Tuesday, January 18, 2011

Auction House Nirvana: Part 1

NOTE: When I first started to write this I had planned on it being one long entry, but it grew and grew to the point that it because a several page monstrosity. I've split it up into 3 entries to give you a day to digest what you've read in between.

Part 1: The Introduction
One expression that has been universally heard a million times too often is "find the happy middle ground." The (almost) universal response to that is "WTF are you talking about?" As you've likely guessed by now, I'm going to do my best to explain what that is and how to find this open air concept of making gold.

This middle ground is not a means to make gold or some fancy hidden secret market. It is nothing more than a method to increase your already existent cash flow. It strengthens your already firm grasp of a market. If you're just starting the AH game you have to GET to the middle ground. If you're in the thick of things, you just need to know where to stand. This middle ground is the single difference between those that are simply rich and those that are wealthy.

This middle ground is a cross roads with an expensive toll that you get to set. The cross roads is a thousand miles away from the casual farmer working on becoming the next big AH baron. You have to go a certain distance before you can get there. But once you do what you've accomplished already will be set in stone and all who wish to pass must pay your fee.

If there ever was a "true" gold making secret, this is it. But it's infinitely more abstract than anything else you'll find in the AH game. It's not a secret farming spot or an item that sells for thousands hourly. It isn't evern a method per-sé or undercutting strategy. It is an idea.

First I'm going to revisit the standard AH cycle of profitable markets.

A Widget sells for 200g each and is in high demand.

You craft and sell many Widgets a day.

People notice that you can farm a Widget easily and begin to do just that.

People begin to sell and undercut their Widgets on the AH.

A Widget now sells for 20g each.

Due to reduced profits people stop farming widgets, reducing supply.

A Widget sells for 200g each due to high demand.

Make sense? Let me explain that a little further. The basic thing here is drawing attention to yourself. When people see that something is easy money, they'll flock to it like moths to a flame. This increases the supply which in turn will lower the price. The people that just got into it will leave because the easy money is gone, reducing supply which will, that's right, raise the price.

This is the reason that I don't sell berserking scrolls for 700g each when I know for a fact that I can. This is why you should undercut by several gold at a time and not by copper. This is the middle ground you need to find.

Check in tomorrow to see how this relates to the so called middle ground and how to prevent costs from falling.


  1. I've been reading this blog from half wotlk, so i break the silence to say: great post once again (thanks for sharing)
    (tho i'm not an ah dealer cuz i'm lazy and feared of spending too much time)
    anyway... my question is: you still undercut manually or you use % of undercut?
    (i'm refering to http://theahpile.blogspot.com/2010/01/profession-how-to-undercutting.html)
    (thanks again for making this blog live once again :D )

  2. @ marco
    I use the automatic function of zeroAuctions to undercut by a set amount. Different markets are different of course. For bags I only undercut by 1g as they tend to sell fast, but other things like leg armors or high end gem cuts I cut down as much as 10g. It's all about balance as you'll see in the coming entry's.