Can you push anyone out of the market?

This is a common debate over goldmaking sites: how to push out the competition to have all the sweets to myself.

There is an obvious answer: by having better methods to generate more items in the same time, or by valuing your time less to generate more items in a day you can increase the supply of the items on the server, driving prices down, making others leave. Example:

Jhonny farms Titanium to sell a bar for 30G and by doing so support his Bike fund. Evy finds a cave where 3 titanium nodes respawn once in an hour, places her miner rogue to the cave, logs there every now and then, steath to the nodes, mine them, vanish, goes to safe spot, logs off. Frank lives in his parent's basement and farms titanium 10 hours a day so he can buy Merlin Robe because this upgrade (from a 232) will definitely cover the difference between his current 1500 and his aimed 7000 DPS. Both Evy and Frank generate extra titanium, increasing the supply, driving the prices down to 20G. Since Frank is desperate and places 0 value on his time, while Evy is smart and one mining round costs here only 2 mins, they will keep selling for that. On the other hand Jhonny will come to the conclusion that the Bike does not worth the hassle and leaves the market, decreasing the supply, increasing the price to 22.


This is just basic economy. The businessman who can find lower production costs by using better technology or cheaper labor can defeat his competitors. However this is not the point of the debates. The point is finding some "magical" method that will make the competitors leave and give me high prices on the long run. The creators and followers of these magical methods are ready to suffer temporary losses for the great outcome.

This post is not another such magic method. This post explains why no such method can exist. First thing first: such methods exist in real life, the most typical is the dumping pricing. It's simple: selling at loss, forcing the competition to sell at loss too, knowing that I have more money to cover the losses. If I can hold out long enough, the competition goes bankrupt and leaves the market to me. Without competition I can raise the prices higher than it was before the dumping, taking extra profit for a long time. Because this trick is eventually bad for the customers, most countries outlawed it, though it's hard to catch, since "being at loss" can be hidden in the books and the dumper can claim that he merely found a more optimal production line. There are two reasons why such methods can not exist in WoW:

At first in real life all industries have fixed costs to pay, even when no production is done. If I have a car factory, and I'm not selling or crafting a single car, I still have workers, taxes, property maintenance, property guarding to pay. If I stop paying them, my workers will leave, the government revoke my tax number and my property will decay. When I choose to restart my factory, I'll have no workers (my old ones already found another job or became drunken welfare leeches), I'll have to repay the taxes so I'm allowed to operate, and I'll have to pay a huge sum to turn that pillaged rust-heap into a factory again. On the other hand a WoW industry has no fixed costs. If I stop crafting glyphs, my character will not ask for salary, nor he'll forget the recipes, the inks and the unsold glyphs won't rot, and I'll keep my exalted discount on parchments in TB. If I stop crafting, I won't make profit of course, but I'll have no costs. In WoW nothing forces me to compete a dumper. I can just wait until he gets bored or runs out of gold. Granted, I'll miss my profit, but I won't have losses (behind the opportunity cost of not having another profession, but if I have an alt, even that disappears)

Secondly, in real life the industries have entry costs. If some monopolist managed to drive out all competitors and raised the price to sky high, I can't just start competing him. I'll have to start a company (legal costs), build a factory (that's lot of money) and recruit workers (good luck when 90% of the unemployed are fired for low performance or alcoholism). I can spend millions of dollars before selling anything. On the other hand in WoW anyone can enter. If someone has a lvl71 character, he can be a maxed-out scribe for lousy 3000G and he can sell glyphs.

In the real world the dumping works because the idle costs damage everyone and those who don't have reserves to survive will bankrupt and the high entry costs prevents them or anyone else to return/start after I elevated the prices back. In WoW there is neither. So you can't use magic tricks to remove competition. You can defeat it only by the standard way: by constantly having a more effective production line or cheaper labor.

This also means that if we prove that a WoW market strategy is at loss, even for a temporary period of time, we have proven that it's a wrong strategy.

Note that my deep undercutting strategy is not such: I never claimed to sell below material cost + work fee. I undercut to near this but never below it. I simply spend less time crafting than them since I craft once with prepared, multitasked other activities (typically cleaning the flat or writing blog) and I post once in 48 hours. Camping takes more time for the same low income. They leave not because they are forced but because they don't want to work for so low. If they are ready to accept this low gold/hour, they can stay and I can't do anything about it. However they can't damage me either, since my work time (time is the only cost in an MMO) is near zero if I don't sell. True, after a competitor's departure the prices will elevate a bit, and it provides the remaining ones better profit, but it's capped at the price when one of the left competitors or a new one would come back/in.

Morons of the week

It doesn't matter if cobalt sells for more, saronite looks cooler. It doesn't matter that it's easier to get, he has time. It doesn't matter if guildies spoon-feed him the information. If someone is a moron, you can't do anything (by Rejuvinator):
It seems Mammoth cutters will be the next crystallized fire: sell them in stack of 100 for a (bit less than) the price of stack of 1000. This time by William:
DreadL and his team had to kick Popootje from their PuG. My guess is he did not reached the softcap of spellpower and Intellect for Death Knights. Or maybe the team was unaware that the flavor of the month spec is 0/0/71.

Spitfire sent me the standard idiot who cannot be missed from any Morons of the week:

Fundra, US-Korgath definitely didn't know that spirit, frost resist and spell power are the most desired stats for a PvP rogue, so he sent me Alveeta. Alveeta is also great in selecting proper gems to his gear.

Finally, George sent me another standard: the "elevate the prices so we all make money" guy. The fun twist is it seems the letters worked on that Toyo guy:

Mirialia, Anachronos (EU) found that the vendors sell Refreshing spring water way below their Real Value^TM. But instead of sending them angry letters (can you send letters to NPC's?) he started posting them on the AH for proper price:

Since that was all the moron collection of the week, no post tomorrow. See you on Monday!

The most annoying pictures

You come to some blog or news site for information. But instead you get a nice advertisement:

[If you see no annoying picture, you are most probably reading this via RSS reader, please visit the blog in your browser].

The picture is annoying as the guy in the PuG with 1000DPS and the uncontrollable need to be funny and nice on chat? Not just that. It's not placed there by trolls. They are created by professionals to make you do waste your money on crap. The biggest enemy of having money (besides wasting it on social events to show off) is impulse buying crap.

You are not without protection. Greedy goblin Inc proudly presents you the simple method to make them leave. Since 52% of you are already visiting this site on Mozilla Firefox, and since I use it too, I show you the method to cleanse these pesky ads using this browser. There are similar methods to all browsers, google is your friend.

First, you have to install the addon called "Adblock plus":
Just by installing it you can get rid of lot of ads, by subscribe to adlists (they are like virus lists) and use these lists to filter the most common ads. You can change what adlist to subscribe in the options:
However the disgusting picture in my post stayed. The reason for that is that I placed it in an unusual site for ads, so common filters can't find it. You have to teach your adblocker to get rid of it by rightclicking it: You can select different options. The first is to block just that picture. The one below block the directory on the server where the picture was, the one below blocks the whole server. Be careful when selecting. This case if you block the server, you block several images on this blog and on several others (as the server belongs to Google's Picasa web albums). If you're unsure, just block this one. The directory deserves blocking if it seems that the site holds only adds there.

The server blocking is good if the ads are served by an external server. Most of them are already blocked via the common adlist, however if you are not English speaker, it's quite possible that your native language ad-servers are unknown to the mostly US-maintained adlists.

You can later change or undo these filters on the options page.


If you see someone saying "adblockers rip the well-deserved profit of content providers", well, you just found a "don't undercut me" class moron letter. They just cry for their lost money they made via pushing people into stupid impulse buys. They just get what they deserve!


Note to really big morons: No, I'm not the creator of Mozilla Firefox or Adblock Plus filter, nor they pay me for this. I just increase hits by providing useful tips to users to protect their money.


PS: There are other ads than images, like javascript or flash code ads. Blocking them is a bit harder and not subject of this post.

Surgeons and goblins

Tobold asked (long ago) a question that is asked thousand times before: why do bankers, business-leaders (not owners but managers), marketing gurus make more money than doctors or engineers in nuclear plants?

The primitive answer is demand and supply: I don't have to pay that much for a doctor because there are more doctors than banking gurus. If there would be less doctors, I'd have to pay more, but this is not the case. This is true, but meaningless. The question is why there are more doctors than able bankers?

The answer, like almost always, can be found in the greatest society simulation in existence: WoW. Let's see three "high performance" groups:

• high-end raiders
• high-end arena PvP-ers
• goldcapped AH manipulators

It's without question that the first is much more abundant than the second, and the second is much more abundant than the third. If we add the wannabe-s, the people who "work on" becoming one, the ratios distort even more. Practically every living body raids somewhere. Much less people put their feet into arenas, and even less ever attempted to make money on the AH.

Since I was in a high-end raiding guild, I can guarantee that it's not at all easy. Actually I couldn't do what was needed to stay there. On the other hand I can make gold without much hardship. So we cannot say that the distribution of people on these fields is the product of difficulty. However two great reasons can be found to explain the uneven distribution:

The first is "respect". High-end raiders are the "elite" of WoW. They have the "coolest" gear, the "coolest" mounts, the coolest titles. Social people want to be them, so they go raid. PvP-ers have harder time to show off their exploits. Of course "gladiator" title is great, but if you are not the #1, you don't get much. The arena rating is not visible on the character. It's pretty hard to show off that you are in the top 5% in PvP. Money is absolutely not showable. Bikes and Mammoths are available to daily quest grinding punks, so it's really not so "cool", only kids adore it.

Also, since PvP-ers and AH-goblins fight other people, they are often perceived "evil", and even if they can show off their results, it brings them rather infamy than fame. The hard mode guild has never pwned the masses or took their gold, so there are no hard feelings besides envy. On the other hand every average player have bad memories about being ganked when wanted to do some holiday battleground stuff or "ripped off 100+G for pressing a button by some greedy jerk".

Same way the doctors, engineers have higher respect than bankers or marketing people. Their results are more obvious (all friends of the patient will know that he's been healed, and everyone can see the new car on the street) and also completely PvE. The doctor helped people against bacteria or accident, the engineer worked on metals and plastic to create something that "the people" use. On the other hand every cent the banker has came from "exploited" people. This "social respect" motivate lot of young people to go doctor or engineer, increasing the supply, lowering the prices.


The other reason also connected to the PvE-PvP nature of the different jobs. To be a good raider in WoW, all material is available. If you learn what EJ and Tankspot teach and simply use that knowledge, you are good to go. Of course it doesn't mean everyone can be good PvE-ers, since it needs basic intelligence, reading skills and lot of effort. Effort needed everywhere, so cancel that. The better half of the mankind has the intelligence and reading skills to don't stand in the fire and learn what boss does what. So, assuming effort done, half of the playerbase could be raiders. PvP data is much less available, exactly because as soon as some trick becomes well-known, it will be countered, rendering it useless. To have the knowledge of a PvP-er, you can't just rely on static databases, you must constantly read the top forums, watch the newest videos of top PvP-ers, and so on. With gold, databases are even less usable. A single guy being aware of the trick can ruin it for you, while you can use yesterday's PvP move on everyone who doesn't know it.

The PvE knowledge is static, teachable, learnable if you are not an idiot. Granted, it takes much higher IQ and much more reading to learn brain surgery than Twin Valkyre strat, but the literature is there in the university library and any professor will happily teach you. On the other hand no one will teach you the recent business tricks, partly because you would use it against them, and also because they are usually immoral and sometimes illegal, so those who use them won't admit using them.

RL banking business is pure PvP as no crafting involved. No one will teach you the tricks, so you either somehow get into the right circles and gain their trust to teach you, or figure it on your own. That's the other thing that make "good" bankers rare.

The pro version of "I farmed for free"

I didn't think that I will ever link anything on his blog, but hey Markco can surprise me. He made up a perfect example for the pro version of "I farmed for free". The primitive version is that the idiot goes out, spend hours farming, then craft something from the farmed materials, sell them below material price and claim that he made profit as the materials were free.

The pro version is cutting the hours and doing the same: find an idiotic farmer and make a trade agreement with him to sell you materials way below their AH price. So far so good. Then sell you crafted items below material market price and claim you made profit as you sold them above material farmer price. Example:
Frost lotus is 50G on your server, other herbs cost 1G. You can craft 2.5 flasks from it, so you can sell a flask for 24G to be at even. You find a dumb farmer to sell you a lotus for 30G. You craft flasks and sell them for 20G and claim that you just made 20*2.5-30-10 = 10G profit. Actually you could sell the lotus itself for 50G, making 20G profit.

Our persistent but not so bright friend figured out that if he make agreements with lot of farmers, and can get herbs very cheap, then he gets money by arbitraging between the market and the farmer price. However he choose a very strange method: instead of reselling the herbs on the AH or directly to the glyph-crafters, he mills them himself and sells the inks. Since inks are only needed by the scribes themselves, it's obvious that he actually supplies those he wants to defeat. In their absence the ink would not sell. Pretty dumb way to destroy someone using a method that needs his existence. Considering that most glyphcrafting scribes have large inventory, every time one of them leaves and dumps his inventory the ink prices will fall, making our friend selling at loss (compared to selling the herbs themselves).

Make no mistake, he still makes money by having a close-to-monopoly on the herb market by tricking idiotic farmers to work for him for low price. This is a legitimate profit for his hard work finding, communicating with and promptly paying those morons. However he wastes his potential profit reselling the herbs to anyone who needs it by crafting inks that will sooner or later sell below herbs.

There is only one way he is not at loss: if the glyphmakers are ready to buy inks above herb price, simply to be saved from the grind of milling. I usually do that, always checking the AH for inks 0.5-0.7G above herb prices. Assuming the glyphsellers have the same taste for milling as I do, Markco can make gold eternally... as the hourly paid grinder of the glyphsellers.

Of course he can craft glyphs of vellums himself below market price, doing exactly what the alchemist of the example did: having huge loss and claim that it's profit since "they farmed it for free".

Wailing and Deadmines on 19

As I already posted, the first bosses of both Wailing Caverns and Deadmines were done by Golmeg on lvl 19. Now I continued the instances. My girlfriend cleared the parts that were done last time and I've continued.

Skum and Lord Serpentis were easy kills. Serpentis hits hard, but DoTs kill him while Health Funnel keeps the voidwalker up. Skum was a bad joke, the void left the battle with half HP without heals.

Mutanus on the other hand is an extremely hard kill. I died 6 times and ran out of the instance 8 times (if you jump down to the "river" and climb out on the other side, you can get away, as Mutanus makes a big circle on the bridge). This nice murlock is:

• Shadow immune: no corruption, CoA, CoW, fear, sbolt
• Chain-cast 15 sec long sleeps
• The sleep is not broken by PvP trinket
• Has a small range AoE fear, so you can't stand by his feet with Arcane Torrent ready
• He hits the void so hard that funnel must be up in 60-75% of the time

Since there is no funnel while asleep, I had to find a way to avoid his sleep spell. The solution: there is a pillar next to the altar of Naralex (on the left of the picture, behind the damage meter). I was casting immolate, kept funnel up and whenever he started casting sleep, ran behind the pillar. There is debris behind the pillar, so it's easy to get stuck. And with no DoTs, my DPS is a joke. So he died very slowly, in 4:20: It was way the hardest kill ever. But hey, for ilvl 26 loot, you must work hard. On the other hand, the repair cost is still managable:

After that, I went to Deadmines. My GF cleared it up to Mr Smite. After some trashpulls came Captain Greenskin with 2 elite adds and a parrot. Not so hard, fear the pirate, DoT the parrot, nuke the caster, after they died, kill the captain and finally the feared pirate.

Edwin vanCleef was a very hard kill. He starts with two elite adds, and summons two more. No way I could handle four adds alone. On the top of that, he hits very hard. I tried to burn him down but it's impossible. After repairs, I read the comments about him on WoWhead. The add summoning is counter-intuitive, it's not time-scripted, nor they walk around and attack as patrol. They spawn at 50% (actually phase-changes at percentages are common in WoW, but still very counter-intuitive to me). So the strat that finally worked:

1. Pull with curse of weakness, sacrifice shield up
   
2. Immediately focus-target one of the add and fear her with focus macro
3. Turn the void from the boss to the other add.
4. Burn that add down, keep the other feared.
5. Turn the void to the remaining add
6. Keep the void up with funnel, kill the add with dots, refresh CoW on vanCleef
   
7. With only corruption on vanCleef, heal the void to full
8. Life-tap until 10% HP
9. Heal yourself with runecloth bandage to full
10. While keeping the void full, DoT vanCleef to 50%
11. When add comes, sacrifice shield up and continue from point 2 of this list
    

Since the comments were contradictory and I didn't want bad surprise with another pair of adds on 25%, I kept Mezzlos topped, so the fight was longer than it could be. Still, at the end I was up and he was down. And hey, my HPS was higher than my DPS! And some call warlock a pure DPS class.


After that I killed the Cook (no adds, no problem), who gave me a much needed new wand.

Deadmines, like most of the old instances have an atmosphere. You can be immersed to their story. It looks like a real pirate hideout and not like a mock setting around a platform for a boss just to get some emblems. I liked it much, just like wailing caverns, RFC and SFK. Goodbye lvl 18-19 scene:

I've leveled to 20 the next day to level engineering, but I did not equip my lvl 20 gear, you see the same gear on Armory that I used in the instances.