Thursday, April 12, 2012

The House Always Wins (3rd post today)

Okay, simple concept that makes its own post.  Since my next post will be on my thoughts for JC.  This series of posts have an underlying thought process as part of how I value professions, I thought it reasonable and necessary to cover it separately.

Its something that I learned a long time ago while learning Real world investing strategies


In real world money markets, the idea is to keep buying stocks regularly at whatever price they are at, since you get more for the same investment when prices go down and that averages with your purchases at a higher price.  Basically every month, or paycheck invest the same amount of money into the "market" "fund" "stock(s)" of choice without reguard for the value of the stocks at the time.

How it has successfully been applied in WOW AH PVP... easily summarized in 2 points.
  1. Buy everything under your threshold
  2. Sell everything above your threshold
and enhanced by 2 more:
  1. Post or cancel/post often
  2. Diversify
Okay, sounds too easy, and yeah it quickly gets more complex.

  1. Manufacture mats (the ore shuffle) for lower cost
  2. Shop the AH 2-5 times daily, with the early mornings and late late evening often being your best times.  It has to do with the level of buying and selling activity.  Generally the majority of players buy what they need as they log on to play durring their play time early to mid evening.  Then at the end of the day they empty their bags into the AH... rather they spent the evening questing and random little things, or an evening spent largely farming... it usually has lower prices at those times because they post it all at the end of the evening and its still there in the morning.  As you play with this you may find nuances and anomalies on your server on the daily, weekly reset and weekend cycles. As well as affects of the time zone of your server and players that do not share that time zone.
  3. If you are buying everything and have more mats than you can use, lower your threshold, if you can not get what you need, find another source, or raise your threshold, but in any case make sure as you change your "buy" thresholds, you change your sell thresholds too.
  4. Find a farmer for you to COD mats
  5. Offer to buy your friends of guild members just leveling items for a fair price that you can crush to enchanting mats for example
  1. Again run a post or cancel post routine 3-6 times a day
  2. Never sell below your threshold
  3. Set your threshold to sell above the mats cost by maybe 5-50gold or more depending on the amount of competition and deposit costs, and how much you value your time.  Setting it low will get your more sales.. setting it high will get you higher profiit margins, or in some cases, you will never sell your goods.
  4. Posting early evening is important, and 1-2 more times in the peak population times and once more before you "go to bed"/"log out for the evening"
  5. Dont compete with the undercutters if you value your time, if you sell nothing, and everytime you are on you are undercut with in minutes especially by the same person, its time to find a market that you have less competition in, or forget all the good advice, and go for the advance techniques of war and server AH market domination
Post or cancel post often:
  1. The more you post and pay attention to sales, undercuts, expired auctions and volume the more you can start to limit how often you do this and focus on the just doing at the best times for the least investment of time for the most gain.
  2. Almost certainly you will be undercut, you combat this by undercutting them back
  1. How I did this is I sold belt buckles, ALL CATA scroll of enchanting, leg armors, a few gems, as well as a few other fun items.. I did many other things, over the process of learning, transmutes, vendor pet, other vendor items etc...
It really comes down to how much time you want to invest, or how much gold you want to make, but in Las Vegas they say, "The House Always Wins"  That is the best example of dollar cost averaging I can come up with maybe...

here is a mathed out example:
Dum Dumbs require 3 Things, 4 Somethings, and 5 Morethings to craft
You buy Things for 5 gold and under
You buy Somethings for 15 gold and under
and you buy Morethings for 50 gold and under

3 Things = 15 gold
4 Somethings = 60 gold
5 Morethings = 250 gold
Total cost is 325gold
Sell theshold can be set to 325 and max 600... undercut by 5 gold

And you will always make gold  even if you never sell for more than 325... because you buy at 5, 15 and 50 gold and under.  That is your MAX cost for mats, but when you figure in average cost, you may find that your actuall cost on avearge is 4.5gold, 13 gold and  47.5 gold.. okay so if thats your average cost your average profit is 22gold at MINIMUM, and that is if you only ever sell at 325... In my experience, sometimes you will not get sales on and item as someone undercuts you to 324, but as they get bought out and then yours sell the market resets to a higher price, it cycles.. and that is why I suggest 3+ cancel post routines a day... once you learn how, you can do it in about 10 minutes depending on how many items you are selling. maybe like 5 miniutes to cance post 100 items.  10 minutes for 300 items, and 20-30 minutes for 1000+ auctions...   if you are short on time, just post. and cancel collect mail later.

The only thing not covered here so far is working in crafting time.. You can do things a couple ways here, and the risks and investment vary by how you do it... On demand crafting and buying or stockpiling, I prefer stockpiling since there is more money in it, but more risk too with the stockpiles... For me, since the best selling times conflicted with raid times often, I precrafted and stocked up, to reduce the amount of time needed to post when it conflicted with raid times... and it broke it up into various activities... Buying, posting, crafting, stocking etc...



  1. Many <3 <3 <3 to this post; it's exactly what I needed: a nice and to the point summary of applying the basic theory of buying and selling.

  2. One could go on and on on this topic, but the ideas are simple, you just have to repeat them over and over. In real world wealth, the majorint of rich people are the ones that consistently apply a simple principle. Spend less than you make and make steady smart investments.

    Thanks again for stopping in and letting me know people actually do read what I write.