Richard found a genius who wants Blizzard to ban undercutting because his JC business is ruined.
Hyperactief from Burning Blade found this "great" offer on trade:
GTFOOTF sent me the next genius who does not seem to get the concept that Snowfall ink is an unwanted byproduct and any gold on that is profit:
Sinéad found this gem. We all know that one can make profit by selling parchments and other reagents on the AH because the M&S can't find a vendor. However Arthron should learn that this trick needs to sell the parchment above vendor price:
Rykkon learned the cons of working in Orgrimmar (instead of Silvermoon city): random punks annoying you. Here is one fine specimen:
Vurkolak, Khadgar- EU met with a suboptimal bargaining strategy: begging. Bonus morons chatting about Hitler and also a random guild invite. Again my dear readers: keep your alts in Silvermoon or whatever the goat city name is. Less lag and less random punks:
Phil sent me two screenshots. One was his own money earn section of the statistics page, the other was from the victim of his success:
Bron is an NPC selling Brewfest food for 1-2 silver. Dugley (Duskwood, US) knew it. Rezzyourself didn't:
Hyperactief from Burning Blade found this "great" offer on trade:
GTFOOTF sent me the next genius who does not seem to get the concept that Snowfall ink is an unwanted byproduct and any gold on that is profit:
Sinéad found this gem. We all know that one can make profit by selling parchments and other reagents on the AH because the M&S can't find a vendor. However Arthron should learn that this trick needs to sell the parchment above vendor price:
Rykkon learned the cons of working in Orgrimmar (instead of Silvermoon city): random punks annoying you. Here is one fine specimen:
Vurkolak, Khadgar- EU met with a suboptimal bargaining strategy: begging. Bonus morons chatting about Hitler and also a random guild invite. Again my dear readers: keep your alts in Silvermoon or whatever the goat city name is. Less lag and less random punks:
Phil sent me two screenshots. One was his own money earn section of the statistics page, the other was from the victim of his success:
Bron is an NPC selling Brewfest food for 1-2 silver. Dugley (Duskwood, US) knew it. Rezzyourself didn't:
27 comments:
Thank you for sharing, please stand by for QQ.
You've Got Phil's image twice!
Why didn't I think of selling festival vendor stuff? I still have too much faith in humanity....
I tried to sell the festival stuff. It didn't work, I ended up drinking a whole lot of beer.
Hahaha Gevlon I stumbled upon that post and could not resist sending it in. Glad to see it here :)
Picture 6, Phil's screenshot, I don't get the point of this one. The guy who wrote the mail to Phil, has got a different way to make money, and explains that way. Why do you consider him a moron? Does he become moron by telling you a different way to get rich?
By your own terms, do you become moron by telling your own way to get rich?
Does he become moron by sending you an email or by whispering you? You also whisper your competitors, asking if they are bots. By this term, do you become moron?
@Anonymous
The accusation of him being a moron comes from the fact that his way to make money is flawed.
1)Lower profit margin = more and faster sales, which = more profit even though profit per item is lower
2) Agreeing to sell at an inflated price = less sales as there is more competition (everyone who agreed to sell at the inflated price), and NO SALES when someone following point #1 comes along.
So if I can have a choice between lots of profit or little to no profit (No purchase = no profit), and someone tells me the strategy that gives me little to no profit is one where "everyone wins," then yes he's either a moron or someone planning to do #1 as soon as I jack up my prices.
Actually, It's Phil who is losing money on that glyph, not the other guy.
Sure, Phil may sell more glyphs, but by unilaterally undercutting like that (going from 50 to 5) he now has to make 12 glyphs to restock instead of only 1 for the same amount of profit.
The optimal strategy is to position yourself at the current sell point for every glyph. If that point is 50, undercut by 1c to 1g (whatever your strategy is) and post. If the point is 5, do the same.
Sure, you can dominate the glyph market by posting every glyph at barely profitable levels, but you then spend all your time restocking your glyphs.
If I track the current price, I sell glyphs for an average of 20 gold. I need to sell 105 glyphs a day to make 2000 gold a day. But if I unilaterally set the price at 5 gold, like Phil is apparently doing, I need to sell 500 glyphs to make the same 2000 gold. (1 gold overhead per glyph) I would spend a boatload more time making glyphs for the SAME profit.
Most of my time supporting my glyph industry is spent making glyphs. I'm not going to multiply that time by 5 to make the same profit.
Walmart can do this, because walmart factors in the cost of it's labor force into the cost of the product. The President of walmart doesn't make every product they sell. The president of your glyph business (you) does.
It's better to sell less glyphs for more money once you factor in the time it takes to make the glyphs. Time is money, friend.
I agree with the above poster. Some people using these tacticts are one step above "trade troll" in that they think it's "funny" or "cool" to undercut. Many aren't interested in this as a long-term strategy (unless you count 48 hrs. as long-term) and are usually gone in a day or two. For the most part, Gevon has only created "disruptive" forces in the markets. Thank goodness most people don't have the patience to make 10 glyphs, etc. let alone 100 or 1,000.
What I find troubling is that people think "making less money" is the same as "losing money." If I have more money at the end than when I started, it's profit.
When I post things in the AH I want them to sell, and not just have a chance of selling. For things like Frostweave the demand is always there and I can even post above market value (I don't but I could) and still make money, but for other things I'm going to price them so that they do sell no matter what, and not risk them returning because someone else undercut me by 1c or whatever.
On my server that means usually undercutting by 15%, though at times it does have to be steeper.
If it comes back to me because the auction expired, I've lost both time and my deposit. Now how is that profit?
*Edit*
Append the first sentence of my last comment to say "Making less money per item."
I post more items, I make more money, since they all sell.
Splat,
We're talking about the glyph industry, not the cloth industry. The two are completely different animals.
There are 343 different glyphs, and even level 15 ones can be sought after by level 80 chars in top raiding guilds.
As such, no matter your strategy, a huge number of your glyph auctions will fail. Generally, this means they were canceled by you with a mass cancel macro.
Glyphs have, theoretically, an almost infinite supply / demand ratio. As long as there are herbs, any glyph can be crafted at any time for very low cost. But since they can only be crafted one at a time, the time to craft becomes your highest cost as your volume increases.
The gating factors are complexity of the glyph selling mechanic (multiple vendor toons running auction automation addons) and the time to craft glyphs.
Having failed auctions costs almost nothing. The posting cost is 30 copper (I post for 24 hours), an automatic process posted them, and another automatic process grabbed the unsold ones out of my mail. The net overhead for 1000 failed auctions a day is 3 gold. The biggest time sink in that process is the 5 seconds I have to wait for my mailbox to refill (Can only get 50 mails at a time)
Where the cost is, is in the crafting of the glyphs. I must craft each and every glyph I sell.
So yes, it's better to sell fewer glyphs for more money.
Time is money, friend.
Splat,
Amyone who has tried both methods extensively, will be able to tell you from experience that crafting fewer glyphs and selling at a higher price always results in a far greater Gold/Time spent in the glyph industry. Sure, massive undercutting can also make you a modest profit, but someone who undercuts 50g glyphs to 5g is a moron plain and simple. Do the math yourself.
The real goblin will always optimize his gold/time spent ratio.
Here's another gem, for anyone interested.
http://forums.worldofwarcraft.com/thread.html?topicId=20136596510&sid=1&pageNo=1
-Ty
@Splat:
"1)Lower profit margin = more and faster sales, which = more profit even though profit per item is lower"
Can you prove this, or you just repeat Gevlon's theory of selling things?
In http://greedygoblin.blogspot.com/2009/09/industry-part-2.html , in the "Deep undercutter vs AH-camper" section Gevlon says: "On the other hand the AH camper sells, so he has to mill, craft, list, cancel, relist, fight other campers and random guys, for 0.1-0.5G/glyph profit or even for a loss. It's clear who will give this up (...)"
He suggests that the AH camper gives it up, but doesn't explain why. As far I can see, AH campers undercut Deep undercutters' prices, they have profit, while deep undercutters have little or none at all.
My hypothesis on the Deep Undercutter vs AH camper (In the context of glyph sales) is as follows:
The Deep Undercutter is setting up a product surplus at the current price point preventing that price from floating up in the event of a demand > supply condition.
If demand > supply at that price point, the Deep Undercutter becomes the default price and sells more glyphs than anyone. (
However, if the supply exceeds demand at that price point, the AH campers will just continue to drive the price lower, resulting in zero sales for the Deep Undercutter, but just on that glyph.
The Deep undercutter, however, is adaptive over time. The next time he posts, his barrier of surplus glyphs will be at a lower price, one that will be closer to (or at) the demand > supply price point.
So, the price will either:
1) Stabilize at a point where supply = demand with the Deep Undercutter providing the lion's share of the sales...
2) Supply will always outstrip demand and the price will be driven into the noise floor, resulting in AH campers clawing for scraps.
If condition 2 occurs, the campers will realize they are making very low gold / hour and quit, thus returning stability to the market via the Deep Undercutter's block of glyphs positioned at the demand = supply point.
If there are multiple deep Undercutters, they will rotate the right to have the "surplus barrier" (It'll be whoever posted last while in the demand > supply range)
If the demand is so high, that not even the Deep Undercutter's barrier of glyphs can stop it, the price will rocket to the ceiling, where the process continues anew with increased supply.
One thing is there, that you always forget: what if there are more AH campers? They keep undercutting Deep undercutters' prices all the time, so actually it's you who loose, especially time.
There isn't an endless supply of AH campers. The point of the deep undercut is to make them sell at the floor until they surrender (or move to another market).
I disagree with everyone that says "Snowfall ink is an unwanted byproduct" so it's free.
If you can sell them for 19g / each on the AH (my server data), then the value is set on 19g. If after factoring that on the Tome production cost you see that the Tome make you more profit then make it. Otherwise look for another product or sell the materials on the AH.
For me, I like to sell both the final product and the inks alone , as I have much more ink than the market could possibly buy as Tomes.
I haven't tried this yet.. and I don't know how to automate the process, but I think this will work:
If the AH campers continue adding glyphs after the prices hits bottom, they will be the sole sellers of those glyphs.
The other sellers, Deep Undercutter and Camper alike, will have a set threshold price they will not sell under. It's important to set that price at a level where little or no profit can be made.
Eventually, everyone will give up on that glyph because there's no profit in it. At that point, all pending glyphs will expire (or be canceled) and the price will jump to the fallback position of the next person to post. I set my fallback to 40 gold.
But there's a flaw:
Scenario: Your threshold is 5 gold. Price hits 5 gold and campers undercut with 1c undercuts. this is the worst possible case as It could take quite a while for the price to hit a point so low that noone would keep it going. That's days and days where you cannot sell that glyph.
Solution: Switch your rules after the price drops below your threshold. Drop the threshold to 1 gold. Only post 1, and change the undercut amount to at least 1g per day (If you post once a day... 1g if you post twice a day, 50s.). You WANT to arrive at the point where noone will undercut you as quickly as possible.
If someone buys your sacrificial glyph, and it was the last one... great! The price jumps to the fallback point of the next poster.
If someone buys your sacrificial glyph and reveals a camper as the new low price, then that camper is that much closer to dumping that position because it's not profitable.
If noone buys your sacrificial glyph, no harm no fowl. You weren't making money on that glyph anyway.
If some idiot undercuts your sacrificial glyph, then you either buys his if only you two remain... then repost at the fallback price, or undercut him again to force the price way below profitability.
Your goal is to force the campers to cancel all their auctions until the onle one left is so low, it will be bought just so the price can return to the fallback.
"If someone buys your sacrificial glyph and reveals a camper as the new low price, then that camper is that much closer to dumping that position because it's not profitable."
How does the sacrificial glyph move them closer to surrender? They are in the same situation as your sacrificial glyph already - if it doesn't sell they will relist. If it does sell, they won't make much money and will lose interest in making more.
You want the camper to sell.
The sacrificial glyph strategy costs you money and inhibits the sale of the camper's glyph.
My strategy (honed from reading gevlon's ideas) - work on supply costs. My current supply costs allow (all) single ink glyphs @ 2g or less. If I list at 4g, that's a 50/50 split for me and the ink supplier! Most campers are buying herbs (or they gather herbs, same cost), which places their supply cost at 4g per single ink glyph or higher. If I list at 4g, that camper will have 0 profit.
The reason he's that much closer to dumping that position is BECAUSE his glyph isn't selling. If his glyph expires... then so too (In all likelihood) all the glyphs above it.
What I want the camper to do is be undercut. I undercut him drastically, thus stopping the chain of 1c undercuts prolonging the price drop of the glyph.
If anything... I want ANOTHER 1c undercut below mine... that cancels glyphs above and makes it possible to buy all the current price glyphs.
What I want is ALL of the glyphs at the current price line to be cheap enough for me to buy, then relist at the fallback price... the undercutting can then start anew.
But this is all just hypothesis at this juncture, like I said, I haven't tried it. I'm just thinking of ways to stop the low ball logjams.
Flaw in your ink price analysis: If campers are milling herbs, then their inks cost the same as yours. They can sell the Snowfall inks off just as easily as your supplier can. If anything, theirs are cheaper because they can choose the cheapest AH herbs.
Meh...or you could copy Gevlon and just undercut by 60 silver every time.
Bah.
I don't copy. I innovate.
@Iiene of Kul Tiras
You'll note I made a distinction between the cloth and glyph markets as well. I COULD sell cloth above market value and still turn a profit. When selling glyphs I don't make that claim.
You also continue to fall back on the "But you could be making MORE!" argument. My crafted items sell very well and I make a decent profit. A higher price point would have them not sell as fast. You have not yet convinced me that your strategy is better than mine.
@William
I'll admit I'm not a full time goblin, merely one who likes to make some gold here or there to support himself and some friends. Time spent reposting any item time I could be spending playing with those friends. I maximize my time by making sure my crafted items sell the first time.
@Anonymous
It's been my strategy in-game for almost 3 years now (before that I wasn't playing WoW), and since I'd never visited this blog until last week I think it's safe to say I'm not copying him but simply market mechanics in general.
But hey, if thinking I'm a parrot lets you sleep at night, then whatever.
Whether the shallow undercutters (vs. deep undercutters) undercut me or not is irrelevant to me at this point as my crafted items are still selling. Should that cease to be the case I will evaluate things from there, but barring patch changes that very rarely happens.
GTFOOTF is being a moron when he calls snowfall ink "free" just because it's a byproduct of his business. Unless it cannot profitably be sold or used for anything else, it isn't free. On my server the stuff sells for 20g ea. So the 5 used for an offhand are worth 100g.
Admittedly, if I do a serious milling and glyph business and flood the market with snowfalls, the price probably goes lower, maybe to 10g, or 5g, but at some point it becomes profitable to make runescrolls or darkmoon cards with them or even vendor them, so there is going to be a price that they are worth. They won't become otherwise worthless ("free") until some patch changes everything.
I would guess the most profitable use for them is offhands, even at quite a bit less than 200g (an average darkmoon card is worth around 100-125g and uses one more plus a bit more g worth of other mats at prices on my server), but currently on my server I can sell the inks for 20g. Which means that once my milling business is going, I will prefer selling the inks to making tomes for less than around 150g, unless/til my inks drive the price down.
Also ink deposit is 3s while tome deposit is over 4g. Can't afford to relist those tomes very much and still make a profit at 150g if the inks will sell for 20g ea.
Of course GTFOOTF's interlocuter is even more foolish. If the demand warrants, he can simply buy those up and relist them, or accept GTFOOTF's offer to cod at his price and make plenty of gold without the hassle of buying or farming herbs milling, etc.
If it doesn't, then he should shut up and compete or GTFO of the market.
I find it pretty well... retarded that so many people (including Gevlon himself) seems to think that deep undercutting is the ONLY viable glyph strategy, regardless of server.
Haven't it occured to anyone that every server is a different market, your results WILL vary depending on your server.
We can all agree that the biggest cost of the glyph industry is time. For me, the time spent crafting them is the biggest time sink (I keep a stock of 9x 32slot bags). It takes me about 3 hours to restock everything if I've been lazy (not having restocked for 2-3 weeks).
I undercut all glyphs by 1 single copper. That's right, some of you'd automatically shout "AH camper lolol wasting time undercutting all day long?", but no, since I've earned up so much gold now (hit gold cap twice, among other things) I can't be bothered to undercut. I still earn 1,500g-2000g every day just because I carpet bomb the market with so many glyphs. Sure I'd make more gold if I undercut a few times as well during the day, but that's more time invested = more cost for me.
If I were to deep undercut everyone I'd be crafting glyphs every second day, I'd be going nuts in a short time. So I fidn it pretty retarded that alot of people here seems to think that "deep undercutting is the only way to go". It isn't. It varies. Sure, it might work better on some markets, but everyone isn't a moron just because they don't deep undercut.
Seems pretty elitist (and retarded) to me to claim that everyone who isn't a deep undercutter is a moron.
I don't think gevlon has ever claimed that anyone who doesn't deep undercut is a moron. Only that people who complain about it and say things like "you're destroying the economy" are morons.
There is also a key issue with inscription glyphs in that there is a significant elasticity jump at the point where people go from thinking of glyphs as gear to thinking of them as consumables.
If glyphs cost 100g ea. People will buy them (if they don't have inscription or know people who will make them cheaper) when they hit 80 or change their spec, but hardly anybody will carry around a stack of a few different glyphs to swap in for particular duties, like they might carry a couple different kinds of food or potions.
For instance, I run a feral tank/resto on my druid, but since I don't raid 3-4 nights a week I'm usually on OT/dps duty when I don't heal in a raid. So I carry around a stack of the standard bear and cat glyphs, so that if a fight requires more than my usual badge run repertoire of rip, SR (cat) and maul (bear) for one function or the other, I can swap them in, and then swap back out as needed.
I do this because I can get all those glyphs for between 5 and 20g ea, so it's not a big deal to eat a few during a raid run. If they cost 100g each, or even 50g each, I probably wouldn't work that way.
All that means is that yes, for certain glyphs, you can probably sell a *lot* more at 10g than at 50g, enough to make it more profitable to list at 10g, even in the absence of competition.
That said, I generally agree with those who'd prefer to craft 1/10 the glyphs and make 1/2 the money -- where that's feasible. And I don't think you need the deep undercut strategy except when dealing with special situations. Much of the time, it's just leaving gold on the table, even if it's game theoretically better against some populations.
I also suspect that Gevlon is overestimating his profit per hour by not treating "afk" time as time or at least some portion of it as time. AFK time isn't zero time, just because you can read blogs or something while it's going on. You have to check back fairly often, and you have to be at your computer. You cannot raid, level an alt, do anything especially productive, or anything fun that doesn't mean sitting at your computer and being interruptible.
AFK time might be better than time spent farming or grinding, but it's still time, IMO, and I count all of it in finding my profit per hour rate which usually runs ~1000g/hr.
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