction House on your realm, but my advice would be to consult the Undermine Journal.
TOOLS OF THE TRADE
The Undermine Journal (hereafter referred to as TUJ) is a website that tracks AH prices over time, allowing you access to a huge database of market trends, sorted by server/faction. This alone would make TUJ an invaluable tool for Goblins everywhere, however there’s one feature available on the website that makes it an absolute MUST HAVE if you’re serious about the AH game.
The TUJ AddOn is a web based tool that monitors the AH of your desired server/faction and alerts you when an item appears under the parameters you set (ie the Snatch List). No registration is necessary as long as you have an existing account with WordPress, Blogger, LiveJournal, Open ID, Facebook, MySpace, Twitter, Google, or AOL. Sterling over at the Consortium Forums has put together an excellent TUJ Snatch List to get you started.
If you’re looking for a little extra bang for the buck however you can invest $3 into Blizzard’s Remote Auction House app. Having the app on your iPhone or Droid means never missing a good deal again. Once you have the TUJ AddOn configured it will send you instant updates to your email, if you set up an email address just for this you’ll know anytime you get mail that it’s a deal waiting to happen. See what it is, and buy it on the remote AH App.
YOUR NEW BEST FRIEND
TradeSkillMaster is a powerful AH addon and is likely to be your partner in crime for the foreseeable future. TSM is the spiritual successor to QuickAuctions which experienced Goblins will likely be familiar with from the halcyon days of the Glyph market in Wrath. Originally, I had intended to write a guide on this wonderful AddOn – however I found two very good and thorough sources on the subject. So why fix what isn’t broken?
TSM can be daunting to a newcomer, it’s highly configurable. And offers a dizzying area of modules and options. Once setup is complete however it becomes the silent partner you’ve always dreamed of, allowing quick AH scans for cheap goods, restocking crafted goods, and posting just enough of your wares to make a profit. As for how to setup the addon, I leave that to the experts before me:
■ Sinshroud has provided an excellent review as well as preliminary setup tips for the addon over at the consortium forums in this post.
■ Similarly, Zoxy has created a library of guides on his blog with detailed looks at setup and use of each module, the index of which can be found here.
■ Click this link to download TSM along with all working modules.
THE IMPORTANCE OF NETWORKING
I, like many of you have a love hate relationship with Trade chat. On the one hand it can be an invaluable resource for someone looking to make some gold. On the other hand, it can just as easily be a cesspool of anal linking Chuck Norris jokes and flame wars. The ignore feature only goes so far, and turning off trade chat entirely isn’t an option when you’re in the AH game. So, you have to learn to separate the wheat from the chafe.
Saate over at Massively Obsessed has written an excellent guide that details how to really “read” trade chat and make deals when you find them. If you have any intentions of buying things from trade chat I highly recommend giving this article a read.
There’s also something to be said for actually listing goods or services in trade chat however, it can serve as not only an effective means of actually selling something – but also preventing someone else from selling something. Toward the end of Wrath I engaged in an all out campaign of psychological warfare, I moved my glyph business to an alt that had never touched the AH before, then set him up to start selling all glyphs at 5g buyout. Every time I logged the character on I spammed trade saying “The end is near, all glyphs MUST GO 5G EACH IN THE AH NOW!”
The result? This behavior coupled with the announcement that all glyphs would be learned caused competition to evaporate over night. I saw competitors scrambling to unload their stock and listing below me hoping to get SOMETHING out of those glyphs. Meanwhile, the price of herbs dropped like a stone. The fever pitch of demand had dried up and now there was a ton of herbs available at rock bottom prices. So, while continuing my campaign to make the competition drop Inscriptions entirely, I quietly bought up all of the cheap herbs I could find. I often found stacks of Wrath herbs for under 5g per stack, I made Ink and started stockpiling glyphs. By the time 4.0 landed I had several full stacks of each glyph and was ready for the eager customers who wanted to get a complete set of glyphs, I was able to supply whole sets. And when Cataclysm finally launched, there was another spike. This time, from people rerolling or coming back to the game. In the end I made ridiculous amounts of profit because I got the raw materials cheap, with my cost so low I was capable of undercutting anyone who was getting into the market at the “new” price.
The lesson of course is that the Trade channel can be an invaluable tool for both buying and selling. A look at what someone is buying (and in what quantities) can you give you a lot of fuel for a hypothesis about the future actions of a rival. It can be an outlet to stoke the fires of fear and effectively cripple competition. And it can help you make critical connections with farmers (both foreign and domestic) who can keep you supplied with the materials needed to make your empire strong.
In the case of dealing with farmers, there is at times a language barrier. Certainly not all farmers are Chinese. Not even all asians are Chinese, but when dealing with someone who is both a farmer and happens to speak Chinese, it’s helpful to have a means of communication. Vanditor of the Consortium forums wrote this excellent post, Chinese Speak 101-All Your Goods Are Belong to Us! on speaking to Chinese farmers. I’ve seen several posts before, but this is by far the most thorough that I’ve encountered and I’ve been using it since to maintain a good working relationship with Chinese associates.
PARTING WORDS
Writing a guide like this is hardly ever an easy thing to do, one is tempted to write the same thing over and over again. What I’ve attempted to do is offer you the tools to be successful without spitting specific techniques out that I expect you to learn by rote. In several instances I’ve felt the need to link to other sites for their specific expertise on a subject, I’ve chosen these as the best examples in that field. In each case, I did not feel I could add anything much to what they’ve already said. And so, I offer links to their work along with the recognition befitting their efforts. However, I would be remiss if I didn’t take a moment to thank those before me who until now have gone unmentioned. I am speaking of course of those figures in the community who have inspired me along the path of the Goblin. So to each of you I say thanks, and to each I dedicate this guide.
■ Gevlon of Greedy Goblin
■ Markco of Just My Two Copper
■ Tella of Hit the Cap
■ Warcraft Econ
■ And of course a very special nod to those whose work I linked to in the body of this guide for all of their efforts and inspiration.
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That is it, that is my guide. Do you like me now?
