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by Basil Berntsen 
May 8th 2010 at 12:00PM
We received a note from a reader this week, and I felt it was appropriate to get the Drama Mamas involved. While this is a situation somewhat unique to auctioneers, it certainly has dramatic potential!
Subject: Gold Capped -- feedback and suggestion for Basil
What do you do (if anything) when your Auction House exploits make you enemies that call you out with whispers and /2 flames?
See, I've recognized certain markets that were being rather monopolized on my realm. My realm is a rather low-population realm to begin with, and heavily dominated by the OTHER faction, so supply is usually short and demand is high for many, many items making our particular economy ripe for that sort of thing.
Sensing that I could infiltrate these markets, I leveled characters with the appropriate tradeskills and did just that. Understandably, the (former) monopolists were none too pleased. Now when I log on my bank/auctioneer toon I am immediately presented with a chorus of "love notes" like "U R DUMB" and "WHY U UNDERCUT ME?" I usually don't respond because these people obviously don't understand economics, or they do and they're just trying to bully me out of "their" markets. Whispers I can /ignore and it's no big deal.
But what do you do when they start spreading falsehoods about you in trade chat? That's a more public forum for their discontent and could hurt my business, especially since none of their accusations are true.
Usually, since I refuse to divulge the name of my main toon on the realm, they like to say that my banker is the bank alt of another character, we'll call him Player X, who is universally despised on our realm. Obviously I don't want to be associated with him/her.
Basil, I'm sure your Auctioneer acumen has earned you at least a few enemies on your realms. How do you handle it? Just thought that might be an interesting topic for your column, since it also proves just how effective your strategies for making gold on the AH are. :)
Thanks!
Daniel
Basil says:
Ah yes, auctioneer hate mail. There are many things you can do to earn this; however, undercutting seems to be the one that gets the most competitors' attention. Tells and mail containing, "WHY U UNDERCUT NOOB!" should be considered badges of honor that you display with pride! It means you're doing it right.
I would hesitate before assuming that these competitors of yours are actually dumb, though. You have a thick skin and a quick trigger finger on the ignore button, but assuming they are sending these little thank-you notes to all their competitors, if they can make one or two of them think they've done something wrong, they might actually end up pushing someone out of the market. I know, it's not rational, but there are hundreds of ways to make money off peoples' irrationality. Daniel, I'm glad that you are not falling for this, but the important lesson for everyone else is that nobody can tell you how to price your stuff. No matter what they say, they're just trying to get you to stop competing with them, and there's no reason you should.
In your case, they've taken it a step farther and started trying to ruin your reputation in trade chat. First off, nobody reads trade chat except the 13-year-old Chuck Norris fans and other auctioneers, neither of which represent a serious segment of your auction house market. Point of fact: Despite what the loudmouths want us to believe, almost nobody looks at name on the auction before buying.
Second, I'd recommend highly against ever telling anyone who your main is. I keep a stable of bling-free bank alts and delete and recreate them every time someone figures out who they're connected to. It's nothing personal, but I have no interest in people second guessing or judging my business. I also don't look when I undercut and don't want that to affect my ability to enjoy hanging out with friends on my main. Bling-free, by the way, is important. If you want to kit out a banker and parade it around the auction house, do it with one you won't be deleting in a couple of weeks.
Another point of interest here is that this competition of yours is resorting to the least effective, lowest common denominator reaction they can in order to try to "protect" their business. This is because monopolies never last and are a stupid business plan! No matter how clever and rich you think you are, the only way you can make a monopoly is by buying out your competition, and that does nothing but convince them to produce more and sell it for more. If you happen to have a horseshoe lodged somewhere in your body and really are the only person capable of supplying a certain demand, by all means, profit from your monopoly! But don't think you can create one. Also, remember that even when you're the only game in town, lower prices always mean more sales, which might mean more profits overall.
Long story short: My advice is to create new alts, and when people demand to know who you represent, tell them to go fly a kite.
Lisa says:
What if you're the other guy -- the one who's been undercut, hot under the collar and raring for a trade chat showdown? No matter how upset you may be to find your perfectly laid plans sapped by some other dastardly trader, please don't mewl like a wet kitten in trade chat. You may indeed earn yourself some attention -- but as Euripides points out, you're preaching to the choir. The only people who'll be applauding your protests are the drama queens and other disgruntled traders. Any potential customers who happen to be listening in are more likely to be horrified by the drama and remember your name in a negative light. Whiners aren't winners. Take your losses and move on.
The only way to "win" this situation next time is to play harder, faster, better. Hone your strategy. Strengthen your market. Make no bones about it: competitive trading in the auction house is competitive. Some players don't find that enjoyable. If you're one of those, don't beat yourself up about it; get out of the traders' pool and focus on more modest goals. If you want to play the trading game, though, you have to be able to roll with the punches.
Robin says:
It seems to me that these people are advertising for you. You could turn it into a cheesy, but fun campaign.
/2 My fellow auctioneers hate me because I undercut their prices! When you see my name on an auction, you know you're getting a good deal!
You could be the Crazy Dave of the trade channel.
/2 Don't hate me because my prices are low! Why are they so low? Because I'm craaaaaazy!
You could even come up with your own cheesy slogan or theme song that is thoroughly annoying, like the local mattress store whose ads I hate but whose name I will never forget.
/2 You always know
/2 My prices are low
/2 So don't be slow
/2 Buy from me now
Yeah, yeah. It doesn't rhyme. I didn't say I was good at coming up with good theme songs. Dammit Jim, I'm a drama mama, not a jingle writer. My point is that you can use their mockery and slander to your own advantage. (Is it libel or slander if it is "said" only by typing? I'm going with slander.) You could turn this around so that you become the person people think about when they want to make a deal. When life gives you drama, make drama-ade. Or something. Yeah, bad at slogans. Obviously, I won't be the Crazy Dave on my server. Ah well. Good luck!
Being an auctioneer is like being able to print money. Or gold, as it were. Wait, that doesn't make sense ... you can print on gold, but you can't print gold. That would be closer to transmutation? I can transmute titanium, but that's only worth it if the price of saronite is low enough to justify the time spent making it. I need some sort of analogy here. Whatever, I'll figure it out later. Making gold? Every so often, Basil will post about various strategies he's learned on the AH. Filed under: Analysis / Opinion, Economy, Time Is Money
Reader Comments (Page 4 of 5)
icepyro May 8th 2010 4:03PM
Great article. While I've not been in that situation, I've been expanding my markets and the competition is starting to build. This article and the wonderful comments have made me think about my own business plans.
I haven't been auctioning long, so I also haven't been that aggressive before, but I do have one question. You mentioned noone looks at the sellers names, and that is partially true. While I don't look at the sellers name specifically, I do notice when someone posts a lot of stuff or is competing with me. I also have noticed some of the crazy price wars that happen. I tend to deal in low volume, high profit margin items (not necessarily high amounts of gold coming in, but steady income at a price to craft 2-3 of the item off the sell of one). In the past, I've had very small amounts of competition and it's usually people power leveling professions. I've had a couple times where my prices slowly inch up and suddenly there is competition until my prices come down. Still nothing aggressive.
Now someone is grossly undercutting me and they have the smarts to make more if I buy them out. The undercutting has brought the average price way down. It's still profitable if one sells, but again, we are talking low volume sales. I don't want to give up this market, but now the price is down to 65g when it was 200g last week. I'm considering pulling out until prices go back up or I can keep undercutting until the price ends up at cost at ~40g. Actually at this point, I've profited enough off the item I could accept a loss if it means they go away. I also wonder if I will ever get prices back up or if I can expect more competition keeping the prices down to the smaller margins if it ever gets high again. I've never done this level of economics and have a lot of "feelings" and "intuition" on what I should do, but I don't like basing economic decisions on feelings, so I'm wondering what others think. (It's actually the first time I wish auctioneer did MORE than it does. I want more statistics!)
MisterRik May 8th 2010 5:13PM
That was kind of my problem with the saronite ore situation: I was low-volume. I could circle Sholazar Basin for an hour or so and collect 2-4 stacks of saronite, depending on how many other people were mining at the same time. That was enough for me - farming any longer than an hour has always been mind-numbing boredom to me, so I was content to sell my 2-4 stacks/day and make 40-100/g a day. I was making enough gold for my modest needs in other ways, so this was just one part of my overall income. But then, out of nowhere, here came 3-4 people who were suddenly posting 30-50 stacks of saronite ore a day for 15g and less per stack. Considering these sellers had names like "Afjtyt" and "Jfbrofx", I really suspected botters/gold sellers. Of course, they may have been simply the kind of "disposable" bank alts mentioned in the article.
In any case, I couldn't compete with sellers who had that much time on their hands to gather that much ore (or teams all funneling product to one bank alt, or botters, or whatever it was), and my time was worth more to me than what I was now able to get out of it, so I just quit mining. It was no longer worth it.
icepyro May 8th 2010 7:46PM
Except... when I say low volume I mean the market as a whole has maybe 3-6 of an item and can expect 1-5 of that to sell in any given day. I don't mean I produce low volume. I have 30 in the bank, but I know they won't sell so why waste the deposit? Most of my items have that "only" checkbox in Appraiser checked.
Still, I do feel for those that make their daily bread on small farming sprees only to have the rug ripped out from under them by botters and pro farmers. Been there, done that. Now I gather every chance I get while questing, but don't farm like that. It sells eventually and I've found my niche in the market for reliable income elsewhere.
Qot May 8th 2010 4:04PM
Chris, the destruction of the information does not affect its status as libel (though it could affect the potential damages awarded). For instance, a defamatory billboard is libel and it doesn't become slander once the billboard is taken down. The Twitter analogy in the article, while not perfect, isn't affected by the LoC archiving since the article was written in '09.
In the case of in-game chat, you've got a message from one person sent to a third party, with knowledge it will be stored, for the explicit purpose of publication either on a small (instant message) or large (trade chat) scale.
Written, sent to a third-party, saved (either to a temporary or permanent file), broadcast to an audience... I simply can't see any way to shoehorn that into slander.
Qot May 8th 2010 4:05PM
Bah. I was replying to my own comment on the page that showed just my comment... And it got stuck down here.
vazhkatsi May 8th 2010 4:51PM
the only monopoly i ever saw that was successful and hated was one by a player on my first server, who would post every green under level 20 for 20+ gold, to take advantage of mains buying gear for alts, and because this was a rp realm. don't know how he maintained it, but all through bc people made a pariah of him in trade while the rest of us laughed at anyone who "needed" to buy level 14 greens
MisterRik May 8th 2010 5:17PM
That kind of thing pisses me off to no end. I rolled a warrior on a different server from my main, and ended up going without a helm until past level 30 because of that kind of pricing nonsense. I had the gold, but I simply refused to pay 30g for a +1STR, +1STA hat. I even saw people selling gray vendor trash helms for 10g+.
Basil Berntsen May 9th 2010 8:40AM
Supply and demand. Don't blame the seller for prices- blame the other buyers. Also, if you wanted that hat for stats alone, you'd be fine replacing it with another, uglier hat in a level or two from a quest reward, right? If not and you want it for looks, then be willing to pay the same thing I paid for my monocle :P
Sanitycrusher May 8th 2010 5:02PM
I don't believe in bank alts. There are ten classes and I only have ten characters so every single one of them ends up getting fan mail and trade flames. I do not fluctuate my prices and when I see someone who is posting way too low I will buy them out and re-post. I frequently under-price people who think that ten times the going rate is reasonable. Anyone who has a problem with fair prices can bite me.
Refusing to group or raid with my characters only helps weed out the people who are incredibly immature and who wouldn't be someone I would want to play with. I often list off all of my characters and my voice my utter lack of sympathy for the flamer and move on.
Zanathos May 9th 2010 12:43AM
my main bank alt is 65, surely you don't level all 10 of them all the time. park an inactive one by the auctionhouse
Basil Berntsen May 9th 2010 8:42AM
While you're being nice to some of your competitors, the only way to make money in the long run is to undercut vehemently and vigorously. Your competitors are not your friends, and you don't owe them anything. More to the point, with anonymous bank alts, you can flat out ignore them outright.
Iirdan May 8th 2010 5:31PM
Great article, made me chuckle.
Bravehome May 9th 2010 11:10AM
Drama Robin:
Just a slight turn of phrase and you'll have a jingo!
/2 You always know
/2 My prices are low
/2 So don't be slow
/2 I'm the way to go!
deluded spider May 8th 2010 7:56PM
A related thing used to happen to me, sort of in reverse, on my server. I don't remember what it was I was selling, but I sold 5 to 10 of a certain item. Let's say they were Netherweave bags. I put them up for what seemed to be a good rate (I wasn't gouging anybody) and waited to see if they'd sell.
They did. And so did everything else I put up on the AH, like ore. Everything was bought at the same time, while I was online so I'd get chat spam that buyers had been found for my auctions. Suspicious.
Then I started to put other things on the AH, like low-level greens. Again, at a reasonable price. I figure if I make any money at all, that's a gain. I don't need to gouge people.
And again, everything was bought at the same time. Finally this time I looked to see who's buying these things, and they were all bought by the same person. Somehow, I got the idea to look at their auctions, and it appears that they were buying everything I put up on the auction house, then selling it for more. Every day. I'd try to sell something for a decent amount, and they'd buy all my stuff and put it up for more. Without fail.
Now I admit, I have a short temper and can get upset about almost anything, but what got me hot under the collar was the idea that 1) being nice apparently doesn't pay, even in a damn video game and 2) this person was making a profit on my stuff, and making me feel like a sucker for not putting it up at a higher price to begin with.
Eventually I found out this person does this to everyone, and if you mention their name in trade chat, people will start agreeing with you and saying very mean things about this person. I actually ended up raiding with them in a PUG once, and almost quit when I saw them. Someone mentioned the auction house thing to them, and they didn't seem to think they were doing anything wrong. I disagree, because I think being a jerk should be a punishable offense.
I eventually downloaded Auctioneer, by the way, and the person stopped doing this, so clearly it was no longer worth it for them to do so. I also stopped looking at the people who bought my auctions. Sounds easy, but it actually screwed future buyers out of getting deals for me; I first looked at who was buying all my stuff and thought I'd cut them a deal if they were always going to need those items.
tl;dr Gold-farmers (even the actual-player type) ruin the game for everyone.
Zanathos May 9th 2010 1:23AM
How is he ruining the game for everyone? You sell things below what people would pay for it, therefore you sell too cheaply. If he didn't buy them up, someone else would have. Your auctions are selling quickly and reliably, the other guy's putting in more effort and making more money. Buyers are still able to buy goods at prices they're willing to pay, or he would change his business model. I don't see the problem. The auction house is for business, not for charity. If you want to help other players, make bags and give them out in leveling areas.
micktha May 8th 2010 8:13PM
When buying off the AH, do you look at the name of the seller or the price of the item? Who cares what they say about your banker, harden up and learn to feed on the tears of the vanquished :)
lolikitty May 9th 2010 4:49AM
I actually do check who i'm buying from. There's this d-bag and his alt on my server, i'd gladly buy an item at a more expensive price than buy from him.
Jay May 8th 2010 9:19PM
I agree with not caring about QQ over your success. However, I'd take a moment to ask "Is this a sign that I could be getting MORE profit from this?"
For some goods, the demand is elastic (changes with supply), and in these cases lowering the price will change how many of them people buy. Large undercuts here do increase the number of buyers.
However, for many other goods, the price doesn't change the number bought - only who they're bought from. Examples are glyphs. I can only have one of a given glyph on my toon. Doesn't matter if you list yours at 10% of the next guy, I can't use two.
In this case, your glyph will be bought if it's the lowest priced. It will only stay the lowest priced until the next sales alt logs on.
There's a window between your listing and the next listing in which a good may sell. Within that window, (while you're still the cheapest) the higher the price you list for, the more profit per sale.
What's this got to do with the article?
Well, if you're getting all this hate mail, it's probably an indicator that you're pitching a long way below the highest price level that your goods would have sold - and thus costing yourself margin.
Keep undercutting them, but test out - do I still sell the same the amount if I list my goods at a smaller discount? If so - take that cash, too!
This doesn't work for goods with elastic demand - such as raw materials or inessential consumables. Only those with a fixed demand, like glyphs, buckles, gems and so on.
Spectre May 8th 2010 10:09PM
There's a person on my server who gets flamed regularly in trade chat, which makes no difference at all to who I buy from. I don't care who is selling it, if it is cheapest then I will buy it. People will always whine when they don't get everything their way so you should just ignore them, it's not your fault they suck at economics.
ShammyGuy May 8th 2010 10:08PM
I had this happen once, had about 10 spam mails in my in box from one doucebag regarding some gems. So, I went over to my jc, I prospected about 200 titanium, and waited till he was online. I sent him a tell, "check the AH now you d-bag"and I flooded the market with "his" gem cut at 1/5 the going price. After a while, I pointed out, I only undercut a few gems a week, but keep up the spam and it'll be 100's. It helps to have access to a good stash of cash from being stingy over the years not buying mounts and crap.