Owning the market or does the market own you?

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.  They read somewhere that you have to “own” the market by buying it all out and then controlling the prices which means you can charge high prices and people have to buy them from you.  So, they go and scan the market and come across something like Wool Cloth and see that there are maybe 30 stacks of it in the Auction House all selling for less than 5 gold per stack.  They buy it all.  They then go back and list it all for 100 gold per stack and wait for their gold to roll in.

And they wait.

The gold never comes.

They go back and look in the Auction House and find that there are now over 100 stacks of Wool Cloth selling for as little as 2 gold per stack.  So they buy it all.  Now they have over 130 stacks of this stuff listed and they keep looking for those sales to roll in, but nothing happens.  They go back to the Auction House and see another 50 stacks listed and they buy it all again.  Someone keeps listing it as fast they can buy it, the prices edges up over time but never gets to the price point that this seller is hoping to get.

What happened?  The premise was faulty to begin with because they cannot control the supply of most items in the game.  The biggest issue here is supply.  You cannot own or control a market that has an infinite supply generated in the game.  In the example of the Wool Cloth, it failed because there is no end to the supply of Wool Cloth as long as someone is willing to go farm it, pull it out of their banks, or is leveling a toon and getting it as drops.  Since a server has tens of thousands of people on them, the odds are against you having a situation where no Wool Cloth exists except for what you have listed.

People will pay higher prices but they will not pay ridiculous prices so the experiment fails and they end up getting stuck with stacks of materials, get frustrated and dump the items into the AH for a loss and tell everyone that you cannot make money in the AH.  If you do this method then you will lose gold and miss the opportunity.

Even in the rare cases where you are able to get this type of method to work, you will take huge losses most of the time which would offset any one time gains.

I will share how to use market leverage and timing to buy low and sell high in a future article, meanwhile don’t make the mistake like so many others and think that you can control a market and make thousands.  You will only end up making me thousands of gold!

Who is this Dealmaker guy?

I started playing WoW about 4 months before BC was launched as an expansion.  I was looking for a new game and stumbled on this one, I had played Warcraft, Warcraft II and Warcraft III.  When I started playing WoW I really had no idea what to expect, in fact I was quite leery of starting some game that required a monthly subscription fee because I had a tendency to play games for a few months and then be bored with them and then move on to the next game.  This game changed everything.  6 years later I am still playing it, my wife plays with me and my oldest daughter will even join in from time to time. 

My very first toon was a warrior, Goonthar.  I was level 12 before I even realized there was this thing called an Auction House.  When I first stepped into Stormwind, I was amazed with the graphics, textures and sounds of the game.  I didn't even realize until then that I could choose professions, learn to cook and do first aid.  I had read some comments in discussion chats that people were referring to AH, having no idea what they meant by it, I made the silly mistake of asking in chat what is was and got several answers, most of which were incorrect but very funny.  Later, I was walking by a building that I saw a lot of toons going in and out of constantly, this intrigued me.  I wondered why so many people were going there, so I walked over and went inside and found the Auction House.  Holy cow!  How cool was this place?  I opened the auction window and just stared at disbelief at all the things that were being sold there, things I had "vendored" away were selling for gold here!

Of course, buying something was really out of the question, because I had maybe 1 to 2 gold tops.  But I was hooked, I knew this was the coolest thing I had seen in game so far and I wanted to do something with it, I had to buy stuff which meant I needed gold.  So I went on and learned two professions, blacksmithing and mining.  These seemed logical for a warrior after all, but I quickly learned that leveling the blacksmithing profession was slow and expensive. 

It was probably around level 16 that I realized that the Auction House was a potential gold maker.  I had mined up some copper,smelted them into bars and went to post them in the Auction House.  This was the second time I had done this since finding the Auction House.  The first time I had listed all my bars for about 75 silver per stack, undercutting the lowest priced bars listed.  On my second visit I noticed that these same bars were now listed at around 1.5 gold per stack.  I listed mine at 1.49 gold and then it hit me; Wait a minute!  Just two days ago I sold them for less than 1 gold per stack, but today, just two days later, they were selling for double?  So I began to ponder what this meant, was it similar to an economy?  Did it work like the stock market?  Will things still sell when they are listed higher than the day before?  Could I buy things cheap, like my copper bars, and then resell them at a higher price?

I thought about this for a while until I was determined that this was going to work, I was going to buy copper bars for under a gold per stack then resell them when they hit 1.5g per stack.  The next day I logged in and had a little over 20 gold, the most I had ever had at this point in the game.  I ran over to the Auction House and stared at the prices on copper bars and copper ore.  It seemed so risky, yet yesterday I was convinced that I could buy cheap sell high and it seemed so logical.  There were tons of copper bars on the market but they were all priced about 1.5 gold per stack and higher.  There was not much copper ore however, and the stacks of the ore were only 50 silver per stack.  So I bought as much as I could with my 20 gold and ran to the other side of Stormwind to smelt them into bars.  I then ran back to the Auction House, excited about the fact that I was going to turn 20 gold into 50 gold or more!  I posted them and within minutes I saw my first sale!  I ran to the mailbox, collected my 1.5 gold and knew this was going to be a fun and neat way to make a ton of gold fast.

The next day I went to the mailbox and found most of my copper bars had sold and a few were returned unsold.  It was a huge success in my eyes, I had just turned 20 gold from mining (which took several hours) into 33 gold and I didn't do anything other than smelt some copper and post them in Auction House.  I did this for a couple of weeks and realized I was on to something huge, but I did not share it with anyone because I was convinced this was an amazing way to make gold and did not want anyone else competing with me.  After two weeks I had turned my original 20 gold into 500 gold.  I was still only a level 25 warrior, but I had 500 gold and could buy whatever I wanted for him at that level! 

After these first two weeks of playing the Auction House, I decided to expand my market from just copper and started using the same techniques in the tin and silver markets.  After a full month of buying and selling just these commodities, I had banked over 1,000 gold and I had tons of supply, in fact I needed room for it all.  That was when I decided that I needed a new toon that would handle all of my auctions, have his own bank space and hopefully it would un-clutter my mailbox and bank for my other toons. 

This is when "Dealmaker" was born.