Step 1 of our Patch 4.2 Gold Strategy Guide discusses the rules of supply and demand as they apply to the World of Warcraft economy, and how to scope out a potential demand in the future. Click ahead for Part 2: Build Your Stock and Part 3: Know the Market.
Now that you’ve decided you want to capitalize on the gold rush of 4.2, it’s time to start devising a plan. As we discussed in the Introduction, there are 3 key components to creating and executing a gold strategy for a new content patch: Identify A Need, Build Your Stock, and Anticipate Demand.
Identify A Need
If you took an Economics class in high school or college, you probably had one concept drilled into your head fairly well: Supply and Demand. The basic rule of this states that when demand is high for an item – when there is a need for the item – supply will be inversely affected, meaning there’s less on the market at any given time.
But what does this mean in World of Warcraft?
Well, we’re going to be working with one example item (Volatile Fire) over the course of this series, so let’s have a look at that as it exists right now. Wowhead is reporting the average Buyout Price of Volatile Fire is about 15g. This is data compiled from different servers and factions, so your mileage will vary, but it is a good starting point.
If I take a look at my server right now, the buyout price ranges from 20g-25g, which according to Auctioneer is above the market average. There’s also only 10 of them up, but a large quantity have sold over the last week. From this data I can infer that Volatile Fire is currently in demand. Not phenomenal “Never on the market for more than 30 minutes” demand, but demand nonetheless.
That’s all well and good, but it only shows that people need it right now. I’m not planning to sell it right now. I’m planning to sell it a week from now when demand skyrockets. But how do I know demand will skyrocket? It’s an educated guess, but it’s a solid one. It functions off of an assumed demand based on the following:
1. There are tons of new recipes that require it in 4.2.
2. The hardcore crowd will want those items crafted ASAP.
New crafted armor like Clutches of Evil require 40 Volatile Fire each. This is pretty standard, and because these items are crafted with Chaos Orbs they’ll be desired as soon as the crafters acquire plans from the gated Firelands dailies.
Yep, gated crafting plans. This is a situation that’s been replayed over and over, most recently with the ammo recipes in Icecrown Citadel. This means the largest demand won’t happen for a bit, but there will still be a demand when 4.2 releases. As such, it’s a great time to test the market and continue developing your plan.
Tycoon Tip #1: You can determine supply and demand for a particular item by using the Competition and Trend columns in Tycoon. Competition is how much of an item is currently on the market: In other words, the current Supply. Trend is how often the item is reaching its Buyout over the given scan period, or Demand. Use these graphs the first week of 4.2 to stay ahead of the market!
Continue to Part 2: Build Your Stock
June 17, 2011
Gold