Friday, July 27, 2012

Smuggling: A How to & How not to

Many bankers refuse to attempt the smuggling game. They have either heard about, or had an experience with, the smuggle sniper and are afraid to risk their product. In my opinion cross faction smuggling is far too useful a tool to be ignored by any banker wishing to reap large profits. When done correctly the risks are minimal and the profits are tremendous. In this post we will take a detailed look at smuggling, how to do it right and how to do it wrong. What addons / mods will be most useful when smuggling.

What is required to perform a successful smuggling operation?  
            First, two separate accounts are required. In World of Warcraft you cannot purchase items that you have placed on the auction house with any of your other characters (alts) from the same account. This prevents you from posting on one side and buying on the other. Second, you will need a couple very useful addons and optionally another person.
            If you have two accounts it is best to hot box both accounts when smuggling or run each account on a separate computer and locate them very closely to each other. The proximity makes it easy to perform the posting and buying in rapid succession. Speed is a factor because of the opportunity to have your product snipped out from under you.
            Three specific addons are extremely useful when smuggling. Auctioneer Suite, Auctionator, Igore’s Mass Auction and Mail Opener. The Auctionieer Suite has the option for one click buy, Auctionator has buy and sell tabs. Igore’s has the option to post 18 items for the same price even if they are of different types and quantities. Lastly Mail Opener is used at the end to help clean out your mail boxes.  When configured correctly a single person can list hundreds of items and buy them without fear of the items being intercepted by a sniper, unless the sniper knows you are smuggling and has their addons configured to intercept your product. How will they know you are smuggling? Read on and learn…

What does bad smuggling look like?  
So you roll into your local neutral city and you come across two characters of opposing factions standing in front of the same auctioneer. Periodically one of them raises their hand in the animation of having just purchased something. A few moments later either both leave at the same time or one logs off then the other heads to the mailbox. This is the most common appearance of smuggling. Keep an eye open for this, chances are, if you are quick you can snipe the cheap items and make a profit. Yes I believe that stupid, lazy, and cheap smugglers deserve to have their product sniped.
Having both parties of a smuggling ring standing in front of the same auctioneer is tantamount to advertising that you are smuggling. It invites unwanted attention and snipers are more likely to pay attention when there are two individuals from opposing factions in front of the same auctioneer.
Rule #1 when Smuggling: Attend different neural auctioneers.
Rule #2 when Smuggling: Always snipe bad smugglers, there are profits to be made.

What does good smuggling look like?  
Smuggling, when done right, has the appearance of a series of basic purchases by a single character. A good smuggle deceives the passerby into thinking that all is normal and there is no smuggling happening. The equivalent of the Jedi mind trick “These are not the smugglers you are looking for.”  

What resources need to be available?   
To smuggle effectively you will need a character from each of the factions, one Horde and one Alliance. These can be level 1 alts that you just leave in place when the smuggling is complete. Each side needs gold to list and buy, I keep a cool 1K on each of my alts to allow me that extra needed to snipe as well as list and buy. If each of your alts has its own guild, then smuggling becomes a once a month or once a week setup. Having guild banks helps maintain a stock of product that is not in use but will be smuggled with out having to leave it in the mail box of the alt.
Rule #3 when Smuggling: Be prepared with enough funds on all smuggling alts.

Precautions to take before smuggling   
Always assume there is a sniper getting ready to purloin your soon to be contraband. Flood the Neutral Auction house with “flack”, this is simply dumping stacks of 1 grey loot or single copper vendor trash. Dump 4 groups of 25 units each in the price ranges of 1copper, 1gold, 5gold, and the price range that brackets your product. Make the duration 12 hours. This adds confusion that the sniper must sift through in order to find your product. Because you are using the Auctionator addon you will never have to see this mess.

Don’t be a cheap ass?   
One of the reasons that people lose items to snipers is because they are listing there products at unreasonably low prices in an effort to minimize the Auction house costs. If you are smuggling realize that you are “Gaming the Game”. You are in essence doing something that limitations have been put in place to deter. The auction house fees though a little steep can be easily made up for when selling your wares on the opposing auction house. Don’t be cheap, list your items for an amount you would like to receive if you were buying from an auction house. This will keep your items out of the lower brackets where people have their bottom feeder addons working.  
Rule #4 when Smuggling: Being cheap is stupid

Process of smuggling?   
There are three different processes for smuggling.
1) With another person in the room.
2) With another person in a different location.
3) Alone

            When smuggling with another player in the room simply let them know when the item is placed on the house. They then search for it using the search function, and purchase it, preferably using the “One Click Buy” option previously mentioned. Other wise they are taking time to select, buy and confirm. Those three actions take time, time that the sniper will use to buy your item before they say “yes”.
            When smuggling with another player in a remote location it is best if you are connected by voice chat. Then it is simply let them know when the item is placed on the house. They then search for it using the search function, and purchase it, preferably using the “One Click Buy” option previously mentioned.
            When hotbox / multibox smuggling the process is different. On the first account you prepare the items you are going to sell, preferably stacks of the same item like wool. Set your listing time for 12 hours, this saves on listing fees. Prepare the receiving account by performing a search in the Auctionator buy tab for the item you will be smuggling. This activity sets up the search without having to risk your product. Now on the seller hit the sell button. Quickly go the buyer account and click the search that you prepared. Auctionator will display how many are available, click to buy and then just continue to buy until there is none left. When there is none left hit the search again just in case you missed one. Hundreds of items can be smuggled in seconds and with relatively little danger of a sniper attack.   
Rule #5 when Smuggling: Always be familiar with your addons.

            “But you didn’t address the Igore’s and Mail Opener addons”. This is true, Igore’s is a mass listing addon, it is self explanatory and easy to use in place of the basic listing options or the appraiser options available in Auctioneer Suite. Mail Opener is also self explanatory and easy to use when you are dumping your mail into your bags.
             So by selecting the right addons, configuring them correctly, and being diligent with your preparations you can smuggle huge amounts of product across the faction lines in a short time with very little loss. I have been using this technique for years and have yet to lose a single item to a sniper. I hope this article has given you the itch to see if you can smuggle across the line, the gold is there for the taking.

            Next time I will cover the economic spy. What they are, how to use them, and why bother. Here is a hint, there is gold to be made. Until then, remember, Time is Money, and if you spent time reading, then this article was worth the money.

Thursday, July 5, 2012

Pricing & Your Realm’s Population Part 5

This is part 5 of a 5 part series of articles concerning; Pricing Theories, Criteria for Pricing, Methods of Pricing, Customer Influences on Pricing, and Pricing Walls. When you have finished reading this series of articles you should have an excellent understanding of the many tactics used in the auction houses on every realm regardless of faction. You should also come away with an understanding of the basics for how to manipulate markets, and a grasp how much of an influence your servers population has on the “value” of items placed on the auction house.

Pricing Walls: The Good, The bad, The Profitable

What are Pricing Walls?

In its simplest form the Price Wall is when a banker places a large number of auctions of the same item on the auction house for all the same price. I say the “simplest” because there are several forms of price wall that you may not be aware of. These are the terms I think of them as:

·        The Variable Quantity / Maximum Price per Unit Wall
This wall is used to sell to various customers thinking of them as a stratus of affordability. The pricing is as high as the seller believes they can receive. A wall of this type would appear as a series of the same item auctions in quantities ranging from 1,5,10, 20, 50 and 100. All have the same bid price per unit and all have the same buy out price per unit.

·        The Set Quantity / Variable Price per Unit Wall
I also think of this as the Price Finders wall, in this situation the seller has chosen various listing prices for the same quantities. In this way the seller can determine the demand of a particular item and what the highest price is that the customer is willingness to pay. 

·        The Minimum Wall
This is an aggressive marketing control method where the banker has listed a large quantity of the same item in the same quantity for a very low price per unit. A wall of this type is good for brining down the perceived values of items on the auction house and messing with the pricing functions of the various auction pricing addons. It can also drive a lesser determined banker out of your chosen market.
·        The Maximum Wall
This wall is used to keep a lid on the inflation of a market. By listing a large quantity of product at the “maximum price” a banker can control the availability of particular resources. If for example you are attempting to drive gold gougers from your market then you would post the same product as the gouger but at ½ the price in a large quantity. The gouger then either buys your product (which is good for your purse) or the customers buy your product forcing the gouger to lower their prices or waste their listing fees.
A Maximum Wall that is maintained for a long period will act as a cap for the perceived value of that particular resource. Maximum Walls can be hard on the  purse if you are not prepared to hold your line.
·        The Quantity/Deal wall
Similar to the Variable Quantity previously described this wall has a graduated pricing scheme where the price per unit changes as the quantity of product changes. Generaly an increase in the quantity leads to a decrease in the price per unit though this is not always the case for difficult to acquire resources. I have seen the walls run in reverse the more Truegold in the stack the more the price per unit in the stack, a large quantity is hard to come by and the customer is going to pay for the convenience of that large quantity.
·        The Descending wall
This wall is designed for the long control of a market. It begins as a Maximum Wall setting a cap on the resource and over time the price per unit is reduced to a value the banker feels is appropriate. This type of wall is also used to drive a gold gouger from your chosen market. They are either forced to buy your “over priced” materials or they drop their prices, you then repeat the listing 48 hours later with a price that is lower still. Most gougers are in it for the quick gold grab and do not have the wherewithal to remain in a market that they perceive to be a challenge.

·        The Traditional wall
This is the Amateur’s Price wall. Easily recognized and combated. This wall depends on the seller having purchased all of the other available resources and then relisted them at their chosen price.

·        The Maximum Purchase Wall
This is not a wall you will recognize right away on the auction house. This is a wall that is observed over time. It is different from all of the other walls in that requires an observation of what is not there. If you are looking up a resource and you notice that the minimum price is the same over a period of time and the sellers are different then what you have is a banker buying all of the product up to a particular price point. They may be relisting it or they may be stocking a bank somewhere what they are doing you may not be able to tell, but knowing that there is a demand at a known price allows you the opportunity to flood that market and take as much of their gold as possible.

 How do you know when they are being used on you?
            Recognizing a price wall is fairly easy once you know what you are looking for. Pay attention to the items on the house and do not fully trust your addons to think for you. Note the various sellers and if any of them appear to be in cahoots with the exact same pricing scheme and alternating or same quantities. Also consider that some bankers use various other alt bankers to drive prices up just to drive prices down and make a profit doing it.

What can you do about them?
            How you respond to a price wall depends on the type of wall you are presented with. Each wall has a strategy to deal with it. The most expedient and sometimes easiest way to deal with a wall is to remove yourself from that market if it is causing you an issue. Store your goods and wait for the individual with the wall to get board and leave. This can be useful if you are going to be taking a break from banking anyway. Here are a few responses that you can use for each type of wall.

·        They Use: The Variable Quantity / Maximum Price per Unit Wall
You Use: The Maximum Wall with set values of 1 or 5. By doing this you will have a larger number of auction and the shear number of them at a lower price will drive their price wall to another page. Lazy buyers will not bother to look farther than the first page. 

·        They Use: The Set Quantity / Variable Price per Unit Wall
·        You Use: The Maximum Purchase Wall and follow it up with a Quantity Deal wall. This is a one two punch, you have bought all of their lowest priced items and then you begin increasing the value to the customer by increasing the quantity available and reducing the price per unit. Effectively throwing their “price finding” into chaos.

·        They Use: The Minimum Wall
You Use: Unless you have a lot of product you wish to dump just pack your stuff for a little while and come back in 48 hours to see if they are still there. You will never make a profit fighting a Minimum Wall war. There are only degrees of losing.   

·        They Use: The Maximum Wall
You Use: What ever pricing wall you like that is under their maximum price. Buying out a maximum wall is counter productive, chances are that the banker has made a concerted effort to keep an price lock on a market and is prepared to defend it by listing more at that price forcing you to buy more of their stock or take a loss for what you have already y purchased. Or in the case of items that cost little to nothing to list, they may be using the house as storage and placed a maximum wall with out realizing it.

·        They Use: The Quantity Deal Wall
You Use: The Traditional Wall and list your items at medium quantities of 5 or 10 per stack. The other more aggressive option is the traditional wall with a unit price that is just under their average, then list in stacks of 1 unit. This puts your auctions on the front page and drives their auctions to the farthest reaches of the auction house search.  

·        They Use: The Descending  Wall
You Use: The Maximum Purchase wall, build up a stock of their Items over time and when you have drained their stock relist in a Traditional wall. This requires you to be aware of the descending wall, have storage space and enough gold to perform this action. The other option is to recognize this wall early, let your product expire, and store it for a future point when the market is better. 

·        They Use: The Traditional  Wall
You Use: The Descending Wall
To fight this type of wall use a Descending Wall and force them to buy your product or be run completely out of the market.

·        They Use: The Maximum Purchase Wall
You Use: Traditional wall and flood the market at their purchase price point. In this way to force them to buy your product and you gain befit of knowing who it is that is stock piling or relisting as well as making a tidy sum.

This is the last article in the Pricing and your Population series. I hope that the series has enlightened you to the various methods of pricing and the influence your server’s population has on the amount of gold you make. Use your fellow bankers to your best advantage, play their markets to maximize your profits and remember if you are not doing they most certainly are.

            Next time we look at cross faction smuggling; how to do it without losing your hat, what you would want to cross the line and why having an alt on the other side is a good business choice. Until then, remember, Time is Money, and if you spent time reading, then this article was worth the money.

Sunday, February 26, 2012

Pricing & Your Realm’s Population Part 4

This is part 4 of a 5 part series of articles concerning; Pricing Theories, Criteria for Pricing, Methods of Pricing, Customer Influences on Pricing, and Pricing Walls. When you have finished reading this series of articles you should have an excellent understanding of the many tactics used in the auction houses on every realm regardless of faction. You should also come away with an understanding of the basics for how to manipulate markets, and a grasp how much of an influence your servers population has on the “value” of items placed on the auction house.

Customer Influences on Pricing

This part of the series details how the customers, the server population that is not bankers, will affect how you price your items on the auction house. Some bankers will claim that this information is unimportant. I claim that if you fail to pay attention to your customers, then they will go elsewhere and you will lose gold. These are some of the ways that the customers affect how much you can expect to sell your good for. 

The Perception of Worth
From time to time folks will quote a price in trade for an item… there will inevitably be somebody that claims the item is not “worth” that amount. The thing to remember is this; Worth is in the opinion of the customer. Just because one person in trade disagrees with your price doesn’t mean it is incorrect or over priced. However if you have been trying to sell the item for what you may view to be an inordinately long time, it is possible you value it too highly. Just because an item is classified as “Epic” due to its being purple, doesn’t mean you can expect to always get an “epic” price for it.

Actual Value to the Customer
All customers value items differently. You want to sell to the customer that values your items the most. Gear in the form of Armor, Weapons, ex., is fine for a one time sale to a customer, but you need to make certain that you have repeat sales. Gear is a one time sale and they move on. Provide your customers with consumable items that need to be replenished. These they will value above gear and will happily pay comparatively more per item when the amount of time is factored in.
An example would be the Darkmoon Firewater. Fairly easy to acquire and yet the demand is constant throughout the month. In the time it takes to clear a low end dungeon, sift the garbage, disenchant the rest of the garbage and vendor the grey, you can have several stacks of the Darkmoon Firewater. Now the gear you might list and receive your asking price, or you might not. You might have to relist it several times until the right customer comes along. With the Darkmoon Firewater though, you can list in stacks of 1, 5 or 10 and sell them faster. Taking less time and selling to more people, you have increased the demand for your consumable, in this way you make more profit than if you wait for a particular piece of gear to finally sell on the auction house.    

Willing to buy versus Have to buy
Customers come is really only two types, those that are willing to buy and those that feel that they have to buy.
The Willing to buy are the best customers ever. These folks are ready and willing to throw their hard earned gold in your direction just because they can. These are the folks that make offers on items, they help support their guilds, and they are generally nice folks. These folk recognize that what you do adds value to the in game economy and are happy that you are there so that they don’t have to do something they don’t find enjoyable. That being farming mobs, vendors, weeds, ore… you name it, if they don’t want to do it they will pay for the privilege not to have to do it.
The other group is the Have to buy. Not as useful as the Willing but still can provide an excellent income resource. These people will attempt to haggle you down and renegotiate a price and attempt to “accidentally” short change you. With these folks it is best to just list your items on the auction house. That way they Have to buy the item before someone who values it more finds it and buys it.
For example: Recently I had a fellow ask me about some star rubies. Feeling cavalier and generous I quoted him 5 gold each, for that is what it would take for me to replace them if I bought the ore off the house and then prospected it. His response was the equivalent of “go F##k your self I don’t pay over 1 gold ever for vanilla materials”. That was fine; I listed 20 on the auction house at 10 gold each and then bought all of the ore in question. His situation was a Have to buy, and he did about 30 minutes later. He got what he needed, I made a nice hefty profit. 
Bottle Necking
Bottle Neck Items are those crafting supplies that players grinding professions must have in quantity. Let me use Wool as the obvious example. Wool is used in various crafting professions and First Aid. Several stacks of wool must be acquired for any player to grind up their First Aid, or their Tailoring, less is needed for Leatherworking and Engineering. No progression can be achieved without wool at one point. This is a bottle neck and it is a money making opportunity. Few folks want to farm up the wool needed and even fewer of them want to sell their wool to others.
Periodically though the population will decry the price of wool and a few of them will attempt to drive the price down. Think of these folks as doing your farming work for you. Buy the cheap wool and store it for a day or so, these people rarely have the stamina to keep listing when they realize that their “sales” are not having the effect they want. Do not list any of your own, this will give them the false sense that they are “making a dent” in the wool market. When they have given up, as they always do, you have a back stock that is ready and willing to be sold to a population that has been starving for wool. I do not suggest this if you have limited funds, bank space or any other limitation that would prevent you from enacting this action.
The previous example is only one of many bottle necks in the game, your job is to locate them and exploit them to your best advantage. I good way to locate them is by watching the trade channel, for “WTB Item Name”, this is generally the first sign that a bottle neck has been hit. Go do some research and then if the opportunity is right, make some profit.

Realm Reputation and its Influence on Pricing
I cannot tell you the number of times I have read that people do not care about whom you are, they just want the lowest price. To an extent this is true, if all you are doing is listing on the auction house. If however you also play the Trade Channel, or in the case of my server the Trade and Market Channels, opportunity can be had rapidly and easily without ever having to go the to auction house. Developing a reputation for having an item or a series of items is as effective as having them on the auction house. Many is the time I have sold items directly out of my bank just because someone asked me for them and did not bother with the Auction house, or if they did, they thought that I might have a better deal than the house. Reputation is key if you are a social banker. Keeping your word, and calling others on it in public when they don’t, builds a loyal customer base. These are the people that you play with and sell to, you want then to like you and not be angry at you when prices creep up.  

So I hope the idea that your realm’s population is an integral part of your pricing scheme has been conveyed in an informative and entertaining manner. Play your customer base as though it were a finely tuned instrument, and profit will dance to your music. Part five will cover Pricing walls, the good, the bad, and the profitable.

Until then, remember, Time is Money, and if you spent time reading, then this article was worth the money.

Saturday, February 11, 2012

Pricing & Your Realm’s Population Part 3

This is part 3 of a 5 part series of articles concerning; Pricing Theories, Criteria for Pricing, Methods of Pricing, Customer Influences on Pricing, and Pricing Walls. When you have finished reading this series of articles you should have an excellent understanding of the many tactics used in the auction houses on every realm regardless of faction. You should also come away with an understanding of the basics for how to manipulate markets, and a grasp how much of an influence your servers population has on the “value” of items placed on the auction house.

Methods of Pricing

      Part 1 dealt with the theories that are employed when developing a price. In Part 2 we discussed the Criteria to consider when pricing. Here we discus the actual process for determining of pricing. In short, what to do to turn that hard earned loot in to digital gold. It sounds simple, put a price in the price slot on the auction house and then post it. And it is that easy. What that price is though is not so easy. I present you with five methods of pricing that have a return consistent with the amount of time taken to perform them.

Online Research
 I can not stress enough how important it is to understand what you are selling. Knowing what you are selling will help you price your items in an appropriate manner. If, for example, it is a rare item you may not know it just because the text is white and it is of a low level. The Roasted Moongraze Tenderloin recipe fits that criteria and yet sells for thousands on some servers. I recommend when determining a baseline for your prices, and then a trip over to to gauge if your chosen price is consistent with what is available on your realm.

Using an Addon to set your pricing
There is an old phrase, “you get what you pay for”, this is true with addons for the auction house. Yes they can be wonderful tools and help you post thousands of items at prices you like. They can also be used incorrectly and cost you thousands in gold for simple errors. Time is what you pay when using an addon. Be familiar with the addon, before you allow it to “peanut butter spread” your pricing. I know of one banker in particular, (points in the mirror), that understands the auction house addons and intentionally forces errors in the data gleaned by these programs.
When in doubt fix price your high ticket items when using an addon. Of course if you are posting in doubt then you are not paying attention, and truly deserve what you will get.

Using Server History to set your pricing
Server Histories are an interesting method to use. It works on the idea that what was, will continue. It is not the best method to use when pricing, as many items have changed over the history of the game. Some items that were “rare” are now common, for example, the Deviate Delight recipe. Once it was ludicrously hard to acquire and demanded hundreds of gold on the auction house. Now it drops like flies in the barrens and sells for silver on my realm’s horde side, and single digit gold on the Alliance side.

Using Price Check to set your pricing
The theory is a bad by itself. Actually using this method to price your items is… well let me say it’s like winning an argument on the internet. If you trust the population enough to post your items at their prices you WILL lose out. It is not in your best interest to price to the lowest common denominator. Never, let me repeat that, Never price according to the Price Check method.

Using consistent pricing
Consistent pricing is simple and can be very productive. If you find that you sell an item regularly at a particular price and there is little to no competition you are already practicing consistent pricing. It requires that you have done the research on the items you sell, the research on the realm you occupy, and you understand your auction house addons. This is truly a case of; do all the front work and then relax while the gold rolls in. It may not be massive amounts of gold, but it will be regular and consistent. Once the front work is done fine tuning on a single item by item basis is all that needs to be addressed.
This type of pricing easily allows for hundreds different items to be posted, and depending on the addons used, adjusted quickly and easily. The only time consistent pricing can hurt you is if the price you have chosen is inordinately high. This means you will list the items over and over and lose gold on the listing fees.        

I hope that this article has given you some ideas on how to price your items for sale. It makes references to auction house addons and I suggest that you go and do some research on them. is a good place to start that research. Next time we will look at the Customer’s Influences on pricing.  

Until then, remember, Time is Money, and if you spent time reading, then this article was worth the money.

Monday, January 23, 2012

Pricing & Your Realm’s Population Part 2

This is part 2 of a 5 part series of articles concerning; Pricing Theories, Criteria for Pricing, Methods of Pricing, Customer Influences on Pricing, and Pricing Walls. When you have finished reading this series of articles you should have an excellent understanding of the many tactics used in the auction houses in every realm regardless of faction. You should also come away with an understanding of the basics for how to manipulate markets, and a grasp how much of an influence your servers population has on the “value” of items placed on the auction house.

Criteria to Consider when Pricing

How often have you come across an item for the first time and had no idea what price you should place on it? Lots of folks use lots of different methods to determine how much to charge. In this article I will cover the most prevalent methods, discuss the ramifications of those methods, and in the end discus my preference. As you read through them consider that every criteria is weighed differently by all customers, RP’ers will value things that PvP’ers do not, and PvE players will value things differently still. There are collectors of; discontinued items, pets, mounts, gear, and the list of player types goes on and on. Hopefully this article will help you determine your criteria and reach your preferred customer base.

How difficult is the Item to Acquire?
This is the most misleading criteria. Difficulty is often considered in tandem with perceived value. The simple fact is that the difficulty of acquisition rarely has any direct effect on the price of an item. Many consistent selling items are fairly easy to come by, they can be bought from vendors, farmed from NPCs out in the world, or created by players. Many of these items can be priced several hundred percent more than their original price and still sell. Items that require the farming of thousands of NPCs will inevitably be valued less than items that are dropped in an high-end instance. So difficulty of acquisition is not necessarily a good measure to use when pricing an item.

How often is it on the Auction House?
Some items only show up on the auction house once in a very great while. The infrequency of availability of an item on the auction house is a good indicator of exactly two opposite occurrences, either the item is so rare that it is snapped up whenever it appears, or it is so useless that nobody wants it. Items like the Pattern: Star Belt, which is a low level pattern but demands hundreds on many realms because it is so infrequently available. When you look on the auction house and do not see your item do not just list it for what you think it might sell for according to its level. Look back at the first article in this series and use some of the ideas presented in it to help you determine the right price to sell it at.

How frequently is the item used?
Ideally you want to sell things that are used often by the population and that need to be repurchased regularly. Crafting materials, cut gems, enchantment scrolls, and potions all fall into this category. Finding out if an item is used frequently will help you determine a price that is high enough for you to make a good profit and yet still sell the item on the first or second listing. Becoming fluent in the requirements of the crafting professions is a must for turning a profit.

How rapidly has it sold in the past?
In business there is a concept called “turns”. Put simply it is how fast you make more money with the same money. Knowing how fast an item sells at a particular price point will help you “turn” your product into cash, and your cash in to more product to turn in to more cash…..Some items sell fast because of a patch release, others sell slow for the same reason. When considering how fast you want to sell an item price it appropriately. Lower prices sell rapidly, generally to other bankers, where higher prices take longer but provide a larger profit. If you have never listed a particular item historically, then do some research. Know what you are selling, and get an idea of how fast it may sell.
Is it an altruistic posting?
Altruism may sound like an anti-banker trait but you would be very wrong to think so. Many bankers, some that have played the game for years, price low end items at extremely low end prices. Their thought is that it provides for the market of new players and new characters. I used applaud this thinking. Now I take advantage of it. World of Warcraft is seven years old, new characters are easily provided with enough gear, bags, money, and materials. They do not need the auction house. Twink characters and Alt characters are the low end users of the auction house. These folks have gold and are willing to spend it to avoid having to do the quests for the gear, bags, and materials.

Is there competition for the sale of the item?
Competition is good, unless they have a lot of product and you have a little. If you are the one with a little then you might consider under pricing your item. It will do several things:
1)      it will sell your item first (generally)
2)      it will deny the person with more product a sale (always good)
3)      it will provide you will a faster return of invested time / money

If you are the one with a lot of the product to move you must consider the possibility of taking a loss or holding on to the product until the cheaper product sells. A third option is the buying out of your adversary’s item. I do not buy out a lot of my adversaries items if for no other reason than I do not know what they may have stockpiled in their banks.

Do you have a Regular Customer Base?
I know that there is a theory out there that says customers do not care about who the seller is, I claim differently. Many of my buyers have purchased from me for years, not because I am the cheapest but because I am consistent. I rotate my stocks of gear, I keep the cloth levels on my auction house at a profitable yet reasonable price and I deal with people fairly and openly in trade or in whisper. Reputation as a baker is important because if people like you, like what you do, and like how you do it, they will buy from you consistently.

I hope that this article has given you some ideas on how to look at your inventory and consider your criteria when pricing. Part three will cover Methods of Pricing.

Until then, remember, Time is Money, and if you spent time reading, then this article was worth the money.

Monday, January 16, 2012

Pricing & Your Realm’s Population Part 1

This is part one of a five part series of articles concerning; Pricing Theories, Criteria for Pricing, Methods of Pricing, Customer Influences on Pricing, and Pricing Walls. When you have finished reading this series of articles you should have an excellent understanding of the many tactics used in the auction houses in every realm regardless of faction. You should also come away with an understanding of the basics for how to manipulate markets, and a grasp how much of an influence your servers population has on the “value” of items placed on the auction house.

Pricing Theories

Pricing Theories are the most common methods for people to follow when listing items on the auction house. There are several theories used when listing items, they are as follows; The Lowest Price, 300% Rule, Trade Price Check, Supply & Demand, What the Market Will Bear and The Lazy. As you read through them consider that every choice is a valid pricing scheme. Not ever theory works to turn profits every day, and not every theory is designed to be helpful to the realms population. Many of them do not work consistently over time and have to be adjusted for.  

Lowest Price
As the name suggests the Lowest Price theory states that, “I list my items for less than the lowest available items on the auction house, I should therefore sell mine first.” To some extent this is true and several of the addon developers have built this functionality in to their products. There is a fallacy in this thinking though; automated pricing to below the lowest available price can interfere with your making a profit. Often individuals that use this price theory end up selling their items for less than they would receive if they had just sold it to a vendor. This leads to a loss of profit and a potential bonus for another banker who buys it and then re-lists it for a high price.

The idea behind the 300% theory is “I list my items at 3 times the amount if the listing fee or 3 times the amount of the vendor’s price.” This theory will provide a relatively low price on most items when compared to their item level (more on that in the criteria article). As with the Lowest Price theory the potential loss of profit can be relatively high. An Hyacinth Macaw sells to vendors for 10 silver, if you only marked it up 300% then your price would be so low that it would be snapped up the minute you put it up on the auction house. Leading, as with the Lowest Price theory, to a loss of profit.

Trade Price Check
This theory states that “People are honest and will answer my question honestly when I ask what I should charge for an item in Trade Chat”. To paraphrase a great statement; there are lies, statistics, and replies in Trade Chat, none are to be trusted implicitly. Consider that when asking in trade chat, a large portion of the responses will be useless and scrolling through them will be time consuming. Of all the theories of pricing this is the worst option. If by some chance a price is determined, it is most likely not going to be very profitable for the seller.

Supply & Demand
The theory of Supply& Demand states that “Prices vary as a result of a balance between product availability and demand for the product.” The issue here is that in a digital environment this situation is turned topsy-turvy. In the game there is nothing that cannot be acquired by every player that wishes to spend the time doing it. With very few exceptions, there is no effective limit to the amount, or type of items that can be acquired. Demand is often easily satiated at the high end, for equipment and materials in a relatively short period of time. After all a character can only use one copy of an item at a time and materials build up. Over time until there is a huge supply and no demand. This has happened with every expansion and patch, it will continue to happen unless Blizzard fundamentally changes the game’s drop system.

What the Market Will Bear
Unfortunately Blizzard has made this a very viable method of pricing. The theory states “I price my stuff at a highest possible price because people can pay it.” This is tied directly to the over abundance of in game gold. It is not unreasonable to expect to make a thousand gold in a single day. This has lead to the preponderance of extremely high prices for basic crafting supplies and low end gear. The negative impact of this is as follows; new players easily become dissatisfied with the prices on the auction house and leave the realm. This may be fine for one person but it is happening all over in every realm and Blizzard is directly to blame for it by making the in game currency so easily available at high levels but not equally available at low levels.  

The Lazy
The theory of The Lazy is my single favorite and the one I use the most when pricing. The theory states, “People that do not wish to perform the content of the game will pay extra gold to not have too.” Or as I prefer to sate it in my chats with others, “The Lazy and their gold are soon parted.”   This theory presupposes that the market is flexible enough to allow some over pricing of items, but not at the level of What the Market Will Bear. Individuals that do not wish to do the content will buy the items in question so that they may continue along with their game playing, and other bankers will not buy the items because the price is such that they will make a minimal profit. This theory is the most research intensive of all the other options.

I hope that this article has given you some ideas on how to look at your inventory and consider your pricing theory. All have their good points… except Trade Price Check, and all have their drawbacks. Part two will cover Criteria to Consider when Pricing.

Until then, remember, Time is Money, and if you spent time reading, then this article was worth the money.