Auction House Guide
The Auction House is the beating heart of the World of Warcraft economy. The gold-making difference between selling your loot to vendors and selling it to other players via the Auction House is huge. In fact, the general rule is: Sell all your loot at the Auction House rather than to vendors.
As a result, a solid understanding of how to use the Auction House is absolutely crucial to the success of any gold-making activity in World of Warcraft.
The Auction House is a world entirely of its own. People can spend hours on end here, looking for good offers and the right prices for the items they want to sell. There are many Addons specifically for trading at the Auction House, of which the Auctioneer is probably the most popular. Many of the most profitable gold strategies are based entirely on trading and can be done without ever leaving the Auction House (except for picking up your won items and profits at the nearest mailbox).
The key to success at the Auction House is buying low and selling high. That is obvious. What is not so obvious is how to figure out the ideal sell price of an item. The ideal sell price of an item optimizes the estimated auction profit and time spent on auctioning. This requires setting a price that is high enough to yield a good profit, yet low enough that another player will actually buy it before your transactional costs (and impatience) ruins everything.
But we are getting a bit ahead of ourselves. Let's break it down.
First off, what is profit? Profit is obviously the difference between net costs and net revenue. However, the net cost is not simply the cost of the items you buy. At the Auction House, you also have transactional costs. When putting up an item for sale, you pay a deposit fee equal to 15%, 30%, or 60% (for an auction duration of 12, 24, or 48 hours, respectively) of the vendor sell price (i.e. the amount of coin the vendor will pay you for the item). If your item doesn't sell, then you lose this deposit. If your item sells, then your get your deposit back, but has to pay an Auction House Cut. At a faction Auction House (i.e. Alliance or Horde) this cut is 5% of the sale price. At Neutral Auction Houses it is 15%.
In summary, the profit of a successful auction is: Sale Price - Buy Price - Auction House Cut - (Times unsold * Deposit Fee).
Hint #1: Always check the deposit fee of your items. Some items have a very high vendor price, resulting in huge deposit fee loses if they don't sell. In contrast, other items (e.g. Enchanting materials) have no vendor price and hence no deposit fee. Several Addons, including the ones mentioned below, can give you the vender price of any item, regardless of your location.
The formula for calculating auction profit hints that to increase profits we can:
Markets can be very different. The underlying reason is that the item demand and supply is unique to each market. Some markets are very similar, fx. the markets for Linen Cloth and Light Leather, because the mechanisms that determine demand and supply (such as the number of players online, the difficulty of farming the item, the professions that utilize the item, etc.) are similar.
Markets are typically categorized according to their size. High-volume markets, such as for Linen Cloth, tend to have lots of auctions and a rather stable price. In contrast, low-volume markets, such as for Felfury Gauntlets, have very few auctions (if any) and a very unstable price. Many markets fall in-between, being mid-volume markets, sharing some of the characteristics of both the high- and low-volume markets.
High-volume markets are the easiest to understand and operate in. It is usually quite easy to determine the ideal sale price (or at least, a good sale price). A simple rule is to put your price a little (i.e. 5% or just 1 copper) below the item at the bottom of the mass market. (This price is usually the price of the item at around the 25% volume fractile.)
Hint #2: When selling an item, put your sale price just below the mass-market price. This will greatly increase your chances of selling your item.
Low-volume markets are much harder to operate in. And therefore, often much more profitable (assuming you know what you are doing). The reason is that determining a sale price is much harder if there are no (or few) other prices to compare against. Actually, there are plenty of prices to compare against, namely the historical prices. Various AddOns, such as the Auctioneer AddOn (that can scan your Auction House regularly for price data) and the WoWEcon AddOn (that keeps a centralized price database updated by thousands of players), can be extremely useful in figuring out a reasonable price for an item in a low-volume market.
Hint #3: Get the Auctioneer Addon and/or WoWEcon Addon, and learn how to use them.
A final piece of advice: The best way to learn is to experiment yourself. It is highly recommended. From a (long-term) gold-making perspective, it is well-worth your time. And great fun too!
If there is any missing information, please email: [email protected]
<-Go Back
As a result, a solid understanding of how to use the Auction House is absolutely crucial to the success of any gold-making activity in World of Warcraft.
The Auction House is a world entirely of its own. People can spend hours on end here, looking for good offers and the right prices for the items they want to sell. There are many Addons specifically for trading at the Auction House, of which the Auctioneer is probably the most popular. Many of the most profitable gold strategies are based entirely on trading and can be done without ever leaving the Auction House (except for picking up your won items and profits at the nearest mailbox).
The key to success at the Auction House is buying low and selling high. That is obvious. What is not so obvious is how to figure out the ideal sell price of an item. The ideal sell price of an item optimizes the estimated auction profit and time spent on auctioning. This requires setting a price that is high enough to yield a good profit, yet low enough that another player will actually buy it before your transactional costs (and impatience) ruins everything.
But we are getting a bit ahead of ourselves. Let's break it down.
First off, what is profit? Profit is obviously the difference between net costs and net revenue. However, the net cost is not simply the cost of the items you buy. At the Auction House, you also have transactional costs. When putting up an item for sale, you pay a deposit fee equal to 15%, 30%, or 60% (for an auction duration of 12, 24, or 48 hours, respectively) of the vendor sell price (i.e. the amount of coin the vendor will pay you for the item). If your item doesn't sell, then you lose this deposit. If your item sells, then your get your deposit back, but has to pay an Auction House Cut. At a faction Auction House (i.e. Alliance or Horde) this cut is 5% of the sale price. At Neutral Auction Houses it is 15%.
In summary, the profit of a successful auction is: Sale Price - Buy Price - Auction House Cut - (Times unsold * Deposit Fee).
Hint #1: Always check the deposit fee of your items. Some items have a very high vendor price, resulting in huge deposit fee loses if they don't sell. In contrast, other items (e.g. Enchanting materials) have no vendor price and hence no deposit fee. Several Addons, including the ones mentioned below, can give you the vender price of any item, regardless of your location.
The formula for calculating auction profit hints that to increase profits we can:
- Increase the Sale Price
- Lower the Buy Price
- Try to sell the item the first time, so we won't lose any Deposit Fee(s).
Markets can be very different. The underlying reason is that the item demand and supply is unique to each market. Some markets are very similar, fx. the markets for Linen Cloth and Light Leather, because the mechanisms that determine demand and supply (such as the number of players online, the difficulty of farming the item, the professions that utilize the item, etc.) are similar.
Markets are typically categorized according to their size. High-volume markets, such as for Linen Cloth, tend to have lots of auctions and a rather stable price. In contrast, low-volume markets, such as for Felfury Gauntlets, have very few auctions (if any) and a very unstable price. Many markets fall in-between, being mid-volume markets, sharing some of the characteristics of both the high- and low-volume markets.
High-volume markets are the easiest to understand and operate in. It is usually quite easy to determine the ideal sale price (or at least, a good sale price). A simple rule is to put your price a little (i.e. 5% or just 1 copper) below the item at the bottom of the mass market. (This price is usually the price of the item at around the 25% volume fractile.)
Hint #2: When selling an item, put your sale price just below the mass-market price. This will greatly increase your chances of selling your item.
Low-volume markets are much harder to operate in. And therefore, often much more profitable (assuming you know what you are doing). The reason is that determining a sale price is much harder if there are no (or few) other prices to compare against. Actually, there are plenty of prices to compare against, namely the historical prices. Various AddOns, such as the Auctioneer AddOn (that can scan your Auction House regularly for price data) and the WoWEcon AddOn (that keeps a centralized price database updated by thousands of players), can be extremely useful in figuring out a reasonable price for an item in a low-volume market.
Hint #3: Get the Auctioneer Addon and/or WoWEcon Addon, and learn how to use them.
A final piece of advice: The best way to learn is to experiment yourself. It is highly recommended. From a (long-term) gold-making perspective, it is well-worth your time. And great fun too!
If there is any missing information, please email: [email protected]
<-Go Back
