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