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2.19.2011

Poisoning the Well (For Profit)

Dirty deeds...
How many people do you think blindly follow what their auction addons tell them to put their items up for? How many players follow the price of things (like ore) closely enough to know if something will be profitable or not?

The answer to the above questions is me. I do both of those things. The question is how can we use the people's tendency to do the first to our advantage? Today I'm going to talk about a technique I call 'poisoning the well'.

What exactly is 'poisoning the well' and why would I want to do something that sounds so evil? I like paying 3.50g (or less) ea. for Obsidium Ore. How can work to keep a steady flow of cheap ore coming in?

Let's say I buy up all the ore I can below 4g ea. What would happen when the next person comes along to sell their ore via an addon? They would most likely list it for just under 4g ea. When I come along to buy again the price would still be right around 4g ea.

...and they're done dirt-cheap!
What if I added a few ore of my own (in singles, not stacks) to the AH at 3.29g ea. "Mr. Automatic Addon" comes along and lists his ore. He might just automatically undercut mine. Obsidium Ore for 3.28g ea? Yes please! Lower prices are good for me. (Not so good for the inattentive auto-seller.)

Think of things like this when buying mats. You don't even have to put up your own items. Even just leaving one stack of low priced ore on the AH after buying most of it will help keep prices down.

Now why do I call it 'poisoning the well'? Well I am trying to artificially make it so people selling ore make less money (so I can make more money). Sure the analogy might not be perfect but it sure does sounds dramatic!

Is my theory sound (or do I have a major flaw in my logic)? Let me know in the comments.

(As a side note if you're looking for a real example of poisoning the well I dumped almost my entire glyph stock on the AH today for 30g each. Glyphs are a great (and slow and monotonous) flow of income for those who are able to babysit the AH nearly constantly. I've been having such success with JC lately I really just want to clear out my glyph stock so I gain back a bit of my sanity. I'm sure glyphs for 30g will be quite a surprise to any scribes who don't have their TSM set up properly (since many were selling in the 100-200g range). I don't feel so bad about poisoning that well for a while.)

6 comments:

  1. Very well explained. You have it in your picture but not in writing, so I would add when you are doing this, make sure that you do it in stacks of one, not full stacks, and you can even undercut yourself to "poison" it a bit further (you might take a small loss if someone snatches your "poison", but it won't hit you too hard, just friend the guy that does, see when he logs out, or gets outta town, and do it again).

    You can also check TuJ for best time to do this (if you aren't watching as much as flux).

    Once again, great explaination.

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  2. Great post Flux!

    It took me a while to figure this out on my own.

    Basic premise is this. As you buy out all of the items, you are inflating your costs of future said items. So always leave a few up to be undercut. Or post some bait as Flux says to get new posters auto posting at low prices.

    Nice job.

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  3. Today, I checked the AH as usual for Pyrite, and saw this: http://imgur.com/cxEmK

    It also happened to be while I had this article open. So, to test it, I left it looking like this: http://imgur.com/xbGgV

    In the mean time, I'll be prospecting for quite some time...

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  4. And, wow, SUCCESS! http://imgur.com/6Azna

    Great tip fluxdada =)

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  5. @David "I love it when a plan comes together."

    (Also I'm jealous of the pyrite prices on your server!)

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  6. They are never so low! I nearly spit my coffee all over my monitor this morning! :D

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