First up, you need the schematics
Unless you happened to have them already, you will probably need to go farm the schematics. These were formerly unfarmable and tied to one of the two branches of engineering, but now both goblin and gnomish engineers can get them as a random drop.
- Schematic: Lil' Smokey is dropped by the Arcane Nullifier X-21, among other mobs. The drop rate in Wowhead says 2%, however that includes all the non-engineers who kill these and don't see the schematic. In reality, it should be much much higher.
- Schematic: Pet Bombling is dropped by Mekgineer Thermaplugg, and again, while it shows a low drop rate, that includes all the non-engineers who kill him and can't see the drop. I read comments saying that it's a very high drop rate for engineers. If you kill him, are eligible to get the schematic, and don't see this, let me know in the comments.
In general, the stuff you will need will be in short supply, so you should be prepared to farm or hire a lower level character to farm it for you. Whenever you are farming for something, there's a trick you can use to determine the most effective strategy. Sort the "dropped by" tab on Wowhead.com by "Count" instead of the percent chance. This will indicate where most of the item you're looking at are coming into the market from, and you can either farm them yourself, or identify the people killing the mobs you want, and try to arrange a direct purchase off them.Making Lil' Smokey
You will require
the following mats:Making the Pet Bombling
You will require
the following mats:Pricing
There are two barriers to making these. Some of the mats are really low supply and not easily farmable. Truesilver, for example. The other barrier is that even the "farmable" mats are often not typically farmed on many servers. You might have to either farm them yourself, or hire a lower level character to farm it for you. Either way, this barrier to entry provides you the opportunity to make sure your margins support your time costs. If making these takes a lot of time and generates a thin margin, you're better off doing whatever you currently do for money, and so are your competitors.
When you price these on the auction house, calculate your materials cost, and then calculate your time cost by figuring out how much you could have made doing something else. If you have few competitors, try listing this pet for the same markup you see opposite faction pets going for.
If your competitors undercut you, you have a choice. You can undercut them back, you can ignore them, or you can buy them out.
- Undercutting them back means you will potentially run out of stock faster. If you managed to find a lot of the rare mats for this on the AH, remember that should you increase your production too much, you risk having to farm the mats yourself or hire someone. This will increase your cost.
- Ignoring your competitors means you will keep your margins, but lose out on some potential sales. Generally, since these things are such a pain in the bum to make, I'd suggest this alternative.
- Buying out a competitor is risky-- if they charge you more than you made yours for, you're essentially giving them money. In most markets, this is just inviting them to mass-produce at a profit and undercut you with a buttload of product. Due to the fact that each of these pets depletes a rarely farmed material, however, you might just drive their cost up past the point where you can be profitably undercut. This will be a temporary situation, however, so you'd better hope you sell all your inventory before they find a way to increase the farming of the "choke point" mats.
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? Check out Gold Capped, Time Is Money, and Insider Trader!