The Only Auction Guide Worth Reading

[Monty]

Kinda my first thread in two years, yeah, I suck.

guide made by: Sciatica of Frostwhisper EU.
I found this guide much more useful than any other auction guide, and its totally free much better than Derek's guide, too, imo. (also repost-proof!)

Yeah, it's pretty big, but its full of greatness, be sure to read it all.

Here it is:

(original thread: WoW-Europe.com Forums -> Sciatica's AH guide v2.0)

.:: Introduction ::.

Greetings.
The following guide is a walkthrough to how you make money in the world of warcraft (focusing almost entirely on the auction house) - and it's probably the best one too if you ask me. I've read through a lot of gold-making guides, and tbh they are all @#@!. Even Derek's Gold Making Guide is @#@! - and that one costs real money. The reason they all suck is because they basicly say: buy low, sell high on the AH, grind some @#@! till you fall asleep and then you will become rich, without being specific. Ofc the commercial guides are written to make the authors earn even more money - real-life money - and not to actually help you. That is the main reason I wrote this guide! So that someone (you) can have a practical, down-to-earth, easily assimilated, step-by-step no-nonsense guide to moneymaking. But I also wrote it to prove my own superiority over the author's of the guides out there that are outdated and/or DUMB. Anyway, this guide will go through everything you need to know to make some decent cash on the AH and your professions. The guide will go through things like investments, the trade channel, undercutting, monopolies, profit, market fluctuations and fake competitions, but the best of all is that no previous "knowledge" is needed - everything will be explained. Grinding all money is for suckers. Sure, grinders can make a lot of money too, but one has to consider the effort-to-gold -ratio imo. And playing the AH has the highest effort-to-gold -ratio in this game if you ask me. I spend 20-30 minutes on the AH every day, and that is enough to give me enough money so I can raid as much as I want, twink a char now and then, and still see my fortune go up for every week/month that I play this game unless I do some heavy spending.

I have always known a lot about the AH and the market, but never really cared to utilize it to the maximum in order to make a profit. So what made me change my mind? Well I had 300g last summer and I needed more money because I couldn't afford @#@!. No mongoose enchants, no respeccs, no raid items, nothing. So I took these 300g, used my "mad AH-skills" and invested them in various items - just as an experiment, and then I waited, for weeks. At first I thought I must have done something wrong, but after 2-3 weeks I had 1200g in cash and 4400g+ worth of items - so I know I wasn't wrong. So what is the point of all this? Well lesson number one is: It can and WILL take time. Nothing changes over one night. Lesson number two: Stop spending, right now: today. Only buy things that you cant play without (elixirs, pots if you are raiding etc). Don't try out some new spec, dont do anything. If you are spending money, you wont notice your AH progression. To help you out with this I recommend that you download Accountant. Accountant is an addon that monitors your own personal money flow. You will see where you get money from, and wth they go - simple as that. Accountant can be downloaded here: Accountant (Updated) | World of Warcraft Addons | World of Warcraft @ Curse.com

Last: If you read everything here, and most importantly: learn it and stick to it every day and stop wasting gold on stupid things, and if you do this for weeks, you WILL make money. I promise that.

Anyway, here is a screenshot to encourage you to follow my guide:
ImageShack - Hosting :: encouragingjd0.jpg
http://i261.photobucket.com/albums/i...ncouraging.jpg (MIRROR)
I know it is not the highest amount of gold you've seen. You are probably thinking "but hey, playerX on my realm got 13k gold" or something along those lines. While that might be true, playerX is probably one of the most active gamers on the entire realm of yours, and all (s)he does is grinding, grinding and grinding for several hours a day. Unlike that person, I don't spend half my awake time trying to make money, but maybe 20-30 minutes on the AH each day (tops). So if you want a laidback method of earning easy cash then this guide is definetly for you, but you need patience.


.:: Money - starting out ::.

First of all, you need to have something to start out. If you have 0 gold and 0 items in your bank, you are gonna have a hard time earning money. You need starting money in order to get the most out of the auction house, your professions and even grinding. Sure you might say that you could always grind those money, but what if you cannot buy water, food and repair your gear? How are you going to get money then? Well the best way to "free money" is by doing quests. 75% of the 5000g required to buy a flymount, I got from doing quests. Doing quests at lvl70 is highly profitable. You can get as much as 25g for every 5man group quest. And now that Blizzard implemented even more daily quests - its even easier. So the first thing you have to do in order to "start out" is to make sure you have money to spend. Money controls everything in WoW. You need money for pretty much everything: Investments, Repairs, Profession materials, Raid items (pots, elixirs, flasks) and much more. So before you go any further: Make sure you have about 200-300g to spare at least. 400g or more is preferable. I will explain why later under the "investmenets" section.


.:: Auctioneer ::.

Auctioneer is a package containing several different addons/modifications for this game. It is a VERY, VERY important tool that you MUST have. Why? Because Auctioneer monitors market values of every item you spot on the auction house, and builds up a database based upon your observations - automaticly ofc.
Auctioneer can be downloaded here: Auctioneer addon for World of Warcraft


.:: Understanding auctioneer ::.

- Setup -

After installing auctioneer, you have to write the following slash commands for all your toons that will be using it:
/auctioneer on
/auctioneer show-suggest off
/bottomscanner load never

The first command starts the data display for auctioneer. The second tells auctioneer to not display suggestions (completely useless information tbh). The bottomscanner one (another addon in this package) tells bottomscanner to not load. Bottomscanner is very, VERY unreliable - and you will end up wasting all your money into thin air unless you have flawless settings for that addon. I haven't bothered to learn bottomscanner, since it only gave me stupid suggestions (buy this, buy that) that didnt make sense. Also, if you use an older version of auctioneer (older than 5.0) you need to run this for every toon:
/auctioneer load always


- Scans -

Now, the most important thing about the auctioneer addon is the database. Without a database containing these market values, auctioneer is of no use. So the first thing you need to do is get yourself a database. The best way to do this is by doing daily scans. Go to an auction house, open up the AH screen and take a look. You will see that all the trade categories now have a checkbox next to them. Make sure only the following is checked: Weapons, Armor, Trade Goods, Recipe and Gem. Then press the new button labeled "Scan". This will take some time (a couple of minutes), so go make yourself a cup of coffee or a sandwich while you wait. One scan is not enough though, so you have to be patient. I advice you to do about 2 scans per day for about 12-14 days (do them with a couple of hours in between, like one time mid-day and one time in the evening), but Im sure you cannot be that patient so I guess one scan per day for the next 7-10 days will have to be enough. DO NOT start your investments before you have a database like this. So do these scans and then continue with this guide. The more scans, you have of the AH, the more information you'll have to make the right decisions.


.:: Profit - Supply and demand ::.

People always ask: How do I get rich on the AH? And the simple answer is buy low and sell high - really. What people fail to explain though (especially in gold guides) is how you learn to buy low and sell high, and exactly what items you should buy. Supply and Demand are the two major forces in economics. The other always interact with the other to determine the price. High demand plus a low supply equals to a higher price on the wares, and the market price goes up. A low demand and a high supply equals lower prices on the wares, and the market price goes down. So what you want to do is to buy items when there is a low demand and a big supply for them, and you want to sell when there is a low supply and high demand.

I will get more into buying/selling under the sections "buying", "selling" and "market fluctuations". So don't go ahead and buy stuff right now, wait a little longer. If you absolutely have to start now, buy something that doesn't cost too much, like netherweave. For example: Netherweave has been ranging between 3g to 5g a stack on Frostwhisper for quite some time. So buying when its down to 3-3,5g and selling it at 6g is a smart move. But BEFORE you buy anything, it is time for lesson number 3: Always, ALWAYS calculate the auction fee and the auction deposit into the price. If you buy netherweave cloth at 4g, and sell it for 5g - you hardly get any profit. That 1g you earn per stack will easily be consumed by the AH fee and the AH deposit price, and for every time the stacks wont sell, you will lose even more.

---------------------

.:: Investing ::.

Investing means that you buy something at a low price, store it in the bank for a period, and then resell the wares when there is a higher demand and a lower supply for it (or both). Investing is the most risky move you can do, but can also be the most profitable one. It can turn out great (major profit) or it can turn out %*!% (major loss) - it works exactly like stocks in a stock exchange. Someone with many stocks will benefit a lot more if the market goes up, than someone with not so many stocks. And at the same time: someone with many stocks will lose a lot more if the market goes down, than someone with not so many stocks. You have to decide on your own what kind of risks you want to take. But try not to invest more than 50% of your dynamic fortune. Dynamic fortune? Whats that?


.:: Calculating fortune ::.

If you ask a bussinessman how much money he has, what type of answer will you get? Will he tell you how much he has on his bank account(s), or will he tell you about all his cars, resturants, flats, etc? Ofc, "wealth" is not just the hard cash in your wallet or on your bank account, so everytime I hear someone saying "LOL - that shaman got 8000g!!!!11one", I ask myself how much static fortune they have. Most of the time it's 0 or close to 0. Anyway, on to that:

There are two types of fortune :
Static fortune - An estimation of all the gold you have invested in items, all the items you have on the AH and all the gold you have spent on AH bids. For example, last summer, if you have had a furies deck on Frostwhisper(very popular tank deck) on the AH and nothing else, the estimated static fortune that you would have would've been 2000 to 2500g. You had this money, but in a static form. You cannot buy flasks, elixirs, cloth or pay repair bills with it. But still, it is money once someone buys it. And like I said in the "investing"-section: Static fortune is the only type of fortune that can fluctuate (unless ofc, a whole new expansion pack is released, making dynamic fortune (gold) more worthless). So be extra careful about it. (note: your own gear should not be considered static fortune, neither should you include your enchants, or raid items that you are about to consume etc - static fortune is ONLY the items you are going to sell)
Dynamic fortune (sometimes refered to as "liquid fortune" - Dynamic fortune is the gold that you own - the only thing that you can buy stuff with.
Total fortune - Static + dynamic fortune. Simple as 1, 2, 3.


.:: Your professions - crafts ::.

In order to maximize profit you need to know your professions - inside out. If you have a crafting profession you need to know this:
-The market prices for all your crafts
-The market prices for all materials needed to create your crafts
-What crafts are wanted by the market and what crafts are not. Some items are needed for quests, like Khorium Power Cores.

Now, if you have a good auctioneer database, get a paper and a pencil and go through all your profession crafts (the ones that doesnt sell for pathetic prices - silvers). Draw three columns. In column 1, write down the names and market prices for the items that sells. In column 2, you
write down the materials needed to get these items (derived to the smallest component). And in column 3 you write down the market prices for those materials needed. *** If you spot a good profit here, start buying/grinding the materials and craft! One example: Last summer, on frostwhisper, Khorium bars sold for 5-6g each, and one stack could be bought for around 35-40g when the market was low. And as you might know, one stack of khorium ore can be melted into 10 khorium bars (worth 50-60g in this case), so by buying ore and selling the bars I made a good profit back then.

(***note: all crafting professions have something called start-, end- and middle components. For example, miners can melt adamantite ore, but also melt hardened adamantite bars and then make hardened adamantite tubes if they are engineers as well. The ore and the hardened adamantite tube are the start and end components, while adamantite vars are the middle component. One thing that is important is that middle components are sometimes cheaper, sometimes more expensive, than start and/or end components, and you need to find out the cheapest possible way to get the materials for your crafts. Sometimes the start components aren't the best option, sometimes the middle components aren't. Anyway, when you have found the cheapest way to get these materials from the AH, write down the value in column 2. I call this LPP "lowest possible price")

- Selling crafts -

If you want to sell the crafts to other people, with their mats, you might want to have a service fee. A good service fee can be anywhere around 5-20% of the materials value. It is completely up to you. For example: the Surefooted enchant shouldnt cost more than 75g for the nether and 25g in service fee on Frostwhisper atm. If you gain a level in your profession by crafting the item, dont take out a service fee AT ALL (having no service fees for unique crafts will give you a good reputation.) If you are crafting khorium scopes for free during one week for example, there is a good possibility that people will recommend you in the future (when you have gained your 375 skill and when you have a service fee). Also, it doesn't cost you anything but a bit of time to craft something for someone (to get a level), but it does cost you gold/time to buy/grind the materials for the craft by yourself - remember that.


.:: Buying ::.

Okay. Now you hopefully got a good understanding of how auctioneer works, when to sell/when to buy, how to make profit out of your professions and you hopefully understand the concept of investments and fortune. And most importantly: you hopefully got a good auctioneer database. So what items should we buy? Be ready, here comes the secrets *drumroll* :
You want take advantage of other peoples mistakes - you want to buy the following:

-Undervalued Blue and epic weapons and armor
-Undervalued Twink items (this is mainly blues/epics, but also lvl59 outland greens)
-Undervalued Darkmoon cards
-Very cheap greens* (see the section about enchantrix for more information)
-Profession materials (finished crafts, start-materials, middle-materials, end-materials)

It goes down to how much time you are willing to spend searching the AH. But you will make good money by just buying blues/epics, twink gear, darkmoon cards and working with your professions. ALL I ever buy nowadays are lvl 1-49 twink gear (blues and epics), and green items that I disenchant for profit - I could aim for more ofc but Im lazy.


- Understanding auctioneer and what to buy -

So, the first thing you can scan for is the following:
Lvl range: max 59
Rarity: rare (blue)
Weapons

You will get up a list containing all blue weapons (up to required lvl59) that are currently on the AH. Sort descending and start checking the list for peoples mistakes. Here are three examples:
http://img211.imageshack.us/img211/2060/buy1tt2.jpg - http://i261.photobucket.com/albums/i..._2008/2buy.jpg (MIRROR)
http://img352.imageshack.us/img352/9572/buy2et5.jpg - http://i261.photobucket.com/albums/i...2008/3buy2.jpg (MIRROR)
http://img352.imageshack.us/img352/9898/buy3kr4.jpg - http://i261.photobucket.com/albums/i...2008/4buy3.jpg (MIRROR)


Lets take example 3 and look at the info there:
The green text tells us how many times an item has been spotted (by you or an automatic scan) on the auction house. Don't buy anything that you haven't seen at least 5 times on the AH btw (preferably more). The next couple of blue lines are the MOST important part of this tooltip. It says:

-The average starting bid for this item is 28g
-In 7% of the cases, someone bids on this item, and the average bid is 20g
-An average buyout value of 34g was set on 99% of the auctions
-The buyout median is 35g

And the light green text says:
-The BO median for the last 30 observations was 35
-The BO median for today (2 observations) is 42g

There is also info about how much you would get from a vendor if you sold it. And in some cases you will also see disenchanting information.
(see the section about enchantrix for more information about disenchanting).

So, do we buy this item for 20g?
The answer should be obvious - yes! we buy this item since we can get a 15g profit from reselling it.

After you have checked all the weapons, press the armor tab and do the same. Buy anything that gives you a 10g profit or more (this is my profit limit, you may ofc lower yours to 5g if you are willing to risk losing money, but this is safe IF YOU LOOK AT THE AH FEE/DEPOSIT PRICES and if you know the probability that the item will sell). I personally ignore items that yields a profit of 8-9g or lower. Also, if the bid is within your profit limit - bid. If the bid is far away from the BO, say the median is 40 and the current price is 10g/40g - bid more than 10g (otherwise someone else will steal it).

Do the same for the darkmoon cards, your profession materials, twink gear (twink gear isnt always blue/epic), and other things that you think you can get a profit from. Be careful about the darkmoon cards though. The market can be pretty vicious about these cards. Always check for competition before you buy something!

-----------------

.:: Selling - Undercutting ::.

Undercutting means that you put up an item on the AH for a lower BO price than your competition. We all learned pretty quickly when we were noobs, that undercutting is the way to go. For the first 25 levels on your char(s), the auction house is only used to buy and sell one thing: Things you can do without. Most people who finds green gear they cant use, put it on AH during these levels. We all learned quickly that in order for OUR greens to sell, we must undercut. This works out perfectly on a market with low-valued high-supply items, but thing is that on the higher levels (60-70) - undercutting makes the market go down, which can hurt your own bussiness. I will explain the ups and downs of the market in the next section: "market fluctuations". So, my general recommendation here is: "It's better to wait with your sale rather than undercut some idiot"

Anyway lets get on with selling. What makes your items sell?:
-They are the cheapest ones available
-They are the only ones available (monopoly)
-They are offered at decent (standard) prices
-There is a high demand

Especially the last one is very important. You dont always have to undercut! Remember that! If you are working with high demand items such as netherweave cloth, flasks or arcane dust. You can be second on the sell list, or even third. If most ppl are offering their cloth stacks at 4g and someone is offering 3 stacks at 3g - you don't undercut him. His cloth will be sold within 30 minutes and then your items will be next in line. So put up your cloth at 4g. Also, when you decide not to undercut (which causes the market to go down), always look at when the competitions auctions will "run out". If someone is selling for example x3 felsteel bars at 15g each, and the time left is "Short", you should put up your own bars there for a real price (20 or 25g each) and just wait for his bars to run out. If the competitors auctions are not "short" it's better to wait, like I said a couple sentences above.

If you are undercutting, take it easy. If someone has a monopoly for khorium bars for example, 5x at 10g each and you know the real price for those is 5-6g - you don't put up your own bars there for 6g - that is just SILLY and yet I see this EVERYDAY (people undercutting like maniacs even though they can get a profit by just undercutting 1g). People who does extreme undercutting are the ones who crashes markets actually. For example, last summer, Arcane tomes were being sold at 20-25g on Frostwhisper, then some idiots started doing massive undercutting (each one undercutting the other by 1g) and the tomes skydived down to 10-15g each. The demand was about the same back then, and so was the supply, but due to massive undercutting, the market turned down, and it never recovered after that, since during the autumn, more and more ppl turned 70 and thus the amount of tomes increased while the demand was lowered.

If you have to undercut, do it properly. For items worth anything in the 25-50 range - undercut by 1g. For items worth anything in the 55-200 range you can undercut with 5g. The more something is worth, the more you can (and should) undercut. Undercutting a Lunacy deck by 1 silver makes you look like an idiot for example, so use your brains.

Another thing worth mentioning about quantities and undercutting:
If someone is undercutting the base price with a large quantity of the item (say that khorium bars sell for 4g and someone puts up a stack (20) for 50), buy it and split the stack up. Stockpile some and resell some.


- Quantity -

Everyone who isnt a complete jackass knows that: The more you sell/buy of an item at the same time, the lower the price should be. You see this EVERYWHERE in real life - especially in supermarkets. Buy 3 shirts and get one for free!
Undercutting is bad, so one alternative can be to offer your wares at bigger quantities, but for a lower price. Lets take khorium bars as an example again. Say someone is selling those at 4g each, and you just bought 10x for 23g or something. A good way to spread them now would be:
3x 1 bar @ 4g each
2x 2 bars @ 6g
1x 3 bars @ 10g

You just undercut your competition with up to 25% (competition 4g x10 = 40g total - your bars 30g total). This makes the undercutting is less obvious, and won't affect the market in the same way. So selling items at different quantities is good, better than undercutting. Also it's a good idea to make a bit of research about this. What quantities are good? What crafts need only 1 bar, and what crafts needs 3, etc?


.:: Market fluctuations ::.

Wikipedia says:
In economics, "fluctuation" is a critical combination of events.
I personally define "market fluctuations" much simplier: Big/major changes to the market.

In the above section, I explained a market fluctuation in the example with arcane tomes. The main reason the price dropped by nearly 50% was mainly because of massive undercutting, but other factors could have been responsible (for example: less demand). Predicting these fluctuations are very hard, but it can in many cases be possible.

First off, what makes the price go down? The price of an item will go down as long as the supply increases and/or the demand decreases. Another reason is undercutting. The more people who undercut - the worse it is for the market. Why? Because the undercutters set up a new standard price - like in my example with the arcane tomes. Split up the market into two types of ppl. Those who accept the prices (the majority), and those desperate to sell (those who undercuts a lot). The undercutting on those arcane tomes kept on for so long, that the market (majority) accepted the new price ranges. The majority couldnt sell their tomes at 20-25g because they were constantly being undercut, so they started adapting by lowering their own prices, and from there the snowball effect continued. The desperate sellers continued to undercut because they wanted fast cash, and the main market (majority) did the same thing, because they had to either adapt or stockpile. And since most people don't stockpile they instead adapted. Today, the 20-25g range for arcane tomes on Frostwhisper is unacceptable. The market (majority) has accepted the new 10-15g price range. And it is never going back again.

Why isn't it going back again?
Because the demand wont increase, and the supply wont decrease (unless blizzard nerfs the drop rate) and because no one is stockpiling. When the price is falling, people panics... they sell out their whole stockpile as fast as possible in order to not lose as much money, so they cause a chain reaction resulting in even more undercutting. Im sure you've heard of the Black Thursday. If you havent then Ill tell you what it was. It was one of the biggest (if not the biggest) stock exchange crashes in the entire history of man. It happend on Wallstreet (New York) in 1929, and tons of people got broke that day.

Other than that, what causes major fluctuations?
Changes to the game.

Examples: When TBC was released, a lot of things happend:
-The paladin class got available to the horde side, meaning that more people was gonna level blacksmithing on the horde side. The demand for blacksmithing materials went up (copper, tin and iron sold for astronomical prices at the start).
-New darkmoon faire cards introduced. When new items are introduced to the market, it always takes some time before they are correctly valuated. Because of this, those cards started out very low (you could get them for 5-20g), but continued to grow in price as more and more ppl hit 70 and got aware of these new cards and the trinkets you get from them.
-Jewelcrafting introduced, along with prospecting. Even higher demand for ore.
-People started leveling their lvl 60 chars - the demand for so-called "outland greens" was introduced to the market.

Im sure you can come up with a lot of other market changes that previous patches has brought us. For example when AQ opened up a long time ago, the demand for nature resist gear went up. Now that you know how powerful patch changes can be, you must ask yourself:

Will any class be more/less popular with the next big patch?
And what items does that class need?
What professions does that class take?
What is the current market trend leading to?
What do people spend money on?
What will people spend money on in next patch?
What will the next patch bring any new content?

Another example is 2.3 - As many know, 2.3 introduced a lot of new gear available via badges. This meant that the demand for gems and leg armor went up a bit. Me and another guy in my guild (got the tip from him actually: Thank you Ploutonas) stockpiled gems before the patch, and then sold them for higher when the patch came out.

I recently noticed another thing that could have been predicted. When 2.3 came (or was it 2.3.1?) a lot of instance gear was buffed, resulting in some old twink gear now being the second best gear. This lead to a price dive on those items. An example of this can be seen here:
http://img125.imageshack.us/img125/5465/warningfq4.jpg
http://i261.photobucket.com/albums/i...8/5warning.jpg (MIRROR)

-----------------

.:: Trade channel ::.

The trade channel is preferable when it comes to three things:
-Selling/buying something - fast (read: cheap)
-Selling/buying something very expensive, or very rare
-Advertizing

Most people want number 1. They want fast cash or they want to buy something for cheaper than the AH-price. The trade channel is FANTASTIC because you dont have to pay any deposits or auction fees at all, and you can "undercut" as much as you want. The negative side to it is that you can sometimes get stuck there for long periods of time (especially if you are trying to sell/buy very rare items/crafts.) The trade channel is an excellent way to buy things cheap, things that you later sell on the AH at a much higher price. It's almost as good as the auction house itself, so do a couple of whispers a day to these sellers, and buy whatever is profitable. To save time, DONT EVER argue with the sellers. Just move along if someone doesnt wanna sell that pair of twink boots to you for a micro-price. Also, if you give them the impression that you won't tolerate their price, they might become even more desperate, giving up for your prices.


.:: Monopolies, cartels, fake competition ::.

In the real world (in a capitalist country) - owning the whole market is illegal. You know it by the name "Monopoly". Why is it illegal?
Because if you have a monopoly - you determine the price, not the market. And this is bad? No? The standard case against monopoly is that with the same cost structure, a monopoly supplier will produce wares at a lower output and charge a higher price than a competitive industry would (found that sentence on the net btw). So if someone got a monopoly on something that you need - bad for you. If you on the other hand got the monopoly - good for you
But it doesn't end there.

Why do you get a monopoly?
You get a monopoly if you are the only person currently selling a ware. Usually it's some wares that few people can craft/farm or aquire in any other way. So what can this be? Crafts and end-materials from semi-unpopular professions like engineering is one example. Not many people bother to level engineering to lvl375 So if you sell khorium scopes and khorium power cores for example, it is very likely that you will get (or already have) a monopoly.

What are the positive effects of having a monopoly?
-Profit increase - since you can and should raise the price (how much depends on the item. But 20-33% is not uncommon)
-There is a posibility that you turn the trend (market goes up), raising the base price of the ware - which is good if you are a supplier and/or have stockpiled the item(s).

What are the negative effects of having a monopoly?
-Raising the price decreases the demand
-You might have to defend your monopoly - which can be costy, especially if the demand is low and/or the supply is high.

And now you know everything you need to know about monopolies. Lets get on with fake competition (one of my favorite "dark side" tactics on the auction house)

"Fake competition" is something I call a monopoly in disguise. A picture says more than a 1000 words so here are two:
http://img129.imageshack.us/img129/1...tition1fg0.jpg - http://i261.photobucket.com/albums/i...ompetition.jpg (MIRROR)
http://img125.imageshack.us/img125/7...tition2zj5.jpg - http://i261.photobucket.com/albums/i...mpetition2.jpg (MIRROR)
(note: the first picture is from last summer, when khorium cost around 5-6g - but the principle is the same and back then I managed to keep a monopoly like that for at least one week)

Here you can see the buyout prices for khorium bars, ranging from 8g to 10g - thing is that I own all these toons. Khorium bars standard price ranged from 5-6g on Frostwhisper last summer, but I successfully raised that price (not taking all credit though ofc) for a time being (when I had a surplus of khorium) by setting up fake competition. At first I thought it wouldn't work at all, but other people joined in and offered their khorium bars above the market price as well!!! Remember when I said that there are two kinds of people on the AH? Well, in this case, the majority accepted the new prices.
If I had sold 15x 1 khorium bars at 10g each, I would immediatly be undercut by someone. Now, with fake competition set up, the not-so experienced player will think: "Oh, I guess the price has gone up" and wont place any 6g khorium bars there. In fact, he or she might not even undercut the 8g khorium bars since there is only two of them. If the demand is high, and he/she knows it, he will undercut the 9g khorium bars and not the 8g ones. When people see more than one person with a new price, they adapt to the new market situation. They never think that it's the same person behind all those toons, regulating the market by himself/herself. The base price will go up, which was good for me since I was a supplier of khorium bars.

- Maintaining the monopoly -

I talked about desperate sellers before, and how they affected the price on arcane tomes. So let us ask what will happen if someone comes there, undercutting your prices by say, 50%? Yes, such people do exist. Suddenly there are khorium bars there for 4g, what do you do?
Depending on the quantity, and the current demand of the ware - you buyout your competition. This is a rather delicate matter though, because you don't want to spend your entire fortune buying up your competition day in and day out - so you MUST be sure that you can take it before you proceed. If it goes wrong, you will end up with a large supply of the ware that you bought for higher than the standard price - and you will also have a smaller dynamic fortune (gold). So be careful when buying your competition.

- Cartels -

A cartel is a group of formally independent producers whose goal is to increase their collective profits by means of price fixing, limiting supply, or other restrictive practices. Cartels are very, very unusual in WoW, but not impossible. They are easiest to create around rare high-demand items that
few people can supply. Say that we are back when TBC was released, and you are the only seller of the Mongoose enchant on your faction side on your realm - you could easily take a service fee of 150-200g or maybe even more. Awesome! But hey, one day you hear about another guy, from another guild who also got the mongoose enchant now, and he is offering it at a slightly lower service fee. What do you do? The not-so good thing would be to start a competition. You lower the service fee, he lower the service fee, you lower the service fee... you see where this is going? For max profit, it would be best if you two offered the enchant at exactly the same price. For max profit, it would be best if you two formed a cartel. How do you form a cartel? Use your social skills. Approach the other seller, explaining the current market situation. Tell him that a cartel is of interest for both of you, since it yields more profit than a competition would. But like I said, cartels are rare. Mainly because there are not so many wares/services in this game that are this rare, but also because people are in general stupid, and greedy, and refuse to listen. Most people dont bother about profit. On frostwhisper (horde side) when the mongoose enchant first came available, the service fee was around 150g if I remember. In one month, up to 3 other providers got the enchant, and the price dropped down to under 100g. Things wouldn't have skydived so fast if a cartel had been set up between the first two sellers.


.:: Learning - Some items never sell ::.

No matter what you do, some items never sell. Unfortunatly, you have to learn this from experience. But here is a couple of hints:
-Items with a lvl requirement of x0 are mostly unwanted by twinks (10, 20, 30, 40), and are less likely to be sold
-Most people twink at lvl19, 29, 39 and 49. Twink items in the 59 range are less wanted by the market. And that particular market NEVER WANTS BLUE/EPIC ITEMS - they want outland greens
-If several people are offering a ware that you know is way below the base price - dont buy it. It is most likely a new trend (market going down). It is better to wait a week and two and see if it's not a temporary fluctuation.
-Crafted blues are very poor to buy. You will notice A LOT of crafted items in the lvl1-49 armor section. There are tons of rings and leather armor there that you should never ever buy unless it's heavily undervaluated. Why? Because the crafters can afford to undercut your ass and still make money.
-Don't buy 60-70 blue armor/weapons unless you do it for disenchanting. People can undercut like idiots in this item range. And many of the items are commonly found in chests, instances and as world drops.


.:: New items - World value ::.

If you are uncertain about the value of an item (if you lack database records of it) then go to wow.allakhazam.com , search for the item, and look at the world price. Press the item link and then check the value: Median AH price. The world price is the AH median price for this item, on all realms together. It offers you a good hint of how much an item is worth, but you should know that prices varies from realm to realm.
You can also ask a guildie or friend if they have any information about the (to you) unknown item.

---------------------

.:: Enchantrix - disenchanting for profit ::.

Enchantrix is an addon that estimates the disenchant value of an item. It requires that you have a database before you start, and it works by estimating what enchanting materials might appear from a disenchant of the said item, and then calculating the selling price for these enchanting materials. If the disenchant value is higher than the bid/buyout, and you have the possibility to DE the item - then you buy it.

Enchantrix comes with the auctioneer package, so all that you have to do is to run a couple of slash commands to set it up:

/enchantrix on
/enchantrix load always
/enchantrix barker on
/enchantrix counts on
/enchantrix valuate on
/enchantrix valuate-hsp on
/enchantrix valuate-median on

Now lets look at a picture:

http://img259.imageshack.us/img259/3...rethreepa4.jpg
http://i261.photobucket.com/albums/i...enchantrix.jpg (MIRROR)

The first couple of lines shows what this item will disenchant into (anything not listed here wont appear from a DE - this item cannot yield nexus crystals for example) - and the chance that it will disenchant to this. After the item name there is also a number, saying how many of that item you will get if you disenchant it. From the tooltip, we can read the following:
There is a 77% chance that this item will disenchant to either 1 or 2 Greater Nether Essence
There is an 18% chance that this item will disenchant to either 1 or 2 Dream Dusts
There is a 5% chance that this item will disenchant to a Large Radiant Shard. And in 1 of 10 cases it does that, it will yield 2 shards.
There is less than 1% chance that two Lesser Astral Essences will come out of this disenchant
There is less than 1% chance that one Greater Astral Essence will come out of this disenchant

Now the three last lines:
HSP stands for "Highest selling price", but it isn't really that true/accurate. HSP is based on a lot of factors, like the historical BO value on the enchanting material, the current BO value of the enchanting material, and the estimated (base) market value of the item. HSP is an optimistic estimation of what the enchanting mats could sell for based on the above factors. Imo, HSP shouldn't be trusted. I did a search on the AH for Greater Nether Essence and found out that they were being sold for 12g each atm (10g market price), and with a 77% probability to get one or even 2 of these nethers, you would get a lot of profit buying this one (if it DEs into nethers). The next line (Median) is the most accurate value estimation. I dont know the exact formulas for these two, but I know from experience that the Disenchant value median is the most accurate. It estimates the DE value based on all factors: chance of all the items to appear, market prices, current BO prices, historical BO prices, etc. And you can see/sense (gut feeling?) that 11g is a lot more closer to reality since it's a 77% chance that you get either one or two of those nethers (worth 10-12g each), and a 18% chance to get the pretty much worthless dream dust (valued at 1g each). So in this case, we buy this Richochet, disenchant it, and resell the materials.

Almost forgot to tell you what the baseline value is:
Im not 100% sure but I think this is some old world values (gathered from allakhazam) for the enchanting mats. (I think thats what the manual says). Anyway, it is not important and should be ignored. You can turn it off if you want with the following slash command:
/enchantrix valuate-baseline off


Another thing about the disenchanting tooltip is that you are often gonna see the following:

http://img266.imageshack.us/img266/6...urefourlq8.jpg
http://i261.photobucket.com/albums/i...nchantrix2.jpg (MIRROR)

Enchantrix works pretty much the same like auctioneer. Everytime something is disenchanted, the information is stored in the database. If something have never been disenchanted (no info in the database) it will say: No disenchant prediction available. When you install enchantrix, it comes with a somewhat okay database. It contains predictions for most lvl60 items and below (the developing team have gathered this information over time, and since TBC is relativly new, no disenchant predictions are available for the TBC items (61 and up)) - only the "self-learned" disenchant prediction can save you here. If you've always used auctioneer and if you are an experienced enchanter (lvled all the way to 375, etc) this wont be much of a problem really. Your database will be very accurate. If you are a casual enchanter - it won't be much of a problem either. Just get enchanting up to lvl 275 so that you can disenchant items up to lvl70.

Also previously there was a slash command to automaticly sort through your latest AH scan to find these profitable disenchants. The command was
/enchantrix bidbroker X
where X is the amount of silvers you want for profit (500 = 5g profit on disenchants). Unfortunatly, the developers have turned off this feature in the newer versions of enchantrix, but it will hopefully come back soon.

Some disenchanting hints:
-I never bother about scanning for items that are lower than req lvl45
-Items that have a req lvl of 65-70 have a very high possibility to DE into Large Prismatic Shards, and very often I see these kind of items being sold for WAY below the price of LPS'.


.:: Grinding ::.

Im no expert grinder so I will only go through the very basics. (I hope that someone more experienced can give some other hints)

-Use the best pve-specc available for your class
-Grind where you have as little competition as possible (the plateau in Nagrand sucks)
-Stack up a lot of food, water, bandages and pots
-The best time to grind is 04:00 - 06:00 server time (not weekends) - when everybody is asleep
-The worst time to grind is after 15:00 in the middle of the week - when all the school children comes home (and from there it only gets worse, since ppl usually come home from work after an hour or two)
-Don't gank
-If you get ganked more than once on the same spot (within a relativly short timespan), move to another spot. It's not worth the time wasted being there.
-Grinding efficiancy is measured in g/hr (gold per hour spent). And it includes all the items you vendor + the current market price of the items you grind. Epics are excluded from this formula. Also remember to calculate the cost of potential pots that you drink during this grind (10 hp pots per hour is a lot of gold after all - about 15g with the current FW prices)
-Try many different places. Go and grind one hour here, write down the g/hr, then go grind one hour there, writing down the g/hr for that spot. (Always try and grind for 1 hour straight without interuption - this so you can be certain that the estimated g/hr gets reliable)
-Avoid the most popular areas unless you are grinding in the morning (Elemental plateau again)
-Most of the great grinding places are found by YOU. Don't listen to stupid guides like Derek's Gold Making guide that tells you to grind the elemental plateau. For example, I recently discovered a very good method of earning A LOT of primals by using the Engineering mote extractor and the engineering goggles and fly around Nagrand extracting "air" clouds in the morning. I think I got 10 primals in 1 hour and 20 minutes (not really focusing a 100% on grinding as well, I was chatting a lot). So once again, if you are heavily into grinding you have to be an analytical experimenter - a tester. And you have to find those awesome spots by YOURSELF. And you have to stop wasting your bloody time at the elemental plateau.

Speaking of the elemental plateau - why is everyone there? Its a @@#@ty place tbh. You are constantly ganked (or spend time ganking others), it is crowded and the space is relativly small. If you need motes of fire, go grind the elementals at the Gul'Dan mountain in shadowmoon instead. Shadowmoon is also a place for motes of water (to the north) and lots of motes of air (in the south/south east). Bottom line: DONT GRIND WHERE OTHERS GRIND.


..:: End ::..

I hope this guide will help at least someone out with their economy (and I also hope that some people have more things to add to it). If you start today, and follow this guide, you WILL BE WEALTHY unless you are an extreme spender. Just remember these words again: It takes time to get the kind of economy I currently have (almost 8k dynamic fortune and around 3-4k static fortune). The first few weeks you might think that something is wrong, and you might go desperate and lower the prices on your wares. DO NOT DO THAT. I've seen people without patience doing that in my guild, later asking me to buy their @@#@ so I can sell it for them. Ofc I didn't do it, because I wanted to teach them a lesson. Anyway, wealth according to this model in this guide scales EXPONENTIALLY. That means that the longer you work with this properly, the more your wealth will increase. When u start out you might have 400g static and 0g dynamic. After 2 weeks you maybe have 300g dynamic and 500g static, and after a month you might have 550g static and 1000g static). And it will continue to grow non-linear like this if you keep checking the AH several times a day for the items listed in this guide. If you feel that you are not gaining money, take some time and calculate your estimated static fortune and you WILL SEE that you are wrong. Anyway, it was fun writing this.

Over and out.

[blondinecarsten]

to.. long :O

[moonpeach]

lol , nice one +Rep , i have auctioneer and is very good to use as it gives a estimated price on your server

[Survival]

Nice guide, +rep

[Fudgey]

Best post in a while

EDIT: +rep x)

[darbdavys]

god, i thought everybody knew about it o_O

[mitzaem]

at least (after 2 years) for his first post, he wrote alot
+rep for the efort!

[krlhnz]

at least (after 2 years) for his first post, he wrote alot
+rep for the efort!

c/p.. i can write that much also

[SchnuBby]

Nicely made guide m8.

sure a lot of work, but also a nice guide i will try this. But 1st i have to scan the AH for awhile now ;( ^^

hopefully i will make a good profit in a few days ;P

oh almost forget ... here's your +Rep cookie

[onlineinsg]

wow that's a wordy post. some common sense stuff but i guess he took the time to put it down.

[Samu12]

Hmm.. I tryed use this. Had no luck but fine.

[Scammich]

+Rep for the amount of time put into this post. The guide was thoughtful and looked at the whole market using auctioneer as a NYSE sort of program. One thing I have not seen in any of the . commands that he advises, so that is something I am going to have to try. All in all, thanks for the contribution and in depth auctioneer post.

[XinuX]

+Rep for the amount of time put into this post. The guide was thoughtful and looked at the whole market using auctioneer as a NYSE sort of program. One thing I have not seen in any of the . commands that he advises, so that is something I am going to have to try. All in all, thanks for the contribution and in depth auctioneer post.

He didn't write it...

[The Maffyx]

+Rep for the amount of time put into this post. The guide was thoughtful and looked at the whole market using auctioneer as a NYSE sort of program. One thing I have not seen in any of the . commands that he advises, so that is something I am going to have to try. All in all, thanks for the contribution and in depth auctioneer post.

Wooooo, man I wish I could get rep for putting 2 seconds into a post. At least he credited it.

[adamtherien]

rep thanks