Tuesday, February 15, 2011

An Auction House Failure Story - A Personal Experience

I'm sure you have heard the phrase, "The best laid plans of mice and men."  Yeah, I thought my plan to make buttloads of gold was genius.  Let me tell you how this little escapade cost me about 3k gold.

It was the Tuesday of 4.0.6.  I was personally excited because the Chaotic Shadowspirit Diamond was finally being fixed to make it actually usable. What I thought would occur is that the demand for this meta would be initially high, at least until the new meta gem recipes hit the market.  I decided on the day that the patch hit as soon as the servers opened up, I would get on my remote AH app on my phone, buy out all the Chaotics and relist them for about 10x their initial price.  When I bought them, there were about 15 for about 120 gold a piece.  I bought all of them and relisted them for approximately 1000 gold a piece. 

No sooner than 15 minutes after reposting all these gems, someone comes in and puts 3 up for 400 gold a piece.  It amazed me that I was undercut that quickly.  So I did the only reasonable thing, I bought him out.  I thought I still would make 600 gold profit and there is no way he could have anymore.

So help me God, no more than 5 minutes later, the same player posted 3 more at the same price.  In addition, someone had already came in and undercut him even further.  At this point, I decided to pull about 5 of my original auctions to try to undercut them.  I thought with all the Chaotics I bought at 120 gold, I still would make triple profit off of them.

Again, no more than 5 minutes from there, somebody undercut me again. (I did sell one of them though before I was undercut again.)  At this point, I decided that I would leave my gems up until they expired.  The way I thought it would work out would be that as players logged on, they would be changing their metas out to the Chaotics and I would still make profit at the rate people bought them.  However, here is the catch.  A lot of people preferred to hold on to their current meta gems until the new pattern dropped.  Why spend 350 gold to just turn around and buy one of the new meta gems when they become available?

So, where am I today?  Starting off, I have 3k gold less on my bank character, though I have made some of it back from other sales.  I also have approximately 25 Chaotic meta gems that I don't know if they are going to sell or not.  Also, the lowest prices for Chaotics on my server are back to the 120 gold per gem, so even if they sell, I will be making even money back. 

So let this be a lesson.  Never overestimate a market after a patch, especially if there is going to be something that will replace what you are trying to control anyway.  If I would have posted them for about 300 gold a piece, I would have turned a profit and likely have had less loss.  Also, be careful when trying to predict player's expectations.  They may not be thinking the way you are thinking. 

1 comment:

Anonymous said...

Hey dude, have you given out them prizes yet? for the banners :D