Monday, March 28, 2011

Your Target: Player's Needs

In the previous post, we have established that player's needs drive the economy, turning them from Players to Buyers.
And the gold-maker's objective is to be able to effectively preempt them, stock up accordingly and post items at the right moment to maximize profits.

So what do players need ? Everything.
Okay, I know, that doesn't seem very helpful and this next part may be very obvious, but just follow me for a sec.
What is the purpose of all these items ?
What drives players to acquire these items ?
To answer this, you need to take a look at what players do in-game.
If you break down their activities, you'll be able to see categories of playstyles, routines, progress of characters and guilds that can define markets and what they want to spend their money on.

So here's a few markets that might be considered:

Leveling gear: Either items that have been picked up or bought or crafted with the intention of selling to people who are leveling their characters. Learn the different types of gear and stats people use to level. ("Green item of the Thief" will sell at a goodly price. "Green item with only Spirit" will give you a better profit if you sell to vendor or if you disenchant and use the result to make gold.)

Leveling trade skills: Items that are required to level trade skills, duh. However, there is a certain science to it - one has to know which are going to be the items in demand for each trade skill. You have to look at the progression of the profession (and Blizzard has a tendency to change that at each expansion) because players will ask for the quickest way to powerlevel the trade skill and the items will have to be on the AH right then and there. Hint: People will heavily follow the guides posted there and it has all the info you need to know: number of items, tips on the hard-to-get ones, recipes to get, etc. It is a shopping list for easy gold.

People who need trade skill items: This is a big one and I will not go into detail about each profession. There are plenty of gold-making blogs that will go in very deeply into the analysis of player needs. I'll just say this: players need glyphs, and when they get to raiding they will need enchants on their gear, tailor or leatherworker armor kits, jewels in their sockets and flasks to bump themselves up. These are the sure markets you know people will have to buy from at some time in their road to max level or at end-game raiding.

Twinking: Twinks are characters that have stopped gaining XP and will try to get the best of everything they can get at their level. In 99% of all cases, they do PvP, otherwise they are a part of a guild that wants to experience WoW at a certain level, either because they don't want to buy the latest expansion or they want to play the game in a more nostalgic way. Either way, a gold-maker will take the opportunity to do the twink's homework and put on sale the Best-in-Slot items for them.

Mounts, Pets and Legendaries: Collector's items with achievements tied to them. Their are sites dedicated to those collections with step-by-step instructions on how to complete them. The items are most used for bragging rights, for hoarding or completionist players who want to have everything they can collect in-game or for Role-Playing purposes. One of the easiest ways to make gold, since a lot of pets can be bought from vendors.

World Events and Achievements: A gold-maker will already be collecting items for World Events months before they actually happen. There are specific achievements for the World Events that require certain items and there's plenty of gold to be made in the AH. Other more general Achievements are the same, but it simply comes down to taking the time to read up on those on Wowhead to take advantage of that information.

And there are more markets out there!
These are just a bunch of general markets that are tried-and-true and still keep making gold.

You just have to study those, find a specific part of a market and figure out how to get the max profit out of it.

For experienced gold-makers who already have a huge chunk of the knowledge wired in, it's all about finding new ways to discover or exploit markets, depending on what changes are about to come in the game or player's behaviors in the Auction House.
And trust me gold-makers are a creative bunch of folks.

Tuesday, March 22, 2011

The Markets

We have a gigantic catalog of items in WoW.
You can expect a lot of them to find their way on the AH.
However, how do you make any sense of all these items, the prices they are listed at, and the fact that the prices go up and down all the time ?
How can you jump in these waters without drowning ?

It's all part of market basics.
There's demand and there's offer.
There's someone trying to make a profit.
There's someone trying to get a bargain.

The interesting thing about the Auction House in WoW is that it is a copy of the real-life stock markets without the complications and external elements that can totally transform the entirety of all markets unexpectedly. (No wonder WoW Economics is being taught in a few universities!)
The only element of surprise can be found in people's behaviors when they buy or sell.
What I mean to say with this is that some behaviors are to be expected by buyers and sellers alike, and one has to take both into account in order to make the most profit.
All this knowledge makes you smarter at playing the Auction House, further reducing risk.

Now, the notion of risk is a key point in a marketplace.
It's how much you will put on the line in order to make a percentage of profit.
It's also how much you are willing to lose before you actually turn up a profit.

Defining this will determine what kind of market you want to work into.
Let's separate risk into 3 types: Low, Medium and High risk.

Low Risk: Selling items that players are sure to need. However, chances are that you will have a lot of competition and will make a tiny but steady profit out of the sells. Will commonly deal with white and green items, tradeskill items and achievement-related items.

Medium Risk: Selling items that specific types of players are sure to need. Competition will be sparse, but will cover more ranges of items. You can make a tidy profit but you will have to repost a portion of your expired auctions. Will commonly deal with green and blue items, tradeskill, craftables and leveling items.

High Risk: Selling items that require a large sum of money from buyers. Competition may be close to none, profits will be great, but patience is required: may take weeks, even months before the items are sold. Will commonly deal with blue and purple items, mounts, high-end gear and very desirable items that are rare to find.

(This is a very gross generalization, of course. There are many different shades of risk when you get into specific markets or specific items. I'm just outlining the basic principles/common conceptions here.)

Different levels of risk for different types of markets.
A beginner auctioneer might want to start with low risk markets to test the waters and get more knowledge about the economy/ecosystem of the server, and eventually branch out to the other markets and higher levels of risk.
Again, this depends on your level of involvement in the AH game.
The best gold-makers out there will tell you that one of the keys to success is to diversify and have your hands dipped in all levels of risk.

The point of this post is to start to make the distinction that even though the Auction House is an always-evolving organism, you can distinguish parts of how it works and start to pinpoint your areas of interest.
You can flesh out some certainties in the AH game, that there is a broad spectrum of risk associated to items, going from the almost perfect certainty of a sell, to the unknowable darkness of the promise of gold to come.

And as a result of this, you will either encounter other gold-makers that are working on those markets or you will be able to discover markets that have been left wide open for you to take.

Next time, I'll go into more detail with niche markets.

Friday, March 18, 2011

The Tools (I'm Not Pointing At Anyone)

Much like Google and Wowhead: Addons are your friends.

Now there is much debate on which addons to use - and to some extent, if you need addons at all.
Yes, sometimes addons can be very cluterrific and hungry for all your RAM and processing power and can be just too hard to figure out.
But I've read about some gold makers using pen, paper, a calculator and their noggin and they are doing a good job at the Auction House.

I don't claim to work with the best addons but the ones I've tried and liked are the ones I'm listing here.
They are not a definite must-have addons - none of them are - because WoW is ever-changing. It is a living, breathing organism, and the needs of the game and players change over time.
So the programmers of addons have to learn to either adapt to the new reality or have their programs face deletion to give way to a better addon.

I See What You Did There

The best way to find the right addons : try them.

Your addon sites: 
Curse Gaming (which I try to avoid as much as possible because they've had to face many viral attacks - I don't care if they are okay now, better safe than sorry)

Some programmers have standalone sites for their projects, like Deadly Boss Mods, so I'll be linking those if possible. So here are the mods I use for gold-making:

Auctioneer: The classic addon that's been around since vanilla WoW. Auctioneer scans all data found on the Auction House to give you average prices on items and can help you calculate the prices at which you should post your items. It is a mammoth addon - prepare to have your computer slog through the moments that it calculates and compiles data. But it gives you SO much info and can practically do all your job for you! It comes with a slew of functions that can seem quite overwhelming to the first-time user, but most of these functions can be turned off. It is an addon so complex and yet so popular that it deserves its own blog post - which I will do in the near future.

Swindler Preventer: Addon that lists in your tooltip if recipes and pets are sold by vendors as well as their vendor price - just in case you're tempted to buy a few items without knowing that someone is just reselling them. The addon is still being updated by the programmer and I will hopefully stop getting report messages, but it works well.

Bank Items: A very nifty addon that can show you what's in your own bags and bank, but also your alts, and your guild(s). But the most important thing is that it lists in the tooltip if you have quantities of the item you're looking at.

Analyst: Awesome addon that helps you keep track of everything you do related to money with a very easy to use interface. You barely have anything to with with that addon.

Money Trail: Very basic addon that keeps track of how much money you have on all your toons.

That's it! I mostly use a finely-tuned Auctioneer and the Windows Calculator, really.
There are plenty of other mods out there but it's best if you try them yourself to see if they fit your needs. There's no other way to go by it.
You can always check out gold blogs to see what addons they are using, but everyone has their own style.
You have to make up your own damn mind.

Bam! Double Matrix reference!

But the most important thing to remember when you are using Auction House addons is that these are tools reading and computing data.
The tricky part is that you have to understand how they work to figure out what the info they give you actually means.
Browsing the Auction House manually also works. Addons are there to cut down on the time to calculate average prices, undercutting prices, profit margins and automatic posting.
They are tools, but do not let yourself be overwhelmed by the tools.
You are the one that makes sense out of all of this madness that is the Auction House data and the addons that transform the data into a more pleasant form.
Because these programs may work very well and you may not believe what they tell you, even if it turns out that they are right, sometimes the data they give you is only reflecting a reality of the Auction House... which you can change drastically if you decide to buy, flip, wall or simply not post items.
Because programs may think that they have the only logical answer to your problem, but sometimes that can lead to bad situations...
I See What You Did There, Dave

Monday, March 14, 2011

So... what can I sell to make gold ?

Answer: Everything.

Practically everything that can be put in the Auction House will give you some money back.
You can try your chance at gray items - I've seen and heard of people that have had good luck selling a few select gray items for RP purposes, collecting or just for fun. But in general, I'd leave grays alone.
As for the rest, there's 99.99% chance that it can be used in the Auction House.
What can be profitable depends of your server's economy and the status of the item in the World of Warcraft.
As items appear and disappear in the game, the demand of certain items changes as the players' needs change.
And, of course, the gold-maker has to be one step ahead of players' needs.

You find yourself with items in your inventory and you don't know what to do with them ?
Wowhead is your friend.
It'll tell you if it's an item for a quest, for a crafted item, if it's needed in a tradeskill, and you'll have player comments (which can be a good indication of the marketability).
Now that you know what it's good for, you can hit the Auction House and see what's happening to that item: if it's selling well, if there's none if it, if you get more money back from crafting whatever it's being used for, if you could make a profit by buying all of the listed items and resell them, etc.
And sometimes there's no way to make a profit - it's just best to vendor some of them or to stockpile them until the stars align and the time is right.

My point is: destroying items is a waste of time because every copper counts and there are many possibilities for items before you should be considering the vendor option.
Pointing back to the post I wrote: the slightest profit can be worthwhile if you have the knowledge of the item, coupled with the right timing and a bit of luck, and if you're using the right tools (which I will go on about in a future post).

I know - this post feels like it's stating something that is obvious but I've discovered that for many people it's not. Just getting to the step of browsing the item on Wowhead is usually too much for many people. And that's how knowledge makes you win.
Because many people will only look for certain items when they have a need for them.
And because you know what they need, you'll be there to supply the items.
And sometimes, the items they they need are the ones they've been selling straight to the vendor.

Friday, March 11, 2011

The 3 Winning factors of gold-making (without using Tiger Blood)

You need 3 things: Knowledge, Time and Luck.

We've already been through Knowledge in the previous post.

Time, as they say, is of the essence.
The most important part about the Time factor is how much of your own playing time you are willing to spend at attempting to make gold. Because some times you can spend your entire daily playing time strictly managing your items, shuffling them from character to character, transforming them, crafting them, browsing the Auction House, calculating, posting the items... Suddenly it's time to go to sleep and you haven't spent any time working on your main character!
That type of decision can go hand in hand with the type of auctioneering you're willing to delve into, because managing 200+ auctions can take a lot of time, compared to 20+ auctions that you will keep posting until they sell.

The proper timing at which you post your items will highly influence your chances of finding buyers.

Peak Times:
Other blogs have been experimenting with that fact, of course, and have come to the conclusion that the quickest buying times are when servers are around their peak times - and that's when a dedicated gold-maker will be in action. That means browsing the AH for open markets, buying out the competition, canceling and re-posting auctions, etc.
Basically: making sure that people with the gold get what they demand, and you are on the front lines with the goodies.
Your auctions will be usually set to 12 hours for max profit, because if the market becomes hot there's no need for you to keep your items up there while it keeps being undercut and left for dead until the auction expires.

Off Times:
Mostly everybody has gone to sleep, some farmers will start their rounds, and the people that browse the AH are few... and you have gold-makers on the prowl for profit.
Usually, a lot of auctions will be lingering until their expiry time and not a lot of people will impulse buy.
What you'll find is that - while you have the odd-scheduled person using the AH for normal needs - gold-makers will be running their auction scan addons and will peruse their results for anything mathematically profitable. That's when items that don't seem attractive to most players will sell, only to be put back on the AH at a higher price (or transformed or crafted, etc.).
That's the wasteland where auctions set for 48 hours will rule above all and you can take advantage of the fact that all the best deals have been bought and you can sneak in your items, should you make them desirable enough.
So, as you have probably gathered, off time sells are either strategically planned or a big gamble.
Which leads us to our 3rd factor...

The Auction House is a game replica of the stock markets. And no one can determine the exact way and time the markets will rise or crash or wobble. But one thing's for sure: sometimes people get lucky.
You can't determine with 100% certainty what the needs and means of everyone are on your server.
Otherwise, everyone would be either all rich or all poor.
So sometimes you'll get people buying everything that you are selling.
Maybe they think they've made a good deal.
Maybe they think your prices are too low and they want to resell at 300% profit.
Maybe they really really need those items right now and can't be bothered to look at the information about that item. They don't know the drop rate or where to farm it, or they are going to their nightly raid in 5 mins and are buying your items in a hurry no matter what the price is.
Maybe they mis-clicked Bid or Buy (even if there's a confirmation window that pops-up right after, it still happens!)
Maybe you're the only one selling the item.
Maybe you're the only one with the most reasonable prices.

It happened to me several times that I've been taking a serious gamble with some items and have come back quite surprised that they either sold or they've sold almost immediately after I've posted them.
The fact is: Luck happens.
You can't count on it to happen, but when it does you become very happy about it.

So there you go: the 3 main factors that determine if you become successful at gold-making.
Make them work for you and you'll find yourself wealthier than you were before!

Thursday, March 10, 2011

#1 lesson of gold making : Information

Information is the key to success.

You may think that slapping items in the Auction House for a random or ridiculous price is the key to gold-making success, but you'd be wrong.
The advantage that the gold-making community has on the other players is that they keep an eye on information that will be valuable to them in their present and future gold-making opportunities.
Then they take that information and theorize on the best ways to maximize their profits.
They even share their theories with others to test the waters and see if their ship will float.

What information are we talking about here ?

  1. Patch information: As soon as we get info on the next expansion, next big patch, next PTR info, gold makers are perusing every single detail and trying to find/divine what the needs of the WoW community will be. Ex.: a new achievement to collect 125 pets (stock up on rare, vendored and craftable pets); a glyph has been updated to give a better advantage (stock up on that new glyph); a new arena season is about to begin (stock up on all kinds of gems and enchants PvPers will go for)
  2. Knowing the game and its items: Drop rates, locations, rarities, levels of items help you make good decisions when you put things on the Auction House. Knowing how the game works helps you make the game work for you. Ex.: that blue pendant may not be worth as much as you'd expect because it drops quite often; the blue jewelcrafter Design that you've found might be worth much more; the Savory Deviate Delight recipes posted for 1g each could actually be bought and resold for a higher price
  3. Know your server's market: What someone says is selling for 25K on his server may not be true for yours. Okay nobody can stop you from trying to do the same on your server, but you may be stuck with that item for a very long time until you start dropping your price and people on your server will consider coughing up the bucks. Maybe your server's not into the Darkmoon Faire items except the card decks and you've wasted time, mats and money on crafting the items for the ticket turn-ins.
  4. Peruse the gold blogs: This is where the creative thinking happens. This is also where people report their experiments with their ideas on how to work certain fields of the Auction House, create or dominate markets, what they think on which markets will go up or down and what's best to do before major changes happen in the game.
If you keep yourself updated once in a while on these sources of information, you're all set to start making gold the smart way.

So to recap:

  1. Get patch information from MMO Champion; get even earlier information by using the MMO Champion Blue Tracker or use the one on the official WoW forums; mix it up with some site that has a tad more analysis with every announcement and immediate community feedback (WoW Insider works for me)
  2. Keep Wowhead handy at all times. They have a search engine add-on that you can install on most browsers so you can quick search their database. And remember that they also list PTR and Beta information on a mirror site when it is available. (And do everybody a favor and install the Wowhead Client on your computer to make sure that the information gathered on the site is as accurate as possible.)
  3. Check the Auction House frequently to see what's popular and what's not, what's loaded with pages upon pages of items to those who have nothing listed. Only you can determine what amount of gold most people have on your server - including gold-makers - and it makes you wiser at guessing how reasonable a price would be for specific items.
  4. Read a few gold blogs to be ahead of the competition on your server. Sometimes you may be lucky and have a few days' head start on a moneymaker that will give you thousands of gold before most people find out about it, build a competition and reduce prices to a jelly.
Yes, overall it is abusing of people's lack of knowledge to make money off of them.
You may feel like it is unfair for other players to not know the things that you do know because they should have as much a chance for gold-making as you do.
But that's exactly what this is : you took the time to read all this because you want to make WoW gold, and so you went out of your way to find this information.
Your friend didn't. Most people didn't and still don't.
They have the choice to either farm the items themselves or just walk to the nearest Auction House. If they want items and they are posted on the Auction House and they have the gold to buy them, then it's a winning situation for everybody
Except you were most likely the smartest, with the gold in your pockets and information in your head.