Virtual Demand

I occasionally like to dabble in social engineering via the AH and have seen some measure of (temporary) success by doing so.

It started out with an exploration of how profitable it might be to craft Spidersilk Boots. These are a level 19 blue-quality footwear that are pretty nice for twinking and are otherwise better than a lot of quest rewards up until the Arathi Basin PvP boots you can buy at level 28. Part of the mats to make the boots include Iridescent Pearls. Checking the AH, I notice that there are only two Iridescent Pearls each going for 6g apiece. Two pearls are enough for one pair of boots, but getting a steady supply is really necessary if this Spidersilk Boot thing works out. So I have a decision to make. Do I:

A) Buy the pearls and make 1 set of boots?
B) Buy the pearls and create virtual demand for Iridescent Pearls?

What do I mean by virtual demand? I bought the two pearls and and posted them for 40g apiece.

The majority of players, even those using addons with historical pricing functions like Auctioneer, take cues from the pricing of materials on the AH within reason. There is an unspoken assumption that human beings are rational creatures (many real-world economic models are based on ridiculous assumptions like perfect information and rational consumers), so in seeing two Iridescent Pearls on the AH for 40g the average person would most likely conclude that Iridescent Pearls have enough demand to support that price - the thought someone was just tossing them up there to screw with them probably has never crossed their mind.

Now, remember I said "within reason." Posting a stack of Linen Cloth for 3000g in an effort to make the 50g/stack look reasonable in comparison is called "poisoning" in Auctioneer-speak, and the addon has some tools to combat that. My goal is not to poison Auctioneer's data or even reset the price (it would indeed be counter-productive to do so). My goal is to motivate players to farm more Iridescent Pearls. How do you get people to farm Iridescent Pearls? By convincing them that Iridescent Pearls are selling at 40g apiece. Suddenly, starting a 20-minute pogrom against the Naga and Murlocks in Hilsbrad is more profitable than doing the normal daily quest routine, thus encouraging (more) people to do it.

I have zero expectations that those two Iridescent Pearls will sell. In fact, I hope they won't, because that would mean I would have to find two more before trying out the Spidersilk Boots thing. If they do, well, I made 68g by flipping Iridescent Pearls. It is virtual demand in the sense that I do not believe the market is capable of sustaining 40g Iridescent Pearls, or 35g, 30g, or even 15g pearls. The best case scenario here is for a handful of people to farm the pearls, get into an undercutting war with my 40g pearls, and after several unsuccessful AH cycles at the inflated price, everyone gives up and goes back to the "true" price of 6g. At which point I now snatch them up and continue on my Boot venture.

Virtual demand does not work in mature markets, but that is fine considering mature markets should not be experiencing such item droughts to begin with. The other problem is the passive nature the initial ploy. You are telegraphing real demand to the person(s) who you bought the first two pearls off of, but what are the odds that they will come back and check on the current AH prices? I mean, I would, but normal people probably will not. What you are really banking on is future people unloading a pearl or two on the AH and seeing the "demand," or those people who want to buy pearls but see that they have been "priced out of the market."

If you have less scruples than rubles, you could probably jump-start the engineering by acting flabergasted in Trade Chat: "OMG! Iridescent Pearls for 40g apiece? This economy sux." I consider that more willfully misleading than simply posting the auctions and giving people space to come to the wrong economic conclusions, but hey. Word of caution: don't be dumb and post that Trade message on the same toon you listed the items on.

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.

Low-Impact Leatherworking

If you have a character with a Leatherworking skill of 485 and a character at level 84-85 (it does not need to be the same character), it is quite possible for this scheme to make you thousands of gold in the time it takes you to take three portals. How? First look at the following picture:

Anything jump out at you? For the uninitiated, Savage Leather Scraps are Skinned from lower-level Cataclysm mobs and have no function in of themselves. You can, however, combine five of them at a time into one piece of perfectly good Savage Leather at 425 Leatherworking. In the above picture, we can see that the prices for Savage Leather Scraps are not, in fact, anywhere close to matching their proportionally-priced counterparts. In other words, you can buy five Savage Leather Scraps for ~9.75g, right click them, and sell the result for 35g. I did just that in the opening days of the expansion and ended up with something stupendously large like 14 stacks of Savage Leather without having skinned a single mob.

It would be easy to stop there and be satisfied with our haul, but we can click a few more buttons and increase the profit potential by, oh, let's say a thousand times. With all of your 28% priced Savage Leather, you can combine them via a 485 Leatherworker into Heavy Savage Leather which increases it's value quite a bit already (none was selling at 1000g apiece however). With your Heavy Savage Leather neatly stacked in increments of 10, it is time to take the final plunge: Pristine Hide.

Much like Arctic Fur of the Wrath days, Pristine Hide is something that can be Skinned very rarely from level-appropiate mobs... or very commonly purchased from Misty Merriweather (Alliance) or Threm Blackscalp (Horde) out in Twilight Highlands by anyone with 10 pieces of Heavy Savage Leather to rub together. This was actually one of my favorite activities in Wrath, as you could easily come across cheap Borean Leather on the AH and after some Leatherworking alchemy turn around and start selling Leg Armor kits with a 60% margin. In any case, I had neglected this market for quite some time until there was an auspicious bidding war in /Trade that was establishing Pristine Hide's value in the neighborhood of 1850g.

Yeah, my jaw did the same thing.

Prices have dropped quite a bit since I wrote this article a few days ago, but the underlying scheme still works:

If Scraps x5 < Savage, then Buy.
If Savage x5 < Heavy Savage, then Convert.
If Heavy Savage x10 < Pristine, then Trade.
???
Profit.

Twilight Highlands = OMGold

Four hours later... what was the haul?

That is Whiptail x130, Cinderbloom x97, Twilight Jasmine x205, Elementium Ore x333, Pyrite Ore x48, four uncommon gems, Volatile Earth x21, Volatile Water x18, Volatile Life x36, Volatile Fire x19. My farming toon is at 525 Herbalism and 525 Mining, and 74% of the way to level 81 from getting 2200 XP per node and exploration alone - I was keeping pace with guildies who did two of the new dungeons, complete with the quests inside. Believe me, hitting 470 Mining and 490 Herbalism in Northrend was painful as hell as it seemed like Saronite nodes stopped spawning altogether and getting four stacks of Icethorn hoping for green skill-ups is equally bad. However, I was eventually able to CoT-portal my way to Uldum, hit up some Whiptail nodes, and then cruise to Twilight Highlands.

Twilight Highlands is beyond a goldmine right now. You honestly and truly have no idea how ridiculous it is. Maybe a picture or two would be good?

  

The first minimap is three Elementium Ore spawns almost right near the zone entrance. The second ended up being three Pyrite Deposits all clustered together, which I came across 13 minutes later as you can see from the time. What you won't see are the Twilight Jasmine dots on the minimap because I had to turn Track Herbs off to even see the terrain. Twilight Jasmine is not the Icethorn of Cataclysm, it is the Peacebloom of Cataclysm, at least going by the amount of spawns in the zone - if you can take a screenshot of your minimap anywhere in the Highlands without at least two nodes showing up I will be very surprised. This of course poses some very interesting economic questions for herb futures down the road, especially considering I was able to farm all of these herbs (and ore for that matter) quickly and effectively without any danger of aggro from the high-level mobs. In the meantime, the only futures market I care about is the one in, oh let's say 40 minutes.

Power-Farming the Cata Launch

When WotLK launched, I did not take my main into Northrend, I took my Herbalism/Engineer shaman alt instead. While everyone else was questing through Dragonblight, I stumbled upon the path leading into Sholazar Basin from Borean Tundra. Herbing there was picking gold out of the ground, and to my total shock I found the southern hills filled to the brim with Saronite and even Titanium deposits, all of which would be untouched until the sea of humanity hit 77 and got their flying mounts. I zipped back to Stormwind, dropped Engineering, bought all of the ore I could off the AH to powerlevel Mining via smelting. Some six hours later, I was selling Saronite Ore at 150g a stack.

Cataclysm is upon us in a few hours, my friends, and I fully intend to spend the first major part of it farming. Had I known before Wrath came out the ease of getting into Sholozar, I could have prepared better. Have you prepared for Cataclysm? My goal is to get into Uldum and/or Twilight Highlands and get to farming before people make it out of Hyjal, and after the jump will be how I plan on doing it.