Thursday, March 17, 2011

Vicious


Today's post is about being an absolutely ruthless shark on the AH. What I write about today I only do when somebody is really on my nerves or is trying to muscle their way into an important market of mine. It happens the most with gems because ever since wrath everybody and their mother seems to have a JC. It happens daily with glyphs but I stopped caring about that bit once you couldn't trade IotS down. But more importantly it's about the fact that you MUST care about your competition.

Let me be clear though, I am not advocating running around being a dick to everyone that wants to sell 5 gems a week to cover repairs. I'm talking about goblin against goblin. Serious competitors that are trying to run you out of your own markets and not some random dude trying to make some quick coin. If your MO is to ensure that absolutely nobody but you can make gold on the AH then stop reading please.

This is about business, it's not about getting personal. You may not like your customers, but they are your customers none the less so you have to respect them. The dude working in a diamond mine being whipped so he works faster helped put that ring on your wife's finger. The guy that spends a weekend flying in circles around Uldum put your bank account to what it is.

And don't forget that you have to let some people make gold on the AH or they won't be sending any your way. After all, how can they afford your awesome purple shiny if they can't sell anything in the first place? Defend your markets but don't try and make them unusable for the casual seller. They're just as important to the economy as you are. That being said, lets move right along.


First here's a quick tip I thought was both hysterical and greatly practical from a commenter.

Crusard said...

"I have another, slightly more aggressive, way to monitor competition. If I see a someone undercutting me often I have a macro I use to "annoy" them (it is a full block of {x} symbols) till they put me on ignore. Then I can see them and they can't see me. This will not net you any sales but it will make your presence undetectable by your competition (at least your online status)."


Some people only care about their time and their profits when they work the AH. If this is your primary concern as well, then you have failed! You absolutely MUST consider your competitions profits, supply, habits, etc. Your fun comes from collecting gold from the mail and what everyone else does has a direct effect on that. I want to make as much gold as possible and especially in as many different ways as possible. I love exploring new markets and new niches and when I find one that's out of the ordinary I'll defend it to my last copper so I can keep having fun with it.

I am very willing and capable to undercut you by 50g per gem even if that puts me down to material prices and below. I don't care, this is my house, this is my market. And you, You're only visiting.

One thing that I do is I always cancel my auctions before I relist more. I do this to hide the stokpile of goods that I have so that some people are a bit more likely to invest a good chunk of their gold into it. Then I'll stop canceling and just list more gems. And more and more and more! I'll keep listing for 48 hour periods until I have two full pages worth of the same gem up. I know you're thinking right now "But Stok, won't you lose a ton on deposits?" Of course I will, but I don't care because I can afford it. The point here is not making money per sé, but to ensure that I can continue making the same profits later on.

Think about it. If you saw that somebody was willing to list 20 of every gem even down to -your- material costs what would you be thinking? The message that you're trying to convey here is that you have a mass amount of things that you can sell in many different markets and don't care if you lose money. I don't care if I lose money not because I can afford it, but because I want to ensure that you make zero.

And once you list close to or at material costs I'll buy up every last thing that you have leaving you with even less gold than you started with. This leaves a very bad taste in the mouths of the competition and makes them far less likely to try and move in on another market that you own.

When you lose thousands, hell even hundreds of gold in a single market you're not very likely to risk that again. Unless you're swimming in gold and can afford it. Suffice to say when somebody tries to take over one of my markets profit becomes a non-issue. Any other day making gold is my bottom line goal, but now it's no longer about the money.

It's territory.

Yes the AH is mostly about being clever and resourceful, but it is just as much about standing your ground. Are gems making you a killing each week? Don't give them up! Don't let anybody take over a single gem cut that you can do! Take no prisoners! And above all else, do not make a deal to "share" the market because it's only a matter of time before they go back on their word. They may be reasonable, they may be just like you. But when money is involved, real or otherwise, it changes people.

People can bitch all they want about high prices but they'll never sell a flask for 50% of the material costs "just to be a nice guy." And just the same people can piss and moan all day about being undercut by 200g. That doesn't stop them from buying the cheapest thing they can find even when it's because "some asshole" undercut "some nice cool guy eh" by 200.

Fact.

So what's the lesson to be learned here? Don't let somebody take over just to "be a cool nice dude." That's going to cut your income in half. And if you only want enough to be independent then you probably wouldn't be reading this in the first place, that's not who I'm writing this for. If you share the market and do not stand your ground when serious competition shows up you're not going to get to the gold cap until level 100.


Thanks for stopping by!

13 comments:

  1. Awesome Post stok, I tend to try and be the "nice guy" however I've reached a gold "plateau" I think starting to get a little more vicious is just what I need to do,Profit margins are getting tighter and I need to squeeze my competitors hard. This'll go a long way to helping get rid of that attitude. ;)

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  2. I usually like your content but today's post is a train I just can't ride.

    On the one hand you say you aren't interested in hurting the guy selling 5 gems a week to cover repairs, and that if "your MO is to ensure that absolutely nobody but you can make gold on the AH then stop reading". You want folks to earn some gold so they can afford to buy other items like your "purple shiny".

    Then on the other hand you advocate posting walls of gems at or below materials cost to drive out competition. You say its about territory, not profits. "Take no prisoners" is the mantra you advocate. You promote ethically questionable tactics like spamming a player until he ignores you. You even say "it's territory" that you are protecting, not market stability.

    These positions seem very contradictory. By playing PvP and driving out any competition you hurt that guy selling his 5 gems to cover repairs as well as anyone who needs to sell gems to make some gold to buy anything. By controlling materials you make it even harder for the casual player who needs to level up a profession.

    The weapon you advocate in AH PvP is a Broadsword, not a scalpel. You can't refine your approach to only hurt the guy trying to carve out a niche market here or there. You will inevitably cut anyone who has an auction listed there.

    You clearly don't need the gold income. You have capped and could most likely dominate any market you choose to enter by drastically undercutting everyone and driving out any competitors. It seems the issue for you is control rather than gold--power, not profit.

    I'm certainly not challenging your skill or experience as a goblin. You have achieved much more as a gold earner than I ever will. I just think it is important to call a spade a spade.

    If the point you are making for an aspiring goblin is to be a ruthless tactician who is prepared to lose gold to protect a market then just say so; but please don't somehow disguise the effort as being 'market friendly' where you let other people earn a profit. It is clear that any profit others earn may threaten your market dominance, thus risking that they incur the Wrath of Stokpile.

    I mean no disrespect, but when you talk about AH PvP there is no balancing action. There is no equality. Like I said, you are a L85 with full Epic raid gear--I'm still wearing quest greens I suppose.

    AH PvP can have only one winner--and everyone else who gets in the way, intentionally or not, becomes a casualty of that war.

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  3. Kammler I see what your saying, but I don't see a way around it. There is no way for him to defend his markets, but not hurt the casual seller temporarily in the process.

    I think what stok meant though was if he finds a competitor who is only listing a few gems here and there then he will let that slide, but if someone puts up 5 of 40 different cuts then he has no reservations about making that decision unpleasant. Will casuals be hurt when that happens. Of course, but its easier to defend a market then to take one over.

    I'd like to make one last point here and I want to emphasize this. I'm tired of seeing gold makers get demonized. Nothing Stok sells is required to play the game. People CHOOSE to pay for his services. In the end it is Stok who is at the mercy of the consumer and not the other way around.

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  4. @ Syn
    You don't necessarily have to be at a certain gold level in some cases. Theres a few people that fight tooth and nail to control certain niche markets where there isn't a ton of gold to be made. But if you're trying to defend the entire JC racket then yes you're right, you do need a decent amount of gold to ante up.

    @ Kammler
    If you would have read the second paragraph a tad more carefully you'd see that I am in no way contradicting myself and you wouldn't have to write a page in response. But let me reiterate to make it more clear.

    I am talking about when one goblin is trying to take over one of your markets and force you out. Yes the market will be bad for people then, but what are you going to do just hand it over? Make a "trade agreement" with them that they're 90% likely to break in two days?

    I am failing to see how this can be misunderstood.

    @ Dale
    Spot on. If somebody wants to sell something I don't care because I don't have to care. I won't ruin somebody's day unless they give me a good reason to.

    As for demonizing gold makers, that is wow hypocrisy at it's finest. People only complain about bad markets when they want to sell in them but never say a word when they need something from this bad market for cheap.

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  5. Stok -

    How much time does defending your markets take you? No way you're just using TSM - you're talking about walls, varying post durations, amounts posted, monitoring your competition (which even auctionator doesn't do). You're talking about full on AH-pvp (via auctioneer, I'm guessing).

    That takes time. Maybe I just don't believe that other goblin's psyche's are so simple or easily manipulated, but I can't feature spending this amount of time on my AH with gems (18 cuts now) and seeing much of a GPH payoff.

    It kinda sounds like you're on the specialize side while I'm on the Diversify side. And yet - you're capped, and I'm only a quarter of the way there, so I could be dead wrong. I say all this from a 'different strokes' perspective, but also in an attempt to better understand how this could help me.

    I've made the transition from small-time to medium-time, and now I want to go big-time...

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  6. In all my playing I avoid the big fights. Post all you want for a wall of gems. Doing that to annoy someone leads no where. In most markets there are only a few sellers that have been around. People do stuff then quit or do something else. Most dont stay on the AH longterm. I only see a few on my server that have been around as long. Do we have price wars....no..it isnt worth it.

    If you did that to me.....I would just keep undercutting you. In fact I would whisper you to tell you to go repost. Done this many times. Funny thing is in the long run it cost you money and time while I just mess with you and wait till the market comes back. Remote AH is easy to use while you watch tv.....just make them keep posting more by posting one.

    I saw this in wrath with leg armors. Massive posts, crazy prices...at cost and below. What did I do...buy the ones undercost and waited a few weeks to relist and have the market back to normal. I have been in the game a long time.....I may move away from a market....I may mess with someone....but I dont ever aim to trash a market. In the long run it isnt in anyones interest. I often think that many that write blogs write about this as they have had success with it where as there are many that do fine and dont use these tactics. I agree with what Kammler wrote even after seeing your response.

    And contrary to what you write it is easy to hit gold cap sharing a market. That isnt really a problem. I have spent lots of gold on myself and those in my family. I teach people how to make gold. I am working on my second million and should be there in a few weeks. I read the blogs to see what others are up to. I dont read to see what I should do as I know how to make gold. Know your competition. Understand your market and you will succeed. There are many ways to play and I prefer mine vs price wars and trying to control a market.

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  7. @ Dale: the problem with your example is that these conditions don't exist in a vacuum: they exist simultaneously. That is my point: it is impossible to perform AH PvP without collateral damage, which makes the premise of 'market preservation' unrealistic.

    As for your final emphasized point, I consider myself part of the gold community so I don't find it persuasive that I'm somehow casting dispersions on everyone sharing this space. I'm not even singling out Stokpile. He is successful. His method works. I'm only pointing out that there is a contradiction between singling out a competitor and wanting to preserve the integrity of the marketplace.

    Also, it is not only disingenuous but also specious to suggest that the goods being transacted are not required to play the game--unless you are suggesting a metaphysical interpretation of "required", in that NOTHING in life is actually 'required' but is only 'desirous'. But I think you didn't mean that.

    The whole reason we can earn gold is BECAUSE the goods are required to level up professions, to improve our gear, to become better equipped to deal with increasingly challenging game mechanics as we progress. We provide them for a fee that is either demanded (through market control) or beneficial (as in cheaper to buy than to farm). Stok and all the rest of us goblins are no more at the mercy of the consumer than the thief is at the mercy of the bank teller.

    @ Stokpile: Respectfully, I didn't misread your second paragraph. I understand what you are saying. I'm suggesting that it is impossible to have the second paragraph true and also have the 3rd, 4th, 7th, 8th, 10th, 11th and especially the 13th true as well.

    There are competing philosophies that I'm not sure you recognize as being disparate. It’s a little like asking the guy in the hole why he keeps digging: he says "to get out". He doesn't get it because he's in the hole. (not that you are in a hole), but the more he digs the less likely it is that he will get out.
    If you plan to 'live and let live' (as in your 2nd paragraph) then the reaction to other folks in your gem market would be more passive. Whether through diversification, patience or guile you would find less assertive ways to deal with the challenger.
    If you are defending your turf then your posture would be aggressive and thus result in PvP. Punishing an aggressor is a viable response whether I agree with it or not. Your return to market domination would then allow you the respite required to decide who is the next threat and needs to be punished, or who is only a casual player that can be allowed to transact.

    When you initiate tactics to restrict other market entrants you do so across the board--the casual player is damaged as well. How are the criteria evaluated? 10 auctions on one cut? 20 auctions across 10 cuts? 50 over 5?

    The gem market is the hardest to enter--the tokens for new patterns accrue at only one per day so a new cut comes every 3 days. If a player has attained 4 cuts and is selling them in your space is he casual? What about when he gets 6? Or 10? When does he stop being casual and become a threat?

    Whether we agree on the ethics of any specific approach, we should agree that had you attained less overall control you would not be able to effectively restrict players you deem a threat. That means at whatever point YOU decide they stop being casual and begin becoming a threat YOU act to restrict them.

    Such is not 'live and let live' activity. It is mutually exclusive behavior to punish threats and remain benevolent towards the casual player because the punishment is broad based and unrelenting. It hits all players, casual and serious alike.

    You might rationalize the 'gentle giant' philosophy as something that makes market dominance somehow palatable but the activity required to maintain such dominance is, by its nature, anything but gentle.

    @ Brent: thank you

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  8. How do you fight the enchanting campers? Read your posts on the glyph under cutters but enchanting mats seem to be in much more supply then herbs.

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  9. Interesting post! And interesting debate. I have a lot of respect for both Kammler and Stokpile, for a variety of reasons.

    How I read Stokpile's point is that you want to be aggressive in a market because you want to keep out the other goblin, not because you want to keep EVERYONE out. To me that's a pretty big distinction, and it's not being a dick. The second paragraph doesn't suggest to "live and let live" at all. At least not to me.

    I'm not sure it's possible to have AH PvP between two goblins without affecting the "little guy" who is just trying to sell a couple gems. It can suck for that person, but that's part of the business of playing the market.

    It would be like suggesting that Microsoft and Mozilla stop offering free browsers in order to allow for Backstreet Software to be able to develop and sell their own browser for a profit. Business just doesn't work that way, nor should it.

    Have you ever played in a Poker tournament? Somewhat similar approach in that the guy with the bigger pile of chips has much more leverage. For him not to use that leverage would be silly.

    In either scenario, the fact that the entity with the advantage is actually using that advantage to their own benefit, doesn't make them dicks. It makes them good businessmen.

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  10. @ Stede
    Naturally it changes on a case by case basic, but it doesn't add too much time to it. Though admittedly that's because I don't tend to pay much attention until my mail box is repeatedly full of unsold items. I'll go through the posters and see who is listing the most ad add people to my friends list and wait to see who is undercutting me when I log off. Then it's just a matter of changing a few settings on my thresholds and posting limits.

    Then I simply let prices plummet and the market go to hell for a week or two, which ever feels right at the time, and then set my levels back to where I normally have them and see what happens next. If they're gone I keep things as they are, but if the camping and.or mass undercutting starts up again I'll go right back to it for longer and lower. And as for diversity vs. specialized, it completely depends on how much profit is in a certain market.

    And as you can see from my business reports, there is a TON of profit in gems and enchants for me, so I defend my take in them. For things like enggy pets and what not, I'm not too pressed about it because like you said, the GPH gain isn't that great. But speaking of gph, you also have to keep in mind you aren't always increasing it, you have to maintain it both now and in the future.

    And the future starts with today.

    @ Brent
    I've done the exact same thing as well. It doesn't cost me as much time because I never drop what I'm doing to go relist because I was undercut. I just lower the price of all gems I have access to by X gold twice a day when I'm undercut until they're all at the bottom and, depending on who I'm dealing with, I may buy theirs or just let things sit where they are. It's not like I'm worried about spending 500g on lost deposits.

    And if you think price wars get you nowhere, go work glyphs full scale for a few weeks and see what happens. Either you turn into a camper yourself or get into the AH pvp, there is no way around it.

    @ Michael
    You're right when you mention leverage. It's the same as gold, what's the point of having it if you're not going to use it on something? I use it to keep making more and having fun on the AH. If somebody doesn't like it, well too bad so sad. I am not doing anything that they are not 100% capable of. Granted it takes longer to start up, but I didn't start the AH game with a million gold, I started with 5,000.

    @ Kammler
    Stop commenting until you see what I am writing and not what you want to be seeing. I will repeat this once more with a quote from the entry "I'm talking about goblin against goblin. Serious competitors that are trying to run you out of your own markets."

    I don't see how that can possibly be made any more clear.

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  11. I think people are misinterpreting what Stokpile is saying. As a brand new reader who just came across this very interesting gold blog, I can say from a neutral standpoint that Stokpile is not being self-contradictory. He's only talking about using 'the nuclear options' against someone described (in his words) as "Serious competitors that are trying to run you out of your own markets and not some random dude trying to make some quick coin.

    There's a very clear distinction. Might there be some temporary collateral damage to the casual just looking to make a quick buck? Of course, but the casual will come back in a couple days because he's a vagrant. Stokpile is only crashing the market when people start to get uppity.

    An interesting article, an interesting site overall. Thanks for doing this.

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  12. @ Chrispy
    That's exactly what I'm saying. Though not only and I saying that only to act this way when called for, I'm saying that it's a bad idea (both personally and for business) to do so any other time.

    Casual sellers come and go into markets constantly, a lot of them only work in what is profitable RIGHT NOW as opposed to stokpiling and what WILL be profitable. In which case they don't sell anything in X market fro a few days and move on.

    I'm usually not too concerned about competition, mostly I focus on the people that get rude and begin to insult me either in tells or trade chat. Then it's on.

    And welcome to the blog =)

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  13. This has always been one of my favorite gold blogs because stok thinks like I do.

    Everything he says in this post is spot on in my experience except the bit about market sharing deals never working. I've made friends and gained allies for AH PvP through price matching agreements.

    I only make simple price matching agreements with no other conditions and that usually works out pretty well. We whitelist each other, match prices and that's it. Most of them only play the auction for a few weeks or months until they hit some goal anyhow.

    If the other guy wants a bunch of rules and conditions I just say forget it. Not only is it too much trouble but he'll probably renege on the deal as soon as it suits him claiming I broke the deal by posting too low, undercutting by too much or whatever excuse he can come up with.

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