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Ky’s AH Process: Step 1 – Strategy

I was going to post this as one massive post, but it’s just too large. I feel it would be a pain for someone to refer back to later so I am setting it up as multiple posts. But since I know a few of you are actually waiting for some of the latter posts, I won’t make you wait all week and will post all of it today. It may take a little time however as I proofread each section.

Step 1: Strategy

Stratego

The first thing you need to do is determine your strategy. There’s probably as many auction house strategies as there are people that play Warcraft. But for the most part I boil them down to two basic types: Minimal Undercutting and Massive Undercutting.

Minimal Undercutting is just like it sounds. You want to undercut the lowest price on the AH by the least amount you are comfortable with. For many of you this means 1 copper. For others it might mean 10 copper or even as high as 100 gold when dealing with items selling for thousands. But whatever the cut, the strategy revolves around undercutting as little as possible, generally using a fixed amount.

Massive Undercutting is just like it sounds as well. You undercut items by large margins in an effort to sell your items. In contrast with minimal undercuts, these are generally handled on a percentage basis rather than on a fixed amount.

Minimal vs. Massive Undercutting

So you might ask yourself why would I ever use Massive Undercutting in lieu of Minimal Undercutting? What are the advantages and disadvantages of both systems?

The average player often determines that Minimal Undercutting is the way to go. Why sell an item for 20g if you can sell it for 50g? For example, I’m shopping on the AH. I need one of those new epic gems we’re all excited about. That particular gem sells for 200 gold. But oh wait! Someone’s posted 2 of them for 100 gold each and it just so happens I can use 2 of them in my gear! SWEET!!!

Now the other sellers are thinking “What an idiot! He sold two gems for the same price he could get for one!” Then they become even angrier because while that’s all going on, someone else is undercutting the 100 gold gem guy and while I don’t see it others do and the next guy undercuts and the next guy, eventually driving the market right into the ground.

Out of the sellers, who wins? The guys posting at 200 gold? Or the guy who sold two gems for 100 gold each?

If there’s a cardinal rule to making gold on the AH, it’s this: If you don’t sell, you can’t make gold!

If You Don’t Sell, You Can’t Make Gold!

It doesn’t matter if I post an item for 1000 gold, 100 gold, or even 1 gold. If it doesn’t sell, I didn’t make any gold. In fact, I lost gold on posting the item unless it was an enchanting mat for which there are no fees. So even if you sell an item for 10 gold when it could have sold for 50 gold, as long as your costs were less you made a profit.

The average player just can’t seem to get this concept in their head and that’s 100% to your advantage. How so, you ask? Because the average player if he thinks he isn’t making gold, or at least not making enough gold for his time investment, will eventually quit and give up.

So hopefully I’ve conveyed that massive undercuts are not necessarily bad. It would be nice to not have to do them, but it’s sometimes necessary.

Choosing Your Strategy

Minimal Undercutting is for the active player. Depending on your competition you should be checking your auctions a few times a day to every couple of hours. Or for the extremist, every 10 minutes. This is because minimal undercutting invites more undercuts.

If I see a glyph posted for 50 gold, I’m going to undercut by 1 copper. My price is 49g 99s 99c. Who among you wouldn’t undercut me? You all would and as soon as you see it you will. So I’ve got a set amount of time in which to sell my glyph. That time is dictated by when I post my glyph until the time my next competitor logs on. On my server that’s usually within 10-30 minutes. Why? Because I think I’m on a lot of friends’ lists. 🙂

On a side note, in order to combat that problem I will often log in, cancel my auctions and repost everything without going AFK or logging out. This is the time I use to make dinner, go to the bathroom, watch a little TV, do laundry, play with kids, etc. Mycompetitors believe I’m still posting and wait for me to log before undercutting me. They all know that as soon as they do I will undercut them and they can’t stand it. So I increase the length of time I have to sell glyphs by staying logged in and pretending I’m not AFK.

Massive Undercutting on the other hand is generally for the less active player. I’m not talking the guy that logs on to play for 30 minutes twice a week. I’m talking about the person that wants to log on, handle auctions in a relative short time, walk away, and make gold without having to resort to stalking the auction house. This might be someone that checks once per day or every other day after the auctions expire. But this can also be a strategy for active players to use in an attempt to discourage competition and drive them away.

There are two things that make this strategy work. First it can discourage others from undercutting. If I’m trying to sell something at 50 gold while another sells it at 30 gold, I may hesitate to undercut and wait for the item to sell in hopes that mine will sell next. The undercutter just bought themselves a little more time because I’m hesitating.

The other thing it may promote is a Reset. I’ll discuss this in another post and even show you how I do it, but essentially a Reset is where someone will buy up the lower priced items to reset the price at a higher level. In this case, your competitors may decide to buy up your stock to get the price back where they would like it to be. Remember a sale is a sale regardless of who buys it. 🙂

My Strategy

So what strategy do I use? Primarily Minimal Undercutting. I log in to my bank toon multiple times per day. Once in the morning before work, once after work, and every hour or two after that depending on what I’m doing on my other toons, and once before bed. I have used Massive Undercutting before to drive competitors away and it worked to drive a couple of the less serious away, but they were always replaced so I’ll use it sparingly in the future or only if I reach a point of wanting to deal with auctions every other day.

This brings up my final point about your strategy. Regardless of which strategy you choose, it won’t always work all the time. Things change. Competition comes and goes. Markets change. You need to be able to adapt.

The Bank Alt

Although not a strategy per se, the use of a bank alt often comes to mind and I’d like to address that here. If you’re like me, you have multiple toons with multiple professions and the thought of trying to manage all those different auctions on multiple toons is not appealing. So you probably have a bank alt on your server and I would recommend one. The advantage of having a bank alt is the extra bank space for handling just your inventory. I tried using an alt that I was actually leveling and that didn’t work because I needed the bank space for items I’d pick up for future quests, profession leveling, etc. So I do recommend using an alt for the sole purpose of banking and the auction house.

I took it one step further and created a bank alt with a guild. Is the extra guild bank space needed? Not entirely, although it makes sorting things that I don’t move very fast easier and frees up my toon’s bank space for glyphs.

Bank Shot

Can you imagine having 9 inscription bags on a toon you’re trying to seriously level? 😛

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9 Responses

  1. Hi,

    First time commenting 🙂

    Love your Blog and Amber’s.

    I’ve also been reading Gevlon’s blog and decided to start a Glyph business…doesnt work so well so far… but i think its mostly mys server fault.

    The reason i’m saying its my server’s fault is: Do you really sell glyph for 50g? because on my server there is absolutely no glyph priced at more than 10g and thats on “good” days.

    Also, there’s a guy who’s going to undercut you as soon as he sees that you’ve undercut him and the price doesnt make any difference…he WILL undercut you even if it means selling under the mats price!
    (I’ve seen him sell 2ink glyph as low as 1.5g).

    Anyway, i really enjoy your blog and i just wished i played on a server where selling glyph at 50g was a possibility.

  2. Great post Ky, can’t wait to read the rest

  3. @Kotak – Further posts should explain this, but check your AH to see if he’s selling his Snowfall Inks. If he is then he’s probably still making a profit on those 1.5g glyphs. It’s small, but it’s still profit and discouraging you from entering the market.

  4. KY:

    Take a look at my blog, I posted a strat for JC stuff. You might find some good info in there 🙂

    Fire

    p.s. I think you should be getting a trackback soon on your healer corps post.

  5. get a life you fucking tard do some work when at work or bang your wife when at home but anyone who has this much time to post all this and play wow needs help

  6. So says the guy who spends the time reading WoW blogs. I wonder if you would have said the same thing if I hadn’t posted these 5 posts in the same day? But seeing as this has been something I’ve been working on for almost four weeks now. It isn’t like they were all written in a day. But I suppose someone who fantasizes about Jeri Ryan enough to make their e-mail address 7of9 has a great social/family life.

    My first troll everyone! Give him a big round of applause. 🙂

  7. yay trolls…

    he will probably never come back 🙂

  8. Hey
    Great post, thx for taking the time to share. Offcause u have to love it, but still thx. Makes me want to ride AH a lot more, but time is scarse 🙂
    cheers

  9. so every once in a while, i come back and go over the strats and such again (what, i like good guides that don’t rely on cheating). I was going through the comments again and i saw the troll on this post.

    As I guessed .. he never came back.

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