Hitting reset... Diversification or Specialization?

Sometimes we find ourselves in a position where we need to reevaluate where we are at, and if we're smart it may be necessary to readjust our direction. For me I've just hit that point in game. I had dropped a lot of gold into leveling some of my professions. I only have a Druid that has made it to 85. And my operating cash (gold) stores had dwindled down. So it was time to readjust my business plan to move back to profitability. To be honest I'm an average guy with a hectic life. I work 2 jobs, go to graduate school, have a wife and kids, and don't have a lot of time. I enjoy doing pvp, some 5 mans, working on achievements, and of course making gold in the AH.

One thing that hurt me was working on the Darkmoon card decks. The cost of putting together several decks, only to find them not selling well on my server at all. So I decided before the Darkmoon faire left Shattarath I turned in the deck for myself. And I gifted one to a good friend I play with. So I found myself at the 15k gold mark, and realized I needed to change some priorities. Just to be clear this is the gold on my AH banker, I use a separate alt with a guild bank as a sort of non-interest bearing savings account. That gold I didn't dip into.

So I re-evaluated what I was doing differently. As of right now I have max leveled inscription, herbalism, alchemy, and tailoring. After Cataclysm I continued to craft netherweave bags (which has recently increased in profitability due to netherweave cloth dropping in price and netherweave bags selling for higher). Also I began selling mysterious fortune cards, fortune cookies, inferno inks, relics, embersilk bags, hyjal bags, abyssal bags, some crafted cloth items for lvl 80-85, flasks, health pots, uncut meta gems, & raw and cooked food items.

I also re-evaluated the glyph market which I had backed out of once prices dropped. Mostly because of the effort to auction glyphs. So I decided to work my way back on the glyph market, crafting any glyphs that were over 50g buyout. With all of the herbs I'm milling I use the ink trader to get the inks for the different types of glyphs, then all of the inferno inks I sell in stacks of 5.

I also realized some of my other scans i used to pay attention to in Auctioneer were being ignored, so I began looking at resales (which can be tricky because people do manipulate junk prices) and vendor sales (when people sell or place for bid an item which would they would get more money selling to a vendor, so I help them with that). Resales aka flipping items can be tricky and my opinion is to stick to things you know, and avoid buying big ticket items unless you do a little research. Make sure that item didn't plummet in price because the last patch increased the drop rate by 100 times or that the quest that used to use that item is now obsolete. I try to stick with items I know will sell, and that I'm familiar with assuring its a good value. Learn the twink market if possible, many times people will place twink items up for a super cheap buyout or bid because they don't realize the value of the items to the twinking community.

Another suggestion is to look at The Undermine Journal for your server and faction to see what is selling and for how much on average. Its also a great spot to see what the top sellers in your competition market are selling and how many of them for what price. Maybe you're missing something in your market.

So sometimes it's time to hit reset and get back to diversification rather than make money in big riskier specializations. Diversifying allows more subtle adjustments before you find yourself with a cash flow problem in your operation.

My lesson from all this - stick with DIVERSIFICATION!!!

It's all about base hits not the home runs. There's always a good feeling when you go to your mailbox and pull 5 - 10,000 gold from it over the last few hours, which you spent watching Criminal Minds with your wife.

Happy Prospecting,

Fat Jack

Diversification

We hear it in business all of the time, diversify, diversify, diversify. Any good investor will tell you the secret to being successful and having consistent growth and minimizing loses is to diversify. My daily sales are not enormous, they are averaging 1,000- 5,000 gold per day, really the biggest variable being my effort to craft and post items. Of course we all have good days and bad days. My normal work / home life prevent me from sitting in the ah all day and night so usually I get on in the evening time and spend some time selling, but try to spend more time playing.

Tonight I did an early AH check on the online armory to see how much I had earned today, signed into my banker and see with only 60 some odd items posted I only had made 60 gold in the past 24 hrs. on my main banker. He was selling some enchanting mats, a BoE crafted robe, some vendor items which usually sell pretty well, a pet or two and some glyphs (I know these were left overs and my glyph supply needs some replenishment.) Admittedly there is not much posted because it is mid week. But even still 60 gold is a pretty small amount for me, although admittedly because time is not something that I've had in abundance, my Auction House play has been very conservative at best especially since Cata is right around the corner.

Then I swapped to another Banker which is used mostly for selling cut jewels. Where over the same time period and only having posted about 20 items or so mostly Gems, I had made over 1200 gold. Although I practice it all the time, I felt this was a prime example as to why you need to diversify your sales and not put all of your eggs in one basket. I know there is a lot of undercutting going on with many of the glyphs on my server, and the BOE market has all but stopped or at very least prices have dropped considerably. So being able to make gold in other avenues is extremely important.

A prime example of this type of diversification in the market place is the Walt Disney Company. What started out as an animation company has grown into one of the top entertainment brands in the business. Not just relying on films or animated movies. They branched into resorts, cruise lines, merchandising, Vacation Clubs, books, Broadway shows, iPad apps, you name it! But there focus remains on quality, family oriented entertainment. Which is similar to how my gold making enterprise works. No gold buying, no botting, no farmers, - just hard work, careful strategic spending, and honest sales. I've never been interested in scams which deceive people. Just give them what they want! While they may not look for your name when making their next purchase, the goal is - you want them to come back to the AH.

Seeing that 1200 gold (after AH cuts) in my bank made the pain of the 60 gold in returns feel a little better. Until next time - remember DIVERSIFY!

Happy Prospecting,

Fat Jack

November 2nd Blogging Carnival - What Mistakes Have You Learned From While Playing the Auction House???

For the November 2nd Blogging Carnival the theme is "What Mistakes Have You Learned from the Auction House?" This is my first trip to the carnival in my own booth, although I've been there several times as a guest / visitor and enjoyed all that the carnival has to offer.

Probably my biggest mistake to date when playing the Auction House in World of Warcraft has been following the advice I had found on several gold making blogs, and meandering over to the vendor in Dalaran to buy the BOE "Tome of Polymorph - Black Cat". This sounded like a great idea because:

1. there were none in the AH on my server,
2. I had a toon with exalted rep with the Kirin Tor ( so I'd be buying it at a discount),
3. and even if I didn't buy it for 2000 gold and sell it for 4000 as they suggested i should be able to make a few hundred gold off of a vendor item.

I'd always had success selling vendor items before to people who were too "lazy" or would just rather save time than save gold by running to the vendor themselves including selling the pets right there in Dalaran. So I figured I'd buy one and try it. Well that was more than a month and a half ago and to date it hasn't sold. If I spam it in trade chat, all of the "experts" take a break from discussing Chuck Norris' magical abilities to criticize me for trying to make a few gold off of a vendor item. I've tried lowering the price to a break even point. The greateast lesson which I hadn't taken into consideration was the amount of a deposit it requires to post the item which you get hit with every time, which you don't sell the item. So if it costs me 300 gold to post it for 24 hours today and it expires without selling, I'm plopping down another 300 for the next 24 hour period. My biggest problem is the only Mage I have is level 35... :(

Another lesson which I've learned is being very cautious in trying to control the markets on certain items. I can't stand to see glyphs posted for dirt cheap prices, so I have tried to buy out the cheap ones and try to sell for a little more to bring the market up a little, only to be undercut by the cheap skates (by a ridiculous amount) which leaves me with a stack of glyphs which usually don't sell that well or that quickly. However, I have had this work to my advantage in other markets. For instance selling titanium bars. I try to sell each bar for 18g bid and 19g buyout which seems like a good average price on my server. Occasionally people will post bars for 11g - 14g. Which I snatch up and flip for my standard price and have no problem making my gold on those and keeping the market for the bars I've transmuted up in the range I'd like to see it at.

I always like to find ways to a) learn from my mistakes and b) correct the mistake with as little pain to me as possible. I've thought of how to do this with the Polymorph Tome, and have even considered leveling the mage. (I do need an enchanter, lol.) I've also considered giving this to a Guildie or having a contest and giving it away. (Although if the winner doesn't have a Mage it won't do them much good either.)

Any Suggestions?

Happy Prospecting!
Fat Jack

What do you do wrong?

This was a question I had asked myself several times in relation to making gold in the game. When I stumbled on the Call to Auction podcast and Markco's Just My Two Copper blog site, I quickly realized some of the things I had been doing wrong.

1. For one thing I had always stayed with a gathering profession and a production profession which isn't necessarily wrong. Except that you can only gather so quickly in the game, and it is very time intensive. (However, not being able to gather your own mats does in a way put you at the mercy of others or the AH to obtain mats, which can make certain rare or unique items more difficult to find.) If you have two lucrative, well played production professions, it is much easier to increase your income. Along the same lines, I realized that I put too much focus on earning and retaining what I earned as opposed to reinvesting in the market. I realized by listening to what other people were doing, that spending hefty amounts on items you know will sell, or are grossly underpriced can pay HUGE dividends in terms of multiplying your investments. It's the old adage - it takes money to make money.

2. Another valuable thing I've learned is the importance of diversification in making gold in the game. I sell many different types of items on a daily basis. Some net me a regular income of a few gold per item, but sell with extreme consistency. This allows me to not rely on big ticket sales to keep moving forward. Some items I sell daily are Armor vellums 3, Runescrolls of Fortitude, Netherweave bags, Advanced mining and herbalism glove enchants, Titanium bars that were transmuted, and Primal Mights.

3. I would have to say the third basic key to my success is a better understanding and use of my add ons, auctioneer in particular. Allow automated price checking for items worthy of flipping, or more importantly mats to craft any of the items that I craft on a regular basis at the best prices possible. Besides that learn small areas of the market too. So that you aren't completely relying on an add on to figure out if somethings a good deal or not.

Once I was able to get past these three things I was able to make serious gold. Now I'm no where near gold capped, because I tend to spend alot of what i make. And since I started I've power leveled my Leatherworking to 450, and completely powerleveled Jewelcrafting and Tailoring from 0-450. At the present time I also have 2 Battered Hilts in the AH which I'm trying to flip for at least 2000-3000 gold profit (I bought them at a really good price.) One other very valuable lesson I've learned is when listening to podcasts and reading gold blogs, don't assume your server is the same and the same items will sell on your as on other servers. Again learn the market.

Happy Prospecting!
Fat Jack

Shared business opportunities - a partnership

Approximately 8 months ago, I entered into a business partnership in game with a long time guildie (and in my case blood relative) to try and combine our professions to make some extra gold. By the time we started out, neither one of us really had a great deal of trouble making gold individually but really we just wanted to see how much more we could make combined.

My partner likes to spend some of his in game time on gathering professions. When he used to play a hunter he was an avid skinner and fisherman. With the skinning feeding his leatherworking. And as we moved into WOTLK he began to roll a warrior so for him it was a natural progression to take up mining and blacksmithing. So he would supply our venture through his mining.

I, on the other hand, had recently dropped herbalism and was leveling tailoring on my priest for several reasons – the cloth gear i could use, the flying carpets, and bags, bags, bags… So I also had alchemy fully leveled and moved from an elixir/flask specialization to a transmute specialization. I would handle the transmuting of any gems he would pick up. Generally we both contributed different eternals needed for epic gem transmutes, and he would also supply saronite bars, which I would transmute into titanium bars and sell on a separate banker which I really just use for our joint business sales (just to make the sales cleaner for me to keep track of.)

I would post the auctions, and would keep us competitive and make sure we were not losing on sales. Around the same time I dumped skinning on my hunter to pick up jewelcrafting. So that I could take those transmuted gems and cut them and sell for an even higher profit. Because he was doing all the mining, I absorbed the deposit costs on anything that didn’t sell. I tried to even things out where ever I could.

He then purchased the pattern to make the Titanium Spikeguards plate bracers. I’d transmute the titanium for him, and donate a portion of the crusader orbs and we’d split the profit. Because the titanium transmute had no cooldown period like the 24 hour epic gems, I could do quite a bit at a time, and we’d have multiple procs per batch most times.

Not counting the profits from the bracers we have made over 17,000 gold each just from this little side venture. I’d say we sold about 10 of the Titanium Spikeguards to date bringing in about 16,000 gold from those alone (another 8,000 gold per person) I’ll admit the bracers we didn’t track profits on. But for the gems I did run a simple spreadsheet on the item, date sold, purchase price, subtracted the AH cut, and then came up with the sum total and cut it in half to display the cut we would each get. To make it easy I’d total up his cut every so many sales and when I sent him his gold, I would color in those boxes leaving only the white boxes as unpaid revenues.

We are both very casual players and as I said this was a side venture for us. It was more about working together than getting rich. Neither of us was hinging on any sales so that we could pay repair bills. But it was a fun little ongoing experiment and a way for more casual players who may not have time to level multiple toons and their professions to combine forces to make their time more profitable.

My best advise to someone interested in trying this is:

1. partner with someone you trust
2. be as honest and fair as you can with your partner
3. use some type of system to track your expenses and profits to make sure both are equally distributed
4. It was helpful to use some of the gems we got from mining to also level my JCing since I wasn't a miner (realizing that I would pay that back in the solo profits I'd give up on down the road. I also discussed this with my partner up front, and we agreed we'd make more if I had the JCer leveled up.)
   
5. have fun! Its a game and there's more to World of Warcraft than the Auction House and /trade channel.

Happy prospecting!