How to make money on the Auction House

This is a portion of an e-mail that I sent around many months ago. I thought it might be useful to repost it here. Incidentally, using the AH and AH speculation, I have been able to consistently pull down 200-300g per week. I raised the money for my epic mount in 3 weeks. The day after spending 900g on my mount, I was back up to 250g. It works - try it.

Also, for those using mods, the Auctioneer mod (available on worldofwar.com, but not updated recently) helps greatly with AH speculation. One thing to be careful of when dealing in resources you're not familiar with - auctioneer gives you the prices that items were posted for. It gives no indication of whether they sold or at what price. If you're not careful with this, you might think you're getting a great deal, when you're actually buying into a dead or dying market.

The repost follows ...
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Hey, all. Allyn and LilLordHelen have been asking me lots of questions lately, and I have been giving them lots of long answers. Most of them are things you guys already know, so I haven’t bothered to burden you by cc’ing you on my long replies to them. However, in my most-recent one, which was largely about making money, I did a section on working the AH. This is where Balt and I make most of our money, and now I am going to reveal to you the secrets of my success – for only 6 payments of $29.99 each. LOL. I actually have mentioned some of this stuff to all of you before (I even think I had something on our blog at some point), but this is the first time I’ve written it all down in one place. Hope it’s helpful – let’s be a rich guild!!!

BTW, when you’re controlling a resource, make sure you’re not undercutting your own guildmates – check the sellers names before you go too crazy.

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A final thought about money. One of the BEST ways to make money is to speculate on the AH. I suggest starting by speculating on materials that you are already familiar with - skins, ore/bars and herbs. As I said above, the "average" price for copper is 4s each or 80s for a stack of 20. That's the average. The price actually fluctuates all over the place. I have picked up stacks for 10s, and I have seen them sell for 1.20g. The key is to learn what the average price is, but low and sell high - just like RL markets. There are a couple of things to be aware of, though. The best markets to spec in are fungible reagent/goods markets - i.e., stuff that gets made into other stuff. Why? Because every auction requires a deposit, and deposits are low on fungible goods. If the auction doesn't sell, you lose your deposit. The worst thing to spec on is items (weapons, armor) b/c the deposits are high. If you're trying to sell a sword for 2g (which prob means it vendors for 80s), and the deposit is 60s, FORGET IT. The capital that you are risking versus the expected return is too high. On the other hand, copper bars require a deposit of 1c each (or so). So, if I look at the AH for copper bars, and most stacks are around 80s+, but there are a few at 50s, I may buy them out and immediately relist them for 50s start price (gets me my money back) and 75-80s buyout, which turns a quick 25-30s profit on a 50s investment. Even if they don't sell, I have acquired 80s "worth" of materials for 50s. (Addendum: Many items, such as shards, Morrowgrain, etc. can be posted with NO deposit, making them a very low risk item to acquire for resale. Why? Because you can post them over and over again without losing any money. If the market dips, you can still post high prices, hoping the market will recover while your items are posted. The downside is (1) this ties up resources (for a while I had more than 150g worth of shards in my inventory that I was waiting to sell) and (2) you still have to observe buy low/sell high, and use your best intuition in knowing when to bail out of a dying market).

Now, this is where market fluctuation comes into play. It's possible that the market on copper could nose dive. I've seen it happen. But, even if 2 weeks later I end up unloading my copper for 40s, I still haven't lost that much. In 6 months, I have made a LOT MORE money speculating than I have lost. But, the key is knowing your market and knowing the average prices. For instance, I will often check mooncloth and see 3 pieces listed at 15g and 8 pieces listed at 18g. This does not change the fact that the average price of mooncloth is 12g. If I buy out the 15's and relist them at 17g, I MAY make some profit from people logging on at that time that REALLY need mooncloth and are willing to pay my price. On the other hand, 3 people may go onto the AH and undersell me, and I may end up taking a 3g per piece loss. KNOW YOUR MARKET. (Addendum: This is where Auctioneer can help. (1) It will give you average prices for recent auctions. (2) You can use it to check prices anywhere, any time, so that you don't actually have to be standing in the AH to price check.)

Second point, focusing on materials you actually gather helps you in another way. First, as I said, your more likely to know the markets for the materials you gather - leather, ore/bars and herbs. But, you can also make more money for your gathering by bidding up the market. For example, I go on a mining tear, and I have 4 stacks of copper. I expect them to sell for 80s, but some yahoo has listed 5 stacks at 50s (everyone else is at 80s). I can list mine at 80s and hope for the best. I can also list mine at 45-50s and pretty much guarantee a sale. OR I can buy out his 5 stacks and relist them at 75s and also list my 4 stacks at 75s. If I do this, I stand to make 25s off each of his stacks and 75s of my 4 (4.25g total profit) versus 50s only on my 4 stacks (2g total profit). By moving the market higher, I have earned a higher return on my own materials, as well as the assets I bought cheaply.

Third point, WoW AH is an imperfect market, but it's very small. IF you have enough money, and IF you are willing to risk it, you can easily monopolize a resource. Balt and I have both done this regularly. So, I log onto the AH. Checking Core of Earth, I see that there are only 4 of them - 2 listed for 3g and 2 listed for 4g. 4g is the average price for Core. However, with only 4 listed, if I am willing, I can buy them all out and relist them for 5g each. Anyone wanting Core of Earth (and it's an important material) will HAVE to pay my price. Monopolizing a market requires constant monitoring of the market. If someone comes on and lists at 4g, I will buy him out, to ensure that only my 5g Cores are for sale. Eventually, the quantity may reach a point where I can no longer control it. But, using my original example, even if only 2 of my cores sell, I have made back 10g of my 14g investment, and I have 2 items worth 4g each. If I sell them at the average price, or even a slight loss, I still come out ahead. There is a reason monopolies are bad - unless you're the monopolist.

Last point - pay attention and be willing to take risks. I was looking for a new axe. For a while. I got to know axes very well. There are 3 high-level blue one-handers, only 2 of which are regularly on the AH. Rin'ji sells for 40g average. Serathil sells for 140g average. When I saw a guy spamming a Rin'ji in the Trade channel for 25g, I immediately offered him 20g. He took it. After offering it to Steve and Joe, neither of whom needed it, I resold it 3 days later on the AH for 45g. I picked up a Serathil for 50g - 90g below market value. I decided to use it rather than resell it, but I could have easily made 50-70g on it, and I still have to consider it a 90g "profit" since that's what I saved by not paying market value for an axe that I wanted to equip. Watch for these types of opportunities.

One last VERY important consideration about the AH - and this goes whether you are trying to make money or just buying equipment. Most people work M-F, which means that there are a lot more players on the weekend than any other time of the week. The AH CLEARLY reflects this. On Friday evening, people are just logging on for the weekend, and they are looking to unload stuff that they picked up during the week but didn't have time to sell. Supply on the AH spikes, and prices almost always fall during the first few hours on Friday night. When I am looking to go shopping, Friday early evening is one of my favorite shopping times. Later on Friday night and heading into Saturday, people are looking to pick up new items. Their auctions have sold, so they're flush, they may have leveled and need new equipment, they're focusing on professions - everyone goes shopping on the weekend. Starting late Friday night and lasting until Sunday evening, supply drops, and prices go up - WAY up for some items (I can regularly sell copper stacks for 1g+ on Saturday night). Late Sunday night, prices fall, and they tend to stay stable at their averages M-Th. So, no matter why you're on the AH, remember that the best time to be a buyer is M-Th and Friday evening. The best time to be a seller is later Friday-Sunday. This tip alone can make/save you dozens of gold a week.

Balt and I, who have the most money of the guild members, make most of our money on the AH. Not from looting! Now you know why. Use it to your advantage!



Now that's how you make money!