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Apr 4, 2008 Featured Comments, WoW Economist
We’ll start off by saying thank you for your participation in this blog by way of the comments you leave for each post. We are reading them all thoroughly and considering each point you bring up.
We thought it might be a good idea to answer a selection of comments on the front page, in a regular post. This way everyone can follow up on the reactions and suggestions left by our readers.
We encourage you to continue participating by leaving comments; we want to know what you think so that we can always be improving this blog. Criticism is also welcome; we realize we are not infallible and many things can always be made better.
Now, onto the feedback:
Wilson said…very very interesting blog 
Put this on my RSS Feeder and hope to get a few tips for my Epic flying mount 
;)
Cheers and keep up the great work!
Thank you for the praise, Wilson. Every time our readers compliment us on the blog, we get a warm fuzzy feeling in our tummies- similar to being buffed with Power Infusion (before Blizz nerfed it ><): needless to say, its pretty awesome. Readers, please follow Wilson and add this to your RSS Feeder so you can stay tuned for our updates. We will try to update this blog at the very least, weekly. Enrique said…I am really digging this blog. If it’s alright by you I would like to feature you guys on my website.
Absolutely Enrique. Since we’re relatively new, we need all the advertisement we can get. You are most welcome to feature us on your website or tell your WoWing friends about us:)
Mark said…
Look I know you guys are just looking to help people… but in all honesty your sort of sabotaging your own interests. There are very few sources because wide spread attention twoords these methods hurts buisness, and in some cases can destroy the opportunity all together.
And in my ownexperience, the people who really need this kind of info are patheticially poor and show little or no effort to improve upon there situation.
and
Tom replied…Mark, I disagree. There’s 10 million players in this game. I doubt even 1% of them read these kind of blogs and even more doubtful that 1% of them can take these words of wisdom to heart. Spread out among all the hundreds of servers out there and you’re talking about very little real competition. Most people in my experience just load up an Auctioneer type mod and think that’s all they need to be successful.
Thank you to both of you for bringing this up. The question here is “by making this investment information public and free, will my profit margins take a hit because of all the new people suddenly following it?” We believe this is unlikely- with 11 million players and counting, spread out over hundreds of realms, how much competition can a single blog really introduce?
Also, we believe that our readerbase is NOT representative of the WoW population as a whole- which could generally be characterized as dimwitted and immature (let’s face it, our game is unfortunately mostly populated by idiots). In fact, we think readers of this blog are people who are already motivated to make money and who are intelligent enough to do so on their own. Lazy players will probably come here and think “oh, too complicated,” or “this isn’t worth my time,” then go back to begging for mount money in trade chat and browsing eBay for another epicced-out 70 to buy.
Glenn said…First off, great idea for a blog, I like what you’ve done so far. I’ve been playing the AH game for years, and while I may not have a nice fancy degree I’d like to think I know a thing or two about making money in WoW.
Glenn, we were just talking ourselves up- neither of us is an academic genius or business tycoon in the making :). Glenn follows up his comment with some sound advice breaking down how to make a profit off Leatherworking mats. I shall consider shamelessly stealing his ingenious idea and making it into a post on this blog XD. Is that alright with you Glenn?
Nuff said…
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.
I understand where you are coming from about how a 1c undercut would make you look like an ass so a buyer would choose the more expensive auction, and I’ll admit, I also used to think this way. However, this just isn’t how the majority of buyers will act. Even if they do buy the more expensive auction at first, we believe they will eventually just go with the cheapest one and not pay much attention to the copper and even silver values.
Any competitive market in this world is a cutthroat one, and if you act like a sheep, well, the wolves are going to eat you. An important issue here is that as a seller, we want the market price of a given item to be within a relatively tight range. This is so that if the auction runs out, it can be relisted at a similar price which would yield a similar profit. If everyone starts undercutting each other by 15s, there is a risk of a market crash, and I’ve seen it happen. The problem is exacerbated when people start undercutting each other by very large amounts of gold which will cause the market to remain very low for several days, maybe even a week or more. This is an awful situation to be in when you have several stacks of and item you bought at “equilibrium price” and we’re hoping to sell off quickly during a demand spike.
However, it must be said that market crashes can be profitable; this is when I would advise someone to buy, but in this case, we are considering a seller’s perspective.
Now if you think undercutting by 1c really hurts your chances of a sale, undercut by 1s or 5s. But don’t exaggerate; things can go downhill faster than you think. Remember, trying to do “the right thing” or act benevolent in a competitive setting will never benefit you. There will always be someone out there more ruthless and more greedy and he’ll end up ahead if you don’t mimic his aggressive actions. For better or for worse, that’s just the way markets function.
Naim said…
Nice site, I’ll be checking in. As a question (or a suggestion for a potential post) what addons (if any) do you use for trending, or just general economic information? Thanks!
Naim, as of right now, I don’t use any addons (this is Will). Before 2.4, every one in a while, I had to open up calculator.exe to find out the price per unit for stacks in the AH but now I can just hover my cursor over the item icon and it’ll tell me that information (ty Blizz!). I’m aware that many people use Auctioneer or some derivative of it and I will give it another shot in the future (I tried it a while back), but there are several issues that hurt what is a very clever idea. A few of these issues were discussed in comments; like the fact that an absurdly priced item can throw off the analysis it does. Another gripe I have is that for it to be really precise, several scans would have to be done every day as the AH market is a rapidly fluctuating one and difficult to get a grasp of with a series of single daily “snapshots”.
Dale Mox said…
1. I hate falling into tarps 
(typo: “Watch out here, because you could fall into a tarp.”)
1. That wasn’t a typo It’s a tarp!
isothermal said…
Interesting blog, guys. Keep it up.
As a newer player, though, I’d welcome your thoughts on some of the lower level AH work. I’m a 48 who doesn’t have a bankroll to support a random purchase of 100g to make 10g. (In fact, I’m just starting to get back to 100g after my mount purchase a while back). How about some tips for the up-and-coming trader?
Isothermal, thank you for bringing this up. This blog is mainly designed for level 70s who have sufficient capital to support large investments and weather unfavorable market conditions, but you reminded me that there are others out there who would also like to participate. Therefore, I promise that two future posts to this blog will be:
1. How to make gold as a low-level
2. How to amass (starting) capital at level 70
Stay tuned.
sid67 said…You missed another type of seller –
5. The Professional – This type watches the AH and trade channel and knows the market really well on a handful of items. They can and do work to control market prices for those items.
sid67, this is us, man! Or what we all strive to be, at least 
April 4th, 2008 at 9:19 pm
The economics of WoW is one of the most interesting aspects of it, because the same kind of logic applies to real life in some aspects. Mastering commerce in WoW is a good way to practice doing the same thing IRL.
Of course you get nay-sayers everywhere about every possible concept. People love to prove other people wrong.
April 5th, 2008 at 7:27 am
First off , Great Job on this blog guys.
I happened to be pointed to it by a fellow WoWholic on about the 3rd post and have been hooked since.
Here’s one of the arbitrages that I’ve been making money off of for a while now (its been around for atleast 2-3 months on my server and ive made so much money off it that i dont mind sharing it and potentially see it go away)
So here goes, (you need to be a LW btw)
Heavy Knothide Armor Kits (the ones that give +10 stam to most leather armor pieces) go for about 8-8.25g on my server
now thats 3x heavy knothide leather = 15x knothide leather = 75x knothide leather scraps
so a stack of scraps should sell for about 8*0.95/75*20 or about 2g a stack.
However at any given time, I have been able to buy 10-15 stacks of scraps for about 90s to 1g each…
So assuming 1g a stack and a selling price for the armor kits of 8g.
you’ve just made 8*.95-75/20*1 = 3.85g per stam armor you can sell
Ive found that you can usually sell atleast 10 of these every day within a price band of abt 20-25s.
And I guess the best part is it doesnt take much money to start with either(abt 40 g can make you 10 of these kits).
Especially reccomended when you’ve gone out and spent all your money on primal mights or fast mounts or whatever else leaves you close to broke (not that you should ever get into that position) and don’t have much money to put to work.
-Jasraj
April 5th, 2008 at 9:30 am
this is a solid blog. dont even remember how i got here. prolly wow insider. anyway, i dont think you’re killing the market. the amount of people with the professions involved in taking advantage of the opprotunities times the number of people that actually put forth the effort to do them… also, about undercutting by a copper; if it wasn’t a solid strat on price is right im sure a lot less people will have enjoyed their moment of glory on the showcase showdown
April 5th, 2008 at 7:33 pm
“Remember, trying to do “the right thing” or act benevolent in a competitive setting will never benefit you. There will always be someone out there more ruthless and more greedy and he’ll end up ahead if you don’t mimic his aggressive actions. For better or for worse, that’s just the way markets function.”
Nash would disagree (and I would certainly think you two bloggers would know about whom I’m talking). I would too. While in this particular example, trying to “be the nice guy” and buying the item that is 1c more expensive does hurt the market, it is wrong to lay down such a blanket statement that cooperation is failure for a competitive market.
April 5th, 2008 at 11:34 pm
Thanks for starting this blog. I was referred here by Wowinsider. I’ll be reading anxiously, especially as I recently hit 70 so I don’t have as much experience with the higher-level items as I do with my previous money-making system of buying low and selling high in the copper/tin/bronze markets.
I’m interested in hearing about some of the methods you guys use to keep track of average prices. Do you use spreadsheets?
Also, how about server economies? I have characters of several servers, and there are distinct differences between a low and high-population server, especially with the low-end mats. (For example, copper going for 50s a stack on a low-pop server vs. 1g50s on a more “regular” server).
And one more question… Are there better times than others to buy and sell certain items? For example, I noticed that Copper sells best (and highest) on Saturday evening, and Void Crystals are nice and expensive on Monday mornings.
April 6th, 2008 at 2:00 pm
I would love to see a post on the effects server events have on the Auction House and farming. AQ saw mats of all kinds going for top gold, Naxx saw some miners get rich, and the Armory opening for the Sunwell Offensive should make some Primal farmers happy.
Great blog, happy to see one of my comments make the Feedback page, and wish you guys continued success! I’ll be watching ya!
April 6th, 2008 at 7:58 pm
nice blog
id like to see a section on how to maxamise your professions. I have several 70 alts and have a number of crafting proffs that i use to make gold. Buy mats cheap, make and resell items - that kind of thing
Ive done my own research into my proffs but id like to see what you come up with. My current big money spinners are JC, disenchanting and tailoring. I clear about 1k gold a day by spending 20-30 min at the AH looking for cheap mats.
Also a secion on big ticket items would be nice. a nice price guide on sought after BoE blues / epic items. EG: darkmoon cards. May take a month and 1400g to get a deck but sell that for 2k+ and thats a 600g profit and all you had to do was remember to check the AH
April 7th, 2008 at 8:24 am
A market crash is not a bad thing, it can be a very good thing. As you pointed out, we can predict very short-term prices or the price a few weeks from now with reasonable accuracy. We can’t predict the price over the next couple of days. If there are not other market forces at play, we can presume that market equilibrium will eventually reestablish itself after a crash. The best course of action during a crash is not to continue to sell – it’s to BUY BUY BUY.
This accomplishes two things: 1) it helps correct the market by stockpiling the excess supply and bringing the market back to equilibrium, and 2) it significantly pads your pocket when you do sell. How much do you buy? That’s up to you, but I’ll often buy up everything up to the equilibrium price minus deposit and 5% AH cut.
Your risk factor is also relatively small. After all, if you have been watching the price on the item for long enough to know the market is crashing, then you also know that worst case scenario you could relist at the price you are buying.
If you are bold enough and have a large enough stockpile, you can actually force a crash. This is risky though, because if you have someone like me watching for it, the profits of the crash are going to go to me – not you.
–
I like to round down my prices to the nearest 60s or 80s. Due to the way the WoW font looks, someone who isn’t closely paying attention might read either of those numbers as a 00s. I avoid looking like the 99c ass and benefit from anyone who ignores the copper or silver price. I routinely sell things things for 20g80s when someone else has them listed at 20g45s.
April 7th, 2008 at 9:12 am
“I would love to see a post on the effects server events have on the Auction House and farming.”
This is the bread & butter, cash money machine for the WoW Investor.
Holiday Events:
Great for crafted quest mats. Every Xmas I see people selling eggs in IF for a 200-500% markup so they can make cookies for the Greatfather quest.
New Arena Seasons:
New gear for the PvPer’s = new gems & enchants for the new items, watch gem/enchant/primal markets skyrocket
New Content Releases:
Depends on content size.
Little content X.3, or X.4 patches you watch PTR patch notes & see what new crafted items are coming up & what the mats are, you can usually make some cash farming mats for new crafted items.
Big content, i.e. WotLK, here’s where the big money can be made by those brave enough. Look for mats for high end crafted items that will allow people to level their profession. BC had an initial run on runecloth & netherweave because everybody needed it for First Aid and tailoring. Same thing w/ Thorium bars, Leather, Ench. mats.
There’s some speculation involved, but there’s good money to be made stockpiling early for little & big content patches.
April 7th, 2008 at 10:44 am
Interesting point regarding the impact of sharing your tips on the WoW economy. I know that there are many millions of players and that a few readers of your blog shouldn’t affect the overall economy. However, there are only a limited number of servers. You only need one or two competitors using the same tactics to have a massive impact on your income.
On my server I am very active in the market for certain commodities. My specific areas of specialism are BOE crafting recipes and twink items in all brackets. My brother controls the gem and ore markets. By trading actively in these items, making bold acquisitions and using aggressive pricing, we are able to maintain a steady 3-4k gold income each week. However, this can be significantly affected when others enter the same market.
By all means, keep sharing your tips, but make sure you have a large enough bankroll to see off competitors of your own making…
April 7th, 2008 at 10:48 am
Thanks for addressing my question guys. I agree with your assessment, I don’t use any addons at the moment to help do market analysis for the same reasons you don’t. Being a software developer I have half a mind to try my hand at the problem and see what I can come up with. Here’s some of my thoughts:
Scanning (unfortunately) I think is the best way to gather data. There are one or two others that will eavesdrop on mail and communicate up to a master server, but the results can be extremely incomplete or tainted because only data from people who use the addon.
The trick then is to combine the idea of scanning with a master server. However the server will only keep track of current averages as well as historical data. A user then doesn’t need to scan as frequently because their client can pull data from the server and have access to the analyzed information from all the users on that server. All your normal statistical analysis would be included in the data (high/low, median, mean, outliers); that would really help keep the information more relevant and smooth (i.e. a few crazy auctions wouldn’t make you fear the validity of the data).
One nice part about this then is the trending capabilities that it would allow. Not only could you view historical trends, but because the economy in WOW is no where near as complex as something like a real market it could certainly empower the user to do some prediction based on hard data. Volume trending would be pretty helpful as well, not just prices.
Shame it would be a lot of work and I have no time.
April 7th, 2008 at 1:28 pm
Any opportunities from the Darkemoon Faire? I know Professor Thaddeus Paleo sells motes of air and water for 16 silver. Can’t beat that for resale value!
April 7th, 2008 at 2:00 pm
From the beginning, there’s one easy way of making money that I know of. Vendor camping. Do the quests in your starting area to build up at least 10-20 silver, then go camp (or have an alt camp) an engineering vendor. For Horde, I’d recommend the vendor in UC or Silvermoon. For Allies, I’d go with Stormwind, due to the ease of getting a level 1 toon to the capitol city. Buy Coarse Blasting Powder for 48 copper each, and sell when you get a complete 20 stack. Due to the rising cost of Coarse Stone, you can sell the blasting powder for 2.5 to 3 gold, and this will give you enough starting capitol to proceed to the next part of your plan. Enchant Bracer: Deflection is sold in Darnassus at the vendor next to the Tailoring/Leatherworking shop, for about 50 silver. You can easily sell a couple for 5-6 gold, especially if you prime the market by having another toon post it at 7-10 gold. I amassed about 100 gold on Daggerspine just by doing this, and my toons were about level 10. Just don’t flood the market. Post 2 good prices, and 1 high price. For Horde, the recipe is in Stonard, at the trade good vendor in the inn. Start an Undead toon, run him immediately to the zeppelin tower, and go to Grom’gol in STV. Get killed, and don’t resurrect. Walk as a ghost thru Duskwood to Swamp of Sorrows, and go to Stonard. When you reach the Spirit Healer, LOG OUT. Log back in, and she’ll let you rez right there, instead of being yanked back to STV. Go to the inn, and commence camping. Send the recipes to an AH alt you have ready, and watch the gold come in.
This works because it’s a green recipe, even though it’s vendor bought, yet people hardly go to SOS. What’s even funnier is that Allies on Daggerspine don’t even seem to go to Darnassus for this.
April 7th, 2008 at 2:07 pm
Amy said…
Any opportunities from the Darkemoon Faire? I know Professor Thaddeus Paleo sells motes of air and water for 16 silver. Can’t beat that for resale value!
Amy, both of those vendors sell high level stuff for cheap cheap cheap. Lots of high level herbs like Black lotus, Felweed, Terocone, Ghost Mushroom…the list goes on. All motes are sold for 16 silver, and occasionally they sell gems. Living Ruby and Talasite are sold at 15 gold I believe, and I’ve seen that you can sell them for 50 gold on some servers.
Do a scan of leather, herbs, and gems before going down there, and you’ll see if it’s worth it. For example, Wild Steelbloom on a couple of my servers is going for 3-8 gold for a 20 stack. You can buy it for 2 silver each at the fair. Ghost Mushrooms sell for 2-3 gold each, but the fair has it for 15 silver.
April 10th, 2008 at 1:02 am
First, I have to say I love the idea of the blog!
Two points I’d like to make: First, I’ve found it’s REALLY easy to make money as a lowbie.
My main advice to new players was to NOT take a trade skill (only “gathering” skills), but I think a wise person can level up and make money at the same time.
I have a alt I’ve been planning on leveling up, but for the most part I’ve just been using him for Blacksmithing and making a few profitable, low level items.
I’m not sure I want to give away the “secrets”, but there are a few specific kinds of items I’ve noticed people are willing to pay big money on, and very few people even address that market. It’s not huge money, but it is steady money. That character hasn’t had a big influx of gold, but he’s over 100g just from items made over a few weeks… and is only level 20.
Second point, or more like a random thought, would be about how to really make good money at the AH. It’s been mentioned a few times that making a few bad auction listings can crash the market… but what if you WANT to crash the market? I think it would be REALLY useful to work out a few reliable strategies for making this event occur, with the goal of creating a buying opportunity for a patient investor.
April 10th, 2008 at 1:18 am
Oh, another point I’d like to address is about how much to lower your price.
First, is the “undercut by 1c”, which I fully agree with… but sometimes you want to give more of an illusion in order to induce a buy. Sometimes you want to distinguish yourself more in a crowded market. In a case where you would be going, say, 1 silver lower, consider going 1.01 silver. It will work on the same psychology of why stores always price things ending with 99 cents. Despite seeing this all the time, everywhere, for our entire lives… it still works.
Another thing: I don’t know about anyone else, but I only deal in buyouts. I don’t worry myself about “oh what should I price this at, and what (or if) should I set the buyout”. Just figure out a price you are happy with… WHICH WILL SELL. Because you’ll always get more stuff to sell, but having to relist generally costs money and eats into your profits.
Which leads me to another point, you can do quite well buying/selling those goods which have no AH fees. IMO, that market is great because the elimination of fees has removed one big incentive for lowering prices (declining profits over time because an item isn’t selling). The other one lowering effect is, of course, impatience, but we can’t do anything about that (except many times view it as a buying opportunity).
If you check out Auctioneer, my favorite features are how it keeps track of your buy/sell history, and another is how it will let you know historical data (I think it only tracks 7 days, correct me if I’m wrong).
One improvement I would love is if it could chart the daily market fluctuations, so perhaps you can see that whatever item you are tracking sells for more on a friday and less on a tuesday (or whatever). Now it could be that info would be worthless, and the AH is too chaotic a market to graph reliably, but it would be interesting to see if that really is the case.
April 27th, 2008 at 4:15 pm
I like the new name, fits a lot better. Feel free to steal it away.
May 15th, 2008 at 1:23 am
Since I didn’t seen any contact info, I’ll post my question here. Maybe it can turn into a future column.
Whats your opinion on buyout prices? I see the occasional auction posted without a buyout, which I don’t understand. I suppose the seller is hoping to provoke a bidding war, but WoW seems to be such an instant gratification game… I think people would rather pay 5g and have an item now, instead of bidding 2g and having to wait a day for a bargain which may or may not come.