Wednesday, December 22, 2010

To hear the lamentations of their brokers

I’m the clan’s auction bish.

All items up for auction go through me. All proceeds thereof go through me – to Grimm, who is in charge of disbursements.

I’m not a power auctionator. I don’t have auction-house-onna-phone. I visit the auction house once a day, maybe twice if we’re bored, and that’s it.

Right now, every toon in the clan (on Alleria-US that is) could buy epic flight and still have beer money. We could go out and get the latest and best crafted robes for all the clothies. We all have at least 5K in our pockets, and will have 6K by the end of next week.  We generally deposit around 1K into the guild bank every 2-3 weeks. In short, we’re well-off, but not filthy stinking rich.

I know there are many get-rich-quick schemes out there, and a lot of them work. But they have their costs. My system … is not spectacular. Is not splashy. But it is steady income and it pays the bills, in its own meager way.

What is the secret? Simply put, it’s a little bit of work, a little bit of research, and a lot of patience. Here are the highlights.

  1. Track everything. You will need to set up spreadsheets. If you don’t know how to do that, go back to the get rich quick guys.
  2. You will have to start out by losing money in order to obtain data. However, data is more important than money, early on.
  3. Never consider anything but the actual sell price of an item – i.e. what you get for selling it. Remember the part abut losing money? Yeah. You’re going to lose money in the process of learning what does and does not sell, but you will know for a fact what does and does not sell, and for how much.
  4. Sell at least one of everything you can make, to get some feel for its financial potential.
  5. Optimally, maintain at least 20 samples for each item you track. Track the average and the mean. If your spreadsheets can do so, use a two-sigma approach to discard excessively high or low samples.  For example, let’s say I’m tacking Glyph of Soul Link. Before I am comfortable with the numbers, I will want to have sold at least 20 of these items for as much as I can get.  I will then look at the average, and the mean (the actual price most frequently seen, or closest to the middle). If the glyph averages 20 gold buyout, and I have one out of 20 that sold for 60 gold, I want to ignore that one exception to the rule, because it will probably be outside of the two-sigma band (average price, plus and minus two times the standard deviation.)
  6. More samples are better.
  7. Set minimum bid at around 1/2 buyout. I know that seems low, but it provides a useful datapoint. If all of an item sell at bid prices rather than buyout, your buyout price is too high. Lower it and enjoy higher volume from the very same people.
  8. Always track the cost of mats. When the cost of mats exceeds the cost of the product, sell the mats.
  9. Don’t hoard. Keep a reserve of one or two stacks of mats, but everything else should be used or sold.
  10. If you have alts, spread out the love. Let no profession go unused. When you run out of professions, assign alts as gatherers. Let no part of the beast go unused. Anything that can be mined, skinned, gathered, or disenchanted can and will have an ultimate destination, either as a mat, or as an item for sale.
  11. Maintain discipline. It’s easy to get excited over a spike in prices of a particular item, only to wake up to 20 unsold auctions in 48 hours as all the spaminators get in below your price point. Double, maybe triple, your normal contribution, but never put all your eggs in such a basket. See if it persists before getting greedy.
  12. Undercut. Don’t let pride talk you out of this. He who is seen as the best value gets the most sales. As long as it’s profitable, be the first on the list.
  13. Persist. Sometimes an item will hit a dry spot in its sales cycle. Just ride it out.
  14. Leave your ego at the door. If some wannabe trade prince tries to engage you in a duel of emails over your undercutting, ignore him or her. That person can either undercut you, or lose sales to you. It’s a free market but nobody gets a free ride.
  15. Remember, data is king. Record everything. Track everything. Sell nothing without writing its final price down in some form.
  16. BE AWARE of what your stuff is worth. For example, at the moment, peacebloom is worthless on my server. I have no qualms about dumping it to vendors.  Some poor schmuck is probably buying it and stockpiling. Well, joke may be on me and he may eke out a profit, but I’ll have used that space for something more profitable in the meantime.
  17. Whenever possible, take advantage of your freebies. For example, Illume does a sweep of some zone or other for herbs once a day. Those get turned into glyphs. Since they cost us nothing, any sale is a profit. Adopt that attitude.
  18. Don’t buy mats off the AH unless it is a major profit opportunity. For example, making a profit from enchanting scrolls is almost impossible. 1/10 of the scrolls you can make can be made at a profit if you buy mats from the AH. And yet, ALL of them are profitable if you get your own mats.

Right now, on Alleria, Glyph sales are a steady income source. I net 200-500 GP a day. Illume gets the mats and makes the glyphs, sends to me, and I dump those (plus the green-level inks) on the AH.  Everything else that goes through my hands is incidental, but Illume is our real money maker.

I hope this gives you some food for thought with regards to auction house profit-taking. Like I said, it’s not spectacular, and it requires a modicum of technical acumen, but if you can swing it, practically nothing that isn’t grey or white will go to waste, and you’ll never worry about training costs again.