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.

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