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Sunday, February 27, 2011

Diversity is my Specialty

The Fairly OddParents
I first came into the real community of gold making last fall.  Someone in a community I read had just reached the gold-cap and I wanted to be just like them.  They did it entirely through glyphs back when they were booming in early Wrath and I set forth to do the same.  I did the exact same thing. Glyphs glyphs glyphs 24/7. It's all I sold.  I was on my toon every 20 minutes cancelling and reposting.




It worked!  Shortly I'd gone from the "most gold I'd ever owned" at roughly 11k to 50k! I was a high roller now!  But something was wrong.  As time went on my competition became more fierce. I would have to friend half the server just to see when people logged off. I know they did the same, because as soon as I'd log off they would then log back on.  It was a brutal market for razor-thin profits demanding countless hours of my play time.  But it's all I knew and so I kept with it.

Eventually Glyphmas came. I made more than I'd made the entire time in those two or so days.  I decided it would be my last hurrah in the glyph market and I stopped crafting glyphs.  Though I'd learned about other markets I'd never really explored them. It was time.

I won't go into the entire evolution of the process, but every week I would try a different market. Some of them became boons to my gold making ventures and I stuck with; others were a complete loss.  Today I have a pretty decent holding in the following markets:

  • Cut Rare Cata Gems
  • Uncut Rare Cata Gems
  • Cata Jewelry (Alicite/Hessonite/Jasper/Nightstone)
  • Uncut JC Daily Gems
  • Tailoring PvP Sets
  • Tailoring Dreamcloth Epics
  • Blacksmithing Ornate/Bloodied PvP Sets
  • Ebonsteel Belt Buckles
  • Titansteel Bars
  • Wrath Eternal Elements
  • Inscription Relics
  • Cataclysm Darkmoon Cards
  • Engineering Pets (Cataclysm-centric)
  • Cataclysm Enchanting Mats
  • Cataclysm Enchanting Scrolls
  • Heirloom Enchants (Crusader and Mighty Int specifically)
  • Mongoose Scrolls
  • Netherweave Bags
  • Vendor Faction-specific recipes and pets

As you can see, it's expanded quite a bit from "glyphs."  I'm making about four times what I was on glyphs; though I attribute that more to my increased investment ability as well as more experience in playing the AH.

But why is diversity important?
This is why diversity is important:

theunderminejournal.com

This is the post history of the main player in my server's glyph market.  He has literally a thousand auctions up at any time and is online all day everyday undercutting anyone who steps into his territory.  (For the record, I've reported him since this is pretty much impossible for any one person to do, but no luck yet.)

There's no way that someone who has a job, school, or even the human requirement of sleep could compete with this. If you had been a glyph seller only, as I once was, this guy just ran in and shut you down completely.  There's no competing with this and you are now out in the cold with a bunch of stock you can't move and no where to turn to bolster your bank account.

If you only sell Bloodied Pyrium gear and suddenly Blizzard changes it so gear with resilience no longer effect average item level for the purposes of queuing for heroics your sales are going to plummet and you have no market to back up your tanked blacksmithing business.

Highly competitve and capable players can tank a market. Blizzard, through bugs, intentional changes, or buffed spawn rates, can tank a market.  If you specialize too heavily in one area you are putting yourself at risk for great devastation.

We've all heard you should not put all your eggs in one basket because Ghostcrawler's going to kick you (because you're a paladin, as all the pros are) and you'll drop your basket and all your eggs are going to break, right?

The game can change in an instant; diversification is your protection against it.  Know markets, consider markets your speciality if you would like, but don't dedicate all of your assets to one market and find yourself out in the cold after the next hotfix.

This post was written with Just My Two Copper's Blogging Carnival in mind, please be sure to check out JMTC and all the other great carnival topics!

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Faidian Slip coming later today if Youtube permits.  /pray to Youtube gods.

3 comments:

  1. I think diversity is a sign of a mature auctioneer.

    Many folks get into gold making by one avenue (like you stated with glyphs) but the true test comes when that market shifts and they have to adjust.

    That is one of the reasons I love the gold making community. I have the toons to gather/craft almost every conceivable item.

    The community, however, often provides which direction I should look in. (More eyes and more brains = more better.)

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  2. I encountered a similar problem with someone i believe to be botting(posting 20 hours a day everyday) the JC market. instead of a wall of gems they post 1 or 2 but with every sale replaces the sold gem so it looks like there are no sales.

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  3. As usual, your post is well written and insightful. I agree with most of what you have written, but want to make comments on two specific areas.

    First, the glyph seller who seems to be on all day may not actually be botting. He may be account sharing with a roommate (also illegal I suppose). It is not hard to keep an AH toon posted in the lobby and ready to post. Keeping a dedicated laptop on a desk in the dorm room would allow passers by to simply press a button or two and perform AH functions, then divvy up the gold at the end of the week.

    I have heard rumors (some very well founded too) of this happening in certain dorms on certain campuses.

    Still a pain in the ass--but that leads me to the second comment.

    "Highly competitive and capable players can tank a market." My tactic in your case would be to inflict the most pain I could on this glyph seller to make his job that much harder and his profit that much less.

    Find the most profitable glyphs and post your auctions right at the burn rate. Make him either undercut you or buy you out. If he undercuts you he erodes profit. If he buys you out, the activity is revenue neutral but he develops such a huge inventory that he cannot ever hope to liquidate it.

    Focusing on his most profitable glyphs sends a message that you are attacking him. Make sure you do this with a dedicated, anonymous toon so you cannot be similarly targeted for retribution. And be prepared to fight a war of attrition.

    A personal story to illustrate this point--involving Netherweave Bags.

    In WoLK the profit margin for a Netherweave Bag was about 3g. Stacks of cloth were going for roughly 3.5g and finished bags were around 7g. I did not spend any time in this market b/c I felt I would earn better returns by spending my time elsewhere.

    After Cataclysm was out for a few weeks the price of these bags finally reached 15g-19g. A stack of cloth was 6g-9g. For a profit of 9g-12g per bag I was willing to sell some NW bags.

    I crafted 12-15 bags at a time and listed in groups of 4, most of the time right in the middle of the price range. I was selling 12-15 bags per day, earning a profit of about 150g/day. By AFK crafting my investment time was limited.

    Then some douche began posting bags for 11g. Since he was also buying all the NW cloth, the price of the cloth went up to 8g-9g. That means he was earning 2g or so per bag. To top it off, he posted 40-50 bags at a time.

    I didn't depend on this income. I was just pissed at the situation. See, the fallout from this situation was that players who DID depend on the income had to find other markets. Thus, I saw more competition and lower prices in the Imbued NW, Frostweave and Embersilk bags--where I made great coin.

    I decided to tank this market for the 'wall of bags' poster and drive him out.

    I bought all the NW cloth I could get all the way up to 12g per stack. Cut off his supply. Check.

    I then crafted 250 NW bags. Now I attacked his wall.

    I started slowly. I posted 10 bags at a time at 1g under his price. He bought them himself. Now he had a supply of bags that he invested 10g in.

    After I had sold about 100 bags that way (about 40 to him) I then posted 50 at a time for 9g each. Yes, at a loss.

    I could see him squirming in my mind's eye. Would he undercut me, and lose money on each bag? Or buy out my stock again?

    He tried both tactics. In the meantime I continued to buy all the NW cloth I could find. I crafted another 200 bags.

    Rinse and repeat. Post at 9g each.

    After a week, he was gone. Seems he is also a JC and has turned his attention to that market.

    And my bags are now listed at 17g each.

    AH PvP is great fun. I lost about 200g overall but spanked his butt.

    He tried to re-enter the market one more time and I immediately did the same thing to him with the same throw-away toon. No way to find out it was me--no retribution. Now I think he's gone for good.

    Thanks for the article though. Very nice.

    ReplyDelete

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