How to Price Items to Sell!

Marko's "Nothings Sells and Nobody Buys Anything" article got my attention, and I realised I hadn't posted here in months. So here is my 2 cents worth on how I price my farmed, and not very good, items to sell. Turnover is key to making gold in Diablo 3, not that single big ticket item you dream of finding while doing runs or flipping. This is the way to make gold while just playing the game with no real market knowledge required or niche markets to try and corner!

While doing runs the majority of what you find is frankly garbage - case in point the boots I did a search similar for in the AH:

They have all the key ingredients for a pair of non-set Monk or Demon Hunter boots, but obviously don't even come closeto the Billion+ ramges we see with an unfiltered Search.

My potential buyer is a newly dinged Monk that is probably someones alt. They aren't going to be spending 1,000,000,000 per item gearing this new character, they just want the basics to make a start on Inferno. Dex, Vit, All Res, and Movement Speed. Anyone who has played a Monk or Demon Hunter should understand the basic stat requirements for each class, without having to get into the depth of IAS or crit benchmarks and which is better Acrhon or CM Wizards for example, or whether a piece without IAS will be potentially better for certain popular Witch Doctor builds.

None of the are stats are particularly high for this item, but they are at least all there, so I expect to do significantly better than vendor or salvage, if I can get it sold FAST. So my price needs to be bottom dollar to sell quickly and not sit for a day and a half clogging up one of my 10 slots just to return to my stash.

Lets see what our buyer can get in the 1,000,000 and below price range:

Note I've sorted by Dexterity as this is the main factor I belive will affect my potential buyers choice of footwear in a given price range. Only include those stats that your potential buyer (the newly dinged monk whats/needs to enter inferno and maybe enable mp1-mp3. He is not looking for life regen, exp, gold/magic find, thorns etc. and all the other junk stats which while nice won't help him past the difficulty barriers ahead.

Ok, we are getting closer with all those 160ish dex boots, but mine are only 154 so let's try 500,000:

Ok, now we are in the ball bark, however there are 2 things to note here:
1: Our items stats are the minimum for the search so lets consider our search parameters, I'm lowering dex to 100 (30% lower) for the next search to see what I'm competing with while keeping the remaining stats the same.
2: I want to sell fast, so I need to significantly undercut the competition, which here 300,000 will get my buyer better boots all around.

So after all of about 1min I have my final search. I'm seeing boots with less Dex but the same or more Vit, AR, and Movement speed for 100,000g, 150,000g and 2 at 200,000g so I listed mine at 150,000g

I listed these right after logging in my newly freed up slots and they sold within the 2 hours I was playing and gathering more similar items that I used the same methods to list at the end of my play session.

I play on average 2 hours a night or less, about 3-4 nights a week, have not parted with any of my own money on the RMAH, although have turned over my battle net balance a couple times in gold and gear buying and selling to kit out my characters.

Feel free to contact me in game on Kurllkrum#1929. I am currently focusing on Hardcore leveling all five classes by "leapfrogging" which I intend to share with my readers in a subsequent post. Currently lvl 35-40 on each class with 2 tragic deaths of Demon Hunters!

What just happend?

So I took a few days off from playing the beta towards the end, feeling I had things pretty well planned out for release..and whammo! I check my reading list this morning and find the RMAH release has been postponed to a week after the game release and transaction and listing fees have been radically altered.

No matter. Part of the game is dealing with Blizzard changing the goal posts, so how will I be going about my business taking these changes into account?

Leveling up in the first week.
I don't intend to race to 60. This I foresee as being disastrous from a gold making point of view. The long standing threat of "YOU WILL DIE" hangs over us along with the repair bills, one of the biggest gold sinks in the game. One we as potential gold sellers need to avoid like the plague! SO what is the plan? Play though on normal, acquire gear, ideally with some magic find and main stat (Strenght since I'll be playing Barbarian). Then on completion of normal TURN AROUND and run through again!

Multiple Magic Find runs in Normal.
The chances of playing though Normal mode once and picking up a decent set of main stat and Magic Find gear in the first run are limited, however a second run though with the newly acquired set will be faster and yield more drops. This in turn allows for 2 things. Firstly a better set of stats prior to entry to Nightmare, and a large quantity of Subtle Essences from the stuff not worth anything to you or others. These can be used for crafting or selling directly on the gold AH to enable stockpiling of gold prior to the RMAH release. Rinse and repeat for Nightmare-Hell, and Hell-Inferno.

Farming the AH for salvageable items and gems.
With the stockpile of gold from re-runs I should be getting my artisans up to a level that corresponds to my characters. This will enable both salvaging and gem combining. Unlike WoW, where a single AH search with Auctioneer will allow you to gobble up every crafting item under a certain price threshold, AH farming in Diablo 3 will require more time investment to search multiple pages for salvageable items to bid, at the same time it is unlikely any one, or even combination of players will find and bid on every item, so there will always be items you can grab for a low cost, provided you are patient and set realistic thresholds. So before and after logging for the evening, or during breaks where you want to just grab a soda or a bite to eat browse and bid on everything you can salvage or gems you can combine. With luck you will also find an under priced item you can flip.

Crafting.
It is likely many players will be trying to craft something, sink a ton of gold into it, and be largely unimpressed with the resulting imperfect gear. Crafting is going to require investment of the gold, essences and teeth that have been farmed from multiple runs. A perfect or near perfect high DPS weapon or main stat + experience/magic/gold is going to be highly sought by those trying to win the 1-60 rat race, but I'll most likely wait to see what stats are selling. It doesn't have to be prefect, you can break even with 50% of the max stats available coming up on maybe 1 in 3 or 4 pieces as people will buy any improvement, but remember, without the ability to buy gold no-one will have the 500,000 gold you need to sell that prefect piece of armor for after it took 50 tries to get it.

After the first week:
Arbitrage
I'll have to rework my percentages somewhat, however come the end of that first week and the release of the RMAH there will be a turbulent time while the gold and item values stabilise.

Selling Gold
Once the RMAH is released we will see thousands of players who have horded 100's of thousands if not millions of gold with which to flood the AH almost instantly. Some players will be desperate at this point, knowing the RMAH is coming and those pants in the gold AH are 500,000 and they will be ready to buy some of that gold. But the long and short of it is that initial supply will outstrip demand so although prices will start high, maybe the $10 per thousand that has been steady on Beta, the undercutting will be intense, and within minutes the price could well be rock bottom, at a point where people stop listing. After a time though the bonce back and settle at a going rate. So there may be a chance to make a few bucks if you can determine the low point in that initial slump before the market recovers, and don't mind investing real money to buy that cheap gold.

Flipping between Aution Houses and Transaction Fees expalined

I've been playing around in beta trying to get a routine going with regards to flipping items.

The strategy is simple, buy something for 100g, sell it for 110g, profit...or is it? Those of you that know the system will immediately see the flaw in the above statement. To quote Rolf Harris"Gee...can you tell what it is yet?"....

So what I want to post today is some simple, yet very necessary information for would be flippers of mats/items on the Gold and Real Money AH.

At the time of writing the transaction fees on Beta are as follows:

Commodities/Gold on both AH's is a 15% fee paid by the Seller.
Items on RMAH $1:25 per item
Items on Gold AH 15%

What does this mean for those planning to play the flipping/salvaging game?

For every 100g you spend on an item you need to be selling for MINIMUM 115g just to break even. So bidding on items to Salvage to Subtle Essence at 150g requires you sell the resulting Essences for 173g. So if the going rate is any less than 180g it's probably just not worth the investment.

Now we also need to bear in mind that since we are likely to be bidding on these items the sales won;t complete for up to 24hours. We tie up our 150g bid in the system until we are out bid, or win at the end of the auction time period. So the price of essences now is irrelevant. We are banking on the price of Subtle Essences being greater than 180g in 24 hours or mores time.

True Flipping is can happen somewhat quicker of course, buying 100 subtle essences for 100g, to sell at a minimum of 100 x 1.15 to break even can be done in a matter of seconds, assuming the market is rising, but as Marko has shown the market is anything but stable, so the real game is going to be guessing when the best time to sell will be. Is it the second after the stack gets into your stash or at sometime down the road (eg. 6pm on a Friday evening when server populations are logging on to play and craft, rather than 2am on Saturday morning when the player base has dumped 200,000 Essences on the AH after a full evening of playing and farming.)

Flipping between the RMAH and Gold AH is going to be even riskier. The margins a lot tighter and transaction fees potentially crippling. When I buy an item or commodity from the RMAH I need to sell it for 1.15 times what I paid for it, and for 1.15times the amount of gold that I can sell for the amount I paid, plus 1.0329 times the amount paid to cover Paypal to cash out. Some may not be following me at this point so I'll explain this again: I will be paying transaction fee of 15% on selling the item on the Gold AH, another transaction fee of 15% selling the gold on the RMAH, and a further transaction fee for cashing out to Paypal of 2.9% plus 0.3%. So that $1.50 item needs to generate $2.05 (1.5x1.15x1.15x1.032) worth of gold. So if gold is worth $1 per 1000 I need to sell for at least 2050 gold, and to sell the gold for at least $1 per thousand to break even. If gold is like Beta and worth closer to $10 per Thousand the item needs to sell for 205 gold to break even. Subtle Essences are a good example of where this is currently workable in Beta. It is possible to buy Subtle Essences on Beta AH for under $1 each, making your threshold value to sell on gold AH 137gold, assuming a 10 to 1000 ratio, however as this drops on release to closer to $1 per thousand or lower we would need to be either buying our Essences for 10c each, or selling for 1370g each to profit from this revenue stream.

Real Money Auction House

So the real money auction house (RMAH) is exactly what it suggests, an auction house where people spend and use real money. They introduced it to remove the unsavory 3rd party trading that was going on in Diablo 2 through websites, some of which were out to steal peoples accounts. People have been argueing that they will bring a "pay-to-win" culture to the game, others argue it existed any way just through these 3rd party transactions and all Blizzard have done is secure it for the players so they don't get ripped off or hacked.

Which ever side of the fence you sit my side is simply - "Why not make a few extra bucks while I'm home playing house husband?" So I began setting things up and testing on the beta, and looking around at some other blogs/sites like Markos http://www.diablo3goldguide.net/ and http://www.diablo3artisans.com/