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Gold Capped: Buy low, sell long

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. Email Basil with your questions, comments, or hate mail!

I've often downplayed the "buy low, sell high" aspect of the money-making game, instead focusing on using trade skills to create value and profits. There is, however, a lot to be said for brokerage. It can be much riskier but has a very good profit per hour when you win your bets. Unlike a game of cards, though, the odds are not stacked against you.

There's one key fact that can stack the odds of brokerage in your favor: People charge less for items in a trade window than others would pay on the auction house. The best strategy to take advantage of this is to buy low and sell long. Why long instead of high? They actually amount to the same thing, but the key here is that instead of immediately trying to find some buyer who will put more money into a trade window than you, you list the product on the auction house.

The auction house is the great differentiator between people looking to make a quick sale and those willing to wait for a high margin. If you see someone selling something in trade chat, chances are that no matter how much they're asking for, they're expecting a low-ball offer and are willing to sell somewhere in the middle. So what is it about the AH that makes stuff sell for more?

The long sale

More people will see an auction than a trade ad, which means you're exposed to a lot more potential buyers. The longer your auction stays up, the more people it's seen by. Trade ads suffer from a long list of factors that make them less likely to reach your intended audience, including the fact that buyers have to be in a city reading trade chat exactly when you happen to be advertising your item.

Auctions suffer from the fact that people have to search for them to see them, but you can add a bit of trade barking about the existence of your auction if you want to increase the number of people seeing your auction.

The more people who see your auction, the more likely one of them is to buy it, assuming the price is reasonable in the eye of the buyer. This means:
  • There are no other cheaper auctions.
  • They have seen the item assigned a value in the same ballpark as you're charging.
Just so long as you're within a price range that's reasonable according to the above criteria, you can set whatever profit margin you want. The more you charge, the longer it will take to sell.

I've been making upwards of 30% profit flipping the quest reward items from the Shadowmourne quests. It's not quick money, but I am willing to keep my money tied up for months, so my exposure to potential buyers is much higher. I've bought at a good discount from someone in trade willing to let a higher price pass by in order to get his money immediately, and I am waiting out the market for the right people to search my auctions and decide to splurge.

Buying off trade and selling in the AH is a tactic that works for a lot of types of items, especially things with low and fixed supply. Things that aren't easily farmable, specifically -- for example, the Shadowmourne vanity items, Books of Glyph Mastery, and mats for BOA enchants from old content. These items all retain their demand well over time, and the more time you spend listing an auction, the higher you can sell it for.

Time-bomb deals

What about items with an expiration date? Trying to sell valor point bracers for too much, for example, can be like playing hot potato with a hand grenade. Hold them too long (for whatever reason) and you'll lose. The reason is that the number of people willing to pay, for example, 20k for bracers the first week is quite low, and they probably all get them from the first few VP farmers. Every week that passes leads to more people willing to sell their VP, which means that the prices plummet sharply.

If you were holding onto a pair of bracers from week 1 of a new patch, hoping for that extra 2000g profit, you can instead end up costing yourself 2000g or more by not finding a buyer in time for the VP cap reset every Tuesday.

So, how can you make money with time bomb goods? The main method is to limit your exposure to the market to items where you can get an extra good deal on the buy side, and simply sell for a normal price and move it quickly. Also, if the item is rare, try to bark in trade about it. Don't spam, as you'll annoy people who otherwise might have considered buying, but linking your item and its price in trade can be a good way to increase the number of people checking it out. I'll often offer a 5% discount to people who give me time to cancel the auction and trade it to them manually, saving the AH cut.

If the deadline for the next batch of items comes up and you're worried that the price will go below what you paid for it, consider a fire sale and offer it at or near what you paid for it. Just so long as you profit from more time bomb flips than you lose, you'll end up ahead.

Maximize your profits with more advice from Gold Capped as well as 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 basil@wowinsider.com.

Filed under: Economy, Gold Capped

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