When I was in high school, I had this economics teacher who was Irish
and possibly bordering on crazy. It’s possible he knew what he was
talking about, but I’m not really sure because my three best friends
were in the class with me and we all sat in the back corner and
chattered and giggled about the things that high school girls chatter
and giggle about.
For some reason I’m not quite sure of – perhaps he was a little too
fresh off the boat, Mr. O’Connor let us sit together the whole term and
therefore, the (only) two things I remember about his class are 1) he
frequently barked to me things like (imagine a heavy Irish accent here)
“Courtney! Keep your cronies quiet, would you?” and 2) he gave me a
very angry, intense, spittle-flying, vein-popping lecture one morning
about using the door to the classroom instead of climbing in through
the second story window (another story for another day). And that’s
about the extent of my economical background, so you’ll forgive my very
late appreciation of the world of economics.
One of the things that held me back from trying and then enjoying World
of Warcraft was the economy-based system. I came from an MMO that had
nothing like loot or professions and that whole part of the game seemed
unnecessary and overwhelming to me; I just wanted to play the damn
game. “Give me something to stab!” was my motto and I was happy with
life just like that. Since my WoW birth however, my motto has changed.
I still like stabbing, sure – but now…now I also love money. (A little
voice in my head is trying to tell me something about the root of all
evil.) In this love of money, I’ve found a new understanding and
respect (and sometimes frustration) for the complexity of the economy.
Lesson 1: Commodities make it happen. I spent far, far too long selling my whites (and greens) to vendors. Just like the time in 4th grade when I ate my Dr. Pepper Lip Smackers,
I was old enough to know better when I was still doing it. But I wasn’t
really sure who could use what, and the auction house gave me tired
head, so I vendored quite a few things that I should have been using to
my advantage. As I’ve skilled up a profession or two, I’ve learned that
the white item drops like Solid Stone and Heavy Leather and Mageroyal
are the commodities in World of Warcraft that allow for all sorts of
cool things to be made. In-game professions fall into two categories:
commodities (gathering) and manufacturing (crafting). Gatherers seem to
make a decent amount of money on their goods, and crafters often have
to spend a lot of gold on the materials required to craft.
Lesson 2: Supply and Demand. This is a very basic
economics concept that is seen time and again in the WoW auction houses
and trade channels. Commodities easiest to get to and in plentiful
supply (Light Leather, Peacebloom, etc.) are cheap, cheap, cheap.
Things that take time and effort to find or create (Stonescale Eels,
Refined Deeprock Salt, etc.) are going to cost you. This is also where
the color of the weapon or armor name comes into importance. The
weapons and armor that are grey or white are pretty easy to come by and
therefore, aren’t going to make anyone a lot of money. But things that
are green, blue, and purple will bring in a decent to significant
amount of money depending on the level and usefulness to the buyer.
Lesson 3: Fluctuating Markets. I’d say this has got to
be the most frustrating part of the whole auction house experience for
me. Some days I’ll list all my crap and rake in the dough quickly
thereafter with only a few expired auctions. Other days, not so much.
There have been times I’ve had to repeatedly list stuff that I know people want, that I know
is useful as a material or a great weapon, but people aren’t buying.
And I’ve been on the other side of the coin…some days I’m more willing
to spend; I’m feeling good about my financial future because I
completed a bunch of quests and got the XP and gold to go with them, or
I just made a heap of gold off some valuable items. But other days,
I’ve recently dropped a bunch of cash on training or supplies or a
really sweet item that makes me agile and strong and healthy, and I’m
just not willing to spend another gold on anything – no matter
how much I need or want it. For crying out loud, I’ve been sitting on a
sweet pair of purple gloves that should be bringing in 40ish gold, but
after multiple listings, they still won’t sell. I’m holding on to them
because I’m just not ready to drop the price any lower and I’m counting
on the fluctuation to come back in my favor so I can sell them for what
I want.
The fluctuation of the market goes hand-in-hand with supply and
demand. If there’s a large supply of something you want to make money
off of, the prices will drop in competition with the other things out
there. If you were one of the first people listing your item, you’re
not likely going to sell it because others will list for lower and make
their money while the buyers are laughing at how high your item is
priced.
Lesson 4: Know Your Market/Buy Low, Sell High. Some
things take time to learn, like what the good prices are for both
buying and selling, and what the good times to list on your server may
be. For about two weeks I kept a spreadsheet of everything I bought and
sold, whether it was crafted or dropped, and what kind of profit I
made. There were some things I bought low and held on to until the
market turned, and ended up making very high percentage profits. How
did I know what was a low price? I cheat with Auctioneer.
I suppose with all this newfound economics knowledge, I should
brush up my resume and start making my way toward the Federal Reserve.
Maybe I’ll even hunt Mr. O’Connor down and have a little chit chat with
him about my views on the fluctuating market. He doesn’t have to know
I’m talking about WoW. In the mean time, I’ll settle for my auction
house toon buying and selling my stuff, counting my gold and basking in
my White-and-Nerdiness. (Don’t act like I’m the only one).
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