Every week, WoW Insider brings you Gold Capped, in which Basil "Euripides" Berntsen aims to show you how to make money on the auction house, and Insider Trader, which is all about professions. Email Basil (new address is email@example.com; old one no longer works) with your comments, questions or hate mail!
Enchanting is a very straightforward business. You have a few steady sources of income; however, one of the reasons that its overall profitability is high is that Blizzard put it behind the level 84 phasing wall, making a huge chunk of the profession in Cataclysm only accessible to people who have access to the shard trader.
As a general rule, if something can be done with enchanting before level 84, it's basically free. My guild's bank is full of stacks of scrolls like agility to boots and crit to cloak that we picked up for less than the cost of the mats. In fact, I routinely restock at ridiculous discounts compared to what it would cost me to buy the mats and do the enchant myself. As long as there are people leveling enchanting, recipes like these will remain unprofitable. The profitability comes when you start using recipes or materials that are harder to get. Eventually, these lower-level recipes may get profitable because many of them are very much in demand, but not until the people who are leveling enchanting have finished.
Let's look at that demographic for a minute, shall we? The people who affect the market for enchanting goods the most are people who use their professions for a profit. While there are always casual crafters, I'd estimate that well over half of the supply for crafted goods comes from people like me who use addons and have multiple characters with multiple professions. Their activity is the supply half of the supply/demand relationship, and the requirement for them to level their enchanters, blacksmiths, leatherworkers, and tailors to 84 in order to unlock a large portion of their trade skill means that there is going to be fewer serious crafters in that space, less supply, and higher prices.
This is certainly nice for those who lucked out and had their main (who probably would have been leveled anyways) already possessing one or two of these professions. These people have much less competition than they would otherwise have had. Unfortunately, however, it means that the consumers of these crafted goods pay much higher profit margins to these crafters.
Many things can be done with a very simple UI, but you will benefit greatly from a few addons. Look at enchant scroll crafting, for example. It's possible to type the name of all the enchants you can make to see which are profitable and decide which to craft, but it's annoying and manual. Still, if you're only going to make a couple of scrolls a week, this will take you less time than setting up and learning a good tool.
If you're willing to use a general purpose AH addon, you can save yourself tons of time simply by using features that should, in my opinion, be included in the default AH UI. Shift clicking on something in your bags or in a profession window to search for it, for example. Auctionator is what I use, but I hear Auctioneer might have started working again. In any case, a general addon can allow you better manually calculate your costs and more easily keep track of profits and list inventory.
A very specialized addon must be used to allow you to scale past manually doing a few crafts and posts a day. Right now, there is only one game in town, and it's called Auction Profit Master. I've talked about them before, but the long and short of it is that while you have to do what feels like an inordinate amount of work while you initially set up the groups and items for sale, once it's done once, you can list auctions and cancel undercuts in a fast batch. And yes, I know it says when you turn it on the first time that it's discontinued, but that's just because their development team is working on a much larger scope addon that's not yet ready for prime-time. APM still works, and it's relatively bug free. When the new one (called TradeSkillMaster, if you're the beta-testing sort) is finished, I'll write a guide on how to use it.
Scrolls are the bread and butter for most enchanters. Before Blizzard introduced vellum, the only way to sell enchants was to use a clunky trade window. This required both parties to be online and not busy at the same time and made comparison shopping so long and annoying that most buyers didn't bother -- which is fine, because more enchanters would ask for a "tip" instead of charging a fee. These days are long gone. Now you can search the auction house for the enchant you want, and the price will be based on the supply and demand for that scroll.
It's important to remember that you can't unmake a scroll. Once you've committed the mats to vellum, it's final. For this reason, it's good to only mass-produce when you're sure you are getting a good deal on the mats. Also, remember that if there's a spike in mats price, there may not be one for scrolls. Short-term spikes in price can be great income for enchanters who make mats (more on that in another post), but if all your mats are tied up in scrolls, the increase in scroll demand may not have as much of an effect on your price, depending on the number of scrolls you and all your competitors have made.
When you're deciding which scrolls to make, remember that some are literally never used by anyone, ever -- well, so rarely used that it's not worth making them, no matter how expensive they're being listed for. Also remember that no matter what expansion the enchant was introduced in, there are people who might be willing to pay for it.
Lastly, remember that price influences demand. Listing an enchant like Greater Critical Strike to cloak for 20,000g is quite a risk, because while the mats are expensive; not many people would be willing to pay that kind of gold for a slight upgrade. It's not that they're buying it from your competitors; they're buying the cheaper version. Maybe before the hotfix that prevented Lifebound Alchemist Stones from being disenchanted, some people were getting these enchants; however, you're unlikely to find many people willing to spend enough money for a BoE epic on a slight stat boost for their enchants.
Odds and ends
Like many professions, enchanting has a few toys that you can use if you need an addition or (or break from) the scroll market. The faction-specific mini-pets, for example, might sell on your faction. They almost certainly will if you can get them through the neutral AH to the other faction. Additionally, if you see an opportunity, remember that you can turn old mats into other old mats. You are also one of the only sources for enchanted leather and thorium.
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 taking your questions at firstname.lastname@example.org.