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Gold Capped: The art of negotiating for luxury goods

Every week, WoW Insider brings you Gold Capped, in which Fox Van Allen and Basil "Euripides" Berntsen aim to show you how to make money on the Auction House. Feed Fox's ego by emailing him, tweeting him at @foxvanallen, or sacrificing your first-born to him. And be sure to catch the return of Basil and Fox's podcast, Call to Auction!

As someone who greatly enjoys getting presents, I love Christmas. But the truth is that I love the day after Christmas just as much. On Dec. 26, all the stores know you're loaded up with cash and gift cards from your relatives. It's the one day of the year where I get to shop for luxuries as if they're everyday purchases.

The urge is there in World of Warcraft, too. I've worked so hard all year long to make money. You have too. But you can't just sit on those millions forever. Money in WoW is a tool -- it's pointless if you don't spend at least a little bit (or, in the case of today's column, spend a lot of it just to prove you can). I'm not just talking Mechano-hogs and Vials of the Sands here, expensive though those purchases may be. I'm talking about the true World of Warcraft luxuries -- your Magic Rooster Eggs and Swift Spectral Tigers, things only a true Auction House maven will ever own.

When an item is being sold in absolute minimal quantity, it's simply impossible for markets to do what they do best. You can't get the opinions of hundreds of sellers, cross-matched against the opinions of hundreds of buyers, to get one reliable, stable market price. You get the opinion of one seller (if you're lucky) cross-matched against your own senses. If you think this is a simple market to play in, you're wrong. It's the elite level, like a game of Jeopardy! where all three contestants are Watson supercomputers. And because it's the elite level, tactics can get (and are almost expected to get) real dirty, real fast.

Public opinion: Worthless

So, what's that Magic Rooster Egg worth? Finding the right answer is pretty tricky. Finding the wrong answer is simple -- just ask trade or the official forums.

A lot of people have opinions on what you should pay for that luxury item. Unfortunately, most of these opinions are uninformed, often coming from people who don't even have close to the kind of money necessary to truly purchase a high-ticket item. That level 83 paladin thinks 150,000 is far too much to pay for a Spectral Tiger? He'd only pay 75,000? Cool story, bro.

Do your research (if you can)

If you were going to go out and spend $50,000 on a car -- or heck, even if you were only going to spend $1,000 -- you'd want to do as much research as you can on your purchase beforehand, right? Buying a big-ticket item in game is really no different. You want to do your research first.

But this is easier said than done. A lot of expensive, luxury items are rare. It's hard to price a Reins of the Swift Spectral Tiger mount if your server hasn't seen one listed in a year and a half. And the Magic Rooster Egg? I'm not sure I've ever seen one of those listed on my server. It's not like you can just go to your Auction House and get a market price for this stuff -- you'd be lucky to see any of it on the Auction House at all.

Your first stop for research should be The Undermine Journal and AHSpy.com. You might not be able to get data for your realm specifically, and data for other realms may not be especially relevant to yours, but you need at least some information. A Christmas Day search of both reveals that on my server, Proudmoore (US), there's a Swift Spectral Tiger available for a whopping 750,000 gold Horde-side. On the Alliance side, one is available for 599,000 gold. Data from other servers shows that the cheapest auction currently listed is 395,000 gold.

Your next stop? The official forums. Often, sellers of expensive goods will list their items there. And, just as often, buyers of expensive goods will list what they're actively seeking to pay for something.

Which of these is the right price? The answer is D, none of the above. Buying a big-ticket item off the Auction House is akin to buying a new car for whatever price the dealer throws up on the sticker. The act of listing something like this on the Auction House is nothing more than cheap advertising -- the seller's way of letting you know that he's got the item for sale, even when he's not around to bark it in trade chat.

Buying and selling expensive items is almost always done through private negotiation. The most important reason is the AH's 5% fee -- on an item like the Swift Spectral Tiger, the Auction House cut can easily be in the tens of thousands of gold. It's like a tax on the lazy.

The listed price on the Auction House should be nothing more than the starting point of the negotiation. The seller of that Horde-side Spectral Tiger would be thrilled if you dropped 750k on the Auction House. But he's only going to get 712,500 gold out of the sale if you do and would just as soon sell it to you at the same price.

Your guess is as good as theirs

If you've made the decision to seriously barter for a luxury item, you need to figure out a few different numbers in your head. The first number you should come up with is the most you'd be willing to pay for the item. In the case of the Swift Spectral Tiger above, you might decide that number to be 712,500 gold -- "worth it at any price." Alternatively, you might decide that number to be 250,000 gold.

With luxury goods available in low quantities, there's no one right answer. Previous sale prices and Auction House listings are merely suggestions. That specific buyer and seller are long gone, and so are the circumstances that led to that sale.

The simple fact that you're in the market for the item gives you a strong angle with which to negotiate -- not many others can afford to drop the kind of money you're looking to drop. Your competition is largely non-existent. Your offer of 250,000 gold may be the only serious offer the seller will get that week.

Starting the negotiation process

Of course, you should never begin your negotiation with your bottom-line figure -- that's the number you want to end negotiations with (if you can't get it even cheaper). Your most powerful move will always be your first move, so it's important to get it right.

Your goal with your first offer isn't necessarily to insult the seller. Offering them next to nothing for what you both know is pretty valuable is a waste of everyone's time. He's probably gotten lowball, non-serious offers before, and he might not even respond to yours if he doesn't think you're serious. And that's the real goal -- to open up negotiations and get him to counter.

Negotiate from multiple angles

So, you've made your first attempt to buy an item and it fell flat. You tried to get that fancy mount for cheap, and now the seller is upset with you. Your next move? Wait a bit, create a new level 1 alt, and try again.

Negotiating from a number of different characters has its benefits. Your seller often has no way of knowing whether or not the different characters approaching him with offers belong to different players. And if two different characters are offering him similar amounts -- "I don't think that mount is worth 750,000, but I'll pay you 200,000 for it" -- it reinforces a perception that the price of 200,000 is a much more realistic price. It also sets you up nicely to follow up with a higher offer on your main -- say, 300,000 -- that looks far better than it otherwise would in light of the lower offers your alts have been making.

But while the seller has no idea how many buyers he's dealing with, you always know you're dealing with the same seller. If his best offer in one negotiation is 500,000 gold, you know that's the worst you can do in the next negotiation. And if he was willing to take 500,000 last time, maybe his best price is 450,000 this time? Or even 400,000?

Is this the most honest way to approach negotiations? No, probably not. But remember, any top-tier seller is probably shuffling high-value goods among his different alts trying to get the same type of advantage over buyers. There's nothing in the rule book that says players have to lay all their cards out on the table.

You can shop both factions

Let's say that you've absolutely got your heart set on a Spectral Tiger mount and that you're willing to buy it at just about any price. And let's say that the seller on Proudmoore's Horde side -- the one asking 750k -- isn't willing to budge at all. You're not necessarily stuck paying that price.

Why? Because there's another Spectral Tiger listed for sale on the Alliance side, and it's listed for far less. Normally, I don't like dealing with the neutral Auction House because of its higher 15% cut, but for big-ticket items such as these, a shrewd negotiator can use the neutral Auction House to their advantage.

Play the two sellers against each other, even if the two sellers don't know you're doing it. If your Horde-side seller isn't willing to come down, see how cheaply you can buy the mount on Alliance-side. Remember, you're going to have to pay at least 15% more (unless the seller is interested in playing some risky cross-server arbitrage). But in many cases, that can still be the better deal.

Maximize your profits with more advice from Gold Capped. Do you have questions about selling, reselling, and building your financial empire on the Auction House? Fox and Basil are taking your questions at fox@wowinsider.com and basil@wowinsider.com.

Filed under: Economy, Gold Capped

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