Greedy Goblin

Tuesday, July 6, 2010

Best selling glyphs

Since I exposed his dirty business, Markco is busy to somehow prove me wrong. He put obvious effort into his last attempt, which contains:
  • good tricks that work, but not related to the pricing strategy, so a deep undercutter who uses it, will still beat the camper using it (best seller glyphs, post without cancel)
  • outright lying about my method to make his competitive (claiming that I sell every glyphs for 5G, what I don't, currently I'm selling with 7G threshold, 20G fallback)
  • reiterating the rock-paper-scissors relation of the three pricing methods and stating the obvious, that monopolist beats deep undercutter, not mentioning the risks and costs.
  • random trolling about my person
For today, let's see the only part that what works in his post and should be adapted, the two tricks. The first is not selling all glyphs, only the best sellers. The point is simple: people don't buy all kind of glyphs and some glyphs cannot be sold due to being mass-produced by people leveling inscription. If you list such glyph, QA3 will search for it, post it, search for it, cancel it, you pick it up from the mailbox. For nothing. Even if it's below the threshold and you don't post it at all, QA3 will still search for it every posting cycle. It would be best to get rid of it. The tool to do it is beancounter:

Since I'm on Agamaggan, I post glyph of rake twice a day. That's about 40 cycles. Scanning it is about a second, posting and canceling 0.5, picking up is 1 more sec. So I spent 160 seconds of my life managing this glyph for 22*0.95-4=17G profit. That's 380G/hour, barely more than daily quest income. So glpyh of rake is not a best seller.

To filter out the bad sellers, pull every glyph in your bag to the item slot in the beancounter interface (where glyph of rake sits on this picture). If you see few sells, or if you see some but for minimal price, move them to another alt. Collect only the best sellers to one alt.

To save time, the not-good sellers should never be canceled-reposted. Just post them when they expire. They may sell, and just by being there stop campers from listing their stuff at 100G and selling two in a month, keeping them on the glpyh market. Don't forget to check beancounter about once a month, you might see some glyphs starting selling. I'd strongly discourage ignoring the bad sellers. If I just post glyph of rake once in two days, never cancel just let expire, my time investment will be 2.5*20=50 secs, making that 17G profit 1200G/hour.


The other good trick in the post is posting without canceling. Imagine that you post for 20G, the camper posts for 19.9999. You cancel your glyph and post it for 18.9999 with 1G undercut. In the cycle you have a scan for cancels, the actual cancels, picking out the glyphs from the mailbox and the posting. However if you just post, your old glyph (for 20G) is still in the AH, and the new ones too. If the camper undercuts you again, you just post more. It's not only saving cancel time, but also make the life of the monopolists harder. If he wants to force a price reset, he must buy up not just your most recent glyphs, but the old ones too.

One thing to keep in mind is you need much higher stockpile. I post twice a day, so if I don't cancel, and got undercut all occasions, I can have 4 batch of glyphs in the AH before the last one expires (48 hours). So if I post them by twos, I must fill my stocks to 10/type. The other thing to keep in mind is to run a cancel before you'd craft or you can end up more than 20 glyphs and they will take 2 slots.


A few words about the rock-paper-scissors: While I obviously don't sell for 5G, deep undercutting demands limiting your price. If I have a fallback price of 20, someone can buy me out and repost for 50G. He made 30G profit, I made 16 (4G is the ink price). In that case he won more than I did. However if there are 2 campers around, then one of them will sell the glyph for 50G, the other sells nothing. If we assume that they are equally good, it's 50-50% who sells. So in half of the cases the guy who bought me out got 30G profit, in half of the cases he gets 16G loss (not 20, since he has the glyph that would cost 4G to craft). The average profit is 7G. Ouch. If there are 3 campers, he has 1/3 chance for 30G profit and 2/3 chance for 16G loss. -0.66G profit. Even if we assume I was selling for my min price, 7G:
  • 1 camper: 43G profit
  • 2 campers: 1/2 chance for 43G profit, 1/2 chance for 3G loss: 20G profit on average
  • 3 campers: 1/3 chance for 43G profit, 2/3 chance for 3G loss: 12.3G profit on average
  • 4 campers: 1/4 chance for 43G profit, 3/4 chance for 3G loss: 8.5G profit on average
  • 5 campers: 1/4 chance for 43G profit, 4/5 chance for 3G loss: 6.2G profit on average
One must ask: what is better? 3G profit for logging in twice a day in my own scheduled time spending 15-15 mins there AFK or 6-12G profit for camping the AH all day. There is a reason why monopolist strategy is called "monopolist": it works only if you are the only serious player in the AH.

But there is a better reason why you should never buy a glyph for resale (unless it's below ink price of course). To have the mentioned profit, the glyph must sell. The reason for no sale can be undercut or simply low demand. Most people already have their glyphs and the summer decreases player activity. Imagine that you have monopoly (no other campers), but only 3 glyphs are bought by users a day of a type. I post 2, 2 times a day. So you must buy 4. You paid 80G for it, and get 150G income instead of 200. Also, when I'm collecting mail and crafting, I notice that my glyphs are sold. I will assume that players are buying it and increase my craft/post quota. If I sell 2 x 3 a day, you have to spend 120G to buy me out, but you still just have 150G income, 30G profit/day while I have 16*6 = 96G. I guess you can figure out the next step: believing that users buying my stuff, I increase my crafting even more, selling 2 x 4, that would cost you 160G to buy out. Of course on a high population server the numbers are higher, but the problem is the same. As deep undercutter I'm happy to work for the price I set. So if you buy me out, I'm happy and encouraged to work more, crafting and selling more, finally reaching the point where you can't buy out the legions of glyphs I'm pouring into the AH (cluelessly believing they are sold to users).

Read the post of Gnome of Zurich about the topic too.

PS: I did not comment on Markco's blog, some troll did that.

--------
The PuG update: We are in second remorseless winter, with several people who seen LK the first time. If you want to be there when he goes down, join!

30 comments:

Bobbins said...

Ahhhhh. Thx for the history behind the 'bad blood'. Thought it was usual for him to get so personal. I would have thought reading your blog he would have been more careful about what he emailed to you.
And remember virtual bullets and all that stuff!

The One and Only... said...

took me X month doing this... cause i was a lazy idiot throwing out money and crafting shit noone wants. i wish i knew about beancounter a long time ago... but i think this should help many others.

The One and Only... said...

just read to some post from markco and must say its very amusing reading him bitching about you. it was even more fun reading some other blog bitching about you.
sry... but markco failed in the first place mailing you his "offer". lets hope this will go on for some more time. maybe this should be settled by the only thing that can handle things like this:

A fistfight!

dont forget your Knickerbockers...

Anti said...

does beancounter play nice with the Quick Auctions auto mail feature?

i always got the impression that if QA was unloading the mailbox beancounter didnt get a chance to correctly get the data it needs.

i could be wrong. i'm not sure how i can test it either way.

Eluzis said...

This needs some graphs Gevlon. You basically said the same you explained in your previous posts. I wanted a more deep financial analysis. This post is more like a personal idea than scientific evidence.

Xaxziminrax the Second said...

@Eluzis:

Why don't you make the graphs yourself? I'm certain if you make any, Gevlon would be more than happy to feature them in a future post, explaining either what they mean for the three strategies, or if they suck, why you're wrong. He's done it before, and graphs are quite fascinating to ponder over.

Nees said...

If there's one problem, imo, with your inscription studies, it's your assumption you are actually able to push (serious) competition out of the market. I have never seen it happen during the year it's been my main source of gold. Serious scribes don't just stop selling glyphs because they have enough cash, a huge stock and automated their business for the largest part. They'll just keep going. I know I do.
Another assumption I have doubts about, is that the competition covers the market 24/7. In my experience they don't, which leaves room for selling "overpriced" glyphs.
Taking that into consideration, I think you're leaving quite some money on the table with a 20g fallback.

Anonymous said...

Gevlon what about this post? http://greedygoblin.blogspot.com/2009/10/my-pricing.html

Gevlon said...

@Anonymous: auctioneer fine-tunes the price better. QA3 is faster. I gave up some profit for some time. My profit/week suffers because of it, but my profit/hour increased.

Also back then I was on Stormscale-EU, one of the highest pop realms with huge competition. Now I'm on a low-pop server, so I can slack a bit.

Strum said...

If I have a fallback price of 20, someone can buy me out and repost for 50G. He made 30G profit, I made 16 (4G is the ink price). In that case he won more than I did.

That's an odd statement. The goal is to maximize your profit, not to minimize the other guy's. When someone buys my glyphs, I get a price I was willing to sell at, and they can use it for whatever they want. If they repost, they get to run the risk of being undercut (either by me or someone else) and paying my prices for that privilege. I've made my profit, without taking a risk that I wasn't interested in (or else I would have had a higher threshhold price).

Senzaki said...

Reading a post like this is a breath of fresh air. I originally started reading this blog for some market tips & tricks, but recently the only posts you have made were the projects you were working on ie. the PuG, Undergeared and the Ganking guild..

Not that i dislike seeing the progress of your projects, i do enjoy reading your analysis posts more!

Anyway, still doing a great job on the blog! Keep it up Gevlon!

Anonymous said...

"If I have a fallback price of 20, someone can buy me out and repost for 50G. He made 30G profit, I made 16 (4G is the ink price). In that case he won more than I did. "

Several times you have said that if someones buys your auctions, it's your profit and the other guy's problem.

These contradictions are becoming too frequent to someone who reads your blog for quite some time. Maybe you're forgetting your own ideas? :)

Splat said...

@Strum

The strategy, if I may be cliché, is volume. I can sell more glyphs at 20g than the person buying me out will sell at 50g. And since he's buying me out (presumably every time) my glyphs have a guaranteed buyer while his will depend on players who want to actually use them.

Lowering prices often increases demand. Retail stores do it all the time.

He can relist until they sell, of course, but in the meantime I'm raking in more sales and therefore more total profit.

Monsieur said...

I don't really have anything to say but the comments on jm2c are the hilarious. Useful write-up too :)

goldszene said...

Why would somebody buy you out, when you post your glyphs at 20g? That's stupid and NOBODY would do that!
Let's look at your numbers: he would make 30g by relisting, you would make 17g. So he would make 13g more than you.
It's much more effective to just post a glyph at 19,99g under yours. He would make 16,99g AND you nothing. So he made 16,99g more than you without risking to get undercut at a ridiculous high price.

I want to remind you: Even the 6,2g profit with 5 campers on your AH are more than you make. AND even with your strategy you wouldn't sell a glyph, if one of the campers have a lower threshold than you.

Anonymous said...

Gevlon I'm the anonymous poster who you responded to. I think the guy you are slandering is actually using the same strategy as you and that he improved upon it. You might want to consider admitting the fact that he's just as right as you are. I don't see how he's wrong when he's using practically the same strategy...

Also what you did was pretty cruel, even for a goblin. I looked over the just my two copper site today and found quite a bit of useful information for someone like me who is just starting out.

I haven't looked at his forums all that much yet but they seem to have quite a bit of information on them. I think you're doing your community here a disservice by ignoring someone like this guy. You call him an idiot but then you talk about how he made good points. I think neither of you are idiots and it's time you both grew up. This is just a game and both of you have come up with interesting ways of making gold.

Norte said...

Why are people equating "In that case he won more than I did." with failure? The way I read the post, it went on to explain that the given situation is likely to end in disaster for all involved except the deep undercutter.
Did I miss something?

Yikes! said...

Could it be that the mighty Gevlon has fallen? I saw that Markco's subscription numbers were fast approaching your own at 2600+!

I think you're helping him quite a bit gevlon by being his 'foil' so to speak with your inscription methods.

I've been here since that post by the anonymous above and he/she is spot on. You're forgetting your original audience!

Deepcut said...

While I don't have an inscriptionist (yet), I make my gold using JC as my cash cow.

I'll admit I am an AH camper but I don't mind being an AH camper. I will routinely spend 5-6 hours a day playing the AH game and cancel/repost when I see fit. Being in trade all the time helps me get good deals to keep my prices below the "deep undercutters". I figure if I can buy my mats cheaper, then I can post cheaper than they can. JC is also different in the fact that deep undercutters quickly make no profit due to AH fees, and also supply is more limited than for glyphs. Definitely makes a monopoly more viable.

It's not really about the time spent/gold for me, rather than the amount of gold. I usually shoot for around 40k a week liquid profit (not sure what you are making per week on glyphs on average, but I doubt it's 40k). Most times I'm AFK doing other things or tabbed out doing homework.

TLDR: I think both methods have their place (and flaws), so use what makes you happy (and makes you gold!). Cheers!

Strum said...

@Splat:

I understand the strategy, but the wording of Gevlon's post implies non-goblin concerns. The buyer's 30g potential profit by flipping is pertinent information. How much the seller makes vs the buyer is irrelevant. A goblin cares about the gold in his pocket, not other guy's.

The Gnome of Zurich said...

The monopolist strategy you outline here is too simplistic to work well, but it isn't the only strategy. As someone who sometimes plays monopolist in crafted markets without ever crafting anything myself, I'll let a more careful explication of a good strategy anoint my own blog at some point today.

Gevlon said...

@Strum: theoretically true. However here we compare their strategies. If the buyer is better off, (as the campers and Markco claims) someone maximizing his profit should be one.

While "I make enough and don't care if you make more" is a valid statement on its own, I claim that someone wanting lot of money do it.

Eaten by a Grue said...

Deepcut,

I think you are more of a trade chat camper than an AH camper. You wait for cheap gem deals to be announced, sounds like.

Eenheid said...

@Strum and others -- when Gevlon says "I made 16 (4G is the ink price). In that case he won more than I did." I think the point is that the high price strategy did better than the monopolist strategy, not that Gevlon is annoyed that someone else made more profit than him.

If you look at it in context, Gevlon is showing that unless there are very few using the high price strategy, it gets less profit than the monopolist strategy.

Oxymustard said...

@ The One and Only
What is an hour when you're afk-posting *shrug*. There is no harm in keeping the bad glyhps that earn you similar amounts as doing dailies. If it doesn't sell for you, it probably isn't going well for the competition. It only further demotivates the guy you are trying to push off the market

No matter what Markco and the others say, deep undercutting works well and it's not just a theory. It works on all types of realms. Low, mid and high population ones.

Martijn said...

Yeah sure, like people are gonna buy out 20g Glyphs to relist for 50g. That time was a loooong time ago.

I personally put my treshold on 15g and my fallback on 99g, I keep 10 of each glyph in my bag and press Post 5 times a day, most easiest way to make gold with Glyphs.

Fiffu said...

In the Undercutting with QA3 article you wrote:-

For example I want to make 4G/glyph or it doesn't worth the work. The ink price is 3G so I must sell for 7G min. I set my threshold to 7, my fallback to 8 and let the angry mails come.

In this article you write:-

currently I'm selling with 7G threshold, 20G fallback)


In your calculation you write:-

So I spent 160 seconds of my life managing this glyph for 22*0.95-4=17G profit. That's 380G/hour, barely more than daily quest income. So glpyh of rake is not a best seller.


How do you sell a glyph for 22g when your fallback is 8g?

You truly are a magician.

Gevlon said...

@Fiffu: no, you just can't read. "There is a brutal and a more sophisticated method." You quote the brutal that I NEVER used. I sometimes mentioned it as a quick way to kick some camper butt, but I always used the more sophisticated.

Also: "Here comes the core move: once a week run a summary, or simply look at your listed auctions. Approximate the average price. Set your fallback to 1.25*average. ". The price goes down so every week the average was lower. When I entered the server, some glyphs were 40-50G. I started with 35G fallback, and decreased it gradually. CURRENTLY it's 20. When glyph of rake was sold it was higher.

It's funny how hard to read. It's funnier that Markco spent a week wasting his time selling glyphs for 5G just to prove it doesn't make profit. If only he read my posts (about 30 mins) he wouldn't waste all these time and wouldn't make a complete fool of himself (again). Don't be like him!

Fiffu said...

I like what Goldzene said a lot. I've been coming back each day in hopes that Gevlon has replied to it but unfortunately I get disappointed every time.

I live in hope though.

Gevlon said...

@goldszene: actually someone suggested exactly that, to buy me out. I agree that it's not really smart.