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.

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 www.wowhead.com when determining a baseline for your prices, and then a trip over to www.theunderminejournal.com 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. www.curse.com/addons/wow/category/auction-economy 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.