Gold Capped: Ask an auctioneer -- time is money

This week's Gold Capped (from Basil "Euripides" Berntsen) is brought to you by the letter "s." Shortly followed by the letters "t," "e," "a" and "k." I'm in Texas on day job business, and nobody -- I'll tell you what, nobody -- does steak as well as Texas. The barbeque here is also pretty darn good. Mmm, meat. Oh yeah, and it's like a bajillion degrees out all the time. It's so hot that the wind doesn't cool you down; it makes you hotter! Want to make money on the auction house? For the inside line on crafting for disenchanting, transmutation, cross-faction arbitrage and more, check in every Wednesday. Also, feel free to email Basil any comments, questions or hate mail!

I swear on everything that's good and just in the world that I will eventually dig myself out from under these emails. If you ever stop sending them, that is. So if I don't get back to you in a few weeks or so, try emailing me on my podcast email and see if you have better luck there.

Luca asks:

Luca, I have two pieces of advice for you. First, learn how and when to use automation. Auctioneer's Snatch tool can be a huge source of lost profits and wasted time if you use it incorrectly or don't keep it up to date. This is true of any automation, but especially true when it comes to buying. Selling has an undo button of sorts, as you can cancel an auction. Buying is a one-way ticket. Still, so long as you make more good moves than bad with automation, you're hopefully still in the black. Keep your snatch prices up to date and always think before clicking "buy" when it makes a suggestion.

Secondly, you have two options for your unwanted and overpriced bars. You can either undercut and sell them fast, liberating money you can use to make profits elsewhere, or if time rather than investment capital is your limiting factor, you can "overcut" and wait for someone to buy out all the reasonably priced bronze. The overcutting method will take longer and has an inherently higher risk of returned auctions but can potentially get you your money back. Check the Undermine Journal (or Market Watcher, if the Undermine Journal isn't yet available for your realm) to see when the demand is typically highest, and limit your auctions for those times.

Speaking of limiting factors, I would suggest that taking a good look at your business and determine what it is. Money, time, profession availability and inventory space are all common ones. My business is limited mostly by time but also by inventory space and professions. I don't have the time to do everything I'm capable of, I take more time crafting than I would if I had less inventory (longer AFK stretches means more efficient crafting), and I don't have the time to level another character to get the last two maxed-out profession slots I want. I know my limitations and work around them.

My old pal Kheldul writes:

I'm betting that the inflation will be about as much as we saw in the last expansion launch. You asked the right question about dailies; the majority of money coming into the economy is from quest rewards and monster loot, and the only place money leaves the economy is gold sinks. I am fairly certain that quests will reward more money and that more loot will drop, and I haven't heard of any significant increases to the gold sinks. Still, 70k will be out of reach of almost the same percent of players as it is now. The difference will be that your buyers have more money, so you'll find it easier to make gold on the AH.

Bill asks:

It's not a waste, but it's still a risk. When it works, it's like printing money, but when it doesn't work, you've put hours of effort and work into earning negative profits. That's a hard pill to swallow, and some people can't take the risk. The upside is that you can scale this business very easily; the more money you have, the more profits you can make, until you reach an equilibrium where you have evened out the supply across the week.

It's helpful to understand what you're really doing when you try to flip for a profit like this: You're basically acting as a market maker or broker. You assume the risk of unsold inventory in exchange for the potential of a profit without a large time investment. It's similar to ticket scalpers outside hockey games. The key difference is that while the NHL tries to prevent scalpers because there are a fixed number of seats for sale, your suppliers won't even notice what you're doing and will simply manufacture more next week to meet the "increased demand." The process of flipping has a net effect of depressing prices.

Still, there's money to be made if you can stomach the risk and occasional losses. It's a real thrill when it works! Still, don't put all your eggs in this basket. You should always try to have a couple of reliable markets that you can count on to keep you afloat when you make a bad move, so level that profession!

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 basil@wow.com.