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All of the latest Mists of Pandaria newsGold Capped: Sleazy auctioneers and giving away trade secrets
by Basil Berntsen 
Oct 28th 2010 at 2:00PM
I walk a strange line. There are two distinct extremes in the readers of this column: those who feel I shouldn't be telling people their "secrets" about how to make gold, and those who believe that anyone who uses the auction house to make gold is somehow bad (in skill or character -- I get both). While the majority of readers are somewhere in the middle of the spectrum between these extremes, let's look at the arguments.
Trade secrets
The people who I upset when I publicize the exact methodology that goes into making money on the auction house tend to say that I'm giving away secret gold-making methods, which is similar to a magician's explaining how to do a magic trick. These people don't seem to mind trading information with each other in gold-making forums, but the argument goes that these methods shouldn't be widely publicized outside these forums, sometimes even outside the members-only parts of the forums.
To this, I say that if it were a real secret, I wouldn't know it. More to the point, unlike well-performed magic, anyone with the time and interest can figure out everything I've written without having read anything but the WoWInterface and Curse addon pages. Auctioneering isn't doing rocket science; it's economics with a dash of UI customization thrown in.
The metaphor breaks down at the magician line, though. Magicians earn their keep by mystifying people for money, and if they were to tell their clients how they do "magic," they would quickly find themselves without clients. My buyers probably don't even look at the name on the auction they're buying; they just buy the cheapest one, and the information I'm sharing is more relevant to my competition than my clients. If I can't handle any informed competition in whatever market I'm in, that simply means they're better than I am -- and if this were real PvP, I'd have just lost some arena points.
More to the point, the more auctioneers there are, the more fun we all have. How much fun would a gladiator title be if you only got it because there wasn't anyone to fight against? Well, at least you'd have an achievement and a mount. Auctioneers get absolutely no in-game recognition, other than the ability buy silly mounts and raiding knicknacks they wouldn't be able to earn without cash. The real fun comes from talking to other players about this particular facet of the endgame -- comparing notes and strategies, telling stories and having rivalries. Don't be hurt when your favorite niche market hits the front page of WoW Insider, but enjoy the challenge of staying on top of an ever-increasing auctioneer player base.
Only sleazy players and gold farmers play the AH
This is the accusation that bothers me the most. The gist of most of these arguments is that the people who just want to log in once a week and sell their honor-bought gems and Primordial Saronite get undercut immediately, and when a regular player needs raw mats to craft, they're expensive. Also, auctioneers are jerks for charging for things that take them no effort to make.
It costs thousands of gold to level a profession, and even more to get all the popular recipes once you're at max skill. Charging a margin on crafted goods is completely fair. The real question is whether you're going to circumvent the open market by bartering or gifting friends with goods, or whether you'll pick up your sword and join the free market in all its cut-throat, capitalist glory. If you're one of those folks who makes stuff for free for friends and for a tip for strangers, that's fine. You've decided to avoid the open market and focus on other parts of the game. The economy is mostly optional participation, however just like PvP, there will be times when someone who is better than you at it pwns you when you weren't looking for a fight.
As for undercutting and the prices of raw materials, it's not auctioneers that are hurting you; it's demand and supply not agreeing on a price you find satisfactory. Auctioneers won't generally buy mats that are overpriced, and they can only undercut as long as they have supply. We are subject to the same pressure of supply and demand that you are. If raw mats are expensive, it's because there's low supply or high demand. If you get undercut selling your Primordial Saronite, it's because there's high supply or low demand. We all have exactly the same cost of doing business and exactly the same opportunity to make money.
Purely self-interested actions (participating in the economy by buying or selling goods, as well as undercutting) can't, by definition, be "jerky". To be honest, though, this kind of metagame does tend to attract jerks. It's completely a solo part of the game where teamwork and playing cooperatively have much less of a benefit to a player than a solid understanding of the prisoner's dilemma and opportunity cost. Honestly, jerks tend to do better. More auctioneers are not jerks than are, though. Sure, some of us build a Shield of Jerk that we wear when we speak to others about this part of the game, but that's a natural reaction to the derision that we can face. Make your way through that, and you'll find that we're actually mostly the same as you. We just care about a different sort of imaginary currency than you do.
Maximize your profits with more advice from Gold Capped, plus the author's Call to Auction podcast. Do you have questions about selling, reselling and building your financial empire on the auction house? Basil is now taking questions for a special series, "Ask an auctioneer," at basil@wow.com.Filed under: Economy, Gold Capped
Reader Comments (Page 6 of 7)
frugality Oct 28th 2010 5:33PM
so 25 divided by six is 4.16, not 4.25. Long week, terrible mental math.
jfofla Oct 28th 2010 5:03PM
Back in Vanilla I once sold a lump of coal for 3g buyout. It sold.
Sleazy?
I prefer to think I cater to an elite class of player to whom price is no object.
Elvgren Oct 28th 2010 5:13PM
"The economy is mostly optional participation"
That is just not true and there in lies my issue with a lot of the folks on the AH. You might be able to call it optional if you don't really have any desire to play your character fully. Right now ... anyone who isn't an inscriptionist has ZERO options but to be buying glyphs on the AH. Bliz propped up A profession at the expensive of the entire user base. When we were on the verge of 4.01 the price of ammunition for hunters went insane. Raid level arrows were being sold one by one for exorbitant amounts by a$$hats cornering the market. You can't expect someone wanting to contribute their best to NOT have the best ammo for a raid. You can make the lame argument about waiting and having a guildy make them but for those who only have an hour or so to play ... said waiting can be a pretty big impact on the fun quotient. Choice was not a factor.
While I'd rather there just simply be no economy side of the game at all (go play a purely economy/resource management based game tyvm) I still have no issue with reasonable folks making reasonable profits on crafted items, vanity pets, non-game mandatory items in the AH. For those things there is choice. One of my best friends is gold-capped, or close to it, by playing the AH. And he's done it being fair and reasonable and fully understanding that he is impacting a lot of people by what he does. He's incredibly generous with his friends and guildmates. He seems a rarity.
There just should be no mechanism in the game for one individual to negatively impact another individual's game time gouging for items required to play the game at their best. At the least there must be price caps on utility resources like food, elixirs, etc. Better would be for there to be vendor options for same.
Claims that Blizzard let's us so it's OK are specious at best.
Morcego Oct 28th 2010 5:29PM
Inscriptionist ?
The word you are looking for is SCRIBE.
John Oct 28th 2010 5:34PM
"While I'd rather there just simply be no economy side of the game at all (go play a purely economy/resource management based game tyvm) "
Feel free to go play a MMO with no crafting/professions/gathering and player-to-player sales aspect to it tyvm.
IMO your wish for someone to impose "reasonable" limits on how others value their time is authoritarian.
Pyromelter Oct 28th 2010 9:42PM
"Raid level arrows were being sold one by one for exorbitant amounts by a$$hats cornering the market"
They were selling for about 1 copper over vendor price on my server right before 4.01... I know cuz I had some saronite razorhead blue arrows, and I tossed em on there as I didn't need them on my warrior. So I checked the purple ones and there were so many on there it was redonculous. There was just way more than all the hunters on my server ever needed.
Eirik Oct 29th 2010 3:59PM
"anyone who isn't an inscriptionist has ZERO options but to be buying glyphs on the AH. "
Friends. Guild members. Buying/picking herbs and asking for a scribe in Trade Chat. Doing without glyphs. Plenty of options.
I'll point out that your reasoning would apply ever since inscription was invented, not simply with the advent of v4.0.1. If you want to consider the marketing metaphor: at some point, the (perceived) cost of buying glyphs could become so great that it becomes cost effective to enter the market yourself, either by creating a new scribe character or changing professions. And yes, the time it takes to level up a profession (or toon) is a factor.
"Choice was not a factor." Choice is ALWAYS a factor. However, the palatability of your options is not guaranteed.
One piece of hindsight: instead of asking a guild member for arrows on raid night, you could have asked them to prepare them for you for the next raid. Or asked guild leadership to include ammunition among raiding supplies. Develop a (business) relationship with a crafter who can make them for you. (Key words: repeat business) These options might not have worked, or might not have worked *for you specifically*, but the are the sort of option you should add to your toolkit. Particularly since reliance on the AH seems to have let you down in major ways.
Cyrus Oct 28th 2010 5:18PM
This reminds me of previous discussions (http://wow.joystiq.com/2009/10/27/breakfast-topic-what-tutorial-would-you-add/1, and here, http://wow.joystiq.com/2009/10/06/researching-virtual-economies-to-learn-about-real-ones/, for example, and I seem to remember others I can't find right now) with some players who apparently view easy, immediate gold as a right and anyone who doesn't behave rationally (as they define it) as a depraved enemy.
If they were they simply trying to make money and being really irate about people who make it harder, my reply would simply be "lighten up, asshole, it's just a game". But the driving attitude seems to be that making money - again, gold - is THE game for them and they don't even consider why people would see otherwise. I'd call getting irate over people who make it harder to make money crazy, but this attitude I'd call completely NUTS.
I'd like to have a lot of gold, sure. I'd also like to have a lot of achievements, collect a lot of mounts, kill a lot of bosses, get a lot of armor sets, and spend time doing completely unquantifiable stuff like killing bosses with my guild. Gold is first and foremost a means to all those ends, and then a goal in and of itself as a distant second. Often, the best way to get gold from the AH is to put something up priced to sell - that is, quite a bit below the next-lowest bid. That way, I get the gold quickly rather than waiting up to two days, which might matter if I've made or am going to make any expensive purchases like a Battered Hilt recently. Also, that way it's a sure thing that it will sell and there's no risk of someone coming along and undercutting me by 1 silver and making my auction house deposit go to waste.
This is not economically rational, at least not as some people understand the term. The economically rational thing to do would be to sit by the auction house for hours with commodities for sale at just below the next-lowest price and check frequently to make sure no one is underbidding me. If someone is, then I have to evaluate whether it makes sense to cancel my auction and underbid them in turn, buy up their stuff and sell it at a profit,or just grind my teeth in anger and hope some buyer wants to buy more than the other guy is selling. (Or to avoid all that I could install addon(s), and put the time into screwing around with my UI and learning to use them and keeping them updated and researching which are safe and which violate the TOU and... and that's just replacing one problem with another.)
The problem is, that's time that would be more fun to spend questing or on alts or in instances, so I put stuff up priced to sell and it only takes five minutes. And for that, people go nuts.
frugality Oct 28th 2010 5:36PM
Cyrus, you are pretty close with your definitions of rationality!
It's all about your enjoyment. You just have to add your "gold worth" of enjoyment to whatever gold you receive. If it's more than ([Gold you could possibly make by 'playing the AH' and winning] -["gold cost of boredom/insanity from hating playing the AH]), then you are doing it right.
Sorry if that sounded rude, didn't mean to be, meant it to be encouraging.
Celeane Oct 28th 2010 5:34PM
I think you single-handedly dropped the price of Netherweave Bags by 27% on my server after that article. Prices are finally creeping back up to normal.
spamofchaz Oct 28th 2010 5:43PM
I've made the bulk of my gold using the old standby of buying cheap greens, DE'ing them, and selling the mats. I've hit the gold cap with that as one of my cornerstones.
I openly share it with anyone who asks. I've posted screenshots on our guild forums showing how I have my auctioneer set up, how I scan/buy, etc. I've even gotten on vent with guildies and walked them through the entire process. After a few days, though, they always give up in frustration. They either fixate on a certain purchase that didn't give them the huge profit they were expecting (and neglected those others that did) or they went and changed their settings.
It's like leading horses to water - you can tell the world how you make gold, but you can't make them become rich.
Tai Oct 28th 2010 6:00PM
I have mixed feeling about your columns. On one hand I learn some new things, for instance I've started using Zero Auctions to craft some goods, especially glyphs. On the other hand sometimes you mention a niche market I've been making a killing in and I could cry. Am I the evil, economy-dominating villain because I am a major glyph seller on my server? I don't think so. I made 40k gold in the 2 days after 4.01 on glyphs. I also by force of competition and the sheer volume of glyphs I had to sell kept many prices lower than they otherwise might have been. I know this because often when I find holes where I'm not posting a particular glyph the price will have gone to 200 gold or so. My maximum price is lower.
Nevertheless I have finally hit the gold cap, a pre-cata goal, only to find out that the new gold cap is 1 million gold /facepalm. So please keep the articles coming because I have 786k gold to go!
Matthew Oct 28th 2010 6:00PM
Even with tricks, the AH requires a committment of time and energy.
Thundrcrackr Oct 28th 2010 6:21PM
I would love it if once an item was purchased on the AH it could no longer be relisted.
It would have to be used, vendored, trashed, or given away.
The problem with resellers is that they are artificially altering prices. They are setting prices for things THEY didn't earn. The farmers should be the ones setting the prices because THEY spent the time earning the item. If every farmer lists X item for 20g each, then fine, that's their prerogative, they earned the item.
But if the farmers are selling it for 10g and "jerk" reseller comes along and buys and relists them all for 20g, then he's fucking with the price that the people who earned it set it at, thereby screwing over everyone else who wants to buy the item to actually USE it, which is why the item is in the game in the first place. Blizz doesn't put X material in the game because they think "this would be a great item to be bought low and resold for a profit!" They put it in the game because players require it to make other items. So average Joe is having to pay double the price because "jerk" reseller is trying to make money off of him without having to actually farm/earn anything.
Resellers are like middle men. Or ticket scalpers. Nobody likes the middle man or a ticket scalper.
Preventing items from being relisted on the AH after having been sold (obviously if it didn't sell then it could be relisted) would prevent this.
Donegan Oct 28th 2010 7:48PM
I understand the argument you're making. But the truth is that in the WoW economy - just as in the real world one - prices are ultimately set by how much the buyer is willing to pay.
In your example, you say the farmer lists the items at 10g and the reseller buys them all and relists them for 20g each, doubling his money (minus fees)...
...but only if they sell.
That's the key. No one is forced to buy anything, ever. If the price for a given item is too high, people will either farm it themselves or buy it later for a price they deem reasonable. Or walk away from the item altogether. Going back to your example, if the items sell for 20g each then in fact it was the farmer who undervalued his product by 50% when he listed them originally. The market obviously is willing to support a 20g price for the item if they were purchased. If they were not, then the farmer was right and the speculator who tried to resell the items paid the price.
icepyro Oct 28th 2010 8:10PM
The problem is the farmer can come along and sell more at 10g leaving the jerk's auctions to rot. Or I can come along and buy up the farmers' stuff and resell at 15g leaving the jerk's auctions to rot. There is no limited supply and the AH is available to all so there are no middle men to broker for you.
So in a sense, resellers are not artificially setting prices as they are normalizing. Low auctions are bought and reposted at the going rate while high auctions rot and are massively undercut.
What's worse is that there are plenty of ways I can think to get around your limitation, which the real jerks would do and make prices worse for the pain. And the worst of it is that it would be by doing exactly what you want to stop: being a middle man. Your limitation makes being a middle man a requirement where it is currently unneeded.
Forreststump Oct 29th 2010 11:31AM
There is a word you need to be introduced to: risk. The reseller is often buying items at prices higher than it would cost to craft, because they believe they can simply resell for a decent profit in less time than they would have spent producing it themselves.
It sounds like you're complaining because someone else is VOLUNTARILY taking risk and possibly profiting from it. So what?
Lohr Oct 28th 2010 6:27PM
The original post, which was not replied to but posted at the end of this comment thread, talks about a second job. Also, since I know what I am worth, I know my relative value outside of a salaried structure, and since I don't have to work 8 hours a day and my beenfits are taken care of at my FT job, it is possible I can attain a PT salary in excess of my hourly 'rate'.
Wow.com...only here do I get people with barely a high school diploma trying to lecture me on opportunity cost, as if flipping a stack of Cardinal Rubies gives you any qualifications to weigh in on economics. People should have to link their diplomas, so I know who to safely ignore.
The internet gives every jackhole the right to comment on myocardial infarctions, but the only person whose opinion matters are Cardiologists. I feel the same way about 'gold blogs' where people who's couldn't explain TMV, Arbitrage, RoR, if they had all the time and help in the world, yet pop in for some pseudo-intellectual sparring while being completely chock full of it.
To continue with your lesson, opportunity cost doesn't factor in enjoyment, positive externality (hey amateur wordsmith, use 'happiness' next time), etc. It's simply: What are you doing vs. what could you be doing, and what is the difference between the two.
Irony: Someone nitpicking the plural of the word 'pedantic', when they didn't know it before today, had to look it up, and it means, paraphrased, being a nitpick, especially regarding grammar.
frugality Oct 28th 2010 7:43PM
You're obviously just an idiot, and now I feel foolish for attempting to explain a relatively simple economic concept to you. I don't have to justify myself to someone like you, and I frankly do not care you think I am uneducated. The fact you failed to address a single point of mine with substance is simply indicative of how clueless you are.
I would add that your utter disregard for the comment system is another symptom of your problem, but even decent people who have a working frontal lobe have difficulties with the comment system
Oh, and happiness doesn't exactly translate into economic jargon, chief. You want to link your oh so worthy diploma, be my guest. And pedantic is an adjective, not a noun. It can't have a plural, ignoring the facts that you completely misused the term in the first place, and your closing paragraph is completely incoherent.
Thanks again for another $4.16.
Eirik Oct 29th 2010 4:07PM
@frugality: Why do I get the feeling that you in particular are being trolled? We need to get you more Fish Feasts, man. You rise to the bait too often.