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postheadericon Warcraft Advanced Gold Guide – Single Market Approach I

Unless you track the prices of an item over time, you cannot really tell if you are getting a bargain or not.

So it’s a five stage process.

  •   Decide which items have the largest price variance
  •   Decide which subset of these items are within your effective price range
  •   Track these items over a period of time to establish trends
  •   When confident that the price is low – buy a mix of items (mix to minimize risk)
  •   Store in the most effective manner possible.
  •   When the price is high – sell

Most of that is common sense. However, actually achieving this in practice can take a long time
If you don’t approach the tasks in the right way and with the right tools.

An easy (but slightly inaccurate) way of doing this is to check each item from your portfolio on your server every day. List them in price order (“Auctioneer” allows you to do this)  then record the highest asking price, and the lowest asking price, taking a mean average of the two as that days figure.

Do this over a period of time. A bare minimum of 8 readings. (include weekends) to check the variance.
However, there is more to it than this. You see Warcraft prices are also very seasonal.
The seasons Warcraft follow do not correspond to “real “seasons.
Here are a list of Warcraft “seasonal” factors

  • Weekends
  • School holidays
  • Real Winter
  • Warcraft holiday seasons
  • Major patch time (leading up to and immediately after)
  • Expansions (leading up to and immediately after)

 

Some might quibble at the word “seasonal” in this context, but this phrase allows us to relate these events to the real world, because our responses need to be the same as the real world.

Our subset of items is the list of items that you can afford to speculate in. As mentioned before the Material Master has over 150 items. Unless you have a remarkable memory, and a lot of time on your hands, you are not going to master the seasonal subtleties of all these items. Nor should you.

Early on in your game some are going to be far too high a value for you.

 

Even if you can afford a couple of pieces of Titansteel at level 22. You really shouldn’t. Don’t over-reach yourself. Look at the list in the previous chapter and the tips on how to specialize in a portfolio.

Likewise when you are level 80 and have a couple of thousand gold, then dabbling in Ruined Leather Scraps is probably a waste of time .

We will come to “Return on Investment” later. Your time is a major investment, we don’t want you to waste it.

Pick a subset of items appropriate to your level (oh and include the appropriate cloth items)
Tracking items over time.
With a single market approach tracking the average cost over time is vital.
Have a look at this graph for Felweed prices over a two week period.

 

Warcraft Price Over Time

Above is a graph showing the price of 20 Felweed, from Terrokar in February /March 2010.

The time period shown on this graph range here is 28 days

The issue you can see with a single market approach is that, although Felweed has a decent price variation, you would really need to buy, then hold on to your stock for several days before reselling. This means you need to store it, and profit cannot be made straight away. A cross market approach, properly researched, gives you profit much more quickly

 

Buying.

In general, school and work holidays in the real world seem to trigger a “feeding frenzy” .. but not straight away. A few other people seem to sense the tide, and look to offload straight away (within 6 hours of getting home from school or work). These characters have been getting a nice stash of stock together, they are vaguely aware that it’s now a good time to sell..then they generally mess the whole process up by flooding the market, and pricing too high at first..then too low.

Why does this happen?

This seemed odd to us, until we realized that it was caused by FEAR!

People understood the seasonality, had managed to gather loads of stock, went to the Auction House on the day the “real” holiday started, saw a couple of others doing the same, and panicked.

Within that first couple of hours, you might even be able to get items CHEAPER than they have been all along. But a weekend is longer than that. If you have the gold – and the confidence BUY
Judge the best time to re-market your new items – probably late Friday night or early Saturday morning.
Look to use the 12 hour auction option (it is cheaper if it fails)

Overall we wouldn’t try and “buy out” the market until you have a feel for it. Other guides prompt you to do this, our evidence suggests it should only be done when you are supremely confident, but it is worth bearing in mind now and again.

Patch 3.4 seemed to shake things up a bit. We will keep this guide updated for Gold consortium members and try and predict the effect that upcoming major patches and updates may bring.

For now, it is key to understand that markets are primarily driven by emotion. In the real world AND in Warcraft. Whether that emotion is greed, fear or apathy, the prices charged and accepted are, to a larger degree than most would realize, a product of how people feel. You want an example ?

Imagine Gromdor has just been farming for Titanium ore – he has managed to get 12 pieces. He is only 75 gold short of the 5000 he really wants for his Epic training. He wants to train NOW.  He looks on the auction house and sees Titanium is 9 gold per ore – but he wants 80 REALLY quick.

What’s the betting he puts all 12 on for 75 gold – because he is simply impatient ? It’s that certain I wouldn’t even give odds. You buy it. You are sensible and patient  – you make (after AH cut) almost 30 for just stepping to the post box and reselling.

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