Thursday, May 26, 2011

750k Gold: New Milestone, New Observations

I'm a few days delinquent in publishing this post. I hit 750k on May 20 just before bed, during my last mail sweep of the evening. I meant to get this post out for Tuesday but life intervened. 

Some interesting trends have recently become obvious to me, and hopefully these observations will help you in your gold acquisition efforts.

Economy of Scale

As my gold base has grown my tolerance for risk has grown as well. I'm a cautious goblin, never risking more than I can comfortably lose. That means I take smaller risks and focus on highest rewards. Since my purse is heavier I have been able to make gentle forays into new markets and gradually take bigger risks. Thus, my gross earnings per day has increased.

When Cataclysm launched I had around 80k gold. I earned 250k on Valentine's Day, roughly 65 days post-Cataclysm, or 170k gold net in 60 days. 

I earned 500k on April 15, 61 days later, or 250k net in 61 days.

To hit 750k in 35 days means I roughly doubled my net gold per day. Also, I had about 5 days in that time period with virtually no gold activity--I logged and did my JC daily but that was it. I attribute this increase in net gold to several factors:
  • Launch of 4.1 content driving demand for PvP gear, Belt Buckles and gems
  • Beginning to use TSM for posting and canceling my auctions
  • Identifying and exploiting the most profitable items to sell
I'll touch on these factors a bit below.

A "Holy Shit" Moment

I review "My Sales" data just about every day. Doing so lets me see sales trends, item demands, etc. and helps me determine what to craft for the upcoming week. I purposefully do not look at the monthly view. Instead, the weekly view gives me a better look. What took place 3 weeks ago is not as important for tomorrow as what happened three days ago.

After I hit 750k I did a monthly view to see what my sales activity was for the month. 

In what can only be called a "holy shit" moment I was amazed at over 670k in sales for the month. 

Given that I buy all my materials from the AH (instead of farming) I should not have been surprised in the gross sales numbers. But I was. 

672k in gross sales with 250k in profit is a 37% profit margin. That may seem rather high to some folks but I shoot for 50% profit on everything I list. Looking further into the numbers I was able to identify some key factors that may have depressed my actual results.

  • I began building a storehouse of materials for 4.2, including Volatiles, Savage Leather, Blackened Dragonscales and Truegold
  • I purchased a number of items that didn't contribute to my net profit--a few pets, Engineering leveling materials, Leatherworking patterns and gear upgrades
  • Also, playing in the JC market actually cuts my profit margin somewhat as the competition is so fierce I have to be willing to sell cheaper than I would like just to make volume
I estimate that my stockpiling, gear and other expenditures ran me about 75k total. If you consider this an investment on future returns then this 10% or so of my gross sales would put my margins up near my 50% goal. 

Interesting Notes From My Sales

Looking at the total unit sales reveals some interesting tidbits.

Netherweave Bags were my biggest seller overall at 652 units. Over a month that's about 20 per day.  Medium and Rugged Leather were surprising to me in total units; not very profitable overall but they do help to bring in some daily revenue. Wool Cloth also surprised me by being so close to the top.

Embersilk Bags have been a great seller for me for a long time so I was not surprised in seeing 48k in total sales here, or seeing 178 units sold. The average sales price of 270g did surprise me. I target 325g but this market has become more competitive of late, driving prices down. I can create a bag for around 150g in cloth plus the Hypnotic Dust byproduct of my prospecting shuffle. If I sell for a minimum of 225g then I should make around 50g to 74g per bag. 

I was very surprised at the Ebonsteel Belt Buckles. I only started selling these a couple of weeks ago. I'm going to watch this activity for the next few days--I may have to ramp up production.

Best Seller List

I was floored by seeing that 3 of the top 5 gross sales leaders were gems. I have been spending so much time canceling and reposting gems that I must have lost sight of how profitable these sales can be. The Hurricane enchant being in the top 10 also surprised me. I expected to see Bloodied gear in the top 20 overall but Obsidium Executioner was a shocker. Two of the top 20 being Meta Gems was also expected--making the patterns I had to purchase a few weeks ago worth their price. I think I paid 5k apiece for them back in March.

Conclusions and Trend Analysis

There are a number of missing items from my list. No high end enchants like Power Torrent or Lavawalker, no DMF cards or trinkets and no BoE epics populate my list. There are no glyphs or Engineering items. It is more of a blue collar list--nothing fancy, just hard work.

Now that Maelstroms are down around 350g on most days I may try my hand with a few higher end chants here and there. I'm not sure how aggressive I will be with material costs of over 2k per chant, but if I can sell a 2k scroll for 2.5k, and do so consistently, the 500g profit would be worthwhile.

PvP gear is becoming very competitive. Diversity in markets only leads to turf wars on more fronts. I have three AH campers for gems, four campers for Enchants, two campers for BS items and two others for Tailoring items. The only way I have found to combat them is to just out post and out camp them. It is very time consuming and mentally numbing. 

Interestingly enough however, I have noticed at least two campers have deleted and re-rolled their AH toons, trying to get off my friends list I suppose. Another has changed his name to include alt characters but I snapped his new name up right away thanks to a handy addon. Another camper began posting only with the mobile AH utility so I couldn't tell when she was reposting. That was the trickiest one to deal with. 

Many of the competitors have faded away. Making it harder for them I guess made them find other markets. The ones that are left are the ones I think will be around for a while. 

Regardless of how long it takes me to get to 1M, I think I'm pretty well positioned for 4.2. I have a few hundred Blackened Dragonscales, a crap ton of Savage Leather, a few thousand Volatiles and I craft my Truegold and Dreamcloth every cooldown. 

In the meantime, Embersilk Bags, Belt Buckles and Gems seem to be the best moneymakers for a while. As the cost of Ore goes down so too does the buy point for Bloodied and Ornate gear so I'll be reducing my sell price on those, hopefully to move more inventory. I will also begin posting some glyphs this month to further diversify my income. 

See ya soon with a 1M Celebration post.


  1. Congrats Brother!

    With your Maelstroms' at that price, I can only imagine what profits you can hit with the "high" end Cata enchants. Unless your essences are extremely priced, most chants with 350 per maelstrom (that need one) will be around a grand in mats...not bad if you can profit 500-1K per.

    If you hit 4.2 as hard as you have recently, your sales will go through the roof! Just make sure you get those recipies before anyone else (the word is they are coming from dailies)

  2. Nice, I hit 1 million a couple of months ago and I'm up to about 1.7 million now. I never got into selling small items like gems, enchants, cloth and bags. I started with 10k in ICC and have just been buying and reselling BOE epic drops from the current raid tier. You may have to invest 10k+ per item, but most of the time they sell for a 5-10k profit each, sometimes 20k. I usually sell between 4 and 10 a week.

  3. Grats!

    I've found myself in a similar situation recently. At around 600k, a couple things happened to me. The first was that I had 2 of my alts ding 75, opening up a whole number of different markets. The second thing that happened was 4.2 patch notes were released and I decided to start stockpiling, which isn't something I usually like to do.

    So, I've gone from probably sitting at about 200K worth of auctions up and virtually nothing stockpiled to about 300-350K and probably about 100 - 150K worth of various stockpiles (mostly LW mats, Truegold and volatiles, just like you).

    It was bit unnerving at first - I think I spent about 20 - 30K a day for about 4 or 5 days in a row, but I also grabbed about 1500 - 2000 stacks of ore to get my JC operation up and running.

    It will be interesting to see your progress, since I'm also pushing for the cap with the 4.2 rush.

    Good Luck

  4. @ Alto: thanks for the comment. I decided to take the plunge on those chants--bought all the Maelstroms under 400g and put a couple of scrolls up just now. We will see how that works out.

    @ Kelestah: grats on your 1M! Amazing we have such different approaches and seem to have similar results, though your total is more impressive. I've tried my hand at BoEs before but never had much luck. I'm on a medium pop server tagged as "for new players" so I think the demand may suffer as a result

    @ Kathroman: gratz to you too. I'm sure you are well positioned for 4.2. 1500 stacks of ore is just a huge quantity. I buy up to 100 at a time but don't stockpile it. Elementium is fairly abundant at 20g to 25g per stack right now. I did buy 125 stacks today but just because it was so damn cheap.

  5. Gratz! Huge milestone. You'll hit the cap in no time.

    Buncha thoughts:

    I have MySales too, but barely ever look at it. Checking it for trends is a great idea.

    When you say you shoot for 50% profit you mean a 110 markup or so, right? To get gross margins to 50%?

    That is some serious AH PvP you get into there!

    I am in awe of all the other posters who talk of stockpiling hundreds / thousands of stacks.

    Great post!