Greedy Goblin

Wednesday, September 9, 2009

The industry part 2

There are 3 pricing methods, 3 different ways to get rich from glyphs. I prefer the third one and I both explain why and how. If you are not interested in market theories just want some gold, skip to the picture.

0. method: random seller. This guy has no industry. He is a scribe, leveling it and wants to sell the glyphs or maybe the guild needed one or he just wants to skip Hodir repgrind. He manually lists some glyphs. There are many of these guys and they list many glyphs at different prices.

1. method: monopolist. He noticed that the glyph demand is inelastic. If some hunter respecs to surv, he will pay even 150G for a glyph of explosive shot. So our monopolist friend buys up all glyphs and lists some at very high price. Even if he have to destroy 5 glyphs he bought for 10G, the 6th will get him 150G income. Customers suck.

Monopolist vs random seller: the random seller lists his glyphs for 1-20G. Monopolist buys them and relists them at 150. Random seller happy and post some more sometimes. Monopolist gets really rich, unless there are too many random sellers (usually it's not the case).

Monopolist vs monopolist: this combination is impossible, if two monopolist meet, they either split up the market or one turns into an AH camper.

2. method: AH-camper. He notices that crafting price is much-much lower than market price. He also notices that glyphs have no deposit cost, so you can cancel-repost without fee. He scans the AH, craft a few glyphs of each and list them 1c below current price. He checks the market regularly (AH-camping), cancels all glyphs that have been undercut and repost again. His aim is to be the cheapest every time, but only by 1c. He usually list few glyphs of each (profitable) type because the time-limiting factor in this method is getting the unsold glyphs out of the mailbox.

AH-camper vs random guy: Random guy posts. Unless he is lucky to find a buyer until the camper logs in, he won't sell anything and gets out of the market fast. AH campers make sure that random guy keeps away from glyphs and ordinary (non-goblin) people say "there is no money in inscription".

AH camper vs monopolist: Monopolist buys up the glyphs of the randoms and campers. Campers and randoms happy. Camper logs in, undercuts monopolist by a copper. Monopolist can't sell anything and going bankrupt (or turns into an AH camper himself).

AH-camper vs AH-camper: the one who checked last time is cheaper by a copper. They have each other on friend list and try to camp more. The market is divided according to the number of cancel-repost cycles. If you repost once a day, and others repost altogether 100 times, you'll have 1% of the sales on average. While prices are still high, gold/hour ratios can be terrible until the competition gives up.

3. method: deep undercutter. "Deep" is a relative term, but it's surely not 1c. It means that in finite, not large number of undercut cycles the price reaches 0. For example I currently run with 60s undercut. It means I can drive a 20G price to 0 in 33 cycles. The deep undercutter doesn't camp the AH. Crafts many glyphs of each type (I currently run with 9), posts them undercutting the currently listed ones and forgets them for 48 hours.

Deep undercutter vs random seller: random guy lists glyphs, sells some. Undercutter logs in, lists below him sells some. Other random guy logs in, lists below, sells some. Prices come down, random guy doesn't list more, in absence of competition the undercutter posts in "normal price" + 20-30% again, price reset, random guy lists again. More or less peaceful coexistence, the market is divided according to number of glpyhs posted.

Deep undercutter vs monopolist: Undercutter lists glyphs at "normal price" + 20-30%, as he find no cheap glyphs. Monopolist buys them up, undercutter happy. Monopolist sells high, happy too. Prices slowly climb up as the auctioneer "normal price" includes the monopolist's price. Peaceful coexistence, everyone sell, customers suck.

Deep undercutter vs AH-camper: Undercutter lists at current price - undercut value. Camper undercuts him by a copper, he sells, deep undercutter gets everything back. Since the glyphs of the camper are still there, he lists below them by undercut value. Camper undercuts him by a copper, he sells, deep undercutter gets everything back. This cycle goes on, and every time the price decreases by undercut value. When price gets to the bottom, the deep undercutter still doesn't sell anything, so his work is only to empty the mailbox and repost glyphs once every 48 hours. 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 (after creating some material to my "morons of the week" posts). As soon as the camper leaves, the prices slowly climb up.

Since people keep posting "he doesn't give up and keeps dominating the market", I have to brake it down: it's the point that he keeps on dominating a dead market. The undercutter wastes 2hrs AFK time/2days for 0 profit, the camper loses 6hrs AFK, 2 hrs online/day for near-0 profit. Some campers are professional goldfarmers or no-life kids and it may take some weeks until they give up, but it's only matter of time. All the undercutter has to do is clicking the "get all mail" once a minute while reading news/blogs and Ctrl-Alt-Shift-Batch Post before going to eat to make the life of the camper miserable. The only way for him to have not miserable life is to give it up (or turning deep undercutter).

Deep undercutter vs deep undercutter: prices drop fast, and soon reach near-zero profit. After the last camper gives it up, they both start to sell, so they have to mill and craft for nothing. The one with less patience, money (or the one with an idea to enter other business like JC) will leave, giving the market to the other one.

4. method: the mystical IWIN. People keep asking for it. You should consider what happens when two players with "mystical IWIN" strategy enters the market... The sad fact is that if the sever would be full of goblins, everyone would have the same G/hour ratio and most people would farm dailies or elementals/ores/herbs/skins because that would be the most profitable.

This like of a rock, paper, and scissors game. The camper beats the monopolist, the undercutter beats the camper and the monopolist beats the undercutter (in a sense that he makes more profit). However the undercutter is still in profit this time, so it's still a viable (but suboptimal) strategy.

It's true that in less frequented servers with no serious competition the monopolist makes a killing, and with little competition the AH camper dominates the market. However on a mature market there is only one will survive: a deep undercutter. Of course for maximum profit you can switch between the strategies adapting to your server, but I found that it doesn't worth the extra time. I won't spend 50% more time for 20% more profit.

Now let's see how this deep undercutting goes:

Select every glyphs one by one once on the Appraiser tab of auctioneer. For each of them set single stack size, sell all, 48 hours duration, "market" pricing, enable price matching and batch posting. After you done this, all you have to do is press Ctrl-Alt-Shift Batch post. It will list all glyphs in about 10 minutes.

2 days later you collect the unsold glyphs, the money after the sold ones, scan the AH, (do it when your glyphs are not on the market) og to your crafter, craft enough glyphs to fill your stacks, send them to the seller alts, and all you have to do is press Ctrl-Alt-Shift Batch post. It takes every 2 days about 30 mins of active time, 1 hour of AFK time and 1 hour of away-from-game (you have to click after a min when getting mails from the mailbox but can Alt-Tab and read e-mails, news, blogs).

One more thing left: how to configure undercutting. The amount depends on the market situation. 40-60 s is usually enough. However if you don't sell and one-two guys are listed on the top of every glyphs with 1-2 copper undercut, you have an AH camper. Set the amount to 2-3G until the prices go below 5G and get rid of him. If the prices are below 5G, set the amount to 30-40 silver since otherwise you'd undercut a 4G auction to 1G and you'd be at a loss.

Don't set the "max under market" too high, or a single random guy will ruin your price for weeks. With my 40% setting if someone post glyphs for 1G (as leveling idiots do) I simply ignore it. His glyphs sell (or someone flips them), the price stays. Nor it set too low. The 40% means that if the market price is 10G, I undercut competitors above 6G (with 60s) and ignore the others.

Don't set the "max over market" too high or the campers come back.

Since these posts are kind of "sticky" (that's why they are on the about page), I will cleanse the comments often, after incorporating their data. So it's not disappeared because you was considered "troll" simply because it's answered in the post.


Kevin Marquette said...

I guess I am a camping deep undercutter. At the moment the majority of my market is under that 5G mark and I run a 20 silver undercut. I do jump my undercut up when I see too many names in the market.

I guess its time I made the jump to 48 hour deep undercuter and see how that goes. With all that free time, I will be able to work those other markets I can never get to.

Anonymous said...

I would suggest to use the Quick Auction 2, even if you not reposting often. The posting time alone reduced a lot.

(QA2 post 10-20 glyph a time, vs auctioneer's 1 glyph at a time)

Anonymous said...

One of the problems with QA2 is that it won't list the glyphs that are undercuted below your minimum margin.

Just because 1 person leveling Inscription post 1 glyph at 30s it doesn't necessarily means that you shouldn't post your glyphs on top of that price for 48 hours. The 30s glyph will sell and you will be the one remaining.

What do I do. I use both, QA2 and Auctioneer. First QA2 and the left overs with Batch Posting.

Very happy with the results so far.

Anonymous said...

"What happened to 40% undercuts?"

hmmm... I think you are a little confused with the 40% undercuts. Look at the image "Max Under Market Price: -40%). He is not undercutting everyone by 40% every time he post. This will just undercut 40% after certain amount of cycles.

Cycles time will depend on how agressive you and your competition play the market.

PS: About the other post.. I think the righ formula should be (adder, icy, lich)Herb*5=(1.4*ink of the sea)+(0.2*Snowfall Ink)

Suse said...

As always a great article, thanks, Gevlon.

Im not really convinced that your analysis really fits and that deep undercutting is really winning against ah camping.

I dont know if i am a deep undercutter or a camper - i undercut by 20s and i repost thrice a day. There are several ah campers on my server. I suppose all of them are using Quick Auctions. Point is: you normaly dont realise if you are undercut by 1c or by 10g (you could, but why bother anyway when posting 600+ glyphs?). You realise that your income dwindles. But if you took the time to get the business rolling, the income is high enoug to keep going. Not 2-3k per day, but 300g due to generally low glyph prices (you always hit one glyph that your fellow scribes didnt post or which sold out). 300 g for some routine afk time is not good, but not so bad also.

To put it simple: My observation is that there can be a time when the prices are low and theres no room for deep undercutting. But that doesnt necessarily leeds to one or more of the campers leaving the market. At least on my server the conditions are quite stable for about 4-5 months now i think...

Insana said...

The problem I have with auctioneer batch posting is the situation where a glyph with a messed up price is not on the market.

For example, on my server (EU-Baelgun) glyph of revenge has a market value of 68s. So basically I am not interested in selling those excepted when there is no competition. If I would follow Gevlons technique of going through appraiser settings once, I would never sell a glyph of revenge. Therefore, in fact with appraiser I have to go through all the settings everytime I batchpost or it would miss to sell some glyphs (or even worse it would undercut under material price in the case that the market value dropped).

What I like in QA2 is the possibility to define a fixed treshold price (in my case I have 2 item groups '1 ink glyphs' and '2 ink glyphs' with different treshold prices) and a fallback price if there is no competition on the market.

In fact I don't think that you should rely on the market value for glyphs. I have a treshold price, under which I don't sell and a fallback price, with which my customers seem to be ok. I don't care if the market value of a glyph is 39g, if I can sell it at 9g I'm happy. Vice versa the 68s market value doesn't bother me much if I can list the glyph for 39g without competition.

Ephemeron said...

The 'monopolist' approach has one often overlooked advantage over other strategies: it doesn't require you to have a scribe character of your own.

Vedast said...

It also helps having Easy Mail add-on, to get all mails faster. And I have a macro in my action bar to reload UI, so I just wait about 10 seconds instead of 1 minute. It's simple "/console reloadui"

Dan said...

An excellent tip there regarding scanning the AH with your own auctions absent.
In regards to pricing with Auctioneer (when I used it to price my glyphs), I took a different approach. I had Appraiser use Beancounter data (and thus ACTUAL sales data) to adjust my price, whether up or down. It helped keep fast selling glyph prices high and the hard selling glyph prices low, reflecting supply and demand at it's core (unlimited supply, high demand vs unlimited supply, low demand). It would fall under the 'deep undercut' method of pricing.

I run two glyph markets, one Alliance side (my home faction) and one Horde side. The Horde side glyph market is a market that Gev's preferred pricing system works best on - there aren't many goblinish scribes there with light duty undercutting (may get undercut twice a day). I undercut by 1 silver on Horde side and leave alone for 24 hours. My Alliance side glyph market has many more goblins involved, several prolific AH campers. I am experimenting with a pricing method where I match the lowest current price with a bid of 90% of my ask price. One day after a major glyph restock earlier this week yielded my best sales day in the history of me playing the game - I had 111 successful auction sales in my mailbox, yielding 2400g.
I do use Quick Auctions 2 to handle my glyph posting - it is significantly faster when posting 300 glyphs than Auctioneer is. Auctioneer Advanced used to split stacks and post as quick as QA2 does, which confuses me.

Ayonel said...

I alternate between deep undercutting and monopolistic depending on current markets. You have no idea how insane it drives the competition when I have bags at the top of the market and the bottom of the market, but I'm selling and making money.

One thing I don't understand is these guys who seem to keep rolling alts to compete. I don't care what your name is, I'm responding to your behavior. I assume it's the same people because there are only 3-4 people in the market at a time and the tactics don't change, just the names.

Iiene of Kul Tiras said...


It's been mentioned before, but if you reload your UI (macro with /console reloadui) you can get more mails right away. My computer reloads the UI in only a couple of seconds, so I get the next 50 mails right away.

A clarification on your terms:

Campers are people that STAY at the auction house constantly looking for people to undercut.

Undercutters are people that log in multiple times a day and undercut.

Both Campers and Undercutters use undercutting. It doesn't matter if they undercut by a copper, 50 silvers, or 5 gold. Their goal is to have one or two of a few glyph types on the market with the lowest price without having to have a sophisticated system of procedures in place.

Campers and undercutters feed off market volatility. A few high scores makes up for the few low ones.

I would call people like you, that post many glyphs every one or two days "Position holders". You are forcing the undercutters of all types to track YOUR price. "Position Holders" are market stabilizers when their position is tenable for the entire period between refreshes. By removing the sales of "High" priced glyphs from campers and undercutters, you remove the psychological "Slot machine win" mechanic... crushing their will to compete.

Above that, there are "Walmarts", people that are Position Holders and have a sophisticated set of procedures in place to efficiently store and replace sold glyphs, while tracking and monitoring prices and number of glyphs needed to hold the positions. There can be only one "Walmart" in each town. You're probably a "Walmart", but simply haven't placed all your cards (Nor should you) on the table.

Most people have the skill set needed to be a camper. You look for high prices, you make a few glyphs and undercut them, rinse and repeat.

Undercutters need the skills to have inventory and the ability to plan. A bit harder, either because of lack of smarts, or psychological barriers, beyond the skills of most people.

Position Holders are rare, this requires commitment, planning, and the ability to risk capitol.

Then, at the very top of the food chain, are "Walmarts" with the skills to construct a Business System that is efficient and fast enough to out-compete the other Position Holders.

Note: The term "Walmart" is derived from a chain of superstores here in the States called... literally.. "Walmart".

Anonymous said...

I prefer a bit of a combined method, with deep undercutting and slight AH camping. For example most glyphs on my sever go 15-20g and these are the ones I craft, but I post them for 10-15g, usually 1 or 2 each about twice a day. It might sound dumb to post an average of 5g lower then most, but we have lots of campers on my server and undercutting by less then 2g usually just means someone post cheaper within an hour if yours doesn't sell first. This way I still make about 8-13g a glyph(ink is about 2g on my server)and I almost never get undercut since our campers don't like to post too low. Sometimes they sell to people who use them, often my competitors buy and resell, but either way I still get decent money(about 600g a day)without too much time spent in AH. Yes, I could make more per glyph by undercutting less, but with 4-5 campers in the current glyph market it would probably require me to camp more or not get things sold. And I'm afraid batch posting would lower the market value since our campers thus far tolerate my undercutting since I don't do too many at a time but might be willing to start undercutting me if I post a lot to drive me out. At this point I'm probably just considered a minor annoyance since they like to buy and resell my glyphs. And since I only post a few per day(of each), I don't drive the market down. As to whether I buy ink or mill my own, my usually strategy is buy if it's 2g or less an ink, mill if it's higher or if herbs are posted cheap and then I get the snowfall ink as a nice side profit. I'm going to give the batch posting at a smaller undercut(I'll go 1-2g instead of 5)a try to see if it will work in my server's market, but I really think we have too many glyph campers.

Anonymous said...

I'm not sure I buy your description of the interactions. For example, a deep undercutter vs. a monopolist does not result in an 'everyones happy' situation for long. It goes more like:

monopolist buys out deep undercutter.

undercutter notes higher demand for glyphs, and makes more.

Repeat until the undercutter is making more glyphs per auction cycle than the actual market demand.
At this point, the monopolist will begin accumulating glyphs. They can actually keep going for a while beyond market demand cause they're buying the glyphs for quite a bit more than they're selling them, but eventually they'll choke to death under a pile of glyphs.

Let's say the the undercutter is unwilling to make more than 20 of a single glyph at a time, willing to sell these for 10G apiece, and only posting once every 48 hours, and only dealing in 100 different glyphs. This means the monopolist is spending 10,000G every day to buy out the undercutter. They might make some money reselling glyphs, but they'll go broke within the month - especially if more people notice the profits to be made selling glyphs.

Monopolists aren't remotely a threat to a goblin. The real threat to a goblin (or at least to their income) is people who feel that it's prestigious to be a big seller on the AH. They're willing to sell things at a loss, just to feel important. You can't compete with them cause they're being rewarded in ways that you aren't.

Theoretically, if there were enough people like that on a server, a goblin would reach the conclusion that the best way to make money is to farm dailies. Fortunately, that kind of behavior would deflate prices so much that farming dailies would provide a significant amount of cash :)

Anonymous said...

I would like to comment on deep undercutter vs AH-camper. I always wondered how to deal with campers, and I tried deep undercutting using Appraiser. I gave up trying after a week of turning in marginal profits, and went back to camping myself. I realize that crafting and posting once within 48 hours is a much smaller time investment than camping. However, until campers give up, it is hard to turn in large profits fast by deep undercutting. I am not a goblin, I don't have the patience to slowly drive out the competition over several weeks (and it would take me many weeks to destroy the campers by deep undercutting as we have several active campers, and all of them have to give up). In camping myself I look for quick gratification. I camp 1-2 nights a week, usually 3-4 hours a night. I cancel and repost my auctions in-between BG queues while leveling my alt in AV. Usually I come out with around 1-1.5k/hour profit. Not terribly efficient. Once I make 7-10k over 2-3 nights, I usually give up and come back once I am out of gold. Despite that camping is labor-intensive and not very efficient gold/hour income, it provides you with quick cash within a day of your investment.

Anonymous said...

A few people have mentioned issues with Auctioneer when the market average on some glyph is around 50s-2g or so. You obviously don't want to post those. So here is another solution:

I use "fixed price" auctions, with the bid 30g and the buyout 35g. Then I adjust the "max undercut percent" to be 85%, and the undercut amount to be 50s.

What this does: Lists no glyph lower than 5g... if there are ones less than 5g, it undercuts the first one over 5g.

It undercuts by 50s (enough to piss off the campers)

And it sells glyphs at no less than cost (On our server snowfalls aren't worth anything... maybe 6-8g each, so my cost per ink is about 2g-2.5g, average glyph costs around 4g to make)

It has worked great for me. I have pushed a few scribes out of the market with it. GL!

Fex said...

All in all this generates around 1500 / 2k gold a day ( before expenses wich for the gems can be considerable ) Overall however i never sell any item below my cost price, i still get to spend most my time in game doing fun stuff. And since i usually handle all the guild related issues etc during my 18.00 relists that time spent "camping" is mainly used for other needed things aswell. It does however piss a lot of people off. There are a few camper / goblins in my market. At least four of them are working all the markets i'm working and they have written and whispered me a lot in frustration. Still 60k income in roughly one month of active market play is not that bad a deal to me. To bad i'm only just starting to break even now ( powerleveling jewelcrafting enchanting and inscription solely from the ah with an added expense bill of over 40k "loss" from my main has a lot of impact on my results. ) However, currently the total sales are starting to beat the total cost in my balance, including all that gold spent on top line enchantments / gems etc from 3 years of playing my main. I'm quite happy with it. Especially with my improved qa2 addon. Just scanning one segment of the market saves so much time.

As for deing, I use it to get rid of all the green lvl gems from my jewelcrafter, simply craft them into rings and such and de. This means upwards of 100 or so items a day. For this i use enchantrix ( part of auctioneer suite ) Set autoloot on your character, put the automation on in enchantrix and simply get your stuff from mail. A popup shows every time at the same place, all you do is click yes. there is the loot sound when the next one comes up. Basically i watch tv with my mouse over the right spot simply clicking once after i hear the stuff looted. Takes some activity but no strain involved. Only issue is that sometimes when not paying enough attention and having sound turned off( every de takes the same time aproximately ) you end up clicking nothing for a while before you realise you're done with disenchanting.

Yaggle said...

Deep undercutting has been proven highly successful by Wal-Mart. Usually it's not even worth it to try and compete with them in the long-term. It's a win situation for the customers, too, just not for the employees. But you do not have employees so it's just win-win for deep undercutting in Wow.

Unknown said...

I'm something of a camper, but I only camp every 2-3 hours. The other campers on my server seem to do about the same.

There's no formal agreement, no cartel. But I'd assume that as 3 hour campers (with varying sleep patterns and varying work/ school commitments) we all end up being the lowest price at some stage during the day and even on a toon with only half the research complete I make 1-2k gold/ day.

Sometimes my 49g50s glyphs sell, sometimes their 49g45s glyphs sell. On the whole because the prices stay high we all make decent profits from the customers.

Unlike the cartels though, because the agreement is entirely unspoken and informal I don't get my knickers in a knot when someone does a deep (or stupid) undercut or when glyphs drop below profit. As long as it's profitable to undercut I'll keep on undercutting. If that means I cancel and auction and relist at 7g instead of 50g sobeit.

If one of the other 3 hour campers started being a more frequent camper and I stopped selling glyphs then I'd probably move into deeper undercutting. But at this stage I make the gold I want while playing an amount I like to play.

I tried massive undercuts once, but I felt bad listing glyphs for 7g that I could have been listing for 14g. I don't believe a market price truly exists for glyphs. The market price is the price of the lowest glyph of a given type on the auction house. Especially for the popular big-sellers that go to top-end raiders (Penance, Living Bomb, Swiftmend, Immolate, etc, etc).

Nils said...

However on a mature market there is only one will survive: a deep undercutter.

Of course for maximum profit you can switch between the strategies adapting to your server, but I found that it doesn't worth the extra time. I won't spend 50% more time for 20% more profit.

These are two contradicting statements...

Ryan Sendek said...

Thanks very much for this. I thought I was using Auctioneer to the best of my ability, but apparently my method was wasting a lot of extra time.

My only regret is that I'm no longer undercutting my competitors using odd pricing, which gave a more personable appearance and made me look less like a bot.

That said, it saves me about an hour's time so I'm sticking to it. Cheers!

Anonymous said...

Another great help to us apprentice goblins level 1 :D

N said...

I switched from deep undercut over 48 hours to shallower (but still 10%) undercuts over 12 hours, and my profits have more than doubled.

We have a decent number of AH campers, it seems, and 48-hour auctions rarely sell in the last 30-odd hours, because they've all been undercut.

Graylo said...
This comment has been removed by the author.
Anonymous said...

Quick datapoint:
"He also notices that glyphs have no deposit cost"
Glyphs *do* have a deposit cost, albeit a ridiculously small one. It's 15c (yes, that's right - copper) for a 12-hour auction, 30c for 24 hours, and a whopping 60c for a 48-hour auction. It's not quite as sweet as enchanting, but I always worry that Blizzard will up the deposit costs and eat into our profit.

Since you've ostensibly posted for later reference, I thought you might want to adjust your comment regarding glyph deposits.

Anonymous said...

Thanks Gevlon!

Can you please add two macros to your guide?
The first one is the "end all auctions"-macro, the second one is the "empty-mail"-macro.

Anonymous said...

It's really interesting seeing the mentality of the deep undercutter. I'm firmly in the camp of thinking it's stupid to undercut the market by an large ammount. If a glyph is 40g and the market has accepted it(which is also resonable enough that most people who have been playing the game for more then 5 minutes can easily afford it), why undercut it at or around 1g or greater when a 1 silver (or 1c if you like) works just as well. The steeper undercutting glyphs do not sell faster or in greater ammounts, they still only sell first. The larger undercut simply does yourself out of more profit (in your case 59 silver per sale), and depreciates the market price faster (meaning a lower average profit, assuming the same number of sales).

I agree with the person who descibed your 3rd method of that as a position holder. You are manipulating the market just as much as the other 2 methods by setting a cealing on the price for the next 48 hours. I imagine you are making most of your sales in the 1-4 hours after you post, with maybe a handful more over the next day or so depending on how activly the other sellers are replacing their inventory on the AH.

In the end you are probably making about as much, if not more, then the other sellers per hour, but due to the depreciation of the price and less time invested it's the low-undercut-and-freaquent reposter who is making more gold total.

Anonymous said...

Thx for you insight Gevlon, i was always pissed off by deep undercutters, i can start to see the point now.

But i really think you are missing something. I'm what you can call an AH camper i think, and i have made hundred thousands of gold with inscription so far. My benefits are ranging from 500g a day to more than 2K (i'm averaging over 1k), and i never spend more than 30 minutes a day on the AH (2*15Minutes, where i post/retrieve 300-500 glyphs each time, depending on my stocks). I run 8 full 32-slots bags, and make a massive refill once every month. The thing is, AH campers sell glyphs for a much higher price, and as so, i have to spend much much less time crafting glyphs than you have for the same benefits. Profitability is much higher, obviously, but i think you are very wrong by saying you only make 20% more benefits with 50% more time spent on inscription (because you NEED to include glyphs crafting time in the gold/hour equation).

Of course it has to do with my server, and maybe my vision is twisted by the fact that being an ah-camper is such a successful method there (personal best over 20K gold the day dual spec was released, with massive ah camping). Timing has a lot to do with ah camping, and you can take a fair amount of market share by undercutting by 1c, only once a day.

Stabs said...

Truly excellent post, I would go so far as to say definitive.

It shows how you get your strategy of bullying other sellers out of the market to work and illustrates the value of automation.

I'm working on the market in Eve which if you ever find time to play it you would find fascinating.

The two key differences are that it's single shard so you have many competitors and that auctioners aren't named so your strategy is aimed at gaps in the market more than aimed at specific competitors.

Despite the differences your post has really helped me clarify my thinking in Eve.

Flex said...

For those that why someone would undercut by 1g when 1c would do, I think a very valid reason is that it has less to do with the prospective buyer and more to do with your competitors.

Each have an emotional stake, of course - the buyer is certainly more likely to buy if he sees a better bargain. But even more at play is the competitor who doesn't want to reduce profits on that item by a large percent. They may choose not to undercut - expecting your item to sell and thinking they'll sell to the next buyer.

At least that seems to be why it works for me.

Raddik said...

Well, I enter the bussines 1 week ago, and everything went well (I can log on and cancel/repost many times a day).

But yesterday I get shocked... I put 200 glyphs at 21:30 and sent a /2 message: 200 Glyphs at AH at minimun price!!!... log out to my Jewelcrafter... 2,5 hours later I log in to my Scribe again and guess what?... ZERO glyphs sold and... NOTHING TO CANCEL!!!... Yes, 2,5 hours of 200 variated (and good) glyphs at AH and none of them been undercuted, at peak time, and nothing sold... What the hell!!?

Luckyly my Jewelcrafter combined with my disenchanter maded 2k gold al Sunday night...

Anonymous said...

It's amazing how much "game theory" comes to play in the inscription market. I have been heavily involved with the glyph market since the introduction of the profession, and I've noticed a lot of changes since it's become "trendy".

There are two forces at work, one of which was touched on. The price people are willing to spend of a glyph is inelastic (higher prices do not significanly deter buyers). But what people often forget is that inscription isn't a high volume market.

I can sell 30-40 netherweave bags in a day... that market can support several crafters listing 10 or more bags at a time, but I'd be lucky to sell 3-5 of a particular glyph in a day even if I have no competition. So in the long run the wal-mart strategy is the least profitable option given the volume in the market... one would be much better off selling one glyph at 20g than 4 at 5g each.

In the past, I've purposely limited my glyph postings to only one of any particular glyph... by not flooding the market I ensure that others profit as well, and as others profit they have no incentive to "camp" or get into price wars that drive prices down.

Reducing postings to keep prices high has worked extremely well for me until recently where it has become trendy to flood the market... Unfortunately several people have moved into the market, and post 4-5 glyphs at a time and each of them camp the auction house fighting to undercut each other. I can't imagine any of them makes more than 2g per glyph they sell and I seriously doubt they do enough volume to make more than what people were making when scribes were making an effort to keep prices high.

That's where "game theory" comes in... the optimal situation is for all crafters in the market to limit postings and keep prices high.... the market can support several crafters in this scenario... if one person starts to wal-mart, then the maximum profit choice of other crafters is to wal-mart as well, but that reduces the price to a point where profits are far below the situation where no one wal-marts.

Sadly I don't think there's any convincing people to restrict their business in favor of a win-win situation for all crafters in the market.

Keep in mind, I don't care about how the size of any undercuts... with low volume of posts in a market, the size of the undercut is irrelevant. If someone undercuts by any amount, so long as they restrict their volume of posts, sales will push the price back up.

_ said...

In regards to collecting al your unsold glyphs: How many of your glyphs would you say you sell ina 48 hour period?

I've pretty much followed your blog to the letter, with minor tweaks to break into my market (which is devoid of goblins, but just people who like to dominate one class of glyphs), but I'm only selling about 10-20% of my glyphs in a 48 hour period. Do you find this number to be common, or would you attribute it's smallness to the competition trying to push another firm out of the market? Mind you, I have seen some increases in my glyph selling, but not more than 5-10% across the past two weeks.

What are your numbers?

Anonymous said...

Hypothetical for ya.

Lets say a glyph was worth posting today, so you post it. The glyph doesn't sell, so 48 hours later it's back in your inventory. A quick scan of the AH shows that glyph isn't worth posting again this time.

Multiply this by any number of glyphs you want. What do you do with all these glyphs that are worth selling later, but not now?

Anonymous said...

Is that really all there is to it? Just log on, receive mail, scan, batch post, log off?

Surely this goblin method can't be this ridiculously easy. There has to be a catch.