Tuesday, December 21, 2010

Finding the Margin

What is the minimum monetary reward you are willing to accept for one posted auction?

This is the single most important question you can answer for yourself on your journey of wealth creation, for it instructs you in a direction that will ultimately be more personally rewarding and you will be more likely to stick with it long enough to actualize that wealth.

My personal minimum is now 30g. That may not make sense to you, and it's not supposed to. That is my margin. You might not believe there is much difference between one auction with a 30g margin and five auctions with a 6g margin that you have automated, but there is a difference well beyond the actual time it takes to post said auctions: motivation, willingness, reward. If you are the type of person who is self-motivated to the point that every copper of profit feels like your birthday, and you can maintain that motivation over the long-term, more power to you; the entire world will be your market.

For the rest of us, we must choose.

Let's talk about Netherweave Bags for a moment. There are plenty of gold blogs out there extolling the virtues of buying 3g stacks of Netherweave Cloth and selling the 16-slot bags for 9g with generally unlimited demand. I have dabbled in this market before, and these bags do indeed fly off the shelves on even low population servers. I am no longer in the Netherweave Bag market however. Why not? While some level of profit is always better than no profit, a 6g margin simply does not excite me anymore. I would much rather buy the 56 stacks of Obsidium Ore on the AH at 97g/stack knowing that each Nightstone I get from prospecting that Obsidium will pay for one stack of the ore, nevermind what I am getting for the other gems.

Does this mean if you are not dropping 5,432g on prospecting ore you are doing it wrong? Of course not. If you would prefer buying 1,810 stacks of Netherweave Cloth to make bags and (eventually) walking away 10,864g richer, then do that. That may come off as facetious, but that is not my intention. My intention here is to get you to (re)examine what is your personal profit margin so that you can use that figure to find the right market for you. It could be that you do not have 5,000g at a time to drop into gold-making schemes or perhaps you do not even have a JC character.

Let me use another example of a market I recently moved out of that you could probably move right into: TBC vendor cooking recipes. The recipes are Warp Burger, Blackened Basilisk, Golden Fish Sticks, and Spicy Crawdad. There are two vendors in Terokkar Forest, SE of Shattrath, who sells them in unlimited quantities for 3g apiece. Before the portals were taken out, I would fly out that way every time I tried my luck in heroic Sethekk Halls for the Raven Lord mount, and would end up selling two copies of each recipe for 40g apiece. I am not sure whether the novelty of Cataclysm has dried up the "boredom-filling demand" for filling up your Profession tab, or perhaps a lower price-point of 30g or whatever would tap into more potential customers, but I have not been selling them as fast as before. Either way, I am no longer bother flying out to restock sold recipes because the margin is not enticing enough. I imagine there are plenty of other persons, perhaps even yourself, that would be more than happy looting ~100g from a vendor every other day or so.

In conclusion: find your margin, then find your market. The AH is literally a gold mine with room enough for spelunchers of every skill and level of dedication. If you have a small acceptable margin or low seed money, stick with things like flipping cloth (believe me, people will pay 20g+ for Wool Cloth) and selling vendor recipes. If those markets do not get your mojo going, leave them. You do not actually need to be everywhere at all times. You will be wealthier in the long run - wealthy in all the various respects that word encompasses - when you have fun doing the things you need to do.

1 comment:

  1. A unique (and valuable) tip I think. I burned out in WotLK with AHing because I was trying to do EVERYTHING no matter how small the profit and it just stopped being fun....so I did the Insane achievement instead. Now I'm back to less than 50k and have been dreading the return to gold making. Having read this article though I think I might just pick a margin and only hit one or two markets that can meet that margin. Hopefully that will get me interested enough (and make me enough gold) so that I can branch out a bit more sensibly this time while still having FUN!! Thanks!