WoW Millionaire: Supply vs. Demand

WoW Millionaire is a World of Warcraft gold guide which is designed to people who feel that their knowledge about getting gold isn't good enough. In WoW Millionaire, I'll give tips, auction house lessons and other things about WoW economy. You can usually find a new post every week of the WoW Millionaire guide. WoW Millionaire is provided free by wow-pro.com.

What is Supply and Demand actually?

I'm sure you've heard it thousand of times. When releating to WoW, supply is normally the stuff such as herbs, dust, leather and so, and demand is the player who buys it - the more buyers the more demand.

I've made this little drawing to show what I mean:

On the drawing the supply is just as high as the demand, which is not really normal on mostly servers. Mostly, either the supply or the demand is the highest. The higher demand the better for getting + profit of it.

We want the market to look like this. When the demand is higher than the supply, we can usually control the market because a small amount of people sells the specific item. When you control the market, you will also be able to raise the price = more profit.

Sadly, on most mature servers the supply is normally higher than the demand, but try turning it upside down, you might see the answer:
Buying. I did mentioned it shortly in my last post. When the supply is higher than the demand, the price will fall due to undercut. Here you might use the method for selling known as "Monopolist". The monopolists buys up all the auctions because they're very cheap, and resell them at the double price. This is the most simple way of cotrolling the market; Monopolize it. So when the supply is very high, it's usually time for buying (I'm also talking about buying reagents to a crafting professions, leveling up a profession, whatever).

Gaining Profit

If you wanna gain profit, you simple just have to follow a basic rule, but a lot of people doesn't do it. So here is the rule: Never craft, create, or buy any item which have a larger crafting/producing price than a selling price.

I give you an example on what I mean:
You have 500g. You want a crafted item, it costs 700g on Auction House, but if you buy the materials for the item, it will only cost 500g. The answer is clear; you go for the materials instead of the item. Let's see how it goes:

By that we "earned" 200g because we choosed "getting the materials" rather than "buying the item directly from AH" (of course we losed 500g because we bought the item, but in fact you saved 200g. Imagine that you resell the item instead ). Note that this can very well be the opposite on some servers (buying the item directly from AH will be better).

If the price was the selling price was the same as the crafting price you not lose, nor gain anything = 0 profit. That's pretty obvious what you buy then, you will not gain anything anyways.

That's all for now, stay tuned for the next week!

WoW Millionaire is a World of Warcraft gold guide which is designed to people who feel that their knowledge about getting gold isn't good enough. In WoW Millionaire, I'll give tips, auction house lessons and other things about WoW economy. You can usually find a new post every week of the WoW Millionaire guide. WoW Millionaire is provided free by wow-pro.com.