Snowmane goes on to give me the prices for herbs and consumables made from those herbs, and if I do the math, it appears that nothing is profitable. Here's the thing, Snow: It appears that you're only looking at a few of the ways an alchemist can make money. Potions and flasks may sell quickly, but you're right that they have an extremely low margin. If you want to make money that way, you need to get better at buying low and get better at selling high. The average price of materials is going to include times when someone dumps an entire week's worth of farming on the AH for a low price, and that low point is the only time you should be accumulating mats.
On the sell side, check out my post on market timing. Every market has demand cycles, and the consumables market has especially noticeable ones. Raid nights are your target nights, and you should try overcutting those nights to profit if your cheaper competitors run out of stock.
That said, selling consumables is only a small part of the money an alchemist can make. If you can transmute titanium profitably, you can make tons of money mostly AFK. Also, if you have a transmute specialization for the 20 percent yield bonus, you should seriously consider transmuting an epic gem a day, even if you have to sell it raw.
Both of these options (consumable commodities and transmutes) have one thing in common: persistence. You can't just splash into the market and expect an immediately noticeable profit; you have to do your tasks every day and make sure that your stock is always listed for sale. The other thing that I'd suggest is measure your success by profits earned, rather than gold in pocket. Gold evaporates out of your pockets, and even if you're making a decent living with alchemy, it may seem like you're pushing a boulder up a hill if you never seem to break 2,000g because you're constantly spending your earnings on leveling another profession.
I started to sell gems profitably on the AH, but soon this person came and started to undercut constantly by 1 copper. At first, I thought this was just normal, but now I see him online 24/7 all day, every day, and as soon as I put something out, he undercuts it straight away. I don't have the will to fight with this guy, as he is always online and undercutting. What should I do? I tried to talk to him but he doesn't respond. I used to sell lots of gems each day, but now I'm lucky if I get to sell 1. One day I even tried to undercut him all the time but in the end he put them out for like 30g when they are worth 100g. So how should I handle this?
You're stuck in a situation that's hard to get out of, Simon. This actually came up recently on a Call to Auction
podcast (episode 14, I think): Some people either have no life, or are botting on the auction house. I'm assuming that since he didn't answer your tells, he's actually AFK running a script. Aside from reporting him to Blizzard, there's nothing you can do but trust that eventually, whatever trick he's using to break the rules will be plugged up. I'd suggest trying to diversify into other markets if you want a low-risk method to continue making profits.
Of course, you didn't expect me to stick with the low-risk option, did you? Here's what I think: He has a lot of stock and clearly is willing to move it at a very low price. Fortunately, he can't keep undercutting below the cost of the raw mats forever. You can do two things to attack his bottom line. First, if you really can get him to post a 100g gem for 30g by posting one for 30.0001g, then post that single auction, and keep buying his undercuts until he runs out of stock. He's an idiot for not programming a minimum price into whatever cheating program he's using, so take advantage of this, and once he runs out, get to work selling his 30g gems for 90g each!
Second, if he seems to have endless supply, consider also attacking his supply. You need deep pockets for this to work, but if you buy enough of the raw materials over time while listing a portion of your purchased items for higher than market price, you'll raise the market price. This means that he either has to pay more at the AH, or that his farmers may think twice before sending him their hard-earned mats c.o.d. at the same cost he used to pay. Honestly, this is not always going to work, and you may be stuck with a large amount of useless gems when Cataclysm
hits. It's probably not a bad idea to buy out any underpriced mats you find, but that's always true.
Maximize your profits with more advice from Gold Capped, plus the author's Call to Auction podcast. Do you have questions about selling, reselling and building your financial empire on the auction house? Basil is now taking questions for a special series, "Ask an auctioneer," at firstname.lastname@example.org.