Greedy Goblin

Thursday, April 15, 2010

Auction house etiquette

I rewritten an old post because the problem it addresses lost no actuality. I still get lot of mails about retards wanting others to "respect their auctions". The scapegoat article is no longer on the net, but summs them all: "An item used to sell for 500g or more but for this example we’ll just say 500g. After selling a few of these I know the price. So ... I start the bid at 475g and buyout at 500g. Now, as expected, someone else gets the card, they see my listing and naturally want to beat that price with ... something like 470g for bid and buyout at 495g. We might go back and forth by 5g or less just to be listed as the cheapest. Then someone comes in and just decides he wants to just sell the item for a quick buck and decides to kill both of our chances at making some nice gold and lists his for 200g buyout. Seeing this travesty my competitor and I are now forced to lower our price to beat his ridiculous price. It’s called etiquette or common courtesy to respect other people’s auctions so we can all make money. Why does someone do this? ... Have you logged into the game to check your auctions, only to find that your stuff hasn’t sold because some jerk has out priced you by several hundred or even thousands gold for a quick sale?"

So, after collecting materials worth 100G, pressing a button and list the item for 500G you notice that some dog, some monster without any moral, undercut you by several hundreds, instead of respecting your auctions so we could all make money like a happy family. Who could be that fiend?

Well, I'm that dog, I'm that monster! And it's me who sits on goldcap while you get your stuff unsold and come to my site to find out how to fix it. Well, it's pretty hard, since I've seen half dozen of errors in the quotes above:
  • At first and above all: If you have ever said "etiquette", "moral", "doing the right thing" and meant it, you don't belong anywhere near the AH. Go do dailies! That's for moral people!
  • Business is direct competition. We can't all make big money because the amount of the gold in the pocket of the buyers is limited. The 200G guy made 100G profit, you got your auction back.
  • There is a thing called demand curve: the lower your price is, the more customers you'll have.
  • "An item used to sell for 500g": wrong again. The item is used to be listed for 500G. My auctioneer says that the median price of spice bread is 1283G. While I love auctioneer, I have a feeling that I won't be rich by selling spice bread for 1282.99.
  • "We might go back and forth by 5g or less just to be listed as the cheapest." Well, I know young men use to go back and forth, but AH is not exactly the place for that. At first a 12+ game is inappropriate to do that, and there are also businessmen here who have no time for that. We want to sell you know. Time efficiency. Listing-relisting take time. It's not a problem if you farm for free anyway, but if you care for your G/hour it is.
  • "After selling a few of these I know the price." You know the price? Great! Like Fitch Ratings knew it! Well, price is not a scientifically measurable object you can know. It's the opinion of the market about the item's value. You can guess it. If you are really experienced, you may feel it. But you'll never ever know it.
The first thing one must do in the quest of ripping the hard-grinded money off the M&S is not joining them by babbling about etiquette. There is only one moral rule there to guide us.

PS: if you are damn sure that the item will sell for 500G, why don't you buy the 200G item and resell it?


Anonymous said...

Too bad you stopped the "morons of the week" thing, I got angry wisps just the other day for undercutting beyond all reason (some comments included "ebayer","kid","you have enough gold?","idiot", ... and so on and so forth)
People seem to think epic gems should go for 150G or more (as they cost 20G to craft, I'm making plenty of money even if I drop them to 100G or way less)

Anonymous said...

Regarding the demand curve, there are recorded instances in which a price increase produced a (counterintuitive) demand increase. I recall the Freakonomics blog mentioning this effect with rice prices, but was unable to find a link. Here is a similar article, though:

Ronnie said...

In my world there is only one "moral" obligation that I abide by.

Selling stacks of 100 arrows instead of 1000 is an attempt to scam by taking advantage of the games inability to type 1000(typing 100... instead).

Other than that I make my gold by whatever means are needed.

Klepsacovic said...

Perhaps you are overreacting to those who would not gain anything by it anyway.

But if a person does want to get moral about it, they should at least think it through. You're a damn Robin Hood: the profit you 'stole' from them was passed on to the buyer. You sell for 100g less, the consumer gets something for 100g less. It all adds up.

Archi said...

About that 200g card :

1) I would buy it in case i don't know the seller, and after checking few other auctions i get sure he is not penetrating market

2) If his name is "Bankyfunky" is definitely check most of AH. If he is active on JC market then I ll definitely have to drive him away. Although if he spends whole day camping AH spending 1 min posting all cards isn't much work for him. So i ll have to undercut him aggresively. But once again if his founds (from JC) > mine... well i gotta find something else :p.

Idleness said...

Your Post Script says it all for people who think any sort of competition is unfair.
Just the other day on my server I saw plain old Silk Cloth listed for less then 30% of the median price - according to Auctioneer.
There was lots ( > 25 stacks), I bought many stacks for ~70s, listed them all for over 2g and they all sold over the next 48 hours - I believe mostly due to the fact that I was still posting below the median price.
Took me 10 minutes and I made 200% profit on as much money as I could dish out on the low-priced goods.
Does this always work? Not in my experience; but it can pay off if you're smart.

Maz said...

But what when someone list their products at vendor price, o close enough to not make any profit?

Before the frozen orbs exchange lot of people in my server listed them at 4 golds, when you can sell it at 5 in a vendor.

I keep it in stock until prices go up, of course, but sometimes it seems like people use the ah to become poorer, not richer.

Phelps said...

PS: if you are damn sure that the item will sell for 500G, why don't you buy the 200G item and resell it?

That was my first thought. If you are so damned sure and incensed, then buy it, relist it, and put your money where your mouth is.

I've made a decent amount (and gotten burned sometimes) buying up cheap auctions and relisting.

barth said...

Good post.. I also find it funny when you sell something for the going price and people try to tell you it's "not worth that much." Oh really? All this time I thought that things were worth what people will pay for them!