07-21-2010, 05:02 AM
(07-19-2010, 06:48 PM)--Pete Wrote: Hi,
Cornering the market is mostly a myth. Pretty much any material that is useful can be farmed in huge amounts. If some fool tried to do what you suggest, people would flood the market with farmed product at 3/4 his price. Then he'd either have to buy out all that and go broke or get undercut and go broke. To quote the big T, "I pity the fool."
--Pete
As someone who just got into playing certain markets on the AH about two weeks ago this very fact alone is one of the reasons most markets in WoW are hard to profit from. Most sellers in WoW have no concept of opportunity costs or even protecting their investments. Particularly in the gem market. The second you cut a gem you've made an investment. It is in your best interest that the profit margins on that gem stay as high as possible. If you cut a Fractured Cardinal Ruby and then someone undercuts you by a ton you can't recut that gem.
I started playing the gem market two weeks ago tuesday and the idiocy I've seen by many of the "big" players is really absurd. Last wednesday I made over 3k buying up Cardinal Rubies for between 115-125 per gem and then selling the cut gems for 180-190 each. I logged off happy about the evening and left an assortment of gems up there at those prices. What do I see when I log in the next day? My gems up there for the prices that those gems sell for, right below me I see one person post a single gem for 115 and all of the "players" start undercutting from there when all it would take is to buy out that single gem priced FAR below market and repost it undercutting my prices. It's like these people are adverse to making gold! And that's coming from someone that was able to make 20k gold over the last two weeks even with this idiocy.
I routinely see people posting cut gems for 20-50g below the going prices for the uncut gems. People are under the illusion that the hours they spend farming for gems have no cost to it. "HAHA! I didn't pay anything for these gems it's pure profit!" Nevermind that farming is probably the most unproductive way of making money in the game and they could do just about anything and still make more money for their time investment.
Applying real world economic models to WoW will always be fishy at best because most of the people creating the market (even ignoring the previously mentioned ideas of opportunity costs and protecting your investment) value their most valuable resource: Time at zero.