“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
At the same time, it does drive me nuts when someone comes in and posts a bunch of auctions at a significantly lower price than the going rate has been.
For example, 5-10 people will sell stacks of saronite ore for about 16g a stack, give or take, and all of a sudden one day someone just comes in and posts 5 pages of stacks at 12g a stack or something.
Then all the people who don’t understand it was just one person offering a temporary surplus at a low price start trying to undercut him, and for an extended period of time, the value of something just bombs for no especially good reason.
I find this kind of crap happens when people use auctioneer to do all their thinking for them. “Well, there’s none of this item on the AH, so I’ll just use auctioneer to give me a price.” Bah!
I gotta agree completely,I remember briefly controlling the auction for ICC arrows when I was one of 2 crafters on the server,I made roughly 1k every hour (no lie) selling arrows at 25g a stack,I remember receiving many hate tells from the other crafter who was selling @ 50g a stack 1 stack being 1/5 of an eternal shadow…people are funny sometimes
Yeah it just makes me laugh whenever anyone thinks they are controlling the market, my attitude is the second you log off someone posted everything you are trying to control at half the price you were trying to fix it at. Or your major competitor has their own supplier, whether it is themselves farming it or a guildy who CoD’s items at a fixed price.
You take a plunge on a market, if you notice the supply is low buy out all the materials and make hay while the sun shines, just the second you think you can keep this up is the second someone will come along and shatter all your illusions.