Auctioneer/Howto

From Norganna's AddOns

The following is an edited copy of a post to the forums.

I've read numerous posts, and most people are asking "How does this work?" "How do I make money?" And usually they attach a "Fast, Now, or Quick," in that last question. So I made a guide. This isn't about Auctioneer, or any of its features. This is simply how to read the Auction House market, and make a good, sound, MONEY-MAKING decision.

There is no "trick." There is no miracle machine that does the work for you. If this is what you're looking for, turn back now.

I am a professional NYSE trader, and I am an advisor to many firms on economics. I am going to remain anonymous for my own personal reasons, but I hope this following guide helps a little.

One of the biggest questions I see is that everyone is lost on how to pick a winning choice. I'll get to this later. Right now, you need to ask yourself if you have the patience to wait, the drive to stare at numbers for lengths of time, and that you learn from your mistakes.

I'm going to make this a quick how to because I know how much you kids like to read. :)

What is Auctioneer?

This is simply a program that allows you to take a "snapshot" of the current market prices. It is like taking a photograph of a running horse, when the photo is developed, you have a "freeze-frame" of what the horse looked like at that exact moment. The horse would have kept moving, just like the market will, after the snapshot. But, it will give you an understanding of what items are selling at what prices.

Now, if you were to take 2 photographs of that horse, you could determine a few things, the direction it's moving, the speed it's traveling, and the distance. In terms of the market, you'll know what prices are moving in what directions, and how far they might go.

The more scans, or pictures, you have of the AH, the more information you'll have to make the right decisions.

I’m not going to dwell on Auctioneer. You can read about what its commands are and what everything means on other FAQ's.

Where to start?

I would say for almost any server everything is different, but one thing remains the same: Demand. Demand is what drives price. Now, without going back to Economics 101, I'll try to give you a quick idea of what demand is, in WoW terms.

Demand and Supply interact with each other to determine price. The higher the demand, and the less of supply equals the higher the price is going to be. Let's take for instance a Krol Blade and Fadeleaves. Every (I know not every, just bear with me) Rogue wants these two items. Considering that both items have equal demand, the Quantity (supply) will determine the price. So, the numerous amounts of Fadeleaf you see on the AH, will not allow it to go skyrocketing into 300+ gold for a few. But because of the rarity of a Krol Blade, it is possible to achieve such a high price.

So a general good idea for starting off would be to play around with LOW cost, HIGH demand items. But what are these?

How to pick a winner!

So now we understand that we need to have a Demand in order to sell items, but what items are high in demands?

You’ll have to figure this out on your own. But ask yourself this:

• What does a certain class need that you can get?

Rogues need fadeleaf, Warriors need Valor armor, etc. Don't limit yourself to herbs, the more varied your portfolio, the more money you'll make.

• What is the current trend leading to?

Is everyone on your server buying up Runecloth? Is it suddenly the new thing to have the Crusader enchantment? (If so, what are the mats?)

• What do people spend money on?

Enchants, Armor, Weapons, Patterns. Servers vary, but you have a good idea by watching your local Trade channel.

Are you on a new server? This means there's a lot of low level characters, which means the demand for lower level materials will be greater than in a server that is full of 60's.

And here's a real good one:

• What will the NEXT patch bring a demand to?

When AQ opened up, the demand for Nature Resist BoE's skyrocketed. What will the next patch bring?

Ok. So you're almost there. What have we learned so far? Well, we know that it's smart to buy things that will sell. And we know how to determine what will sell. But I'm not about to send a level 10 into Felwood to farm Felcloth or Essence of Water. We're going to keep you safe and sound in the auction house.

Starting small...

Yes, we all have to do it. The more initial money you have, the easier it is to invest into the market, but aren't all of our goals the same? TO MAKE MORE MONEY?! When you're starting out small, you don't want to go for big items. Your Mother has said it a million times: Don't put your eggs in one basket. So don't put all your gold into one item, unless you KNOW you will sell it soon. Even then, it's risky.

But look for items that are still in demand, even if you're on a server with a lot of 60's, chances are that they have alts, and those alts need low level materials to level professions to 300. I have faith, you'll come up with a few items. You only need to stay small until you think you can move up in the world. I don't need to tell you that if you can't afford a Ferrari, you can't afford a Ferrari. You know your limits, don't extend them.

A quick note about long patience...

Patience goes a LONG way. If you have something that the market is currently selling for less than you bought it for, or less than you want it to, don't get rid of it. A big mistake that I see a lot of guys make is that they get rid of their stock for something less than they paid for it.

Look. If it sinks below market value, it sinks below market value. All this means is that the item you have is currently selling for less. It doesn't mean your item is worth less, it just means you'll have to wait until the market comes back up, or until someone (like you!) manipulates the market. Patience, we'll get to that later too.

Selling and those m.f-ing Taxes

Yes, only two things in life are certain... Death and Taxes. Taxes for the AH hunter take two forms: deposits and commissions.

Deposits are the amount you pay to the AH to list your item. The good news about deposits are that you get them back if your item sells. The bad news is that, if it doesn't, you don't, and that's lost profit for you. Deposits are based on the length of the auction you post and the vendor price of the item, so high priced items (usually weapons and armor, but also some high level books and the like) tend to have the highest deposit amounts. You need to be careful about listing these items lots and lots of times while looking for the very best sales prices.

Commissions are basically the AH cut of every successful sale. If you sell an item for 10g, you're not going to get all 10g yourself - the AH is going to keep a cut of that. This generally means it's unprofitable to buy items and then resell them for very small amounts more than you paid for them, since the AH cut will actually make you lose money in the end. But we are normally looking for bargains of a much higher scale, so the commission is something you can just ignore for the most part.

It is worth noting that the deposit and commission amounts are higher for items listed in the neutral AH's than they are for the items in your faction AH's, so be careful if you do a lot of cross-faction sales there.

The reason this is important is because you never want your Deposits and/or Commissions to exceed the final price of the Item. If you’re selling 1 Peacebloom for 5 silver, and it costs you 30 silver to post it, you are losing 25 silver if it doesn't sell.

Deposits and Commissions aren't normally a problem when you get to high priced items. But, it can be a bother. Even if you're trying to sell Runecloth for 1 gold a stack, and it costs you 10 silver every time you post it, and you post it 10 times without a sale, it has cost you 1 gold so far. So here you either need to raise the price, resort to the Trade channel, or just vendor it.

Just be aware of it. Some items have high deposits.

Time can be your friend.

Different times during the day will yield different returns. This means you want to sell items during peak hours, and BID (not buy out) during the off.

So if it is 4pm, and peak hours are from 6pm-10pm, and it's a high demand item, try to post it with the auction ending in 8 hours. This will lower the deposit, and give you a higher return profit. Likewise, if you're attempting to win an item through bidding, try to put your bid on it when others won't be. Is it dead quiet on your server at 6am? Good. Do your shopping then.

Making sure your things sell... The Snake oil salesman

If you're not controlling the market, you need to manipulate the best you can. This can be done by creating a competition. Even if the competition you're posting is minute, it will encourage people to buy your items over the others.

Determine a percent value that you're willing to undercut the market prices. And sell all your items that pose competition in that manner.

Bank on the idiots

Alright, so you got your Auctioneer scanning, you've been cruising the AH for a while now. And suddenly you notice something about Large Brilliant Shards... The first three are listed as 3 gold bid/4 gold buyout. And suddenly there's one with a buyout of 2 gold. BINGO! Xiaoxaioxxx made a mistake by posting his LBS for less than the market value! His loss is now your gain. You just made 2 gold (assuming the market allows it to sell for 4 gold) by walking from the AH to the mailbox and back.

Bidding

Another way is to bid on items. A lot of people make the mistake of putting up high cost items without changing Blizzards suggest start bid. This means that sometimes you'll see Shadowcraft Bracers with a buyout for 25 gold, but a beginning bid of 2 gold. Use your Auctioneer to determine what auctions are a nice, low bid and have a SHORT (30 minutes or less) auction timer.

Backing the market into a corner... then taking advantage of it

In real life, owning the entire market is illegal. Can anyone tell me what this is called? Anyone? Yes, you in the back with the eye patch! - "A monopoly, yaaarg!" - Exactly.

A monopoly is when someone or a business owns the entire market it is involved in. The reason they are illegal (well, one of the reasons, that relates to this) is because in a monopoly the owner controls price. Thankfully WoW’s AH does not pertain to real laws and GAAP, and all that stuff in-between.

So how do we create a monopoly? There’s two parts to this. We first we need to buy EVERYTHING. Then we raise the price to what we think people will pay for it. Once again, the Krol Blade and Fadeleaf scenario, if you buy all the Fadeleaf, and put it at Krol Blade prices, no one will buy it. Trust me.

Secondly, after everything is back on the AH with its nice, new, inflated price, we now need to defend them. This means buying out competition. Nine times out of ten, competition will try to post their items at a lower cost, this is good for you. Can anyone tell me why? That's right, we want to bank off idiots! The competition is putting their items under the new (your!) market price. So buy them, and re-list them at your price. The other 10% will post their items over market price. This is a wonderful thing, this will push buyers to your items instead.

(Hey, try getting some of your friends into this, and dominate a market for a weekend...)

Enchantrix... the new love of my life

Going back to banking on idiots. Enchantrix is an addon that will scan the AH for items that will disenchant into more valuable items. This happens a lot on my server. A lot of cheap looking green items end up yielding 300-400% of what I bought them for, just because I de-enchanted them (into something that had more of a demand). Whenever you search for items that are below market value, search for these too.

Finally, my secret weapon...

Pens and paper ready? This is the biggest money maker I have...

Have fun. If you aren't having fun, there's no point in all of this.

If you can't get fired up about making money, then you need to go find something else to do. You’re right! I didn't say it was easy. But does ease matter for anything worth working for? Hell no! If this wasn't a challenge, then everyone would be doing it. And you don't want that! That increases competition!

By the way, if you're reading this, you agree not to use these tactics on Magtheridon USA, Alliance server. ;)

Conclusion

This isn't a guide to make you a pro-auctioneer. This is to allow people with no knowledge to a level of know knowledge. This will make you ready to become better. I wrote this to help out all those kids who think that the market is some mysterious beast that could go in any direction. It's not, and it is tamable. And the amount of money you make is based on your ability to dedicate to the market, knowing the market inside and out, and every once and a while catching a breeze of good luck.

Remember, Have fun! Good luck! And Happy Hunting!