Wednesday, June 9, 2010

Play the farmers



This entry is inspired by a post at maintankadin in one of the gold making threads that cropped up. It's the website that taught me and many others how to run a prot pally and not just face roll left to right. The proper way is from right to left. I felt that the theory behind it warranted going a bit more in depth with to explain and expound on. This is one of those times where if you're not consciously aware of something you can't do much with it, let alone capitalize on and take further. Here's the original question and answer I'm referring to and a link to my entry describing the effects of different markets upon each other.

Courtesy of Ceela from Neptulon-EU.


Rodos says:
Does anyone have a good strategy for artificially lowering the price of raw materials (other than dumping large quantities of said materials)?

Context: Primal Might sells well for me, but recently the price of Primal Air shot up to 60g each, and Primal Water is high too, which really eats into the profits. I sent Rodos out to Nagrand and sucked up about 5 air over breakfast this morning. I transmuted 3 and listed the other 2 at the current (high) price, so I'll get a decent return on my farming time either way, but I'm lazy and would prefer to just buy, transmute, list, collect gold.

How do I start a price war that I can capitalize on? I realize that if there's a real shortage there isn't a lot I can do, but I'd like to probe and see if I can bring some suppliers out of the woodwork.



Ceela replies:
Given time, the high price will encourage farmers anyway, as long as it looks like there's money to be made. You might be able to persuade them to farm more by buying one or two from each seller so they realise there's a profit to be made and start warring on price :) Alternatively, if you can spot a pattern in when they (re)list theirs, list a couple yourself just beforehand at a deep undercut to force their prices down.

On my server saronite ore's just on the downswing again from a big supply shortage/price spike. I'm not sure if it's a coincidence or not that prices started coming down again once I gave up waiting it out and mass-bought at the higher price, thus making it a bit more worthwhile farming (I suspect that nobody was buying at all for a while).



Given time, the high price will encourage farmers anyway
This is a fact of WoW. When profits get up there people will swarm to get while the getting is good. I wrote about it once while talking about the life cycle of different markets and the secondary ones that effect them. Encouraging people to look into farming it by posting in /2 on a few different names commenting on how the prices are crazy and how gosh darn, if only you could farm them yourself!

If nothing else, you can usually rest assured that prices will always be swinging so long as there's a relatively consistent demand. So if you are wishing the price on adder's tongue would go down, you usually just need to wait for it to happen. And sooner or later it definitely will and prices will crash then the cycle will begin once more. Be there when it's time to buy.

This is also the very same reason that I try to keep my prices low if I don't have a pseudo-monopoly (god that word sucks to type). If you saw that heavy armor kits or belt buckles were selling at 200g each, I think you'd try to craft a few to sell. After you undercut of course. Then another person gets the same idea of course. Then I have to be a jerk and crash the prices.

Of course.


Buying one or two from each seller
This is a great tactic for those that don't buy up everything they see regardless. But even if you do, take a look at who the sellers are. If you see somebody selling a ton of mats that are out of your buying range, buy a couple anyways to encourage them to keep farming. Eventually they will lower their price to either undercut the other farmers or to try and get more sales faster. Either way they'll all end up in your bags at the end of the day and that's the point after all.


List a couple yourself
A great way to manipulate the UF's is to give them the illusion of competition. The people that spend a few hours a day farming are willing to list their stuff at rock bottom prices if they have to so they can ensure daily sales. Also, they aren't usually clever or patient enough to buy your cheap wares and relist at their price. If you post a few stacks a little bit beneath theirs a minute or two after they do they'll usually still be there at their tent near the AH and post a bunch more under your. Then just hop onto another toon and buy them up. The only thing to be careful of is that you goods can easily be bought by somebody else and have no effect on the farmer at all, leaving you with less mats than you had a bit ago and usually losing a few gold as well. Granted it's a small risk but a risk none the less. However the fun when it works just totally makes you feel like a boss.


Prices started coming down again
When you buy up an ass ton of mats that's going to draw attention. If it's in a material flood it'll keep it going for a bit longer as people see there's still good profit to be made. If it's in a drought they'll still see that people are willing to pay a certain price and it'll encourage them to keep up the farming. Everything in the AH game tends to have an effect and, depending on the item, can have some very large and immediately noticeable ones. If you work it right they can greatly play to your advantage.


Thanks for stopping by!

12 comments:

  1. This is somewhat off topic, but it could be considered playing the farmers. But reading back in your Howto: alchemy post (New to the blog, working my way through the posts, this seems to be a slightly more "hands on" blog then gevlons and I like that) you mentioned that you would rarely make potions of spend. Now I'm not sure what it's like on your server but you can get lucky on tuesday raid nights fairly often when there are almost none on the AH. The farmers will rarely manage to sustain the servers demand for them on a tuesday and you can easily sell them for 200-300% of market price, then restock on a saturday for 80%.

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  2. This post is so relevant to a question I wanted to ask anyways..

    Reading an older post about your secondary and primary markets and how they pay together.. some things just weren't making sense.

    You were talking about buying all the stock of flasks, and then subsequently buying up all frost lotus to force supply down.. which forced people to farm (and by farming for frost lotus, it gives everyone herbs.. more herbs = cheaper prices..etc).

    But here's my question... If you are doing this to try and profit, you have to buy up all the flasks (which some will be at market, below maret, and above market. Then the same with Frost Lotus, and then you said buy up all the herbs too..

    This seems like you will be spending a lot of gold keeping herbs out of the AH... and when someone goes to farm wont they just list it for a higher than average price anyways?... (I know I would if there was nothing in the AH) making your attempt at dropping the price futile?

    I just don't see where or how the profits are coming in.

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  3. Now I'm not a great blogger or auctioneer, but I made an entry on my blog with my take on the manipulation described in your "List a couple yourself" section. I've only used this on Netherweave Cloth, but in many cases with great success. I list full stacks without buyout so I can just cancel the auction to avoid losses - and list stacks of 3-11 cloth on multuple characters. I risk losing a few gold, but the gains are just too good not to be doing this.

    Read here if interested http://mcschnitzel.blogspot.com/2010/06/bait.html

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  4. I was going to make a post tomorrow about the state of the market on my realm. I have noticed this week as I have started up the AH game that there seem to be very low stocks and very high prices. Ia m barely seeing any Outland herbs and certainly no inks. Northrend herbs have been consistantly highly priced and reasonably low stocks and the inks whe I check are usually around the 5g mark.

    Reading this post gives me hope that if I wait that stocks may improve and then prices fall. If not, I may have to go back to farming to get my own stocks up a bit. Fingers crossed that things improve.

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  5. hi,

    First I want like to congratulate you to great blog :) you have been great inspiration for me on my way to 50k gold (next stop will be 100k)

    I'd like to share one tip I accidentally found :) I was raising price on herbs for last 2 weeks (buying everything up to treshold and putting small batches of herbs back on AH at 200% price). I stopped it eventually, because it started to be boring :). Anyway, at one moment there was like 10-15 pages of every usefull herb. All of it was prices over 150% of "standard" AH price. And when I stopped buying/posting prices crashed to ground in matter of few days :) And guess who bought most of it?

    What a wall of text I wrote :)

    PS: Please, don't stop posting. I'll miss reading your blogs on coffee break..

    Detroier

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  6. @ Merl: Outland herbs make cheap decks for the Insane achievement and you're looking during the Faire week. I'm working towards this as well and if I see cheapies up I buy them up. Another problem is that people rarely farm them. Sadly, they are the easiest and fastest to get if you have an herbalist.

    We have a severe shortage on my server, I've tried gibbing prices during the weekend only to get bought out. Since I'm busy with my mega achievement grind anyhow, I'm just waiting it out. I figure when I see the next surplus for low prices I'm going to go hog wild. I have a gold-capped buyer toon set up just waiting for the return of the prices. I found out a while ago it was also a bad idea to make your bulk purchases on the same character you sell with, some of these sellers are also my competitors in other arenas.

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  7. @Zero I was unaware of the affect of Insane on the herb market (certainly the Outland one) but then it makes sense. I knew DMF was in town but hadn't thought about it much beyond putting up some cards I had in storage.

    Heh, and I do have a herbalist (druid naturally) and have been giving some thought as to doing some farming but the whole point of my blog is trying to leave the farming and enter the AH game. Of course, as Stockpile has pointed out, sometimes you have no choice but to farm.

    As a quick question Stock, when you are making vanilla enchanting scrolls, do you make normal vellums or vellum IIIs. I know that it would be easier just to make the IIIs due to ease of materials but am wondering if it would be cheaper to make the lower level. I'm hoping to check myself once the faire leaves and the stocks return.

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  8. @ Draken
    It may just be my server, but I've never once seen potions of any kind above the material costs. Unless potion mastery procs every single time it's a waste of money to make them. Good to know that's not the case for everyone though.

    @ Outlier
    Sure the prices will eventually go up along with the supply and as supply goes up prices will go down. Meanwhile you have a ton of low end priced flasks to sell so when prices peak from your buying spree you can drop them all for a good profit. mostly because flasks tend to move at lightning speed.

    @ Destroir
    Good to know that the theory is sound and has been put into practice with success. This is one of the things that I don't know for sure if I've done or not, but the theory is sound. And according to you, it works like a charm if the timing is right.

    @ Merl
    For vanilla scrolls, I'll generally try to buy low level vellum's from the AH as people make them while leveling inscription and sell them for a few silver each, but I'll never make them. But if I can't find any cheap low level vellum's then I'll just use the NR level ones. Also don't be afraid of buying cheap TBC herbs if you are extra short on inks. Etheral ink is the second most commonly needed ink so a good price on them is worth it, but you do lose the option or trading them in for a different type.

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  9. @Stokpile

    Thanks for the advice. I shall be keeping an eye on the AH now. Just as an amusing aside, I realised that the enchanter on my GFs account might just have some vellums in stock in her guild bank. Low and behold, several of each sort. Looks like my inate knowledge of our stock failed me this time.

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  10. Totally offtopic here, but that new Remote AH feature is complete win. The fact that it costs less than 10 cents a day is even more win. I can scan the neutral and home AH while sitting at work taking breaks. I even picked up a few bargains and new toys for my toon. One thing that always made me mad was losing out on good bargains that pop up while I'm not around, no more excuses!

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  11. @Zerohour
    Talking about bargains, I picked up Plans: Saronite Swordbreakers for 600G last night. Sold the plans 4 hrs later for 3999G. A nice 3200G profit (after AH cut)! My biggest single sale to date. My turn to say Booyah!

    The same person posted 3 other toc patterns and plans for 600G. I bought them all :)

    @Stokpile
    Good stuff as always. Now please leave tailoring and enchanting alone. Work the gems and glyphs for a bit :)

    Happy Happy Happy,
    Mulegirl

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