Phase 3: Profit !

Dear Reader, Sovrun recently got in touch with me and asked if he could try a guest post on P3P. After a little back and forth, he crafted the following. Sovrun is a fellow AIE’er, has a ton of WoW gold, and is generally worth listening to. So, without further ado, let’s give him a chance to speak up!

GL!/bow -Jimm

Econ 101: Introduction to the WoW Economy
By Sovrun

Hello all, I should really start off by explaining a little about myself prior to moving into the dirt.  I have been playing WoW since the launch of Wrath.  Yes, I am a Wrath baby.  It’s okay.  Call me what you want.  I don’t have time for participate in the end game much.  I guess this is what makes be an altaholic with a professions issue.  A friend of mine asked my to take up writing about the WoW economy as a substitute for the typical 12 step program.  So….here is step one.

The first step into any venture is to understand the market to see what opportunities exist and help to define your angle and strategy.   Well,  that’s a load of nothing specific.  What does this mean?  If you look at the market you will see that it behaves similar to many of the real world markets, but just not the ones that you are likely thinking of   You are not going to make headlines because of the latest do-dad that your innovative team of engineers just came up with, no matter how thin you screen is.   The WoW economy is a nuts and bolts industry.  No really, it’s just like buying nuts, bolts, screws and nails.  You are not going to find any cults of fruit that will buy anything that Harrison Jones is offering.  You, nor I, have that kind of pull with our “Made by” tags. 

So what do I mean by Nails…  Nails are your typical bulk items that sell in high volumes, but have no real differentiation.  Yes, there may be a nail built by some amazing designer, but most will settle of the less wonderful bulk item.  They may be different size or for a specialized use, but they are still basic and no one cares were they come from.  Did I just describe the Bag Market?  Of course, I did.  Items that fit into this category are the types of things that are in high demand with generally low margins.  Think Bags, Fortune Cards, Belt Buckles when you put items into the Nails category.

Ok, but Screws?  Have you ever bought a screw?  Screws are more specialized than nails.  Companies that are participating in the Screws Market must create different variations to meet the customer’s fickle demand.  Are these descriptions hitting home or what?  Yes, you guessed it.  The screws market is similar to Gems, Enchants and Glyph.  These items sell really well, but you need the breadth of scope to capture the sales.  If you only sell one type of Gem, Enchant or Glyph, you can pretty much guarantee that you will not make much in the way of Gold.  Even the rare recipes don’t sell as often or have as much profit potential as the group in general.

The Nuts and Bolt market is even further specialized.  The main difference is that they are complimentary.  This category is made up of item that may be subcomponents, most blues and epic items, recipes and pets.  These items may warrant a premium, but sell at a lower rate than the other two categories.  Yes, there are many niche items in this area that will do really well, but the risk is also higher than the other categories.

This can’t really just be about renaming groups of items into something you can find at the local hardware store.  Again, you are way smart than…well, the small screen staring back at me.  Once you understand which segment you are selling to you need to ensure that you are profitable.  Add-ons will help understand what items are currently not selling for.  But to ensure profitability, I recommend manually setting a minimum threshold that ensures financial growth.  Feel free to undercut as much as you want as long as the item is still posted above you costs.  Needless to say, companies don’t stay in business long selling everything at a loss.  There is no such thing as a loss leader on the Auction House.  I don’t want to go into pricing strategies at this time, but stay mindful of your ratio of Price to Cost.

Each segment requires a different strategy to attach. 

Nails have high competition, but you don’t have to be to lowest priced supplier on the Auction House to sell.  The demand will allow you to have long posting cycles with high volumes.  Let’s just call it a low time investment category. 

I also put the gathering professions in this category. Herbs, Ore, Cloth, and Leather are also additional examples of Nails.  The real difference here is thinking about how these items are used in the professions and by popular add-ons.  For instance, Trade Skill Master is gaining momentum for heavy Auction House Users.  The TSM Shopping Scan will only consider herbs or ore stacks that can evenly create inks and gems during it’s semi-automated buying cycle.  Based on this information alone, it doesn’t make sense to post Ore and Herbs in anything but groups of 5, 10, 15 and 20.  Otherwise, you miss the opportunity to sell your raw materials to potential manufacturers.

Screws, on the other hand, have the demand spread throughout the category.  These are typically fiercely competitive where only the lowest priced items will sell.  My experience with the glyph market is that when you have complete glyph coverage, the 12-hour posting window is way too long.  You actually will sell the vast majority of items within the first hour or two.  These two characteristics combine to make this a high time investment category.  Additionally, this category is ripe for price resetting, but I will cover this more under pricing strategies

Lastly, the Nuts and Bolts category is similar to the Nails in that long posting cycles are typical, but the demand is much lower.  In fact, you may be the only item on the AH and not have a single offer.

In my next segment (no pun intended), I will go into pricing strategies.  How do I price my items?  Do I undercut?  By how much?  How can two hunters help?  You got it.  I’ll explain it all next time…. Until then, have fun and make more copper than the next guy.

It’s time to talk about the newest profession, Archaeology. Let’s do it Idiot’s Guide-style; in case you’ve forgotten, look back at the last time we did this to see what I mean by that. Let’s go!

What is Archaeology?

Archaeology is a secondary profession that allows you to find stuff in various zones in game. The zones show up on your map, and are level-dependent. You find archaeology fragments and then assemble them into stuff. Usually you assemble common (read: grey vendor trash) items, but sometimes you get rares. The rares are usually vanity-type items, but there are a few pieces of weapons and armor, including the much sought after Zin’rohk. Here’s a link to the wowpedia article, complete with a full list of rares.

No, seriously, what is Archaeology?

Archaeology is a huge waste of time. That’s about it. It’s like vanilla fishing. A little dot pops up on your map, you fly across the continent, survey, find the pieces, and come back.

Wait, survey?

Indeed. You get a function to “survey.” This is basically how you use archaeology. You get in a zone that’s marked on your map and you survey. A little survey tool appears, and the color of the light on the tool indicates how near or far you are from the fragment. You keep surveying until you’re close enough to find the fragment, which eventually apprears as a lootable item on the ground.

(If you want more details, look any of the excellent guides online. For professions generally I like WoW Professions, but there are other good ones as well.)

I’m really just supposed to fly around and look for things?

Yep, that’s it.

Why would I do this?

Well, there are a number of reasons.

First of all, it’s definitely aimed at completionists and casuals. So, if you’ve got the completionist urge and just must fill up every bar, Archaeology is much better than killing Furbolgs or running Sethekk Halls, again, to try to get that Druid Bird mount that never drops.

There is some money to be made. Occasionally you get common items that are worth a few hundred gold, and that’s nice. And you do get a shot at some fun vanity rares that will turn you into a bug, speak with dark gods, or let you go home with a dwarf chick. All in all, there are a few pets, a mount, and some other fun stuff.

What’s the downside?

It’s a huge, ripping, screaming waste of time. I mean, even more than WoW is. It’s horrendously boring- you just fly, survey, pick up a dozen or so fragments in a zone, and then fly ACROSS THE CONTINENT to pick up another dozen or so fragments. Then you assemble whatever you’ve been working on, and there’s a magical moment when it’s unclear what will pop up next. Then, when it isn’t Zin’Rohk but is, instead, just another stupid bijou, you almost throw your computer out the window.

So, if it’s so boring, how far along are you, Bigjimm, right now?

I’m umm…. I’m *cough* maxed. I’ve found more than 100 commons. I’m almost a Professor (18/20 rares as of this post). In fact, I’ve done almost everything that I can. (I’m not an alchemist, so I can’t find the recipe for the Vial of the Sands.) Yes, it’s a horrible waste of time. But… it’s oddly addicting. It’s Whac-A-Mole on your map, except that there’s always more moles (ie: zones) to whack (ie: survey). There can’t ever be less than four, so… I just keep looting them.

And, in fact, Archaeology works perfectly for people like me. I don’t raid anymore and don’t have any desire to. I haven’t even done all the heroics. I play at night, when I’m so wound up from working (in a restaurant) that I can’t sleep, but don’t want to think about anything. When I log on at 11pm or midnight, I don’t want to move out of the goo, I don’t want to stare at a boss’s crotch or tank the ads or anything like that. I just want to listen to a few podcasts, have a glass of milk or maybe my preferred adult beverage, and relax. Archaeology is the casual profession, bar none.

Any final thoughts?

I did get Zin’Rohk. So… I feel a little guilty about that. And Archaeology does give you time to talk to your guildies while you’re flying around. When you’re a member of AIE, that’s a good thing. (Especially when they stroke my ego a bit.)

Markco... who?

In conclusion: don’t do archaeology to make money. It’s roughly about as much gold per hour as questing… so not good at all. But it is relaxing and fun, and I like it.

One final note: I’ve received a lot of feedback, here on the blog and in-game, regarding my upcoming move. Thanks to everyone who took the time to wish me well. I genuinely appreciate it. As ever, we here at P3P look forward to all your feedback. If you have a sec, take some time to leave a comment on this post. We read them all.

GL! /bow

Jimm

This is one of those Starter Cash segments that’s aimed at people who are already at max level, or close to it. It involves TBC content, so if you’re still struggling at level 30, relax, farm some copper, and wait for December 7 to alleviate all your leveling woes.

With that said, let me start like this: I love Nagrand. I really do. Like many people, it is my favorite TBC zone. (Arathi Highlands is my favorite Vanilla Zone, just in case you were keeping score.) So naturally I bring my toons through there. I always end up doing the quests in Nagrand, including the Consortium quests.

Why does this matter? Well, it’s pretty simple. As you get higher levels of reputation with the Consortium, you get access to free TBC gems via the only monthly quest in the game, Membership Benefits. That’s right, at the start of each month you can fly out to Nagrand, speak with Gezhe, and get a free sack of loot just for doing some quests that you’ve probably already forgotten about if you’re level 80.

In this way you can take part in what Markco calls the “Golden Draenite Lottery.” (Meaning that if you get one, you’ve got about 10g more than you did before, at least.) Yes, this is a lot of afk time, but it’s still easy as the portals from Dalaran still exist. And, also, it will give you a chance to go see something you probably haven’t seen in a while, namely the lovely, open spaces of Nagrand.

(What’s that you say… why yes, Nagrand is MUCH more open than anything in WotLK. Why is that, you ask? Well, because of lag. Loading lots of people fighting over Halaa on a flat plain is much harder than if they’re obstructed by cliffs or on a very high plateau. Yes, TBC was the end of the majestic vista… at least until Cataclysm.)

GL! /bow

-Jimm