This is a repost from months ago during my Tuesday with Daknit series. Being Christmas Time in WoW, I thought it would be a good post for those that have not seen it. It tells the story of how one small egg changed the way we looked at the AH, and how we learn to deal with item flooding.
–Daknit
Flood! (the story of one small egg)
(the following story has some numbers that might not be exact. I can’t remember the precise number of items posts by whom, but I know I am very much within the ball park. The sale prices are pretty exact.)
It’s Tuesday. It’s you. It’s me. Welcome back. Granted, as I’m writing this the servers are back up, but I thought I share a story of the small egg with you as I’m scanning the auction house.
The wow achievement system just came out about three years ago and everyone is itching to get those points. Stupid things, from exploring whole realms to drinking 50 different kinds of drinks, were now worth doing. Halloween was the test run that year. Christmas was the beast that broke the flood walls of the AH.
Everyone knows this quest. First day of the Christmas event. Father Winter is hungry. He demands gingerbread cookies. We must feed him.
I don’t have cookies. I don’t cook. So, I’m going to buy them from the AH. Cookie per stack of 5? 500 GP. More than 100 postings. Looks like I’m going to learn how to cook.
Key ingredient to cooking? Small Egg. Cost on the AH? 100 + GP each. 5 pages of posting. Wow. Looks like I’m going farming.
This is flooding. We all know the rules of supply and demand. The demand was high, the supply was low, so the prices were high. But in this case, the demand was high, the supply was high, and so were the prices.
Wait. I know. You know. Everyone knows what happens next. By the second day, cookie stacks sold a 1 GP per stack and the small egg sold for 1GP each. The pages were less, though. The supply was there and the demand was starting to wane, but the prices began to drop. On day three and so on, the prices dropped to 1 SP each item and there was nearly 6 pages of this each.
That’s the effect of the flood. But that you already know. Let’s skip ahead to the following year.
(Let me state this before we go any further: People are stupid. We are stupid because we are lazy. People will pay 1000 GP for a small egg if that is the only option left to them. Heaven forbid they actually go out and farm the **** thing!)
Christmas event is coming up soon and I remember what happened to the market last year. I decide to go farming. (Sorry citizens of Lakeshire, you’re plight will just have to wait.) I hit Westfall with a vengeance. I was a plague upon all fowl for 5 hours. My payment was 40 small eggs.
On the Eve of the Event, I (the sole poster at this point) post up 40 small eggs, each selling 10 GP each. I sold 5.
By the time the event hit, the flood walls opened up. I posted 40 at 10GP, then someone else posted 150 at 9GP, then someone else post 100 at 8GP, and so on. I ended up selling 1GP each in the long run.
Still, 85 GP for 40 eggs isn’t too shabby. But, by being the first to post, I set the standard for what the eggs should sell at, and I set the bar too low. (Low population servers tend to have a less stable system than large population server due to the lower flux of buyers and seller. In short, low pop servers get away with crazier prices!)
So I figured it out in how to master a flood. Last Christmas, I collected over 200 small eggs. (through out the year, not just one day.) I figured, if I wanted to control and profit from the market, I had to be in every market. Here’s how I posted:
25 eggs @ 1000 GP each
25 eggs @ 500 GP each
25 eggs @ 250 GP each
25 eggs @ 100 GP each
25 eggs @ 50 GP each
25 eggs @ 10 GP each
25 eggs @ 5 GP each
25 eggs @ 1 GP each
I posted on the Eve and a few posts were already attempting to dominate the field. The average was 100 GP an egg. I posted the above anyways and deliberately flooded the market. Anyone after me didn’t know what to post for. They had two choices: post their eggs a less than 1 GP each, or buy me out. And why not? Buy 1 for 1 GP and resell for 10 or 50 more?
So, how did I do? 50 eggs didn’t sell. I’ll let you guess which ones. And because of this early flooding, I helped stabilize the market to a reasonable price. Eggs sold for about than 10 GP by the end of day one while the cookies were attempting to sell at 1 GP for a stack of 5. (a second flood, I’m afraid)
By the way, those last 50 eggs I had? I sold them for 25 GP each on the last day of the event. Everyone was egg-ed out and was pretty much tried to trying to move those items. By the time the last day came, and the lazy ones were scrambling around to finish quests/achievements, few eggs were to be found. I bought the remaining on the AH for a few GP for about 15 eggs. I reposted them at 100 GP and my eggs at 25 GP. All eggs sold.
Profit? Well. I’ll let you figure that one out. (About all of which I shamelessly spent on bad AH investments and darkmoon fair candy. don’t ask.)
If you wish to call me out on this, that’s fine. I would think this story was bull-plop too, if it didn’t happen to me.
Lessons learned:
1. People are idiots.
2. Low population servers have unstable markets that can be taken advantage of.
3. Needed items sell high at the beginning and end of an event. Timing is critical. (sell on the Eve and sell within the last 12 to 8 hours of the event)
4. I should have save that money for faster flying mounts later on. Oh well.
So those snowball being posted up at 50 Sp a stack? Buy them up now in the off season. They will sell for 10 to 100 times that come Christmas time again.
I thought it was an amusing story to pass on to you.
Until next time…..
10 replies to "Flood! (the story of one small egg)"
I agree about the profits on gingerbread recipe…I must have sold well over 100 recipes on a low population server, most ended up going for about 8 gold (I did try a few different prices and settled at about that seemed to be the moving price for my server). Seems not many people realized how well such a ‘cheap’ item could be resold for, and I didn’t have much competition to worry about, kept the supply in AH low and was lucky to avoid others flooding. Made for a nice tidy profit. And of course..also sold cookies, eggs, and snowballs. 😀
This year the cookies were much better than the eggs. Price has now fallen off but was very good for the first few days 🙂
THis rocks
25 eggs @ 1000 GP each
25 eggs @ 500 GP each
25 eggs @ 250 GP each
25 eggs @ 100 GP each
25 eggs @ 50 GP each
25 eggs @ 10 GP each
25 eggs @ 5 GP each
25 eggs @ 1 GP each
Okay, I thought I woud try this. I remembered what you wrote about the Christmas season, so last week I bought about 10 stacks of 20 snowballs for a total of 5 silver per stack.
Last night I offered the snowballs for sale, using the prices you recommended here. I sold all but one stack. Dag, I made so much gold that my conscience started to bother me!
Then on the way to the AH, I ran into the NPC selling recipes for gingerbread and such. I bought a half dozen recipes at 5 copper each and sold them for 20 gold each.
Life is good…
there is just one devious tactic you left out with your egg posting of 1000g down (perhaps intentionally, but i’ll add the trick for the people that are smart and actually read the advice on the net). if you are going to undercut yourself, make it look like there is real competition.
when i am having trouble with a flood on the AH for a niche i usually try to dominate (say runecloth for example) and people are posting so much that i am running out of space when i buyout their dumb non-economic-understanding ***, i will use what i call “false competition.” i will post a small number of stacks for a price i know won’t sell under one alt, then post a slightly larger number of stacks undercutting that from a second alt, then post most of my stacks (anywhere from 10 to 100 stacks of 20) from the alt i use the most at just a few silver (or gold depending on the commodity) higher than my established price, and so on and so on. the one thing you need to balance and keep track of is your fails/deposits. this is a great strategy for copper where the deposit is low, the mark up can be very high on some servers compared to the “real value” of copper, and demand is steady to high depending on time of year and how many people are leveling. this strategy doesn’t work so well for something like saronite ore where deposits are high compared to what you are going to actually sell it for, there is always a flood of it because people are out there farming titanium and they end up with a ton of saronite they want to just get rid of, and demand tends to be lower than you would think. disclaimer: these are just two examples from my server, your world may vary.
if you have ten characters and you are good at micro-managing you can prevent other people from undercutting you quite a bit. a good deal of people understand not to post when there is a butt-ton at all different prices on the AH already, and the dumbies who undercut with say 100 stacks of wool at 20 silver when you know it sells for 10g might just learn something if they see different names selling stuff all around the same price. think about it, what is the normal reaction when you see a guy with 200 stacks of something at a yellow or orange auctioneer percentage? “****, that guy beat me to all the dumbies flooding the market, oh well, guess i’ll undercut the ******* with my 5-20 stacks because with his high price i know i can sell these.” BUT if you see what looks like competition and close prices from four (or even ten) different names you might say “hmm, looks like there is a lot of action going on this item. do i really want to be the guy who sells stacks at 1g just to get rid of it? nah, i’ll wait until the market is better and i can make some real money on these.” the dumby i refer to will inevitably post at a ridiculous low price, because as stated above people are idiots (see item 1 by Daknit), just buy him out when you can and re-post; it is almost like free money.
a lot of people do this with their friends or guilds, but by managing your alts properly you can do it all by yourself. for most people that have read Daknit’s stuff, you probably already know this. sorry for sharing the secret. oh yeah, don’t use “bank” in your name, that is not only lame but irks the **** out of AH pros who know how to work the system and sends a red flag and dead give-away to the dumbies.
peace
~S.O.Crates
The trick is, I’m finding, dealing with the guilt. Last night someone wanted to sell me some frost oil back because he only needed two of the stack or five he bought. I instead invited him to have a few more, free, if he liked. I guess I mentioned that I had over 23K gold so I didn’t mind helping. His response was to ask why, with so much money, do I sell them at such an inflated price? I realized that the best answer I had was habit. I made that gold by looking for ways to make a profit. Probably time to make a donation to the guild bank. Maybe that will help ease my conscience. lol
If you, or anyone else you know, happens to have a great deal of expendable gold, please remember that this is the giving season. Please give generously to the “Support Daknit’s Poor *** Foundation” and ease any guilt within your soul, no matter how small.
Guilt? Guilt?! Really? Why? Refer to point one of Dugi’s post: 1. People are idiots. You’ve made you gold (assuming that you didn’t buy it out of the game). You said you made your gold “looking for ways to make a profit”. Good for you, congratulations. You have the right to sell your stuff at whatever margin is profitable. You do not have anything, ever, to be guilty about. It Is a Game. It is Game Gold. Make your money off of the idiots, buy an epic mount and enjoy your rewards for your hard work.
AAHHHRRGG… the cat is out … LOL
Great story, and I can agree 100% to what your are saying …
I made a lot of gold last Christmas doing exactly this.
Great story and good advice. Thanks much for posting.