Tuesday, 6 January 2009

Rex's Goldmaking Guide: Part 1 - General Rules

Having to constantly respec to fill tanking, healing and dps roles and keeping different sets of gear enchanted and gemmed has forced me to take a keen interest in making gold and the general WoW economy. I have become wealthy in WoW and by doing so, has freed me into pursuing anything I want to and not have to grind for gold when you can be doing better things.

So what follows is my goldmaking guide series. Firstly, in Part 1, we'll have a look at what separates the rich from the poor and general money making principles.

1 - Salary mentality
There are generally two types of people that earn an income in WoW, the first type are those that get gold when they need it and go out and farm or quest. The problem with this mentality is that you receive a linear income. I.e. Your income is directly related to how much time you put in. When you stop farming, you only have a very limited supply of goods to sell, and once these are sold you need to go back out and farm some more. Similarly with questing, these players only make money by finishing quests and need to do more quests to get more gold. It is hard to become 'rich' in this way as you do not generate money passively. For a long time, this is how I made my money, and how I saved up for my epic mount. After purchasing my mount I quickly became poor again and was caught up in a cycle of working to pay the bills.

2 - Business mentality
The richest players I've met view making gold as a business. They often buy goods in bulk (which leads to a discount) and then use it to craft them into something more expensive. The trick is to do it in such a way as to make a profit, which is difficult to do as many crafted professions usually do so at a loss. This approach then becomes a business mentality, as you have moved from being a farmer, to a manufacturer. You buy basic goods from other players (herbs, ore, eternals) and turn them into something much more valuable in a short period of time. Then its simply a matter of listing it on the AH and you are free to pursue instances, raids etc.

I'll include 'flippers' in this category. Flippers are those players that scour the auction house (often with the help of Auctioneer) for a bargain and relist it for sale. While I don't have a problem with flipping, it seems like a conservative way to make money with a lot of risk. If I flip say eternal airs, and it sells for a profit, you should ask, why did it sell? You may have missed out on a further profit if you could have transformed that good into something better rather than just flipping it.

For this reason, I stay away from flipping, and prefer to maximise my profit by trying to buy some basic goods cheap and then transforming it into something much more valuable.

3 - No farming
Personally, I hate farming, and is a complete waste of time! The exception to this is when it isn't actually listed on the Auction House and you have no other choice. I prefer to buy something that is overpriced than to farm for it. Not because I'm lazy, but because of the opportunity cost involved. If you're desparate for cash to buy goods from the AH such as eternals or ore, it is usually faster to do some dailies, and use the gold made from those quests to buy it. Not to mention other benefits from questing such as rep gains or achievements.


4 - When is the best time to trade?
All the time! I've often heard people say that they prefer to trade on the weekend, when the server is at its busiest and the price is at its highest. This usually comes from farmers since they have to work to get their goods and want the best price for their goods.

As a manufacturer, you want to sell as much of your goods as possible for a profit. Im going to borrow an investment cliche here: Time in the market is more important than trying to time the market. It is important that you keep trying to sell your goods all the time, rather than trying to pick specific days to trade. You may make less of a profit on different days, however that is the important thing. You are still making profit you would otherwise have missed out!

5 - Flooding the Auciton House
The market can only absorb so much at one time, so I prefer to list my goods in quantities of at least three stacks and at maximum six. I find that listing in quantities more than six results in severe undercutting and often a lot of unsold items, but anything less than three means you potentially miss out on more further sales if the first two are sold quickly.

6 - Auction House listings
The Auction House gives you three choices, 12, 24 and 48 hours. My preference is for a 24 hour listing over 48 hours. I find that with 48 hours it is far too long unless you're trying to sell something like an epic item. To me, that means you dont expect to sell the item for two days, and you will probably be undercut before then.

It also costs more which may impact on the number of listings you can afford.

So unless you don't intend on logging on for more than a day, stick to 24 hour listings.

7 - Mods
For trading, I use two mods. The first one is Auctioneer, an Auction House mod. There are plenty of guides on how to use Auctioneer, so I'm not really going to cover it here. I don't do scans of prices for the AH for the median price because by doing so, it encourages you to wait for a higher price rather than trying to sell it now. I prefer to be at the front of auctions so I can turnover the goods quickly, knowing that I can keep supplying more. What I do like about Auctioneer is the ability to do multiple listings of the one item with a single click. It will also automatically list your auctions in the preferred stack size once its set.

The second mod I use is a mailbox mod called Postal. This mod allows you to open all your mail with a single click and will tell you all the sales you've made as well as your expired auctions. Additionally, Postal provides a summary of all the gold collected at the end. I usually have anywhere from 50 to 400+ auctions running at any one time so Postal is a Godsend for preventing RSI!

In Part 2
In the next part of this guide, I will examine current trends and opportunities in Wotlk.

Cheers,

Rex

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