The Flipping Market – watch the cross realm prices!

for other ideas on the glyph market and other general tips see the free Croda's Inscription Gold Guide

i have had loads of emails on the Flipping Market following my prior post with some asking what the common traps are.

Below is one of those common traps:

A recent scan using the Undermine Journal showed a potential great deal to buy a “Pattern: Heavy Scorpid Belt” for 20.65gold when the mean price is 4772gold and one standard deviation is 1061gold.  Hence, the current price is strongly below the mean less 2 standard deviations.

Indeed, a look at its recent posting history suggests that it is not often on the market and one has been on for 5000gold recently.

So far so good.  But the next steps of my research shows a problem and emphasises why these steps are important.

On other realms the Pattern sells for a mere 85gold!

Therefore, it appears that we are seeing an inflated price here, caused by someone posting the Pattern for a very high price over a few days.

It is unlikely that my realm will have seen the prices jump to these new levels whilst the other realms have not followed.  Hence, the mean price stated of 4772gold is unlikely to be a true and fair reflection of the price i would achieve and indeed a price of the mean price less one standard deviation is still very unlikely to be achived.

Hence, i did not buy this Pattern.

Weekend Post – No Concept of the Cost of Storage

for other ideas on the glyph market and other general tips see the free Croda's Inscription Gold Guide

I aim to post every two days one this blog.  However, i find that my weekend posts generally get less attention (i suspect most people read posts during the week and therefore land on my homepage and read the post i did at the weekend at the same time).  Therefore, for the weekend post i plan to post on how the World of Warcraft economy relates to the real world or theoretical concepts for the World of Warcraft economy.  Ironically, it is this subject matter which causes the most email traffic!

In the World of Warcraft there is no cost in tying up your gold in raw materials.  Neither a direct cost nor an opportunity cost (potential profits lost by using the gold elsewhere).

We do not have to rent storage space and gold used to buy raw materials could not otherwise be earning a risk free return elsewhere given there is no concept of the risk free rate in World of Warcraft.  I.e. we do not need to make the choice of buy Herbs or invest the gold in Azeroth Treasuries that make 2% pa and you are guaranteed your gold back.

Other than buying the bank tabs, guild tabs and bags there is no ongoing cost of storage (i.e. rental costs) and the raw materials are not perishable (i.e. our Herbs do not wither and die over time if not used).

The absence of this cost from the market is what, in part, what allows World of Warcraft gold makers to operate strategies that are not so easily adopted in real life.


For example:

A gold maker can attempt to control supply by buying up all raw materials.  As long as they have the gold and storage space then their risk is that they can't make a profit on the raw materials they have controlled.

They benefit by preventing other crafters from competing due to lack of raw materials.

They also benefit by forcing up the price of the raw materials and therefore forcing up the price of the crafted products as other crafters raise prices to restore profit margins.

In the real world such an action would require considerable storage cost and the money tied up could be usefully earning a return elsewhere.

In the game, we all sit with surplus gold hence our inventory is not preventing us making profits elsewhere.  I am not having to make that decision of “invest at no risk for a small return vs invest at some risk for a greater return”.  My choice is “use some surplus funds to make an investment for risk vs leave the remaining surplus funds earning no return for no risk”.  Hence, buying up all the raw materials is a strategy seriously considered.


And the view of Blizzard on such an action?

To me, it is not clear what Blizzard’s view on this is.  I suspect they don’t really care given there is no obvious abuse of the market going on to the detriment of the player base that plays World of Warcraft for the questing / dungeons / raiding.

Furthermore, i can’t readily think of what Blizzard could do that would not have consequences elsewhere.  It is arguable that gold makers do keep the market alive with a consistent stream of raw materials and crafted items – though whether the prices are higher or lower than would otherwise be the case is debatable.

Friday Shout Out - FriendsShare

for other ideas on the glyph market and other general tips see the free Croda's Inscription Gold Guide

Jim Younkin of Powerword:Gold on his great Livestreams about 1:26:00 in mentions this blog when he was looking for an addon called FriendsShare Resurrecton.

I use this addon as part of my glyph market process to keep an eye on my competitors - so, worth a recap on what it does.

FriendsShare Resurrection is an Addon that lets you keep the same friends list across your characters on a server.

If you add or remove a friend then that friend will be added or removed on your other characters the next time you log onto them.

Hence, it makes sure all your characters automatically have the same friends which is very useful, indeed required, if you want to determine if your competitors are online and gives you an idea where they are and what they do whilst they are online.

When some of your friends/competitors leave WoW you will get the notice “player not found” and in which case you enter /friendsshare rebuild only once and your list is rebuilt on all your characters when you log onto them.

Jim Younkin's livestreams can be found on YouTube or embedded on Powerword:Gold

Scribe scrolls – i am selling more of these

for other ideas on the glyph market and other general tips see the free Croda's Inscription Gold Guide

Just recently i have started selling a lot more of the Scribe scrolls – notably Scroll of Agility IX and Scroll of Intellect IX.

Unlike many other items a scribe can produce, these scrolls can be substituted by other items – either a spell or a flask, for example.

These scrolls give the users an increase in the relevant ability by 100 for 30 minutes and counts as a battle elixir or gives some other stat increase and counts as a guardian elixir.

Hence, an increase in sales of these Scribe’s scrolls would indicate that there is demand and that the substitutes are not available or only available at a higher price.

I suspect during these slow times ahead of the Mists of Pandaria there are players levelling their toons at a time when the flask equivalents are not available.

These Scrolls of level IX all cost 1 blackfallow ink and 2 resilient parchment to craft 5 at a time.  Given herbs are now selling for 2 gold each (40 gold a stack) that equates to each five scrolls costing c7 gold (each stack of herbs produces c6 inks) and therefore each scroll costing 1.4 gold.

I sell them with a threshold of 10 gold each and a maximum price of 15 gold each making a hefty profit.

I set the threshold price at 10 gold so that if someone else starts posting lower i don’t start a price war and take the price all the way down to 1 gold – which is perfectly possible given these scrolls have competition from other items such as flasks.

I post 10 single scrolls at a time and they all sell at once.

At the moment i am the only seller and therefore i am selling each scroll for 15 gold.

The Flipping Market

for other ideas on the glyph market and other general tips see the free Croda's Inscription Gold Guide

The Flipping Market can develop into a business of its own.

It gives lumpy income but develop this broadly enough and the lumpiness starts to blend and provide a nice steady high level of earnings.

For me this is becoming one of my major income streams and is starting to challenge Enchanting as my number two earner.

Flipping, quite simply, is buying items off the Auction House and reposting them at a higher price.

My strategy here is to look for items that are priced way below the fair price, buy them and then repost at a good level below the fair price.

Therefore i am targeting 2 markets - those that want to use the item and those that want to flip again.

I am aim to buy for 5 gold and sell for 500 gold, or buy for 2000 gold and sell for 6000 gold, or buy for 4000 gold and sell for 10000 gold.  Not buy for 30 and sell for 100 or buy for 500 and sell for 800.  I want a few big winners not many small gains with this strategy.

The reason is that I will occasionally make a mistake and so will use up storage space for a while before I either make that sale or cut my losses and post at a very low price.

I don't have to buy every time i check the Auction House.  Indeed i don't even buy every day.



What is my method?

I use the Undermine Journal to scan for items that are priced substantially below their mean price.

Step 1:

I look at the Undermine Journal Deals Page – it scans the Auction House every 70 minutes.  It lists items under various categories showing the item, number available, lowest price on the Auction House, Mean Price and Standard Deviation.

What i am looking for are items that have a high mean price and are posted more than 2 standard deviations below the mean price.  These are the items that are likely posted on the Auction House too low and can be flipped.

Graphically, the Undermine Journal shows this with the gray horizontal like representing the mean price plus or minus two standard deviations with the black blob representing the current quoted price within this range.

Step 2:

When i find an item that looks interesting (=high mean price and current price more than two standard deviations below the mean price) then i investigate further my clicking on the item.

This opens a new Undermine Journal page that shows me the recent history and additional data on the item across other realms.

What i am checking for here is to make sure the item has not recently spiked in price (i.e. the price has not been manipulated higher to give a false high mean price) and that the mean price is also high in other realms (so further proof of the item’s value).

Step 3:

I also click on the item on this second Undermine Journal page to take a look at the WoWhead page.

What i am looking for here are to firstly make sure the item cannot be bought from a vendor and secondly to read the comments made to determine if this is a rare drop and not made out of date by a more recent item.

Step 4:

If i am satisfied by the prior steps then i buy the item and repost it at the stated mean less 1 standard deviation.  I post the item for 48 hours using Auctionator.

in this example the item sold within 24 hours:

So far, as a rule of thumb, the higher the mean price the quicker it sells. 

Setting up a Guild Bank

for other ideas on the glyph market please follow the link to the free Croda's Inscription Gold Guide

If you are entering a crafting market or markets in a serious fashion then storage space is a key resource.  The ability to store raw materials as you buy them at low prices on the Auction House is an absolute requirement.  The Bank and its bag slots are unlikely to prove sufficient and shuffling materials between alts will prove cumbersome.  To resolve this, owning a guild and being the sole member will give you an additional 588 storage slots.

In the Guild, each tab has 98 item slots and tabs are purchased much like bag slots in Banks.  The first tab costs 100 gold, the next 250 gold, then 500 gold and so on.  To buy all 6 tabs you would spend 9350 gold.

Technically, you can get 8 guild tabs but your guild needs to reach at least level 5 and, lets face it, a guild of one person used for crafting is not going to advance.

Setting up a Guild Bank.

The good news is that setting up a guild bank is very easy, quick and has a low cost (easily under 100 gold).

1) Talk to the Guild Master NPC in a major city to purchase the Charter for 10 silver (see below for the names and locations – but asking a City Guard will give you the location).
2) You need three other players to agree to be members of your guild to get it up and running. So, go to the starter area and ask players to sign the Charter in exchange for 10 gold.  All starter players, and even new alts, will be willing to do this.  Don’t be deceiving, explain that you only need their signatures and that they will be kicked from the guild when it is started.  So whisper the question first, if the answer is yes then present the charter to be signed.
3) Once you have the three signatures get back to the Guild Master NPC to register the guild and start it up
4) Kick the signatory players and there you have your Guild.

Be aware that the players that signed your Charter can delete their character or sign another Charter and so remove their signatures from your Charter.  So don’t hang around once you have your four signatures. Also, be aware that it is one signature per player – so a player’s alt cannot sign the charter.

The whole process should take less than half an hour.


The Downsides to having a Guild Bank.

1) That character can not belong to another guild –so say goodbye to raiding for that character.

2) It is hard to pass a guild bank to another alt –you will need a trusted friend online to allow you to pass the guild bank to them and then log on the alt to receive the guild bank.

Names and locations of the Guild Masters:
·         Guild master Lysheana at the Craftsmen's Terrace in Darnassus
·         Guild master Jondor Steelbrow at The Commons in Ironforge
·         Guild master Aldwin Laughin at the Trade District in Stormwind
·         Guild master Funaam at Trader's Tier in the Exodar
·         Guild master Andrew Matthews at Dalaran Visitor Center in Dalaran
·         Guild master Urtrun Clanbringer at the Valley of Strength in Orgrimmar
·         Guild master Krumn in Lower Rise in Thunder Bluff
·         Guild master Christopher Drakul at The Trade Quarter in Undercity
·         Guild master Tandrine at the Walk of the Elders in Silvermoon

The Holiday Battlers are back!

for other ideas on the glyph market please follow the link to the free Croda's Inscription Gold Guide

The Holiday Battlers are back on my server, and they are in a hurry.

These are the intrepid players that come back to World of Warcraft during the (school) holidays.  Their aim is to level up and gear up - and to that end they need the gold.  And their time is limited - they need to do this fast.  No doubt they can see Mists of Pandaria on the horizon and want to be prepared for that as well.

They run and dungeons, do the raids and hit the quests.  From all that exhausting efforts they have items to sell.

They know about the Auction House but they don't know the true value of what they post - especially rare drops where pricing data is limited.  They want to make a quick sell.

To that end, i am scanning the Auction House for good deals more often using the Undermine Journal quick deals page and my Snatch Lists.

I plan to write a post in my Flipping Business in the near future which is expanding fast - no doubt helped by these Holiday Battlers during this time.

Real Life Value of in game Gold

for other ideas on the glyph market please follow the link to the free Croda's Inscription Gold Guide

We now have a method to track this – via the “Guardian cub”

For 10 euros (or £8) any player can buy the Guardian Cub and then sell them to other players via the Auction House.

On my server there are about 2 to 3 on the Auction House at any one time and they are currently going for 4000 gold and move between 4000 gold and 5000 gold.  Hence, on my server each euro is worth 400 to 500 gold.

Within the EU, they typically sell for about 12000 on the Alliance side indicating that each euro is worth 1200 gold.

Those that buy the pet for euros to post on the Auction House are legitimately buying gold with the risk that the amount of gold is uncertain when the 10 euros are paid.

I don’t participate in this market but i do keep an eye on this price.  For me, it indicates the general health of the server and therefore the economy.

Guardian Cubs used to sell at 6500 gold and now have slipped back to 4000 to 5000gold.  Given the volumes on sale it is unlikely that natural demand is satisfied.  It is more likely that the server is merely becoming less active over time relative to other EU servers.

There is not much i can do about that unless i am offered a free transfer (with all my gold – and that is key) to another server – in which case i would need to do some fast and indepth research into the Inscription market on that server.

 

Selling more of Rituals of the New Moon

for other ideas on the glyph market please follow the link to the free Croda's Inscription Gold Guide

This is another item i am selling more of recently.

A scribe can produce a random book called Rituals of the New Moon with 5 Ink of Sea + 3 Eternal Shadow + 10 Resilient Parchment.  On my server that costs about 120gold (it used to be 85gold but costs are rising as the supply of Eternal Shadows falls).  The book created is either red, white, black or grey.

The acquirer of the book is able to transform into a giant wolf for 2 minutes.  The colour of the wolf is determined by which book they buy: red; white; black; or grey.  When transformed the user is pacified and silenced though they are able to, still do things like using or creating items.

The Rituals of the New Moon can only be crafted by a Scribe.  It does not drop from a mob nor can it be bought from a vendor. Scribes therefore are the sole supplier.

Furthermore, few Scribes bother to post these - making the supply very low.

Clearly, it is an item that serves no purpose other than aesthetics and yet there is demand.  There is very little competition on my server reflecting the low demand – though i now sell one a day.

I used to differentiate between the books given grey is the most common but now i just sell them all for 500 gold.

Required return per hour spent

for other ideas on the glyph market please follow the link to the free Croda's Inscription Gold Guide

There is no concept in World of Warcraft for how to measure what level of profit you should make to cover the risk you are taking.  For the record, in the real world it is about 2% (10 year US Treasury yields).

However, in World of Warcraft i am able to determine what level of profit you should make for each hour of time spent.

i do this with reference to gathering herbs.  Though it is not without its flaws.

I can gather 20 stacks of whiptail in an hour.  I can sell those at present for 40 gold a stack (2 gold a herb) over a 24 hour posting on the auction house.  Therefore, for each hour of gathering i can earn 800 gold.

Therefore, i determine that my gold making activities must make more than 800 gold per hour else i am better off gathering.

Following this through a bit more.  At present, the supply of herbs is low, hence i believe i could gather for 2 hours a day and therefore sell 40 stacks of whiptail each day at 40 gold a stack for 7 days (i.e. 2 hours gathering every day).

That gives me 11200 gold per week.

Therefore, i determine that if i spend 2 hours a day on gold making activities then i must make over 11200 gold per week – else i should revert to gathering.

Though markets are slow, my Inscription profession is earning me over 11200 gold per week at present before i add in the profits from Enchanting and flipping.