Auction House Principles, part 1
Mar 30, 2008 Auction House, How-To, Player Interaction
Here are a few basic pointers that are crucial to your understanding of the World of Warcraft Auction House:
1. The Cut: the inter-faction AHs located in Goblin cities take a 15% cut of the final selling price. However, since you should only be using these to transfer gold between your alliance and horde characters, this is largely irrelevant to being an investor.
The normal AHs take a 5% cut of the final price. That means that if you sell an item for 100g, you will only actually “get” 95g (the AH takes 5g). An easy rule of thumb is that for every 20g of the final selling price, the AH takes 1g. It is very important to keep this in mind when following advice here, as margins can often be quite small. For example, let’s say you buy a Living Ruby for 60g, cut it into a Runed Living Ruby and sell that for 62g. You would actually be losing 1g10s if the Runed Living Ruby sold. Why? Because the AH took a 5% cut of 62g which is 3g10s while the price difference with the Living Ruby was only 2g.
2. Auction Duration: The AH gives you a choice to select the duration the auction will remain until it expires and is returned to you via mail. The three options are 12, 24 and 48 hours. For the vast majority of auctions that are not listed very late at night, 12 hours should be sufficient for it to sell. The deposit price increases with longer times and will only be returned to you if the auction sells within that time.
The AH in our experience is a volatile market and while it is easy to predict in both the short and long term, it can be difficult between the two. What does this mean? It means that if I check auctions at 7pm, I can give you a reasonable conjecture as to how much a given item will be selling at in 3-4 hours based on the current trend and I can probably make, based on the evolution of the game, a decent estimate of what it will be selling at in a month or two but it is difficult for me to say anything accurate about the next 2-3 days or 2-3 weeks.
What’s the jist of that wall of text then? List your auctions for 12 hours, at prime time, and if it fails to sell, relist it again for 12 hours. The exception here is for items that have very low deposits relative to value or no deposit at all (example: enchanting mats). You can go ahead and list these for 24 or 48 hours and if you decide to cancel the auction and relist it, you don’t lose a single copper.
3. Pricing: You see 5 Large Prismatic Shards selling for 100g and the lowest price of an individual shard is 25g. You move quickly to buy the stack of 5 and relist them individually in the AH, a strategy that is discussed elsewhere in this blog. What price do you list them at? 22g? No. 23g? Fail more, nub. You list it at 24g99s99c because it will sell just as rapidly as if you listed it at 1c. This is the law of pricing that we recommend you to follow religiously. Always undercut by 1c. Period.
April 1st, 2008 at 7:26 pm
is there a way to transfer money from a alliance to a horde character, you mention something about it, dealing with goblin auction houses.
April 1st, 2008 at 8:24 pm
Aye…you put up a grey item for 1000 gold. Your opposite faction character on another account buys it for that amount. You’ve just transfered gold from one faction to the other.
If you only have one account, find a guildmate or friend you trust and have them buy it for you.
April 2nd, 2008 at 6:13 am
I disagree with “Always undercut by 1c. Period.”
For example, in my realm I noticed Expert Fishing books were listed at 5g for a week straight. There was a single player who always had 4-5 books listed at 5g.
This is an significant premium as any player can easily get the book in booty bay for 1g, which is <5 mins from SW AH.
So I jumped into the book selling game. I did not list at 4g99s99c as you would suggest - I listed at 1g99s.
My logic was that most people looking at expert fishing are probably level 25-40 and a 4g premium is just way too much for a short trip to booty bay. Moreover, and this is key, I didn’t want someone else to jump into the same game - an ~80s profit is easily worth my time as a relative noob to the game, but definitely not worth the time of most players.
I’ve done some price sensitivity and definitely find 1g99s is the volume price.
Therefore, pricing at 1c less than the next highest price is not at all always the best choice.
- Don
April 2nd, 2008 at 8:41 am
I also disagree with “Always undercut by 1c. Period.”
Flat out when I look at auctions and see two items listed and one person obviously undercut by 1c that person is being an ass. I buy the more expensive one and I know many others who do as well. Undercut by even just 15s and you don’t look like an ass and yours will sell better.
April 5th, 2008 at 2:07 pm
Another practice that I personally use is undercut the bid price, not buyout. I too don’t really prefer undercutting by 1c, so I just lower the bid price (amount depends on the item). That way my auction shows up higher on the list, and I don’t drive the price of the item down.
April 7th, 2008 at 11:00 am
Auction House is the way to start out. Personally I started WOW a few weeks after my brother. He was kind enough to loan me 10g to start out equipping my character. I spent a little, but then discovered the Auction House. I was able to build that 10g into 100g in about 3 weeks, and now have 70,000g cash and approx. 30,000g of stock/mats/gear. From little acorns…
In the early days, when I had only a small bankroll, I found the following items a reliable source of income:
- Wolf Bracers, limited spawn vendor greens. Bought for 35s 15c they sell for 2-3g on AH. Lazy people are good business!
- Enchanting mats. Make your own - low level green drops, quest rewards and your old soulbound items often DE into mats worth far more than the vendor or AH value of the item. Enchanting is the 4th gathering skill, and far more lucrative at low levels than the others!
Most of my money was made buying underpriced items on AH and reselling them for profit. Enchanting mats are the best with small bankrolls due to the lack of listing fees. In those days I only bought items that I could mark up 200-300%, as I needed to use my limited bankroll as effectively as possible. These days I am comfortable with a 50% markup on higher value items.
April 17th, 2008 at 5:53 am
@Blog Authors, very nice blog.
@Donald Smith - you’re the kind of idiot who spoils the auction house for true investors. I’m not surprised you are reading this blog because you obviously need help making money.
The fishing books (as well as first aid books and many other things) DO sell for 5gold to lazy people so why not sell them for that. Put one up for 4g99s if someone has one and wants to undercut you they still will, but if they don’t you make 4gold instead of 1gold. if they undercut you then you lose the same.
There is a little known limited supply alchemy recipe that sells in a major city for a matter of silvers and yet I regularly sell it for 20 gold to people who are too lazy to go look for it.
Unfortunately there are ill-educated people like you who put it on the Auction House for 2-3 gold when I have it on for 20 gold! WTF? I buy it ff AH for up to 5g because I know it will sell for 20g.
Donald, you have entirely missed the point of business.
@Nuff - I don’t believe you. Seriously, how many times have you been made bankrupt? IRL if you walk down the high street to buy a DVD and see one for £10 in shop number one and then £9.99 in shop number 2 are you telling me you would go back to shop number 1 to buy the more expensive one? Do you think to yourself that guy in shop number 2 is an ass for undercutting by 1p? No it is business plain and simple. Even communist Russia has learnt this, where do you live? Undercut by 15s and you have just lost 14s99c - DOLT!
@Oleg, that used to be the way to ensure your auctions were always at the top of the listing but they changed the way the AH sorts now, I think they did that in 2.0
April 18th, 2008 at 6:37 am
People like you are the reason that people like Nuff and I don’t buy stuff that undercuts for 1c.
April 20th, 2008 at 8:17 pm
Just thought I’d congratulate you on giving some good info here (unfortunately one of them is my bread and butter so I hope not too many people pick it up)
It would be nice to give those starting out a few gold making tips as they need it the most.
eg. Buying out limited supply items from NPC’s and posting on the AH for profit.
2 simple ones in Stormwind are Black Shirts and Aquadynamic fish attractors - both available close to the Trade District and make good markups for lowbies in the AH
Keep up the good work!
April 23rd, 2008 at 9:39 am
actually, that’s something I don’t understand. why are things like dye, thread, other very easily available things on the AH? I understand if you have to go halfway across the world for something it makes sense to put it on the AH, but if you don’t it doesn’t make sense to me.
April 23rd, 2008 at 7:39 pm
Robin: My best guess is some crafters just aren’t as smart as others and may look to the AH for all of their raw materials - including the ones you can get at any local vendor.