Wednesday, May 26, 2010

Auction House and Gold Generation for Achievements

I have little in the way of achievements to report just now. Almost all of my focus has been on getting a good cash-generating system in place so that I can simply follow a quick process every day and make solid profits.

My gold generation is coming along very well. I am currently working on an MBA in Finance and one of the most contentious issue is "Does the efficient market hypothesis hold true in the real world?" In other words, is it possible to make long-term, sustainable profits at a rate higher than the amount of risk you take. (roughly).

In this experiment, all I can say is a resounding "yes". People are lazy and will pay a lot for convenience it seems.

A quick status update: I have 3000g on my main (Deathspiral), 3 of every single enchanting scroll that is profitable on my alt poster (around 50 different scrolls, so 150 total) and an alt that is completely full of jewelcrafting mats. I also have lots of high-quality blues and epics on the AH. Oh, and I powerlevelled Jewelcrafting from 0-450 in an hour for about 4000g.

I started with less than 1000g a week ago and I'd say my net worth is right around 10,000g now, not including the new JC profession. Not bad for my first week.

This project to make gold has made me interesting in starting a side business in the real world. I'm going to use the same ideas: cheapest inputs possible and highly automated/computerized processes to build some websites. We'll see how that project goe in time.

Saturday, May 22, 2010

Grinding Argent Dawn, plus Netherwing and Jewelcrafting

I'm 14000/21000 argent dawn and I plan on getting exalted today (I'm running my wife's lowbie though UD strat).

I ditched mining and went jewelcrafting. I'm sitting at 421/450 util I get enough tokens to make a profitable meta cut and then I'll cap it out.

My enchanting scrolls auction system is going very well. Once I build up my cash reserves a little more, I should be at the point where I have two of every profitable enchanting scroll on the AH all of the time.

Doing all of this AH grinding has made me wonder if the skills are transferable to the real world. Because of WoW, I've recently started a web business with a heavy reliance on computerized automation. I think it could do very well, and the startup costs are almost nil. The simple act of planning out every step in a process and making it as efficient as possible (for AH gold generation) has really made me aware of places in the real world where similar strategies could work.

Monday, May 17, 2010

20 Reputations!

I picked up Cenarion Circle soon after Loremaster. I went from honored to exalted in one day with Scryers due to extremely luck in the auction house: 49 Arcane tomes were listed for 220g buyout!

I'm currently working on Netherwing dailies as well as any others I can fit in.

Friday, May 14, 2010

Getting set up for gold generation

I did some research last night and I realised that the enchanting market on my server is highly inefficient. Many good scrolls were missing entirely and the ones that _were_ there were selling for at least a 100% markup with very little competition.

Let's start with the basics. We make money when we sell an item for more than its cost. "Cost" is misunderstood however, since many people don't seem to understand that it should include opportunity cost as well as the actual gold cost of an item.

I'll start with a simple example: Let's say that I decide to sell a limited supply recipe from Winterspring such as the Healing Potion recipe (http://www.wowhead.com/item=13446/major-healing-potion). I would take a portal to org, run to the flightmaster, fly to winterspring, run to the vendor and pay 10s if there is an item in stock, then I'd recall and head to the AH to list it.

It would cost (I think) 1 silver to list (which I'd get back if it sells) and if I listed the recipe for 55s, I'd be making a 500% profit, right?

Wrong. This computation fails to take into account the oppertunity cost of my time. Instead of doing all of this running around to make 44silver profit (or even 5g profit - a a 5000% profit), I could have done a daily quest and picked up over 15 gold in rewards. Thus, we learn a key lesson that is useful for life as well as for the game: time is money.

I estimate that if I follow a good daily quest pattern and only hit those quests that are most profitable and closest together, I'll get around 8-10 done in an hour with an average profit of about 15g per quest. If I run 2 dungeons or farm or mine some stuff in the same amount of time, I could probably make a little more. Lets call the cost of my time somewhere around 150 to 200g an hour.

With the above "buy a healing potion recipie" plan, I'd gain 44 silver and lose 10 minutes of my time, i.e. 33.3gold. Indeed, if I sell the recipie for anything less than 35g or so, I'm losing money.

This leads to the following equation:

cost of goods sold (COGS) = cost of materials + time to craft ("labor cost") + time to list and relist + failed AH fees + 5% AH "cut" on final sale price

Now, profit = (sale price - COGS)*quantity sold

That's it. That's all there is to it. To increase profit, you have to either sell more (increase quantity), sell at a higher price or lower costs. Ideally, you would do all three.

I am going to start with COGS, since this is the variable that we can have the most control over. Clearly, we want to pay the lowest possible costs for our items. Since I am goign to start with enchanting scrolls, this means the following:

1. Enchanting scrolls have NO listing fee! This means they can be relisted forever without incurring any cost other than lost time.

2. Enchanting a scroll requires the appropriate vellum. Vellums come from inscription and can cost quite a lot if you buy them blank from the AH. Ideally you want to make these yourself, using an inscription alt or a main to mill the inks from the cheapest possible herb sources. To start, I am going to have a guild friend create huge stacks for me and I'll simply tip them well to do so.

3. Enchanting requires a bunch of shards, essences etc. There come from several sources: DEing your own gear, buying them from the AH, buying greens from the AH to disenchant or making greens yourself and disenchanting those. This is where things get interesting.

I am going to become a jewelcrafter and start to make my own items as a source of disechanting mats for scrolls.  Typically, the process goes as follows:

Obtain saronite->prospect the saronite into gems->make rings->DE the rings->make scrolls.

This is called the "saronite shuffle" and is widely known. Typically, you also sell the "side effects" such as blue gems (usually after sutting them for the most markup).

There is lots more to say, of course. For example, you need to find your cheapest input. Sometimes that's saronite, and sometimes it's just buying the gems directly from the AH. At other times, it's buying the shards and dusts and ignoring the whole shuffle. Every step must add value or it's not worth doing - you'd be better just buying the next step from the AH.

So, I am going to start by picking up 5000g from selling scrolls and doing dailies and then dump my mining for jewelcrafting and start doign the shuffle in earnest.

My strategy for selling scrolls is as follows:

I want to have 2 of every scroll that is either best or second best for each slot up on the AH all fo the time. I also want to have 2-3 of commonly used lower level scrolls like Crusader and Fiery and any twink scrolls I can find up as well.

I plan on having some "stock" to refill the scrolls that sell out. Probably around a total of 4-6 total scrolls of each type. (I don't want to flood the market by listing all of my scrolls at one time).

I plan to use the following listing strategy:

1. If there are no competitors, I plan on listing for 199% of my COGS. Why not more? Because this is a long-term strategy. I don't want to encourage competition to step in when they see insanely high profit margins. I'm going to make most of my money by increasing my quantity sold.

2. If there are only a few competitors, I am going to start out by undercutting them by 1 copper. This is just an experiment. I want to see if these people are AH campers (in which case, I'd expect to see them relist 1c below me fairly quickly) or if these people are "casuals" who don't watch the AH closely.

3. If I meet competition that undercuts me, I'm going to get more agressive in my price cutting. This is the Walmart strategy. I am going to be in this for the long haul, so I want to drive my competition out. Anything above my COGS is profit, so I'm happy to keep cutting and cutting until I hit the "floor" of my COGS. If my competition goes lower than this, I'll probably start buying their stock, since I know that selling for a price lower than cost means they will eventually run out of money. And remember, my plan is to have the lowest possible cost in the industry.

I plan on undercutting at reasonably meaningful levels - around 2.5% lower than the other persons price. This will mean the market will come down to my COGS in about 35 "cycles" of listing/relisting if I get into a price war.

Because this will probably annoy some people, I'm planning on posting my enchanting auctions from a level 1 "banker" alt. Once I get my JC levelled up, I'm going to do the same with a different alt for cut gems.

My cycle will be as follows:

morning:
1. Collect mail and scan AH.
2. Work out which auctions I need to craft more scrolls for.
3. Find the materials as cheaply as possible (probably via the "saronite shuffle" and craft the required scrolls to restock.
4. List at least 1 scroll in every category, following the rules above (199% of COGS if no competition, 1 copper lower if undown competition and 2.5% lower if known, active competition). List for 48 hours.

Lunch (optional)
5. Relist single scrolls that are not the lowest in their market.

Evening (6pm or so):
6. Relist single scrolls that are not the lowest in their market.

Late evening (10pm or so)
7. Look for cheapest deals on the AH for raw materials and pick them all up.

I'll obviously be using lots of addons to automate all of this.

Sound like a plan?

Thursday, May 13, 2010

Making gold for achievements.

Yesterday, I realised I needed around 60 thousand gold to buy all of the items required for my achievements. This means things like a Mechanohog (12,500+) and a mammoth (15,000 or so).

In addition to all of this, I need to pick up huge numbers of sunfury signets and other items that I really don't want to have to farm. I also want to dump mining for jewelcrafting since the stat bonuses ar emuch better.

Finally, when cataclysm comes out, I want to hit the profession caps as soon as possible. In short: I'm tired of being concerned about gold.

So, as part of this project, I'm going to pick up at least 100,000g before the end of the year.

Here are my current resources: I have about 650g in the bank and a few hundred gold in auctions. I have 450 enchanting and 450 mining. I have solid PVP and PVE egar sets. That's about it.

I'm going to go through all my bags and my bank and sell off everything that I don't need and then I'll get started on my plan.

Mostly, I think I need the following:

1. I need to set up Postal, Auctioneer and Quick Auctions 2. I plan on making my gold from the AH and to do this, I need to be able to work efficiently. As a software developer in real life, I always like to make the computer do the work, so I don't have to.

2. I need an alliance AH mule and a Horde AH mule, plus some easy ways to move items between characters. Since you can't buy your own auctions, I'll need to ask my wife to do the alliance side until I can get set up with a second account.

3. I need some data. I think I have a good idea of the markets and how they work but I'll need to do more research. One thing I noticed when going for the "75 Pets" achievements is that people are happy to pay insane markups for pets so they don't have to get them themselves.

4. I need markets. For now, I want to be in the enchanting scrolls market since very few people seem to post these regularly for some weird reason, and there is great profit to be made right now. I also plan on dealing with pets. Eventually, I'll level Jewelcrafting and get into the whole prospect->craft->disenchant->make scrolls cycle.

I'll get this stuff set up tonight and I'll post today or tomorrow on how it all goes.

Monday, May 10, 2010

Loremaster!

Finally!

I'm tired, so a  full writeup will have to wait until tomorrow, but I finally got the damn thing!

Saturday, May 8, 2010

3000 Quests complete!

It's all coming together today :)

I found a missing quest chain in Feralas thanks to Everyquest that pushed me over the 3000 limit. Loremaster is less than 20 away now!

The Barrens had a lot of singles from mob drops as well.

Childrens Week!

Finally.

The PVP achievements were actually suprisingly easy - I one-shot all of them. The biggest problem was simply getting AB to pop. I've heard that simply doing randoms is better.

Childrens week is simple, except...


All I need for Childrens Week is a single AB to pop and to cap a flag. This would seem easy, except... 3+ hours and still no AB.

Wednesday, May 5, 2010

The Explorer

I finally picked up World Explorer.

Still working on Loremaster and Childrens Week - I've only had an hour or so in the past week to do any of this due to RL pressures.

Soon!

Monday, May 3, 2010

Definitely NOT Loremaster

Doubtless, you'll notice a distinct lack of Loremaster screenshots today.

I have completed exactly ONE quest since I last posted. I didn't play at all over the weekend as we had some friends staying from Friday until late on Sunday.

I woke up this morning, intending to at least put a dent in the list only to spend my time doing arena with my 2's partner instead.

I'll probably do Childrens Week tonight (seems fairly easy) and I have a goal of getting 25 quests completed for Loremaster as well. Hopefully I'll finish soon.

I'm also going to start on my rep grind, with Ogrila and the Skylords as my first targets. (I need 5 daily quests with my orphan out for Childrens Week anyway...)

Finally, my hope is that Chldrens Week will help my rep a little as well. According to Joshua "I'm sure you've got to do it anyways, but childrens week give a bit of lower city rep, and I believe oracle rep too."

Thanks for the heads up!

Saturday, May 1, 2010

The only person to beat Bejeweled 2

http://www.gamesradar.com/pc/bejeweled-2-deluxe/news/opinion-man-beats-bejeweled-2-after-three-years-was-it-worth-it/a-2010043014175972070/g-2005120714414257238769

And I thought beating WoW was tough... This guy beat Bejeweled 2 after 3 years of playing. He got so far that his score reset itself.

I like the mention of Little Gray in the article too: "It's an achievement, certainly, but we do have to wonder where you draw a line between impressive and worrying. Leyde isn't the only man to sacrifice hours of his life in order to accomplish in-game feats that would make weaker men tremble. A few months ago, Taiwanese World of Warcraft player "Little Gray" made headlines by "beating" Blizzard's popular MMO, collecting 986 Achievements to officially beat WoW before the next expansion.



In order to beat it, Little Gray killed 390,895 creatures, dealt 7,255,538,878 points of damage, completed 5,906 quests, raided 405 dungeons and hugged 11 players. We think he had sex zero times."