So as you can guess, today we're going to talk about the magical relationship between quality, cost and time, in relation to business.
In the most simplest form these are the 3 quantifiers (or is it qualifiers? my grammer and spelling sux) that you consciously, or sometimes unconsciously, compare when making a purchasing decision. Quality refers to the quality level of a product or service. Time refers to how long or short it takes to access (buy) said product/service. And lastly cost is obviously how much gold/dollars/pesos its going to set you back.
The golden rule normally is, in most situations, pick any two. Since this is a wow gold blog lets have a look at some quick AH examples from the eyes of a buyer:
- Want a cut epic gem (high quality) and want it now (short access time)? Dont be surprised at the high cost.
- Want the latest purple BOE (high quality) but want it as cheap as possible (low cost)? It takes time to keep checking the AH and finally snatching one when the price is low enough (long access time).
- Lastly, need an enchant for a new chestpiece now (short access time) but can only afford something cheap (low cost)? +8 stats (low quality) is all you're going to be able to buy.
There are of course exceptions to these rules. Sometimes you can get epic gems cheap right now on the AH because the seller is not a pro goblin and needs the cash to splurge on the new weapon he's been drooling over for the last few days.
So what does this have to do with you the budding business goblin of the wow world? Simple.
The first rule of business club is: set a goal.
The second rule is: know yourself and your competition.
The third rule of business club is: know your target audience ie your customers.
The goblin that has 5 million gold on your server understands exactly how much to fine tune the above 3 variables for each of his products and services, to maximize his operating profit. Be that goblin! Win the AH for Critical!
The true goblin also understands how to manipulate the formula to maximize gold income.
ReplyDelete((All data below is from The Undermine Journal for this past week.))
For example, raid nights mean flasks are in high demand pre-raid. Shopping for the overflow, post-raid, as suppliers may look to dump their unsold inventory could lead to bargains.
Draconic Mind flasks sell for 115g to 175g on my server. The supply curve (think of a giant "V", spanning several days) goes from a high on Wednesdays with about 70 available for avg 125g each to 4 on Saturday night at 170g each to 74 for 120g on Sunday night.
The Sold Heat Map shows Friday night from 7-10 pm, 66 Draconic Mind flasks sold. Saturday from 7-10, 44 units sold. Average prices during that time were 135g to 170g.
Armed with this knowledge, the goblin will try to affect the "time" part of your equation by purchasing the oversupply of flasks for up to 140g each on Wednesdays (or other low price days).
This might mean he spends 9k gold on Wednesday (70 at around 130g each), holds the flasks, and sells them Friday and Saturday for around 15k gold (100 for avg 165g each).
6k gold profit for about 10 minutes of work--7 minutes research and 3 minutes buying and then re-listing the items.
Thus by controlling one of the three factors (time) the goblin can force others to buy on his terms.
Quality, Cost and Service. Time is part of service but there's a lot more to it than just time.
ReplyDeleteThe golden rule in business (real life) is you can get the best of any 2 of Quality, Cost and Service in the same deal but not all 3.
Of course in WoW terms you can pretty much ignore Quality since everything is the same quality regardless of who makes it. WoW Service is mostly about convenience, or how much Time it takes you to get what you want.
I knew Time didnt sound exactly quite right! Speed, accessibility were worse descriptors. Thanks Kammler and Mox.
ReplyDeleteWhile my epic gem is exactly the same as your epic gem, quality can still be applicable because you have distinctions between uncommon, rare and epic gems for example.
That's true but in most cases you're comparing apples to apples not oranges so there is no difference in quality. Your gems are the same quality as mine. The buyer isn't going to compare my carnelian to your queen's garnet, he's going to compare my carnelian to your carnelian and your garnet to my garnet.
ReplyDeleteWe both post all the same gems on the AH so quality is the same. There is no after sales service like warranty, maintenance or repair service so service (convenience) is the same.
All that really leaves is cost... Which is why undercutting wars are so prevalent when playing the auction.
Sure one can always come up with strawman arguments. You could argue a seller can bark his wares in trade to give better service. But so can the other player. Realistically speaking quality and service in WoW are virtually identical for all sellers, leaving just cost (or price) as the main way of differentiating between sellers.
Or to put it in very simple terns when someone wants say a Bold Inferno Ruby he doesn't search the AH for the highest quality Bold Inferno Ruby because they're all exactly the same quality.
ReplyDeleteHe doesn't search the for the Bold Inferno Ruby with the best service either because all auction sales have exactly the same service.
Nope, he just searches for the *cheapest Bold Inferno Ruby.
Mind you he might decide not to buy the cheapest because he doesn't like that seller but that's a whole different thing.
A mild disagreement with MoxNix.
ReplyDeleteWhere service does play a part is that you consistenly ensure that a market has stock for sale.
Eg. Darkmoon faire cards; feast fish. There are markets that can be left idle; creating unsatisfied customers. Sometimes customers grumble about paying to much compared to the alternatives; but it turns customers into competitors when they want to buy something and nothing is up.
And in regards to your PS Critical; once a week is fine; better than I am doing at the moment. But you wont get the reader count with weekly vs daily.
I disagree Mox. Buyers do compare bold carnelians, inferno rubies and queens garnets when deciding which quality of red strength gems to buy. After he/she decides on which quality, then he/she buys the cheapest available.
ReplyDeleteYou/me may not because we can afford to go with the highest quality at whatever cost, but most players we are not.
Foo: yea readers love a daily posting schedule. Too bad im fat and lazy now.
I never said they don't. I said they don't compare my carnelian with your garnet. They compare my garnet with your garnet and your carnelian with my carnelian.
ReplyDeleteThere is no difference in quality between my carnelian and your's. They're exactly the same, unlike in real life there is no difference in the quality of workmanship.
One thing I'd like to add to those three variables is the risk of the market you are aiming for. Risk could maybe be added as a time window where you have succeed in executing your formula of variables. Or maybe some numerical value added to a market, I don't know. But I do know that high speed risky business is different from steady easy going sales, like glyphs.
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