Gold Capped: Cross-faction arbitrage
Want to get Gold Capped? This column shows you how. Join author Basil "Euripides" Berntsen, also of outdps.com, the Hunting Party podcast and the Call to Auction podcast.
Each server has two markets. Two economies, two sets of prices and two mostly isolated groups of players. The neutral auction house (conveniently located about as far from civilization as you can get in Gadgetzan, Booty Bay and Everlook) is the only place where Alliance and Horde characters can trade with each other, and this auction house has a much steeper cost of doing business. The deposit and AH cut are both three times the price as the normal faction AH.
Needless to say, the central location and competitive fees of the neutral auction house lead to most business' being done on the faction AH. So what purpose does this place serve? An intelligent arbitrageur can use it to transfer goods and money between factions for personal profit.
Identify your market
First, let's talk about the opportunity. Now that all realms (including PvP) allow players to create characters on both factions, go create an alt on your opposing faction, run it into the closest city, and scan the auction house. You will want to look into a variety of markets -- here's a list you can use for inspiration:
Northrend farmables (ore, herbs, leather, eternals, enchanting mats, cloth)
Old-world farmables
Finished goods (raiding consumables, permanent gear enhancements, cut and uncut gems, enchant scrolls)
Vanity pets, especially faction specific ones
Gear (epic, twink and leveling)
Rare recipes
I'd suggest that you start with markets you already know. If you can find cheaper mats for something you already make and sell, that's an easy decision. If you are branching out to markets you don't normally involve yourself in, be aware that it can be a real hassle to move goods cross-faction, so focus on the most profitable opportunities.
Let's say for our example that you discover that there's a massive price difference between the Horde and Alliance price of Titanium Ore, and you want to buy them on the Horde AH and sell them (or use them) on the Alliance side.
Moving goods
The process for getting your stuff over the faction barrier is fairly simple in theory. You need a friend (or a second account). In our example, you would list your ore for sale with your Horde alt on the neutral AH, have your friend's Alliance character buy it and then have your friend trade (or mail) it back to your Alliance toon.
The complications come in when trying to reduce the AH cut. That 15% can turn a massively profitable trade into a somewhat profitable one -- and you still have to pay the 5% on your faction's auction house. The only way to get around this is to mess with the amount you sell your goods for when you're faction-transferring them. In our case, if instead of listing it for something close to market value, we list our stacks of ore for 1s, the 15% AH cut would be minimal.
The problem is that there's a level 1 Troll in the Booty Bay neutral AH named "Ĝōţčĥŷâń00β" who is refreshing his view every few seconds and sniper-buying any ridiculously good deals he sees as fast or faster than your friend can. Who knows? He may be botting. When this happens to me, they seem to be able to buyout faster than should be possible. I know that according to the terms of service, addons are supposed to allow one purchase per hardware event. Maybe he's just got a really low latency. However he does this, we run the risk of losing all our titanium!
Here's the best solution to snipers I've come up with. It's a multi-tier approach:
List a single Cobalt Ore or something for one copper. This is your canary auction.
Never have more than one auction up for sale at a time.
As soon as a sniper makes his presence felt (by buying your canary auction or getting lucky and grabbing something you actually care about), stop everything. Cancel your auction if you can and decide what to do next.
If you have a friend helping you and you don't want to reschedule, start putting your product up for some sizable fraction of its value. This may deter the sniper or fall outside of the botting algorithm's threshold.
If you have your own second account and no scheduling issues, just open a ticket complaining about a botter and do something else for a few hours.
If this clearly is a botter, see whether they set their algorithm up stupidly and will buy anything listed at 1 copper. I once sold 4,000 arrows individually for 40 silver total. It cost me 20 silver at the vendor, and my client had to spend upwards of an hour clearing them from his mail.
If you lose less than 15% of your stock to snipers this way, you're spending less than it would cost to take the no-risk approach.
Moving money can be done similarly. If you need to send seed cash to your opposite faction alt, you can list something on the neutral AH for the amount you need and then arrange for a friend to buy it (with money you've given them). This will (again) cost you 15%. Alternately, you can send items the way I outlined above and sell those to get starter cash. Once you have a float on both sides, you should be able to arrange it so you're always transferring items instead of cash over the neutral AH, and then your only cost is snipers and time.
Getting there
Assuming you're starting this with no cross-faction alts, you're going to need to find a way of getting a level 1 to a neutral AH. Here's the easiest way I know:
Horde Getting a Horde alt to a neutral AH is easy. Start an orc or troll, and from the starting area, run along the west wall until you find a place where you can jump down into the river to the west. From there, you'll probably aggro a crab and die, and you will be able to spirit res in Ratchet. Catch the boat to Booty Bay, and you're all set.
Alliance Unfortunately, there's no shortcut that I know of for this one. Create a human, run down through Westfall, and then corpse run your way through Stranglethorn Vale to Booty Bay.
Being an auctioneer is like being able to print money (or gold, as it were). Wait, that doesn't make sense ... You can print on gold, but you can't print gold. That would be closer to transmutation? I can transmute titanium, but that's only worth it if the price of saronite is low enough to justify the time spent making it. I need some sort of analogy here. ... Whatever, I'll figure it out later. Making gold? Every week, Gold Capped will teach you the tricks of the trade, from setting up your auction addons and user interface, to cross faction arbitrage, to learning how to use your trade skills.
