Category Archives: Gold Making
Can gold making skill translate to the real world?
Happy new year folks! I’m going to kick start posting for 2011 with an interesting one for you. A topic that comes up often in reader emails and in-game chats is transferring gold making skills to the real world.
It’s easy to see how this could be a frustrating issue for some. The economies of online games can be incredibly complex and data-rich beasts. Mastering the knowledge and techniques to best your fellow gamers and profit is no small feat! So what stops this talent translating to real world profit and riches?
I think the best answer to that question is that it is at once both as simple and as difficult as you think. As simple because the underlying key to making money is what you’ve already mastered online. Acquire a product at one price then resell it at a higher price – that’s it.
The complexity (and the roadblock) is in the detail. In real life product availability and pricing are much less transparent. There’s no auction house search option that instantly tells you if the price you’re looking at is the best one you’ll find.
What should you sell? Where will you source it from? Where will you store it? How will you sell it? Who should you sell it to? How much should you sell it for? How much do others sell it for? How much do you have to sell to cover costs? How much do you have to sell to profit? Is that worth your time? What’s your backup plan?
Provided there’s sufficient interest I’d like to use this series of articles to encourage discussion and promote learning around real world markets. I’ll post about noteworthy real world examples that I encounter or that people leave comments about and we can explore the mechanics behind them together.
Market Saturation and the Glass Jar Paradox
I really like this first example. I don’t plan on providing all the answers along with the examples – that’d defeat the point wouldn’t it! Instead I’d like to present information, maybe with a little direction, and get you thinking.
Leading up to the holiday break my girlfriend and I few batches of Jam to give out to friends as gifts. When it came to looking for glass jars to put the Jam in we checked out a few stores looking for the right kind of jars. After visiting a variety of stores to find the right jars the prices ranged from around $2.50 up to $5 per jar depending on the quality and the type of store. Nothing struck me as terribly unusual about the prices and we continued on to our grocery shopping.
With jar hunting still fresh on my mind, I noticed something interesting when we arrived at the condiment aisle. There were quite nice jars on the shelves there, filled with jam and various other things, for as little as $1.30!
So what’s going on? How can an empty jar sell for more than a full jar? How is it possible that the process of making a product and putting it IN the jar has lowered the sale value?
I’ve pointed toward the answer above and I think it’s a fantastic one to ponder. Let me know how you go! If anyone has similar observations to add leave a comment or send me an email.
Reverse Speculation
What am I talking about? Instead of making a profit from accurately predicting upcoming market swings you make a profit from market swings that have already occured but for which your target market remain unaware.
A really good example of this kind of market – throughout early WOTLK one of my best selling enchants was [Enchant Boots - Surefooted] and for the life of me I could not figure out why. I was creating the scrolls for around 15g and selling them for 150-200g each.
I had no competition and these things kept selling. I tried to figure it out – there were now better boot enchant options and this particular enchant wasnt viable for twinks as it required a level 35 or greater item. So what was going on?
After some time thinking about this I eventually whispered a random purchaser and asked. What response did I get? “Oh, well I didnt know there was anything better”.
Pristine Black Diamonds in the wake of 4.0.3a
So the world has changed and with it the Shen’dralar reputation quests are out. [Pristine Black Diamonds] were selling for around 400g on my server leading up to all the recent announcements. With the patch in the diamonds are worthless…right?
Well check this out:
Although there’s a definite negative trend in pricing it certainly doesnt reflect the lower value you’d assume. This could be for a few reasons:
- They have potential value if Blizzard reinstates Shen’dralar rep quests
- They have potential value if buyers don’t know the quests have been removed and pay the listed price
- Nobody is actually buying them, so the prices are slowly slowly trending down over generations of undercuts
Whatever the reason I think it’s very interesting to examine trends like this one where the anticipated or intuitive outcome has not eventuated! anyone have thoughts or wisdom to add on this?
Irrationality and information availability
I like information. I could probably leave this blog post at that simple fact and be happy I think. It’d probably be better than some of the stuff I’ve written in the past as well so it’d really be a win-win for all concerned really!
When I say I like information I guess what I really mean is the relationships between different pieces of information. How when you know one thing, you can use that to infer all sorts of other things. I remember, in my early call centre days, discovering that there was a whole department dedicated to forecasting how many calls would arrive at a specific time on a specific day. It seemed crazy! Yet these people were able to do it with amazing accuracy.
Ever since then, some ten years on, my fascination with information relationships and trends lives on strong. Sometimes the relationships I find are probably best kept to myself (If I take the first letter of the name of each person who works at the cafe near work and rearrange them I can make the words MEAN and NAME!) and other times they can lead to discovering trends or linkages that help me in my job or..say…making gold in WoW.
So with my bias on the table I have to get this out – it really annoys me when people have access to quality information but for some reason refuse to use it. Refuse to use it? Maybe that’s a bit too far really, I think it’s a few steps back from that and something more like “Make a judgement call weighing up potential gain versus effort of expending mental energy and decide the use of mental energy is too much of a risk.”.
Yeah, that’s it I think.
I see with people who want to make gold but don’t want to have to read. I see it with people who ask for quest help in trade chat and arguing with trolls for half an hour instead of a thirty second bit of wowhead reading. I see it with people in the workplace who recoil in horror at the idea of quicker ways to do things. It’s this whole comfort sphere thing and the horrible terrible notion of CHANGE! (queue dramatic music).
As a manager in the workplace I’ve always enjoyed challenging the “fear of change” people. It usually boils down to a single poorly constructed notion in their head that they’ve long ago adopted without question and forgot to ever challenge. Think about your workplace – these are the “..because that’s the way I was told to do it!” people that often lack big picture thinking.
There’s something big to this I think. There’s a beautiful solution floating around that I can more feel than see. It’s not just about attaining a better understanding of the ‘why’ in this irrationality but about finding that elegant solution that helps overcome it everywhere.
It might yet be a long time coming, but I’m not giving up.
Posted in General, Gold Making
Tagged change, fear, information, maturity, psychology, rationality, work
Suspended for ‘Abuse of Economy’
Story time! On Thursday night I logged in to discover someone had listed [Reins of the Crimson Deathcharger] in the AH. They were in there for 40k which was an excellent price given they routinely go for much more. I bought them. I woke up the next morning and attempted to login, but discovered my account had been suspended.
I opened up my email and sure enough amidst the other fake blizzard emails was the suspension notice. It stated the following:
Account Action: 72 Hour Suspension
Reason for Action: Terms of Use Violation –
Exploitative Activity: Abuse of the Economy
Since I have an authenticator on my account and my activities in game are only ever legitimate I wasn’t overly concerned. It was obvious that the system had triggered off some recent account activity (such as the 40k AH purchase) and automatically taken action. It felt the action was necessary to potentially protect both myself and the integrity of the game economy.
My main concern was actually that it might take a few days to clear up and that my 5-box shaman alts would miss the rest of brewfest! :p It’s a long weekend here in Australia too so I wasnt looking forward to the prospect of not being able to login.
I’m extremely happy to say that after emailing Blizzard on Friday morning at 8am (Sydney Time) I had a response in my inbox at 9:55am! It advised that after a review the action had been reversed and apologized for any inconvenience. Colour me impressed!
I have a genuine interest in figuring out why their system has inconsistent false positives like this. I’ve posted a similar breakdown to the one above in the Customer Service Forums. You can see the thread here and I would encourage anyone with constructive input to participate in the discussion.
Since all this has occured I’ve also noticed that something unusual appears to be happening with the [Reins of the Crimson Deathcharger] items appearing in great numbers. A blue poster has already commented stating that ‘duping is impossible’ but the data do not lie! Be wary folks, and think carefully before buying these up for resale!
Posted in Gold Making
Tagged abuse, crimson, economy, gold, market, mount, suspended, temporarily
How dare you!
I’m honest and open when people ask me questions. I’ve got a track record of demonstrating that here in my guides and my posts each week. I always make time to talk to people in-game when I get random whispers. I always make time to listen. I enjoy the contact, I enjoy teaching, I enjoy helping. With me so far?
There’s one thing that seriously pisses me off though – when someone approaches me, asks for my advice and upon receiving it actively refutes it.
Now I freely admit to being wrong on occasion – ok once, in June of ’97 – but this is a different kettle of fish.
Imagine one day Continue reading
Clever Concepts: Getting your foot in the door
It’s important in business to always appreciate new and different approaches that catch you off guard. These approaches are far from being bad, too!
Having deftly slipped through our defenses we can learn a tremendous amount from asking ourselves ‘how the hell did that just happen?’ and going back over the experience step by step to find out.
So quite recently I was playing my 5-box shaman team, questing away in Dragonblight and minding my own business. I should probably explain before continuing that my shaman team are named after a group of Russian composers – their names are Korsakov, Mussorgsky, Balakirev, Antonovich and Porfiryevich.
So you can imagine my confusion when I received the following whisper: Continue reading
Clever Concepts – Different approaches to business that work
I always appreciate interesting and innovative approaches to old problems. Over a decade ago in the relative lawlessness of pre-trammel Ultima Online you really needed to have your wits about you to not get screwed over.
There were always new scams and you had to make sure you were well researched and permanently ‘on guard’ to prevent yourself getting ripped off. I really enjoyed the savageness of this. As a result I always had an appreciation for scams that nearly got me because they took my abilities and awareness right to the edge.
So when I read [this article] today about select McDonalds restaurants in Sweden being used as polling places for the coming 2010 election I was intrigued to say the least.
Not only will people be able to vote at the McDonalds restaurants but they’ll be able to vote there up to two weeks ahead of time! The stated reasons for this initiative are to improve a historically lower voting rate in these areas and to create more engagement particularly from younger voters that frequent the establishments.
My initial reaction was that this was a bad idea. Mixing private enterprise and the democratic process? Never work! Then as I thought about it more over the course of the day I came to appreciate how clever this really was.
As the article didnt go into detail on how they’ll ensure the process is secure and the venue politically neutral I shall wear my [Yellow Hat] and assume those points ARE taken care of. So what, then, are the potential results of this initiative? Increased voter participation for the government and increased sales for McDonalds.
When I hear about clever ideas like this that potentially make for great synergies I always wonder why nobody thought of them until now. I’m not just talking about large scale stuff like this but even little process improvements in the workplace. Stuff that you never thought of but that hits you like a breath of fresh air and you make that “ahhhhhhh!” realisation.
Have you come up with ideas like this yourself? Been around when others had them? How much did they change things for you? I want to hear about your experiences with innovative concepts and clever ideas. Let’s have them!
Gold Update
It’s been a while since I posted about how I’m doing with my gold. Time for an update!
Since reaching the gold cap I’ve relaxed on levels of activity but didnt by any means stop posting auctions or making gold. I bought the [Grand Black War Mammoth] drop for 10k off someone after I lost the roll since I’m a sucker for feats of strength.
I also slowly gathered the materials to craft a [Sulfuron Hammer] in the naive hope an [Eye of Sulfuras] will drop for me one of these weeks. Interesting to note the price variability (and rareness) of [Blood of the Mountain]. Definite profit there!
With that said and a little gold spent I’m currently around 220k liquid with a lot more than that in materials. I’ve been enjoying using the remote armory lately too, mainly for searching for and buying cheap materials. I think it’s too inefficient to use to cancel/relist undercut auctions at this stage.
Here’s a few screenshots:
I’ve been buying up hugely on enchanting materials whenever the market takes a dip. I’ve also been buying up loads of cheap items on US-Shadowsong to transfer across with my old alts when I finally move them to US-Aman’thul with Saate.
Here’s a quick mashup of two screenshots I took this morning showing some of the stuff I’ve been saving, probably most notable in that lot is the 70 x [Pristine Black Diamond] that I’ve been buying on US-Shadowsong for 50-150g!
What’s gold progress like for everyone else? Anyone else been using the remote auction house app? Would love to hear how you’re going in the comments below!
“Controlling the Market”
People often chat to me about their gold making techniques and experiences. From time to time I see the phrase ‘controlling the market’ used and it bothers me. The economically uninitiated throw it around freely and for them it’s all about ego ego ego.
“You keep using that word. I do not think it means what you think it means.” -Inigo Montoya, The Princess Bride
If you’re the single person on your server with an ultra-rare recipe then you’re definitely entitled to say you ‘control’ the market. Similarly if you’re supplying a large majority (ie 90% plus) of a high demand item you may also be able to make that claim.
In reality, though, how often do you think that’s the case? It’d be a very rare occurrence these days, I can tell you that. I know that even the items I profit from most regularly I don’t have any sort of monopoly on.
There’s a big difference between controlling a market and identifying a market with reasonable demand and low supplier participation rates.
The above is a simple diagram I put together to help demonstrate my point. Unless you can control supply you can’t control the market. At the very best if you’re buying out everything in the Auction House you can temporarily set a higher price. That is until additional suppliers come along of course.
If the resupply rate is sufficiently low and there’s demand then you can make a profit this way. Although, again, most of the time I see people bragging about this it’s been for foolish high-supply materials.
I fondly remember, some years back, getting a hate whisper from someone after I’d posted a bunch of Greater Eternal Essences on the AH. The person abused me and told me I was setting my auctions too low. I responded and said something like “I set them at what I felt was an appropriate price, buy them if you think they’re too low”.
Totally misunderstanding what I’d said, the person assumed that in saying the word “set” I meant I’d “set” the market price. Boy was he hopping mad at that – “YOU SET THE PRICE? I’ve been controlling the market and setting the price for weeks!” he exclaimed. Wrong wrong wrong!
Clearly because he did not control the supply he did not control the market. Some random person was able to come along and unknowingly upset his imaginary little tea party.
So next time before you throw about the term ‘Controlling the market’ maybe have a think about it. Is it really the best way to describe what you’re doing or is perhaps “Minor manipulation through focused and regular intervention” more apt? actually…never mind me :p
Interviewed by Warcraft Econ
So after reaching gold cap a few weeks back I did an interview with warcraftecon.net that was all about my journey to reaching the gold cap.
It was fun and worth the read I think, go check it out!
