One of the biggest mistakes I see from people who think that making gold in the AH is only about buying low and selling high. You have seen these guys, they go and buy every single item in a category, like wool cloth, and then relist them at ridiculously high prices because someone told them this is how you do it. They end up getting stuck with stacks of materials, no sales and then get frustrated and dump the items into the AH for a loss and tell everyone that you cannot make money in the AH. Don’t do this! If you do this method then you will lose gold and miss the opportunity.
That doesn’t mean you can’t make some nice gold coins on Wool Cloth, in fact it was one of my staples for years and I even dabble in still today. When starting out in the Auction House game, it is always wise to start in the commodities like cloth, ore, bars, enchanting materials, leather, herbs, etc. These items are always in demand, people are leveling alts, new players are always joining the game and they all want to level their skills along the way.
Basic Strategy: Let’s use the Wool Cloth as our example, unlike the idiot who bought it all in the Auction House and then relisted them for 100g per stack, we will look for the sweet spot and try to maximize the amount we can get for our cloth. Now remember, that ever server is different in pricing structure so it is very very very important that you have a basis of reference when you decide you want to resell the cloth. What is the average price? How many are selling? What is the deviation (the spread between the average price, the low price and the high price.
On my server, Wool Cloth averages about 8gold per stack. I find stacks listed between 5g and 100g and I know from watching the market for years (you may need to use Auctioneer or The Undermine Journal to know this data) that people will pay as high as 40gold per stack before they resist the purchase. That means I have some profits to make!
Depending on the spread in the market, I will buy the Wool Cloth as long as I can generate more than 100% profits (this is my goal) which means I will buy all the cloth I can up to about 20g per stack. This is also a great price point because fewer people will list these stacks over 20g per stack thinking that others would not buy them. I will. I buy the stacks, relist for 39.99gold for each stack and then monitor and wait.
Is it that easy? Yes and No. First of all, there may be some cloth stacks for 30g when I relisted mine for 39.99g but I’m ok with this for two reasons. One, it is below my profit threshold so if I buy it I will only make 33%, not 100% that set my bar at. Secondly, I really don’t mind seeing it sit there cheaper because that means other people will price theirs lower to undercut and the more they do that the more Wool Cloth I get to buy at the right price. It will sell; I just have to be patient.
Patience is not just a virtue, it is a necessity in the Auction House game at times. When I relist my Wool Cloth it might sell within minutes or it may take a week. Quite frankly, I don’t care because my margins for profit allow me a ton of room to relist them every day. The only time I may relist them cheaper is if someone decides to undercut me by less than a gold per stack and they list a boatload of it on the Auction. In this case, I cancel my auctions and relist it undercutting him by a copper. As long as there are less than 30 stacks or fewer listed below my cloth, I will be fine and leave it.
Lastly, you may have noticed the price point was 40g per stack but I listed it for 39.99 gold per stack. This is on purpose; it is a mental thing where people perceive prices differently when priced under a price point rather than at a price point. When was the last time you saw a house for $150,000 or a care for $25,000? Not often, if ever. They price them at $149.999 for the house and $24,999 for the car and I use the same method, whether it truly matters or not…who knows? But it makes me happy!
When setting your price, you need to know what % you want to make on your investment and you also want to plan on how fast you want it sold. In my example, I know it may take a week to sell it but that is ok with me. You may want your gold back faster so you gain momentum and if that is the case then you have drop your margins down. Selling it 20g will be faster than 40g, so if you find that you buy a few stacks for under 10g and you see that you still move these quick at 20g, the go for it! Profit is profit and when you are starting out you may need to go for higher volume over increased margins.
So now you want to drop into a market and use this method I explained, and hopefully what you learned from this post are the following:
· Know the market really well that you want to enter
· No how far you can push the price of an item before people stop buying it
· Have a goal set BEFORE you enter the market for the % return on your gold investment
· Be Patient
· Undercut if necessary, but it is not always necessary
Good luck and Happy Auctioneering!
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