Tobold's Blog
Wednesday, January 07, 2009
Market advice and market size

Gevlon, the Greedy Goblin has an interesting post up in which he explains how to make 1,000 gold a day by selling glyphs. Only problem with the advice was that I tried it, and it didn't work on my server. The materials (herbs or pigments or inks) just aren't as cheap on my server as on Gevlon's. And there is a lot more competition on the glyph selling side, driving the prices and thus profits down. I'm not saying his advice is bad, it is just not working for every faction on every server.

In another example I've been making good money by buying cheap Spellweave, Moonshroud, and Ebonweave for around 150 gold each, turning 8 of them plus other materials worth around 200 gold into epic robes, and selling those robes for up to 2,200 gold. Minus AH fees that comes out to up to 700 gold profit per item. But after having sold a couple, one or two other people had the same idea, so the prices for the cloth shot up, and the prices for the epics went down. So this is another idea which *might* work for you to, but isn't guaranteed to.

A major part of that equation is market size. Demand for epics worth over 2,000 gold is limited. Demand for glyphs is also limited, because people just don't change glyphs all that often. Other parts of the market are far more liquid, for example herbs/potions, ore/gems, or regular cloth. A single inscriber can crash the market for glyphs, but a single jewelcrafter won't crash the market for gems. And of course market size also depends on what faction you are playing on what server. On my server there are twice as many Alliance than Horde, and it shows in the AHs (which is why I have to use my Alliance bank toon sometimes to buy stuff for my Horde characters). Less populated servers have less liquid markets than more populated servers.

Small, illiquid markets can be both a problem and an opportunity. If there is only 1 item of a given good is sold per week, and several people try to sell one, they end up underbidding each other to the point where there is no more profit to be made. Some guy just decided to make 10 Spellweave Robes to level up tailoring, and you can forget that market for a month. The opportunity is that if a certain item doesn't sell very often, there is a good chance that many people long gave up on it, and that there is currently nobody selling one. If you are the only seller, you can dictate the price, within limits.

So "how to get rich quick" advice for World of Warcraft is rarely valid everywhere. A few people on your server having read the same market advice can completely spoil your profit. Big, liquid markets are more stable against such perturbations, but small, illiquid markets have their own opportunities. You just need to find them for yourself.
Almost by definition, the market will be different on every server. Also, WoW's player economy is very limited (compared to some other games) for a number of reasons, and thus easily manipulated, to the point where a single player can inadvertently causes massive up/down trends on various commodities.

Also, "How to get rich quick" advice becomes obsolete as soon as it is made public. Just look at RL - who do you think actually gets rich from promoting get rich quick businesses? Even if the advice was valid, the sheer number of people who jump on the bandwagon will quickly make it unviable.

If you want to get rich on the markets in WoW, or any game for the matter, you have to do your homework and figure out what people want and how to supply it at a price that's more than what you paid for it. In some games this is easy, in others, less so, but it's the same principle everywhere.
Tobold's tips for DEing renown items in Warhammer actually took a while to catch on. I made a few of the purple 'permanent' STA talismans and made a good chunk of cash. Too bad I don't really play warhammer.

I've spent about $300 on server transfers in WoW, though, during my time with the game, and one fun little 'minigame' is trying to figure out what sells on your old server and stocking up on it before moving to the new one. Is the new server full of lazy people, and primals go for three times as much? Or are they overfarmed, but enchanting mats are in demand? It's an interesting thing to consider before hitting the switch on an xfer, but not very useful in 'day to day' operations.
Agreed. You're lucky if the item you try to produce is not being produced or sold by someone else. Otherwise the profits just aren't worth it.
I usually recommend people to pick up two gathering professions. They do not have to worry about market prices, they will always make a profit and spend less on recipes and levelling.

I must agree, I doubt the value of those "how to get rich" guides, too. The general hints are usually much more helpful.
Of course the profits are lower if there are competition. That's why I have to switch fields fast if someone want mine.

BTW my post for tomorrow will be about exactly the effect of the server size.
Part of the fun (for me, at least) is to figure out ways to make profits in the market. Generally, one can find much better ways by yourself, versus reading a guide somewhere. As others have mentioned, once it's in a guide, it's become public knowledge, and won't be as profitable in a short matter of time.

Well, unless you do something obvious, like buy stuff that people are just trying to unload. Pre-TBC, you'd occasionally find Blue items that people were pricing too low that you could easily resell for a nice payout provided that you didn't mind waiting a few days.
Even on the same server AH prices and availability can be markedly different between factions. For example, on Cairne Netherweave bags were going for 10G+ Horde side, Alliance side I was able to pick them up for 5G.

There may even be a market opportunity there ;)
Specific market segment guides may be obsolete once aired, yes, but distilling the principles of market functions allows for someone to find these segments on their own. Sort of the "teach a man to fish" thing, just by example. Once you know what to look for, you can then go fishing on the market. That's what I get out of Gevlon's work, more than a specific "recipe for riches".
The smaller the market, the less competition and thus better margins. I notice that even across factions, where on my server Alliance outnumbers Horde.

I broke the 214k gold cap mostly by crafting and selling epics. But if I wanted to make serious money, I'd rewrite Auctioneer to automatically execute my buy/sell strategies.
My server has an 800+ queue time almost every night, so I stay out of the market as much as possible.
I think you're missing the point of Greedy Goblin's post. The point he is making is that he makes large amounts of game money using a sophisticated corporate-like business approach. In an earlier blog entry he describes using a blacksmith as a "factory" to mass produce belt buckles for him to retail. In this post he is describing his stock management process which allows him to operate in a more sophisticated way than most glyph retailers.

It's interesting and useful that he is using an alt inventory monitoring program to monitor his sales and react systematically based on that. It's not particularly interesting or useful to most of us that certain market gaps exist on his server (but not on ours).

Look at how he's making money not what he's selling today.
Because of the human factor and easily manipulated prices, it all comes down to knowing the market, the items sold and working with several, changing strategies. There is no set strategy to accomplish great wealth in WoW, nor in real life: there are some tools to make it easier, and there is no tool more important than information.

On the Glyphs: the mean prices of them are way lower on the server I'm in, but still I made some nice profit in few hours by purchasing low and selling at 'reasonable' price. On the other hand, tyson at mmo Auctioneer does quite the opposite: he attacks the epic's market and quite easily gains nice profits from them. IMO this requires some serious knowledge of the epics, something I don't have any real interest to invest my time.

Risk a little, gain a little.

On my server the Glyph market is very competitive but I am lucky that I can spend a good amount of time scanning the AH and making sure my Glyphs are the lowest price. I make anywhere from 800 to 1200g a day just from selling glyphs so it's working out well for me so far. I had been farming my own herbs and milling them but I am debating just buying the ink and selling the herbs as it seems to be cheaper. I pay about 2.5 gold per ink of the sea in the AH versus around 5 to 6 gold an ink milling my own herbs based on what I can sell my herbs for. The dark horse in that is the price of snowfall ink is close to 75 gold apiece at least until the next patch so it might be more profitable to mill I guess.
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