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3 Biggest WoW Auction House Mistakes

Over the course of my WoW career I have made no shortage of mistakes and errors when trying to play the auction house. It’s just a fact of life, prospective financial systems…both in the real and virtual worlds, are subject to poor decision making. But, if you want to win you’ve got to play the game. Some of my mistakes hold a special place in my memory and these are those stories.

1. Arcane Dust Monopoly Experiment

It was about halfway through the Burning Crusade. I had been playing around with the idea of trying to monopolize a particular good and hold theĀ  entire market for a long period of time. At the time I was the wealthiest player on my server, with around 150,000 gold, so I was feeling pretty big and bad. So, after a few weeks of waiting I just did it…bought out the arcane dust wowentire auction house of arcane dust and inflated the price 300%. At first it was going great, I was making sales and it was looking perfect. But very quickly the AH started to fill back up.

To maintain my monopoly I continued to buy the incoming dust and after and initial 5,000 gold investment and 2,500 gold of continuous buying I finally gave up. But it was far from over. After it was all said and done I had 2 complete tabs full of arcane dust stacks, which over the course of the next 2 years (…yes, 2 years) I sold for an average profit of 0.5 gold per dust.

So what did I learn from this? Don’t try to game the auction house and create a monopoly of a good that is easily supplied by virtually any player

biggest wow ah mistakes2. Epic Item Failure

In my early days of AH farming I had always eye the big money items. Back in classic when a big epic item investment was 1 – 1.5K gold. There were big profit margins and I wanted in. So, after watching the market for what felt like a long time (in reality only a couple of weeks) I decided to make a go on a few different epic items. I spent nearly 2,000 gold on 2 weapons, which I thought were undervalued by around 50% for each item.

In any regard, I was unable to sell these items after around a month of listing and had to take a 30% loss on each of them just to move them before the expansion (TBC) was released. I today’s terms I didn’t lose a huge sum of gold, but back then 2,000g was a huge chunk of change and worth about $125 / 1000 gold on Chinese gold selling sites.

What did I learn? If you’re going to work in high value markets you’ve got to be 100% certain you know exactly what is going on in that market. High value items are risky and can burn you quickly if you don’t know all the facts.

3. Pricing Wars

This whole “mistake” is better said as, “don’t piss off the wrong people”. During TBC I was one of two gold making machines on my server. I always kept an eye on the other prominent gold making giant on my server, often watching the markets she was working and sneakily undercutting her. As time went on I wanted to push my gold making potential even further, so I started moving more and more into her markets and undercutting her dramatically.

Needles to say, she didn’t appreciate it this, and virtually over night began systematically targeted the item niches I was working in. Over the course of the next several months we battled it out, continuously undercutting each other. As WotLK drew near she disappeared once again, presumably to take a break, and when she returned it was as if nothing had happened. Either through forgetfulness or foregiveness the pricing war that wouldn’t end was finally over.

What I learned? Don’t engage in unnecessary pricing wars. In the end it just hurts the profit margins of everyone involved. Better to play nice and let everyone have their own share of the pie.

  1. WoW Gold Tips – Auction House Buying Strategy
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  5. 3 Gold Tips for Cataclysm Preparation

Comments

6 Responses to “3 Biggest WoW Auction House Mistakes”

  1. Kammler on November 2nd, 2010 10:10 am

    Great tips, especially #s 2 and 3. I have never been in a pricing war (not a big enough player I guess) but have reaped the rewards when they have happened! Buying cheap is great when you can do it.

    On the “cornering the market” idea, I can say that it works in small windows but the results may not be worth it in the long run.

    For example, on my server I moved on Silver bars and ore, buying all there were and listing for 125%. My goal was to see what would happen. The window lasted about two weeks.

    I bought bars and ore for anywhere below 90% value and relisted at a firm 125%. At first they sat, but gradually they sold–too much demand for silver by tradesmen. As new supplies came in, I bought them all and relisted. Over two weeks I spent 5.5k gold and earned just over 9k gold, for a tidy 4.5k profit.

    I then got out of the market entirely. I just stopped buying new listings. The result was oversupply–I was the biggest buyer and when I stopped, the market crashed.

    Now, silver bars sell for 2.5g each (my old price was 4.5g) and ore sells for 5g (my old price was 7.25g). My theory is that miners farmed a TON of silver and slowly put them in the AH for what they thought were good prices–whatever the level was that I was buying. When I stopped, they were left with stockpiles that they couldn’t move.

    Net result? Yes, I got a tidy profit, but the whole market for silver has changed and remains changed months after my little experiment. The lesson here is that yes, market domination CAN work–for some items for a short time–but the final result may be to completely alter the landscape for that product.

  2. MoxNix on November 2nd, 2010 2:34 pm

    I am one of those “wrong people” you don’t want to piss off. I used to just sell epic gems, that was it nothing else and made plenty of gold doing it. I’m easy to get along with, willing to share markets… Then one day the other big JC on the server decided he could run me out of business.

    He bots on multiple accounts so he can constantly undercut every minute or so without a break and he’ll go below cost subsidizing losses from profits in other markets until the competitor gives up. That tactic had always worked for him in the past to force competitors in other markets out of business. I tried to warn him he was going after the wrong guy this time, that I wasn’t going away no matter what he did but he just laughed.

    Now more than a year later I’ve expanded into many other markets (all cut gems, enchanting, flasks, materials, etc.), taken over virtually all of the most lucrative niche markets he used to control (meta gems, belt buckles etc.). I have a massive snatch list now, half of which I started buying just so *he couldn’t get it cheap anymore. I’ve also helped a few of his competitors in other markets learn how to fight him effectively.

    The funny thing is If he’d just been willing to share the epic gem market in the first place I still probably wouldn’t bother with anything but epic gems. I’d be making a lot of gold but he’d be making a lot more with no serious competition in several other markets. Instead due to his own need and attempt to grief me he’s facing stiff competition everywhere, I’m making more gold than before (though with a lot more time invested too) and he’s making a lot less.

  3. Zuggy on November 2nd, 2010 3:14 pm

    @Kammler – That’s a really intriguing story about the silver ore market. It’s one that has been theorycrafted time and time again on all kinds of blogs, but rarely have I seen it successfully work. Sounds like you really just employed very basic economic principles. I will definitely have to give the faux inflated market a try, sounds like it could be fun. =)

    @NoxNix – You sound like “one of those people” =) The auction house really is like a recess in elementary school. Play nice or someone is going to lose an eye…or all their gold.

  4. MissMediocre on November 2nd, 2010 9:46 pm

    Lol, I’ve never been part of a full on Pricing War, but they sound scary! I always try to play nice, but it is easy to get caught up in a little AH PvP from time to time! I also made the epic item fail mistake when I first started trying to make gold, and lost about half of the gold I had :S All good learning experiences though :D

  5. Kammler on November 2nd, 2010 10:13 pm

    @Zuggy–thanks for the comment. Always nice to hear someone of your caliber give positive feedback. I usually feel like such a noob when I read your stuff, and other legends too…lol!

    You hit the nail on the head in your post about research. I watched the silver market for a long time, three weeks or so, and tracked the high/low prices, volumes, days, posters, etc. I made a spreadsheet and finally decided to buy on the high inventory day. Prices were lower, and I figured it would draw out the stockpiles, if any, that other players had. It did, and the next listings were all higher prices–demand, they figured, more profit. But I wasn’t buying at those prices.

    Those auctions stayed there 48 hrs, some sales here and there, but most expired and re-listed around the regular prices. I bought all them again. After a week, almost no new postings, just the random player who listed excess stuff now and again. At that point, I was King of the Silver–for about a month or a bit longer anyway.

    Feel free to PM me if you want more details or flavor. I have case studies on other items. I have replicated this multiple times, but in a less drastic fashion so as to not affect the long term stability of that item’s value.

    @Miss Mediocre, I feel your pain. I think I have made every mistake I have seen posted in the carnival, rofl. Investing in bad markets, undercutting and getting spanked, failing to seize opportunity when it arose, you name it. I still have a Bold Cardinal Ruby I carry in my AH toon’s bag as a visual reminder every day about making stupid choices.

    I think the key is diversification. If I see I’m getting undercut a lot in a market, I just pull out until the flurry is over. Right now I have 240 stacks (and growing) of rugged leather in one of my guild banks for that very reason. Some yahoo started posting his rugged at 10s below my prices over the weekend. Every posting, every day since last Friday.

    So ok, shoot your wad. When you are done, the market will stabilize and I will earn my correct margin. I still buy all the rugged I can at value (66% value or less) and I spend my time with ore instead.

    Great comments from all.

  6. Zuggy on November 3rd, 2010 12:58 am

    @MissMedicore – I know how that is…you can get burned easy, but sometimes, no guts no glory. =) Who needs gold when you’ve got fishing though.

    @Kammler – I’m so glad you said this, because I think this is biggest mistake #1 for so many players…

    “I made a spreadsheet ”

    Or rather, lack there of. So many aspiring AH farmers just want to get a few addons and start bringing in bank, but the fact of the matter is you’ve got to do your research first and you’ve got track prices. If you can do it with an addon great, if not…you need to figure out what works for you.

    Spreadsheets are a super easy and effective way and really should be used by more players.

    I really am interesting in hearing the full story on this case study, Kammler. If you’d like to do a guest post on this, or another situation, I’d love to feature it on my site. Drop me an email via my contact form and we can talk more.

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