Living Ember
I have been watching the AH for Living Ember to see how these were going to price since 4.2 hit the public realms two weeks ago. Nothing on our server the first week, to be expected since it requires boss kills in the new Firelands Raid. The 2nd week rolls around and I see 1 Living Ember hit the AH for 100k...LMAO. Yeah, OK. Then the guy drops it down to 75k, then to 50k and finally to 25k. No one else has one listed.
Then on Thursday I see a guy in trade wanting to sell Living Embers, I whisper him for price and he says 15k. I tell him no way, but I want to buy all of them so how much for them all? He tells me he has 10 and will sell them all for 75k! I try to make a deal, offering him 60k for 10 of them but he will not budge. I hesitate and he whispers me back saying he actually has 20 of them and wants to unload all of them for 140k. his is a huge gamble, we really do not know where the market will sit with these or how fast they will drop in price because it is just too early to tell. My gut says buy them and sell them fast, but to do so is to risk 140k...I go for it and do the deal.
I immediately go to the AH and post 8 of them for 20k each, then I figure I will do some marketing in the trade channel using the AH price to my advantage. Whenever you go to sell in trade channel it is wise to know the lowest price in the AH and if you can undercut while still making a profit. Since I was the only one listing them for 20k each, and I bought them for 7k each, I had some room to negotiate.
I started offering them in Trade for 15k ea. No nibbles. I am getting nervous, but I remind myself that it is early on a Thursday and our server picks up dramatically by 6 server. My goal is to sell these fast and get 10k minimum for each one, that would equate to tidy profit of 60k gold. But I know that I need to move them fast and the demand is not high when priced at this level. I get my first bite, guy offers me 13k, we banter back and forth and I settle on 14k for one. I start to smile realizing that I doubled my investment on the first sale. The I watch as the guy who buys it from me runs to the AH...so I follow. Sure enough, he posts it in the AH for 16k, which is 4k less than mine in the AH! What is he thinking? First of all, why would you undercut so heavily when there is room for more profits? Secondly, he just paid 14k, he lists it for 16k and that means that after AH fees he will receive 1,200 gold for the work which is only a 11.67% return on investment. What a dumb move.
I go back to barking in trade chat and after a few minutes I get another bite. This guy wants 4 for his newly collected pattern and is willing to pay 40k for 4. That is perfect, right in the zone I wanted of 10k each. But I figure his opening offer means he is willing to pay more for them and I am willing to take more of his gold! After a couple of messages we settle on 47.5k for 4 of them. Now I am feeling better, just a few hours after spending 140k for 20 of these Living Ember, I have already recouped 61k and I still have 15 left.
As I continue listing them in the Trade channel, I start to realize that I need to diversify. One of my rules in the AH game is to never put all of your eggs in one basket, it is just too risky with a market that has big swings in pricing. So I go back to the AH and browse the newly added epic patterns that come from Firelands trash. They are all averaging about 10-15k each. A few are under 10k, but one catches my eye instantly. It is the 2nd lowest priced pattern and it is for Cloth DPS Boots. This means the market is open to 3 classes of players; Mages, Warlocks and Priests. I like this opportunity to sell, plus there are no boots in the Valor Vendor so the only way to get boots is to get a drop from Firelands. This means there is ample opportunity to sell the crafted item. So I buy it and ship it to my mage who is a tailor. I spend 6k on the pattern, not bad but not great either. I figure it is worth it and I quickly make the boots, send them back to Dealmaker and list them in the AH.
Now I have to price them. No one else has these in the AH on our server yet, so I do some research in other servers and cannot find any data. This makes some sense, the pattern is only 2 weeks old and most crafters will probably not even have 4 Living Embers to make them yet. So I figure out my costs, 7k x Living Embers is 28k, plus the 6k for the recipe and roughly 4k for the 8 Dreamcloth means my investment is about 42k. I like to make at least 30% margins, but in this case I can go higher because I have no one else to compete with and there should be a demand for it so I list them for 75k. I figure I can start there and drop it down if necessary. It is the highest priced piece of gear in the AH. Not even 3 hours after posting it, they sold! Woot!
At this point I have invested a total of 140k for the Embers and 6k for the pattern, and I have recouped 133k already and I still have 10 of these Living Embers left!
I go to check the AH and see how my listing looks and am quite surprised to see that someone else has listed 8 Living Embers at 15k, 5k below me and 1 k below the idiot who bought one from me earlier that day. I know this means we may have a price war so I cancel the auctions and re-list at 1 copper below his and then watch them every hour. Sure enough, the war is on. Every time I re-list them, he does too. Over the next day prices drop from the 15k range down to 10k! I don't worry though, because at this point anything I get for them is profit. I end up selling 3 more Embers in Trade for 27k, not great but not bad and it means I have officially made a profit from my investment.
I craft another set of boots, list them in the AH at 65k because the Living Ember market is crashing hard. Even though I don't have anyone competing with me on the boots, I still have to contend with others who may have the pattern and just need the Living Embers which are now selling for under 8k each. In 24 hours these went from 15k down to 8k, with more supply hitting the market than I figured would that early on. My guess is that guilds were sitting on these and looking to see how the pricing went before they listed them. I eventually take my Embers out of the AH because I figure I can wait for the supply to run out and then list them again at a higher rate. My 2nd set of boots sold for 55k and I have only 3 Living Embers left which are now back in the AH at 12.5k each, everyone else either sold out or their auctions expired.
My total profits so far are 75k, a 50% return on my investment. Plus I still have 3 Living Embers to sell. Not bad work for a huge investment and quick turnaround.
Watch your server for these and be careful, the lesson here is that there is gold to be made but you will have to act fast and be careful. The smartest thing I did was to buy a pattern and sell a crafted item, they netted me over 120k alone and helped me move inventory fast. These will continue to drop in price over time but there will be some wild swings in the prices because there is just not that much supply yet, and there are a lot of crafters who have collected the patterns from drops in their trash runs who are itching to make them but need the Embers. Time the market right and you may have some great returns, but it is not for the weak hearted, and I would not use more than 25% of your gold reserve to do it.
Good luck and go them deals!
