Tuesday, May 17, 2011

As it applies to RL and rough numbers, then lessons in patience and process

I find myself following several blogs and I have tendancy to diverge from what other bloggers seem to focus on.  Just a reflection about the way I think about the AH game and other aspects of the game.

Tanking is Strategy
DPS is Science
Healing is art
Goblineering is All Three

I Noticed my Main Poster was at about 170K last night which puts me firmly back in the recoved from the maelstrom crystal losses when He was nearly busted.  And back to to the total of about 400K with about 195K on the Ally side and other toons w/ bits here and ther.  Thats what I have in liquid...

More after the jump, Warning its a much longer post than I like, but cant make it much shorter and deliver the message... :-/

I take into perspective all 3 points above in my AH game, Strategy, Science, Art.  If you take a linear approch to the AH Game you will likely not find the same success that others do for extended periods.

I also look at most of what I do for Real life lessons.  Things, Like, Risk, Risk Management, Processes, Controls, Systems and tools, Investments and returns.  There is a lot to be learned if you look.  Depending if you go for it or not, you can even work in politics, relationships, leadership and management skills that can be applied to real life.   Examples, working with competitors to white list each other, building relationships wth farmers, effectively using the multi media sales (trade channel and the AH)  and others...

In raiding and Guild management and leadership, there are tons more oportunities to practice and learn management and leadership.  Skills that can truely impact real life and finances.

Because I am not interested in the science of the AH, it is mostly understood, I look for lessons to learn from the game and the processes of working with others in the game, guilds and raid.  Guild leader positions, raid leader positions, AND also the lessons to be learned from the other side... As a raid member, guild member, Assisting the leaders, passing on delegation and responsibility, providing support and encouragement up and down within the organization, as well as what many seem afraid to do...  Critical and constructive feedback to strengthen the organization that makes up the raid team.  There is a lot to learn if you look and make an attempt to apply things.

Hence the reason(s) I do not track my gold like Stok did...  its just not an important aspect to things... from MY perspective.

However, All of that said, I do track my numbers to make sure I am doing a couple things...
  • Preventing/Minimizing losses,  Both time and gold
  • Minimizing cost, buy low cost mats (AH fees are not a concern in my markets)
  • Exerting Market dominance...  By volume, undercuts and sacrificing profit per, in exchange for a sale, or sales volume
  • Rechecking and reseting thresholds and fallbacks...
Last night when I looked I had 800 GCEs, 3K hypnotic dusts, and an unknown quantity of Heavenly shards and Maelstrom Crystals.  I have not really been able to make large stocks of shards or crystals below my thresholds.  Its just a daily thing to check and buy.  I also have piles of other mats like essence of fire for fiery enchants, essence of undeath and living essence for lifestealing...  and others...  The numbers are high for my Cata scrolls because I can deplete those stocks rather quickly. 

I guess the biggest thing I have to consider is that in each market am I doing one of 2 things.
  1. Exerting market dominance...
  2. Or making a reasonable profit for my time and efforts to stock and list the item...
Number one is to help increase the volume of transactions I personally have
The second is to ensure that the gold per transaction is reasonable.

Example one... Small market/low volume/niche  Borean armor kits.  Often profitable, but often undercut by leveling players unloading...  I look for about 10 gold to 50 gold profits in this area... or I dont list, they just sit in bags waiting for prices to return... 10gold because that is good enough return for the time.  50 gold because if it much higher it will attract competition and then reduce transactions...

Example two...  Enchant chest Avalanche  this is one that the threshold can be set at about zero profit based on my purchase threshold.  If I have mats at 150Gold... that is my threshold...  I frequently buy below threshold, so the avg prices I buy at make it profitable anyway.  The catch here is that if I am watching ZA on the "log" screen, I can see "posted at threshold."  This can be an indicator to go look at this item.  Its not a leveling item really, it should be pretty consistently posted at cost plus AH fees or higher.  When my item is posting at threshold I will look it up and often find that there is rampant undercutting below mats cost.  Well, I can buy mats, or completed material below cost.. hrmm... buy all the scrolls maybe and reset the market...  I know this is a good bet, because w/ consistency I sell the item at a rate of 3-8/day depending on what day of the week it is, how many times I cancel/post, as well as what times I cancel/post.

Lessons in Patience and Process... this is where most wanna be gold makers fail...  they do not follow through and they "fail" within a couple days...  IMO they failed to learn the lessons the market was teaching them...

The basic process that can be followed, I document it in my other blog,  http://ctlaltdelgoldmaking.blogspot.com/.  But basically the process is this.

  1. AH scan
  2. Lil Sparky's Workshop review for profitable items to craft and list
  3. Obtain mats and review history of mats for expected thresholds to obtain them.
  4. Craft 1-3 items for market trial.
  5. Evaluate estimated market competition and set up ZA for posting. 
  6. Post and monitor the items and competition as I enter the market initially and continue to watch for how many times Cancel/post and how many sales I produce.
Real world example: some pair of leather boots... show up as profitable in the LSW crafting interface.
They need 2 pieces of leather, 1 hide and 2 thread to craft....
Historical markets tell me that the leather should be able to be goten for under 2 gold if I regularly shop for it.  2 gold is the threshold for the leather.  the hide can be gotten for under 5 gold, 5 gold is the threshold, thread is cheap and at the vendor... total cost plus AH fees is now 10 gold at no profits... For my intial market test.. 12 gold "feels" like a good threshold... little bit of profit, and no chance of loss on sales.  Now, I can make 2 boots... and the fallback price will be 20 gold.  more than that IMO it may be too attractive and attract competition.. more evaluation and adjustment later...  post the items... over the next few days, I continue to shop for a small stockpile of mats and watch sales on the item.  Day one they sell out and I found leather at 95 silver each and hides at 3 gold each... Prices stay the same... this is just extra profits... I continue to craft and post, selling  the goods at a profit, selling 1-2 most days...  AND I find that I always get my leather unde 1gold. and my hides under 3 gold... Now I reset my threshold to 6 gold... Still no risk, still all profit and if anyone enters my market, I will undercut them down to cost and I will hopefully chase them out of my market.  Reseting my threshold I find I sell out most days at 7-10 gold each... so increase production and listing to 3 per day...  a few days later I am still selling out and increase to 4 and so on... Increasing my stockpiles in proportion for about 3-10 day of sales...

Now I have invested about a week or so into this item and now have one automated process to craft and post my way to greater liquid gold. And I have learned something about this market...

This is a good example... it could go wrong and you have to evaluate what is going on and possiblilities of why its happening.  But the 2+ weeks of evaluation and watching the market will give you an idea.

How I handle ques for crafting and stocking is largely this.... I keep one (or more) in the bags, mail or bank.  I log the LW and look at his bank/g-bank/bags.  Mouse-over the boots, arkinventory tells me he has one and the banker alt has 2 in auction.  I then open the LW craft interface. Glance at LSW to make sure its still profitable. Craft 12 boots and send one mail to banker alt. Log over to banker and find that he has sold both open mail and take 2 to post... another mail has 1 pair of gloves left and 2 in auction. Take out gloves and send to LW crafter, next time he logs he makes 11 pairs of gloves and sends one mail with 12 pairs back... its extended storage.  Works well with vendor pets too, send them 12 at a time to posting alt from crafting buying alt... Since all of my buying alt are goblins on hoard, i always get the discounts racial... :-) good stuff.

K, its been a forever long post, and not sure I could have made it shorter...  see you next time

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