Friday, April 19, 2013

Timing Market Entry and Knowing When to Walk Away

This was the post prepped for this last Tuesday.  I hope you have taken the time to look into another person's situation and learned some things.

Here's some strategy for those of you wondering how to keep from spending all of your evenings grinding out the wins like some Blackjack junkie convinced you'll eventually hit a run.

If you look at what I sell, it's basically a list of everything in the game.  Of course, I could tell anyone to make X, post X, and pray they make a decent return.  I'll leave that for the people dispensing bad advice and the crowds of people thrilled they've got 10k gold in their pockets for the first time ever.  I deal in millions, not thousands; my time is worth more than to sit around playing leap frog with people who haven't got the slightest clue what modeling a well run virtual business is about, and worse have no concept of efficiency and time management.  These are your competitors, and hopefully since you're reading this stuff - not you.

If you've ever sold anything a day in your life, the first thing you learn is "who is my market?" and "why would they buy?"  In WoW gold making, your life is merely a series of 7 day events that go from Tuesday through the following Monday, and in between you monitor your activity.  At least you should be.  Without telling you exactly what I post on certain days, I think it's MOST important that you have the frame of mind during the week.  You should know what is going on each day of the week, and make market entries and market retreats based on this information.  That's if you want to maximize your efficiency and go do other things besides hang out at the AH all day.

I like to think of it as "having my server clocked".  I know what's popular on each and every single day, and who I should be appealing to.  Each server is different, but they all tend to have similar life cycles.  So think critically...  What should I be selling?  Who is my market?

Tuesday - This is the reset day for US servers.  If you're playing EU, just add a day here.  On Tuesday, everyone's valor is reset, LFRs/Raid IDs reset, and people can begin collecting more Conquest points.  This is generally always my biggest profit day of the week since demand on this day skyrockets to what will be the all time high for the week.  You should be monitoring exactly what guilds are progressing on, what new items will be available with respect to their slots.  Macroeconomics day.  On this day, you want to focus on what will enhance the pieces people will be retaining.  PvPers especially go hogwild on Tuesdays, since they generally will hit their cap for the week and make a purchase decision on this day, especially those saving for weapons.

Wednesday - Or Tuesday Lite, as I sometimes refer to it.  You should still see heavy action like Tuesday, as most progression guilds begin hitting their progression fights.  Generally those doing LFR hit the last half of their grind tonight.  When it comes to gear collection, the first two days of the week are always going to be mains, and people spend the most gold on mains.

Thursday - Now the week starts to peter off.  Raiding guilds start hitting bosses they can't down yet, PvPers are still active but not so much in the buying side (they're usually going for rating before the weekend and not so much for points), and those not raiding begin playing their alts again.  Prices drastically start to return to earth on everything enchanting or gem related and it's probably time I retreat from this market.

Friday through Monday - Alts.  Thousands of alts awaken from their weekday slumber to start looking for minor upgrades.  They're looking to level easier, or they've just hit 90 and want to look into getting into LFR as fast as possible.  Or they want to begin grinding honor points in battlegrounds and aren't interested in being the typical baddie getting 2 shot by rogues.  Many casual guilds finish their progression raiding for the week.  Some are even looking to improve the pieces that they've retained, but I wouldn't go overboard and post for a measly 5% profit.  Close price analysis and setting your mods accordingly will prevent you from taking losses at this time.

Does any of this look foreign to you?  I hope it doesn't, it's common sense. But like I told a coworker of mine this last week - Common sense is actually uncommon.  Sometimes a person needs to have the obvious pointed out to them.

During the week, I have certain price points for all of my pieces of gear.  Some items I post every single day of the week, some I only post one or two days.  It really depends on profit opportunity.  BOEs tend to sell better on some days, so I don't have those set up in any group and post using Auctioneer.  Many items I specifically place on different banks that are weekend specific posters.  During the weekdays, they never get logged into.

Here's a good example:  Gems.  I hate the hell out of having to cut and post these things, some people do it every single day of the week and I wonder how they can stand it.  What generally happens is the demand for them is enormous on Tuesday and Wednesday, and you'll sell through your entire stock at heavy premiums.  Other days, you get back 90% of them.  Why?  Because the demand isn't there.  As demand is lower, prices start falling down as people fall over themselves to undercut each other.  Meanwhile, if you stay in this market, you 1) spend money on deposits and 2) sell them at reduced profits and 3) cost yourself more money if you play the undercutting game thus contributing to the problem.  Of course, I still post a few during the week, but I also renegotiate my floor prices.  If I'm not getting at least Wednesday prices on a cut, it's not going up and it stays in the bag for next week.

Quick Rant:  People do this because they're told the shuffle makes you gold no matter what and just by cutting gems.  The shuffle however is in a bastardized form today because most people doing it don't realize that the shuffle was created originally as a means to making enchanting highly profitable, provided your server has a demand for enchanting, and not to make all of the the profits in gems.  I wonder why people got this strange idea and bought into this bizarre fallacy.  Who could possibly have told them it was all gems?  Hmmm.  People do half the shuffle, overload the AH with cheap gems, and then sit on the green gems or something.  Maybe they're vendoring them.  Either way, bad form.  Moving on.

I demonstrated for you the idea and rationale behind why you should have a spreadsheet in place and further, why you should be in the habit of stockpiling in lieu of going Just In Time.  The people that roll JIT are buying on Tuesdays and Wednesdays, and then trying to squeeze a profit out.  Meanwhile, they're doing nothing the other days of the week.  Conversely, there are people that sell no matter the prices.  There's no reason to sell your stockpile for the sake of selling your stockpile.

Retaining well priced materials is an art, and it's not always easy to get certain things for below market value and it's not always easy to replenish your stock.  Story time!  It reminds me of a time I wanted to sell something to a customer when I was just starting out in my sales career and a young buck know-nothing 24 year old.  We were making a whole 8% profit margin off the item (and my paycheck would look better), but we were coming into the busy time of the year and to replace the item in our inventory had a lead time of 3 months.  But, after a begging and pleading session with my boss, I had to turn the person away.  You know, having to do that and tell a buyer they're too freaking cheap is never fun.  The good news was, I located a buyer at 17% just 2 months later and scored twice the commission.  If I had sold the item initially, I would not have had the inventory to sell to the customer and would have had to wait a month, and the company would have lost out on future opportunity should my deal not arrived.  When a buyer is hot, you don't ask them to wait, you deliver immediately, unless you are not in a position to immediately sell off your inventory.  This was a lesson that I learned early on, think long term and don't sell just to sell.

Selling mats off at 10% margins when you could sell them at 100% makes very little sense, but people are happy beating their heads against the keyboard to do it.  If you understood what I was talking about in my earlier posts on this blog, then what I've explained here will be absolutely second nature. 

As prices ebb and flow during the week, your buying and posting patterns should directly mimic them.  I'm fairly certain that if you were to look at the prices on your server, and then weighed them against the events of the week, you would see that supply and demand essentially flip upside down during the week at some point.  This is a simple market phenomenon, and makes the difference between someone who posts everything during the week and hopes it sells (a sale is a sale, right?) and someone that calculates their moves and makes more profits with less effort.  Think of it like having spring sales and winter sales.  As the seasons change, you always rotate your stock around and sell certain things at higher pricing during the year.  Except our "years" are merely 7 days long.

So my keys for successful profitability and less camping:

1) Know your server's week with respect to demand
2) Sell high on proper days
3) Buy low during the week
4) Don't sell just to sell, think.

Margin Call, Week of April 7, 2013

It was quite the struggle this week, I honestly am finding myself hitting that most horrible of horrible walls.  Ever wonder why prices sometimes go off the charts or strange things happen in your AH?  It's probably because one of the leaders dropped out of the market.  For me this week I was far more motivated to play D3 than to even bother logging in to Warcraft (although I did, habits are hard to break).  Most people on my friend list, or more specifically my Battletag list, are not even bothering right now.  I didn't grab a screenshot of it, but this last week snagged a measly 343,000g in revenues.

A tip for your week - Consider your actions before posting, you directly affect pricing.

Thanks for stopping in!

3 comments:

  1. Great post! I found myself nodding in agreement for the most part. I go through so much stock in gems though, that I pretty much always post as long as it's profitable. I'm able to do this at the moment due to 3 JC's making heavy undercuts and the rest of the herd following with their 1c undercuts. This enables me to keep my stock healthy everyday as I reset the market (often from 40-60g/gem to 250g per). I make the idiots do all the work for my profit!!!

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  2. Ey ! Did you hear about "Market Watcher" is an add-on wich creates graphics with the prices when you run a scan, so you can see the prices variation if you scan daily.

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    1. Been using it for years. Even commented on it the other night while doing a guest spot on a podcast. I use it more for quick buying today, although I initially got it for the charts. That was all pre-TUJ of course.

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