Saturday, January 15, 2011

Enchant Scroll Speculation

In my For the Hoard! post, I warned against following WoW investment advice given by persons with longer time horizons than you. That warning is still in effect, but...

...this is getting a little ridiculous.

Chances are good that if you have an Enchanter, you already knew that your Enchanting peers were dumping scrolls on the market with complete abandon. You would probably even be (somewhat justifiably) upset with this situation, since it destroys any semblance of a market. Well, any semblance of a Seller's Market. After all, if you stumbled upon people flooding the AH with items not only below their (probable) market price, but also below their True Vendor Price (e.g. the cost of mats to craft them), you would buy them all and relist them all day, yes?

Well... maybe.

 Take a look at these other Enchant Scroll examples (click for full size):

Some of those listings border on the criminally insane. Enchant Shield - Blocking takes twelve (12) Hypnotic Dust to make and someone listed four (4) of them at 2.95g each. Is the average price of Hypnotic Dust 24s on your server? It fluctuates between 12g and 18g per pinch o' dust on mine, although you probably wouldn't know that based on the above picture. That scroll of Blocking should be at 144g minimum just to break even, but someone felt selling at a 141g loss was better than... just holding onto the scrolls for later?

Fundamentally, that is what enchant scroll speculation is asking you to do: purchase these uber-cheap scrolls and hold onto them for weeks/months until the supply of leveling-Enchanters dries up and the market returns to some semblance of normality. Just like any sort of speculation, there are risks involved... although the risk of buying 3g scrolls is pretty small. The problem starts creeping up once you eliminate the uber-cheap and start working your way up to the, say, 33g-100g scrolls that cost 200g in mats. It is a problem, that is, unless you follow my 2nd Commandment of Investing:

Never invest in something you would/could not end up using.

I bought all of the sub-50g enchanting scrolls listed in the pictures above, and have been stockpiling anything below 20g automatically. I do this without worrying about whether the market will ever recover because A) it probably will recover at some point, but more importantly B) because I can use these myself, or my guild can in any case. In fact, the guild bank has roughly 200 scrolls of various flavors such that any Strength-based DPS will be covered whenever they get a glove upgrade until the end of the expansion. There might be a small issue with the +35 Strength to gloves enchant, actually, considering it is not BiS: Mighty Strength is actually BiS, although it takes two Maelstrom Crystals that are north of 800g apiece at the moment. Nevertheless, I can carry a few in my bags whenever we raid and have something cheap, but effective on-hand so that we aren't wasting time if that guy wants something on his shiny-new drop.

You may think this is a lot of words compared the the easier "Yes, buy cheap scrolls" response. And you would be correct. Be that as it may, I do still feel very strongly that what is a no-brainer for someone with a long-time horizon is bad advice for someone with a more immediate one. Enchanting scrolls are speculations, not investments, and there is no vendor alternative (e.g. selling cut gems from Obsidium) should the market lurch into a bad direction as you are cashing out. So stay smart and stay safe by speculating on things you could see yourself using anyway.


  1. Well stokpiling some cheaper ones are highly recommended because sometimes a desperate enchanteer resets the base and a scroll gets a true value of mats. When you are there it's fun to undercut by a 10s and sell few enchant scrolls and gain profit that totally brings your invest back. Bought 20 for 200g, sold 2 for 100g each, yay. Leveling process will come to an end. Albeit it might come later, but when it does you have nice stokpile and do not have to use your own enchanter/mats at all :) nice.

  2. I actually played the role of "desperate enchanter" for a few of the scrolls by buying out the entire market and then relisting only a few in an attempt to jump-start the normalization process. It works occasionally, but yeah, it is much too early to try cornering the markets; the next day there were 15 more scrolls undercutting mine and now I have two stacks (at least) of +35 Strength to gloves.

    Luckily enough, I can supply my guild and alts until next expansion if I never get a chance to move them on the AH. :P

  3. The same thing is happening on my server, but not just for scrolls, for almost everything Cata related even crafted Epics. Being an enchanter, I have a bank full of scrolls just sitting there waiting for the market to level out. There are a few enchants that are strong sellers, but only a few. The ones that seem to be holding their value are the 525+ endgame ones like Power Torrent, Peerless Stats, etc.

  4. A lot depends on the server type you play on. If its a mature server, not as many new players leveling then you might see market stabilization sooner. If you are on a "new player" server, expect to see lower prices on these leveling scrolls for a while.

    Buying some cheap and holding them may pay off in the long run, but I consider this a fairly risky strategy insofar as some of the lower material cost scrolls will always be "leveling fodder" for new enchanters--meaning every now and again you can expect to see 5x a certain scroll at stupid prices.

    The opposite strategy might work better but I don't think it will ever happen. If no one would buy the cheap scrolls then the sellers would be forced to either hold them or destroy them--and I suspect most don't have the storage space to waste. Either would keep them off the market which would drive down supply.

  5. Since I love to play safe, I made this simple rule to choose which scrolls to buy at which price. I check the mats and calculate the following threshold:
    threshold=[hypnotic dusts needed]*1g+[greater celestial essences needed]*6g
    And I buy anything under that price.
    Since I don't expect hypnotic dusts to go below 5g anytime soon (I think that most of them come from DEing Jasper Rings, and you can still cut gems and vendor them instead) nor greater celestial essence below 13g, this is sure profits.
    I could have set the threshold higher, but truth to be said I already buy hundreds of each kind of scroll this way and I didn't see why invest so much more... When prices normalize the daily supply will still have some kind of limit, so my stocks will last for months anyway.

  6. Great post.

    On Malygos the same "get this stuff out of my bags" pricing was in effect for much of December. I bought everything that looked stupidly priced (e.g., tons of scrolls for under 10g when a single Hypnotic dust cost 12g+).

    I figure eventually I'll be able to sell the stuff for 5x, 10x as much as I paid, so it's all good.

    A good AHer has to ruthlessly snatch up bargains (the less risk, the better) with a view to making it up down the road. The one danger with "cheap scrolls" is that mats will drop in price as well. So that scroll that costs 150g in mats now may only cost 60g in mats later - and you may still have "leveling" competition. So paying 35g for it wouldn't be such a win. At 2g95s, though - fill a bank tab with them!

    I bought a bunch of scrolls when they were dirt cheap. Now prices are firming up a bit (still under mat cost, though), and Hypnotic Dust is under 10g per.

    I'm not bothering with any enchant scrolls other than Berserking at the moment.

    [In a side note, the market for Abyss Crystals is finally firming up. I've been able to buy pretty much as many as I wanted under 10g since Cata launched (as people empty their banks of the stuff). This weekend, prices gradually rose to the 15g-20g range. Love them for Abyssal Shatter.]