I got record amount of comments on the
post about my pricing method. Most of them go along the line "It wouldn't work on my server", claiming that their method are superior, despite the poor results compared to mine. Of course the limited success is caused by "bad server". (everything above daily G/hour is success just in different amounts)
So I'm making continued effort to analyze the QA2-undercutting strategy, trying to prove that the strategy is naturally flawed and necessarily provide poor results.
Let's state the obvious: if some NPC would buy glyphs for 50G, than every living body would be crafting glyphs and selling to him (assuming that herbs are available at their current price). It's also obvious that the glyph buyers are not NPCs, and won't buy that many. In economy terms: for 40-50G the supply is vastly bigger than the demand. The QA2 wizards handle this problem by 1c undercutting. If your glyph is the cheapest it is the one that's sold and the others are not.
When you undercut an 50G glyph by 1c (or post a glyph for 50G on an empty market), you are actually
gambling.
You place a bet that a buyer will arrive first and not a competitor. If buyer comes, your glyph sells and you get huge profit. If competitor comes, you won't sell and your glyph returns or you are forced to undercut, so you lost some worktime.
As in every gambling action your odds can be calculated. It is exactly: demand * your_cycles / competitor_cycles. Demand is the number of glyphs sold daily, your_cycles is the number of times you check the AH for cancel-repost, competitor_cycles is obvious. If you double your cycle number, your profit will double. If you put your competitor to friend list, and post after their logoff, you not only added one to your own cycles, but decreasing one of theirs. If you are online 24/7 and have everyone on friend list, you can instantly undercut, therefore own the whole market.
So in the QA2-undecutting game your only choice to increase your sells is camping harder. If everyone else plays QA2-undercuts, sells=profit as price is high.
My pricing is giving higher gold/hour active time and also allows me to batch my work. I don't have to camp the AH, I can assign time to my actions when I want to, with the only restriction to be within 48 hours. It is important to notice that a QA2-undercutter makes more gold than I do on the same market, however at the cost of much more time online and the (hardly quantifyable) "must check the AH every hour" unpleasant condition.
At first I use Auctioneer to determine
market price. Many people claim that market price have no meaning. Actually it has: it holds the competitor activity. Price reset can happen when the buyers consumed all of the competition's glyphs. This case you can cancel yours and repost at 50G (or whatever fallback price) and still be the cheapest. A reset requires that buyers arrive in a row, buying all of them. If one of the competitors arrive before
all glyphs are sold, he simply list more at the current price. If there are more competitors, there are more glyphs so it needs more buyers to clear the AH. Since they arrive in a random time, the chance of their random aggregation decreases rapidly with their number needed for a successful reset. If the resets are less frequent, more undercuts happen, so the price
slowly climbs down. The market price of 30G means that repost_cycle:reset = 20G/undercut_value.
By using this price I adjust to the number of competitors. The more they are, the lower the price is. My first move is making random resets impossible and forced resets (buying all up) expensive and risky. Remember, if you buy my glyphs up and post at 50G, you may sell nothing before your competitor arrives. This case you lost your buyout gold for nothing. If the competitor number grows, my price lowers, so you have to risk less money to buy me out, but you have less chance to sell before one of the many competitors arrive.
My second move is slowly driving the prices down. Without resets, even with 1c undercuts the price will crawl down. I add my 60s undercut value to this. I can easily drive a 50G price into the mud in two weeks using only automated processes.
Why is it good for me? Because there are two possibilities:
- the competitor gives it up, abandons that glyph (by having a higher threshold or simply by leaving the market). This case I post a bit higher automatically and have 5-8G profit on a glyph.
- the competitor keeps undercutting, this case I sell nothing, so I don't have to craft, so I don't waste time.
I either have a nice profit or no work. That guarantees my sky-high gold/hour. The
only case when I sell for 3-4G is the one session when the competitor gives it up. My glyphs are out, and with the competition gone, are the cheapest so sold. That is the only time I suck. But next time I can post higher (and automatically do) as I'm out of competition.
The point is that until the competitor is there, I'm safe from selling = working.
If the competition is very determined, I'm selling nothing at all, so I have practically 0 workload. Since I keep on decreasing the price with no chance of reset, his profit is closing to 0. There is no way that someone can keep up his determination with no profit, nor even the chance of profit.
You can claim that he can save himself by setting a 5G threshold. That case I will sell for 4.xx G. That's true. However here comes my savior, another QA2 wizard with 4.99 threshold! I've seen such funny threshold-undercut-war many times.
My safety-threshold is applied on crafting. If the price is too low, I stop crafting, but I use the existing glyphs to keep the price low, for the amusement of the competition.
The fundamental fault of the QA2 game is being more work intensive. I lose less time by selling for low than my competitors, so I can go deeper in price. My work-overhead is decreased by batching. Logging on 10 times a day cost time itself along with the annoyment. Me on the other hand can schedule the crafting session to the moment when it's less painful and have enough offline stuff available to decrease time lost.
By driving the price to the point where supply = demand, I have a stable
business (as opposed to gambling) and I can decide if I want that business. If I don't I don't craft glyphs. Of course if the prices would reset in my absence, next time I post again,
at the old market price, destroying the effect of reset. So I can set my crafting threshold to an arbitrarily high price (currently 6G) and still sell, simply by making the QA2 game so time-ineffective that all my competitors give it up sooner or later.
The only one dangerous to my scheme is my mirror image. This case we'd
automatically share the market according to our crafting threshold. If I posted a glyph for low profit, he won't craft, and won't post, mine sell. If he did it, his sell. Our G/hour will be equal to the G/hour
expectation of the one who is ready to work cheaper. If he needs gold more than I do and ready to work for less G/hour, he can make me not sell. However he can't drive me out or elevate his G/hour since I'd immediately start crafting and selling. My standby workload (relisting every 48 hours) is close to 0.
Your only real resources are time and skill. If we assume that 2 goblins use the optimal strategy, we arrive to the point that only time spent on business makes difference between them. If everyone would be an AH goblin, everyone in the server would have equal G/hour. My 3-4K G/hour (active time hours, excluding long auctioneer posting or clicking the mailbox once a minute while cleaning my home) comes from the fact that most people have no idea about economics and only do what MMO-champion tells them.
The aim when fighting with QA2 wizards is not stopping them from selling. You can't do that anyway without being one of them. The point is to stop yourself from selling while making everyone else sell at loss, making them leave. I usually do my glyph listing at the morning or early afternoon, to make sure that the QA2 wizards have enough time undercutting me before the buyers come in the evening.
One more tip: if the "pro ppl" are already selling below material cost, buy them out. Not to cause a reset, but to make them craft more, therefore driving them deeper in loss. As they craft, they not only wasting time, but driving herb prices up, making it harder for themselves to craft more. You can just sell the bought glyphs later. Just don't do it with leveling glyphs.
PS: it's funny that whenever I post something "philosophical", people comment "go back to WoW". When I post something as direct as it can be, they simply don't believe it or blame luck for my G/hour.
PS2: There are some clueless who claim that since they don't undercut by 1c, they are different from other QA2 wizards. The defining characteristic is the undercut-fallback cycle. If a QA2 wizard finds the market empty, he posts on an arbitrary high fallback price, while I post on old market price +25%. He welcomes undercutters back, I don't.
PS3: QA2 became famous back in the day when most servers had no or just 1-2 sellers. Nowadays (thanks to MMO champion) there are dozens on every servers. Most of them are desperate kids who put all their gold into starting an industry, so they will waste all the time they have (and they have a lot) to undercut you. You
could make good money with QA2 back then. Now, when everyone else does the same, you have to beat the trend to win.