Leeah's Guide to Auction House Pricing Strategies

[Metrocube]

A SELLER'S GUIDE (well, buyers too, but mostly sellers) TO THE AUCTION HOUSE
written (slowly) by Leeah (aka Roger Wong)
updated: 1/12/2005

DRAFT and OUTLINE

ObDisclaimer: Leeah makes no warranty as to the fitness of this information for any purpose. The information in this guide is subject to change and obsolescence without notice.

CHAPTER 1. THE AUCTION HOUSE AND YOU.

The auction house in Blizzard's World of Warcraft presents players with a method for selling items to others. Most of these items fall into two broad categories:
- equipment: stuff you can wear or wield
- trade goods: stuff you use to manufacture equipment
Effective auction techniques differ slightly for these two categories, and we thus describe them in separate sections of this guide.

CHAPTER 2. THE IRONFORGE/OGRIMMAR AUCTION HOUSE IS ONLY A MAILBOX AWAY
It is essential that anyone intending to use the auction house regularly create at least one "alt" to keep in the city that houses the auction house. Postage is only 30 copper, and with most of your items selling for 30s or more, this equates to 1% overhead. In exchange for this 1% overhead, your benefits include (1) spending more time playing the game and wasting less time in travel, (2) extra bank space, (3) amusing conversations such as this:

[Alyiah]: Kind sir, would ye take 1g50 for that firearm?
[Dstryerd00d]: k. at bridge
... Trade Complete.
[Dstryerd00d]: wtf? ur level 2! what you gonna do w that?
[Alyiah]: It's to protect myself from the unwanted attention of men. I have a conceal/carry license.


CHAPTER 2. PSYCHOLOGY: CONFESSIONS OF A USED-TRAM SALESMAN.
Social-engineering your pitch to get discounts from individuals advertising WTS or WTB ads on the trade channel.

How to bargain, and why bargaining is essential to the feel-good factor.


CHAPTER 3. TRADE GOOD AUCTIONS

3.1. BUY LOW, SELL HIGH
Obtaining commodities on the cheap from players who don't know any better (their trash is your treasure).

3.2. SCHOOL CHILDREN ARE POOR AT MATH, HAVE LITTLE PATIENCE, AND HAVE SHORT-MEMORIES
Understanding some driving principles behind WoW trade good economics: the U.S. public education system, opportunity cost, and the lack of price history data.

3.3. WHY CORNERING A MARKET IS A BAD IDEA, AND HOW TO GET AWAY WITH IT ANYWAY
Identifying soft markets where you can make money on a regular basis.
Keeping the trade alive without smothering it.
What to do if someone starts imitating you.

3.4. SUPPLY AND DEMAND
Coping with uncertainty and fluctuating prices. Hint: When in doubt, do nothing.

CHAPTER 4. EQUIPMENT AUCTIONS

4.1 PRICING TO SELL
Auction deposits on equipment is a function of their vendor sales price, and is thus much higher than for trade goods. To avoid having your profits eaten into by relisting expired auction items, you should price your item to sell on the first go.

Determining the ideal selling price for an item depends on its enchantments and who the item is intended for. For example, you can price a dagger with a spirit/intellect enchantment at a higher point than a dagger with a strength/stamina enchantment, because daggers are attractive to spell-casters who value mana more than attack power. (Always roll for items with bonuses to Agility, as Agility-bonused items always sell well.)

To establish your base price, search the auction house for similar items. Remember, the auction house is a bit like poker, and you are competing against the other auctioneers for other players money:
- If your item has more desirable magic bonuses than the other items, you can price it more.
- If the item has less-desirable traits, you may have to price it for somewhat less.
Exactly how much less is a matter for debate. If the only other Boondoggle Sword of the Monkey is SHORT and is set to expire, you have more upwards-mobility in your pricing options. If there are five other similar swords, all on LONG or VERY LONG timers, you'll have to stay within 20% of the average price for Boondoggle Swords

4.2 HOW TO BUY
Unless you're familiar enough with prices to know when someone has posted a buynow price under market value, you'll have to win the item in a good 'ol auction. The keys here are Patience and SHORT auctions out of prime-time: If you have the patience to wait for an item to go SHORT while no one is looking, you have a very good chance of acquiring it for the auction price. Go shopping for your equipment 3 or 4 levels before you need it. This gives most players at least a week to obtain equipment at cheap prices.

[LochnarITB]

Placeholder for article (to be written after I eat this delicious barbecue and the girlfriend leaves for work)

-Leeah
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Hmmm it seems to me I remember something such as "No way!" when the suggestion was made to write this guide. You must have thought over the value of infomercials with three easy payments of just $39.95. ;)

I do look forward to this guide. It sounds like you have been very successful. My auctions are very hit or miss and I'm not certain why. I'm sure equipment is because I am too unfamiliar with what is available and valuable to various classes. Being an alchemist, I often try potions. I have had certain types that get a buyout almost immediately in one auction and then don't even get a bid another time. I go for obvious ones such as mana and health as well as those that are required for quests and other professions. I wonder if a lot of people stay away because of lag so that the auctions don't get viewed as often as they should. I would love to see linked auction houses in many locations to take the load off a central location.

[Phyloxerra]

Hmmm it seems to me I remember something such as "No way!" when the suggestion was made to write this guide.  You must have thought over the value of infomercials with three easy payments of just $39.95.  ;)

I do look forward to this guide.  It sounds like you have been very successful.  My auctions are very hit or miss and I'm not certain why.  I'm sure equipment is because I am too unfamiliar with what is available and valuable to various classes.  Being an alchemist, I often try potions.  I have had certain types that get a buyout almost immediately in one auction and then don't even get a bid another time.  I go for obvious ones such as mana and health as well as those that are required for quests and other professions.  I wonder if a lot of people stay away because of lag so that the auctions don't get viewed as often as they should.  I would love to see linked auction houses in many locations to take the load off a central location.
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Howdy Lochnar,

In my short time playing I've noticed that time of day is as important to the auction as what you're trying to sell. I've found that the auctions I start during the evening and run till the weeee hours of the morning do the best sales-wise. Hope this helps.

Scotty

[apandapion]

I have a text file here with a post from someone commenting about the auction house in the beta. It impressed me sufficiently that I decided to save a copy. The title is:

Zen and the Art of Auction Maintenance
...or "How I Learned To Stop Worrying And Love The Auction House".

Would you be wanting a copy for working on your guide?

[Boutros]

I'm eagerly awaiting the completion of this guide. I myself have very recently started "playing" the auction house, but not in a tremendously serious capacity. As I soon hope to reach level 40, I started mining some iron and mithril to sell at the auction house. I was selling the iron for 2g a stack, and it was generally selling fine, when one day I saw a ton of people selling for 1.5g a stack, so I decided to buy as much as I could and resell at 2g. It kind of snowballed from there, now iron sells for as much as 3g a stack, I'm doing my best to buy out every scrap of cheap iron and mithril I can, and I've started to move into the truesilver market but I think it might be harder to control since it's more expensive and usually sold 1 bar at a time.

I've thought of moving into areas other than metals, but I find I either can't tell if I'm getting a good price (in the case of green/blue items) or the market is too large for me to make any effort at dictating prices (cloth, leather, and bags). Metals seem to have small supply, high relative value/margins, and you are virtually assured to sell your inventory if your price is in the right ballpark. The biggest factor, though, is that I know what I want the prices to be, and I don't for other types of items.

[Xanthix]

Just a note: you may want to refer to Tessie's Auction House FAQ at the link below, if you need any basic information about auctions or auction houses.

http://forums.worldofwarcraft.com/thread.a...ons&T=11762&P=1

[MongoJerry]

I use the Auction House to sell a *lot* of leather and other commodity goods. The primary point I'd make with these kinds of tradeskill ingredients is to *always* include a buyout price, as people will pay much more (nearly double) if they can have something *now* rather than have to wait and worry if they're going to get something later.

The converse of this is that if you're a buyer of a commodity tradeskill good is to be patient and try not to place yourself in the position of having to buy something *right now*. Instead, bid on a bunch of auctions and expect to be outbid on a bunch of them. Eventually, you'll amass the materials you need at a fraction of the price you would have paid if you had bought out all those auctions.

[Artega]

Play the "buy low, sell high" game. I spent a couple days running Staff of Protection (20-something dps, 100 Armor, +6 Resistance to All staves), buying them for 6g from the vendor and selling them for 14g at the AH. Made getting the mount a far sight easier.

I've had a monopoly on certain trade goods from time to time. I buy out people with lower prices and price them higher than they were; if people want Iron Bars (since they were THE thing a week ago, and still sell well), they HAVE to buy them from me. Made about 107g out of that little monopoly before I decided to stop farming Iron and start killing stuff again :)

[Cryptic]

:ph34r:

Temporary monopolies are sickeningly easy to create in many of the WoW realms right now. It's easiest on horde-side, and on low- to medium-population servers (ahem).


What should you monopolize? It pays to spend some time watching the trade chats in your area's capital. What materials are people always asking for? (In "my world," for example, it's currently Iridescent Pearls, Iron, and Thick Leather.)

Once you have an idea of what your 2-5 test commodities should be, here's what you do: Buy out all of it that you can, and bid on the rest. You may have to spend a bit in doing this. But it's particularly easy to buy out the entire AH multiple times and keep the population starved of what they need.

Then, relieve the pressure briefly with a single buyout auction. (I call this the "hate reduction" - you want people to see you as a savior, not as the vicious conniving monopolist you are.) Remember that people can see who you are as a seller, but apparently there's no way to see who you are as a buyer. ("Hey, who keeps bidding against me on X?") So it's pretty easy to keep a good reputation while being a manipulative bastard.

So far so good. When the weekend hits and your audience / demand are highest, put everything out on the market with 24-hour runs and a high buyout. Keep buying out the bargain competition while your auctions are up. People will gripe about the buyout price you've set and monopolized, but when they see that they'd otherwise have to wait a "very long" time if they don't cave in and hit the buyout, they'll cave. You'll reap the profit.

Keep in mind that your audience's tastes in materials will change as time progresses and their skills increase. For example, although I can easily mine mithril and I have hundreds in store, I don't yet sell it. Iron actually sells for more than mithril right now on my server, because more people can utilize it and are competing for it. Once I see mithril interest, I'll go for that market instead and set iron free.

Trending the market according to average faction level in this manner yields HUGE results - I'm level 45 and I currently have a mount and 340 gold. And I spend carelessly as well.

So, you can get "rich" pretty easily. (Although a rich level 45 is equivalent to a level 60 pauper; just make what you need and don't generate hate.) I can only imagine what these techniques would yield on a high-population alliance-side market. You'd probably need a cartel *cough* guild with deep pockets to do any serious manipulation. But once you took the initial hit of 200-300 gold or whatever, you'd be reaping 100%+ profit on the most in-demand commodities.

Anything that can be reliably harvested/replicated and is in demand is better than random farming of items - piles of bars/potions/what-have-you are where the real money is at. Just have fun playing the markets, try to be a temporary monopolist so you don't death spiral the entire economy, and let us know how it all goes.

Apologies to anyone caught in the crossfire - I actually used to mail gold to anyone who complained about me by name, until there was love all around, but word got out and the handout-cravers started coming in.

Just remember to keep a good reputation, a merciless eye and a dirty hand. People will wise up as more hit 60, but for now, the robber barons rule! So be one, work for one, or get out of the way. Enjoy the rough and tumble!