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Below is a guide to working the Auction House; how to make tons of wicked cash off it.
Overview and Guidelines
Choose Your Business
On AH, there are several distinct ways to earn gold. Each of them requires a different play style and level of understanding. It is important to choose those which match your strengths and preferences in order to excel.
Farming is the simplest and most guaranteed way to make gold. It comprises of using gathering professions (Mining, Herbalism, Skinning, Fishing) to gather trade goods and then sell them on AH. Usually you will not earn tons of gold/hour doing this, but there are very few risks involved and level of knowledge required to start is minimal.
Crafting means using your production professions (Jewelcrafting, Inscription, Alchemy, etc.) to craft items and sell them on AH. Requires having chosen professions leveled up and stocked with valuable recipes as well as understanding which products sell well. Crafting has a lot of potential, but involves investment and risk.
The most advanced way of making gold. It includes any form of buying and then reselling goods. Has the greatest potential for earning a lot of gold/hour, but requires very deep understanding of WoW market in general and your realm's market specifically.
Knowledge is Power
This is very true for making gold on AH. The more complex line of business you choose (crafting or trading) the more important it becomes. While you can learn on your own from mistakes, much better approach is to use and consult plethora of free online resources and guides available. Learn common and well-known practices first and then use your creativity and cunning to improve upon those. Spending a few hours reading online about how to make gold on AH can boost your income several times. (e.g. place to start: 'The Consortium' gold making forums)
Use the Right Tools for the Job
Many tools and addons are available to increase your gold-making efficiency and make your life easier. Use them! They will give you advantage over your competitors and save you time. (e.g. TradeSkillMaster addon or WoWuction online database)
Understand Your Environment
As you sharpen your gold making skills, understanding the specifics of your realm's market will become increasingly important. While generic guides and tips on what to farm, craft or trade might be a very good start, to really master your AH you will need to pay a lot of attention to your environment. Environment mainly means understanding your competition. You need to be aware how many competitors in each niche there are and what are they doing. Some very profitable niche can be completely useless if one or two good competitors appear in it. Always be aware and observe. You can try to push out your competitor by undercutting prices for some time, but sometimes it is wiser to just move away to a different niche. These will be your most difficult calls!
If you're ever browsing the Auction House and you see an item cheaper than usual (i.e. Black Malice normally goes for ~10g, but you see it for 6g) buy it and re-sell it on the Auction House for the proper price.
Things to remember:
- Be sure to have at least 3 more of the same item (preferably from different sellers because some people put up lots of one item at an abnormally high price with one of the items set relatively low, though still abnormally high, so they can get more money for the item than it's really worth) to refer to for the real price (ex. perhaps you see two Lightforge Gauntlets on the AH, one for 30g and the other for 50g. 50g is just really expensive, in fact so is 30g! You need to check the price against at least 3 other examples of the same item to be sure that you're actually buying it cheap)
- Remember that prices can vary depending on the time and day...For example, prices may be cheaper on the weekend due to competition among sellers.
- Don't spend all your gold on a single item. You may see The Oathkeeper for 50g (normally sells for ~100g), and you have 52g 34s. Don't spend it all, as there is still a chance that you won't be able to sell it, the price will go down, etc.
- When re-selling, always select 24 hours or 48 hours for the auction length.
There are many items of value that can be farmed from npc's, either in bulk or a single drop. Some examples of the most coveted items to farm:
- Formula: Enchant Weapon - Crusader
- Formula: Enchant Weapon - Lifestealing
- Heart of the Wild
- Blood Elf Bandit Mask
- Mageweave Cloth
- Rares and Epics
- Mithril Bar
- Righteous Orb
When farming, remember that it is a painstaking process that requires patience and perseverance. Sometimes, to get the item you want, you may have to farm for days or, if you are extremely patient, perhaps weeks at a time! On the plus side, almost all enemies worth farming also give XP and drop other loot as well (also money), so you never know what's going to pop up in your next loot window!
Suggested Areas to Farm, and the Loot:
- Alterac Mountains - Mithril Ore, Iron Ore, Truesilver Ore
- Western Plagelands, the watchtower along the path to Hearthglen - Runecloth, Formula: Enchant Weapon - Crusader, Blue (rare) drops
- Stratholme, Living Side - Righteous Orb
Pricing an Item
If you just want to experiment, and do not want to lose money, do the following:
- List an item using the default auction house price. Set the buyout to the default price. Set the time limit to 48 hours.
- If the item expires once, re-list in the same way.
- If the item expires twice, vendor it.
Obviously, for some items, you may find after several expirations, it would have been better to have just sold it to the vendor outright. However, you will likely find that this is very rarely the case, if you are simply selling drops.
If you are doing more advanced auction house techniques like buying and reselling, either from vendors or the auction house itself, you need to be more cognizant of profit margins.
Staying in the Green
If I list an item at the suggested auction house price, how many times can it expire before I lose money?
- 48 hour listing - Two times.
- 24 hour listing - Four times, break even on the fifth expiration.
- 12 hour listing - Nine times, break even on the tenth expiration.
Assuming your item does not expire, or does not have a listing fee (such as with Enchanting dusts or shards), you must sell the item for a minimum 5% markup of the vendor value. Obviously items that can be sold on the auction house for 50%, 100%, 300%, or even higher markups are much more profitable. The higher that markup, the more room you have for a few expirations.
Compare your item. The best way to do this is with price statistics. Some people using the median or average price statistics on Allakhazam. Others use addons such as Auctioneer that gather historic prices you have seen on your server.
This may be an American thing, this may be a young person thing, this may be a gamer thing, or maybe it's just a human thing, but there is a buyer phenomenon or mentality. If you understand it, you can take advantage and profit. This is not necessarily manipulation - think of it as providing a convenience service to your buyers. If they do not like your price, they will not bid on the item! Since we're all online gaming, buyers have all of the same online resources and add-ons (Allakhazam, Thottbot, WoWHead, Curse, etc.) available to them that sellers have, so it's all fair.
That being said, remember that buyers are lazy. Buyers like instant satisfaction. And buyers love convenience. This is why auction houses work, why they are linked between cities, why we have the Trading channel, and why we have buyout.
The main form of using this concept for profit is buying and re-selling. Whether your source is a vendor or the auction house, you are ultimately utilizing this concept. With the principle of lazy, instant satisfaction, and convenience in mind, you should almost always be successful with the following techniques:
- Re-selling items only available from vendors in far away places. The "fee" you charge your buyers for the hassle is typically a minimum of 1G, sometimes much higher for items that do not spawn frequently.
- Always use buyout. Yes there might have been some people out there willing to spend more than the list price you invented, but you'd be surprised what people are willing to pay for that item they want right now!
- Sell in large stacks. Even if you can buy 20 items cheaper by buying them in smaller stacks over a couple of days with a calculator, most people will simply pay for the pricier but complete stack now. They didn't have to do any math, and again, they got what they needed (or wanted) NOW.
Farming the Auction House
Anyone who has used the auction house as experienced this, whether they realize it or not. Especially after the release of Burning Crusade with it's nearly 12G daily quests, there are a lot of characters with a lot of disposable income.
Small Scale Example
For the casual farmer, let's give an example. Say your realm has 50 stacks of Wool Cloth for sale typically at any given time. Maybe one or two have a buyout for 1G, and several more have bids for 1G. The other prices are significantly higher, maybe a few at 2.5G, some at 3, 3.5, 4, and the occasional 4.5G for the desperate crowd.
- The first week, the monopolizer bids or buys all Wool Cloth at 1G, his buy price point.
- At the end of the first week, he has collected his outbid money, and has accumulated 20 stacks of Wool Cloth.
- The next week, he lists two or three stacks a day with 3G buyouts, a middle to below average price for his server. Because these have 48 hour timeouts, they all sell.
- He has now made 37G from an 15 extra minutes a week scanning the auction house and checking mail for sales and outbids.
There are two different approaches to large scale price manipulation or even monopolization of a market. Let market be defined as an item with high demand and high volume, such as gems or cloth. The first approach is the classic buy-it-all, re-sell much higher. This is not only expensive, but it's committing. You actually have all of the items and you must sell them to profit. However, you have the most control, and while risky, if it works, you can make a lot of money by deciding your profit margin, rather than squeezing it into an existing market.
The second approach is manipulating the bottom of a market. The manipulator raises the minimum bids, therefore making his price nearer to the bottom of the pile. By removing only the super cheap, and by also raising every minimum bid, the bottom of the market is raised. By raising the minimum bid, the manipulator may actually type in more than is required by the minimum bid, paying a little more for the item if it is won, but also removing this price as an option to other prospective buyers.
This approach is safer because it is committing only to cash, but not to actual items. For example, assume all of your bids are eventually outbid. While they were still on the auction house, your money was temporarily not available (much like a real world investment). However in the end, you didn't lose anything because all of your bids are returned at no cost (no penalty bidding). On the contrary if you did win all of the items, by leaving a fair amount of pricier items, unlike the first example, and at the same time removing the bottom of the market, your listings are actually closer to the top and seem less extreme. Theoretically, you make more money, or at least have a less risky investment.