Keeping up with the DMF Trinket Market

Glyphs is one of my favourite markets, but now in Mists of Pandaria I'm finding that inscription has a wealth of markets all competing for those same herbs.

In Cataclysm, the DMF trinket market was ruled largely by the price of [Volatile Life]. Aside from the very first faire, I always had a surplus of [Inferno Ink], so that to this day I still have over 3500 bouncing around in my mail. [Blackfallow Ink] was rarely converted, mostly because the volume of surplus [Inferno Ink] on the AH kept the price well under the conversion threshold.

Now in Mists, [Ink of Dreams] gets traded up for [Starlight Ink] all the time, and the 1:10 conversion ratio is reflected much better in the prices on the AH as well. There are fluctuations of course, but from a quick glance it seems that it is generally always cheaper to buy and mill the herbs in any case (with the caveat that it depends on how efficient your milling processes are).

The first major change for Mists was the introduction of the shoulder inscription market. The major reason I'm not keeping up with my DMF card potential is that my process after bulk milling herbs is:

1. Restock glyphs
2. Trade most of the remaining [Ink of Dreams] for [Starlight Ink]
3. Restock shoulder inscriptions
4. See what is left over to make DMF cards 

Of late, there hasn't been much left over. Shoulder inscriptions are fantastic. Depending on your server, they can yield as good a mark up as DMF trinkets, while not relying on a daily cooldown, a monthly cycle, as much inventory space or as much capital. With only 8 bag slots, you can automate them right alongside your belt buckles, gems, flasks, potions and other consumables for really low maintenance. The only slight downside is that the deposit cost isn't cheap. 2g81s for 12 hours? That's a little steep!

The second major change is that the second ingredient (to go with the uncommon ink) changed from [Volatile Life] which was produced in large quantities through herbalism, to [Scroll of Wisdom] which is regulated by a daily cooldown. While the scroll cooldown seemed exceedingly restrictive in the early days of the expansion there are many players with multiple scribes that just can't keep up at this point. I only have two scribes, but I still struggle to find enough reasonably priced herbs to keep up with turning my scrolls into cards.

As usual, as I write these posts my problems reveal themselves more clearly, as do the super obvious solutions.

Problem 1: I can't find enough reasonably priced herbs.

The obvious solution is to not be so cheap. I admit I'm the type of player that regularly decides on a price that is "acceptable" for a material. I'll buy anything under that price. As prices fall, I quickly reduce that limit, and more aggressively craft and aggressively price products on the AH to move my stock ahead of the price falling on the products. However, as the price of materials rises I'm much slower to bump up my limit, and often run out of stock. As long as my competitors have similar or smaller stockpiles, I can reenter the market as I please, which is usually how it works out. I could just buy more expensive herbs, as long as the DMF cards remain profitable.

Problem 2: I don't have enough [Starlight Ink] left over after my other markets.

The obvious solution is just to buy inks! While the price of inks is usually much more expensive than herbs plus milling time, the operative word is usually. I'll have another look at what DMF trinkets are selling for, and set a threshold for buying inks to help plow through the scrolls. The threshold doesn't have to be as cheap as the equivalent herbs, it just had to be profitable.

I'll also have a look at the other products that use scrolls, and evaluate those other opportunities.

For those of you that picked the super obvious solution: JUST STOP DOING YOUR SCROLL OF WISDOM DAILY... are you kidding me? Who can resist their profession daily cooldowns?

For the Record: January 2013 Glyph Sales

Surprise, surprise, this graph looks really familiar.

January  Stats:

• Total Glyph Sales: 59670g 
• Total Glyphs Sold: 885
• Average Price: 67g42s

So I usually sell between 800 and 900 glyphs per month, with 50k+ in sales depending on the average price, which can vary a little. When there's a major event, like an expansion with a glyph overhaul... the graph can get a little exciting. Otherwise, I've been using the monthly post to chat about other things. Well no longer!

I like my graphs, and I have a sentimental attachment to my monthly glyph graph ever since my first export of mysales data. So I'm going to start adding the title and label, 'For the Record' to these posts and keep them short and sweet, so I can spend a little more time on other topics. If you're interested in pretty graphs, or my gold making milestones, drop in and check them out, otherwise you can skip to other topics of discussion.

Twitchie's Guide to Resetting Markets

Have you ever been frustrated that the profit margins in your favourite market are razor thin? Have you ever thought, "My goods are worth more than that!"? Well, with a little capital and some moxie, you can have an impact on the prices on your auction house. Read on for some tips on finding the markets ripe for resetting and ways to reduce your risk.

The graph above is a reset I performed in the [Living Steel Belt Buckle] market just a couple of days ago. Thanks to The Undermine Journal, it is easy to analyse the impact the reset has had over the following days.

WHAT TO LOOK FOR BEFORE PERFORMING A RESET

Volume. In order to reset a market, you need to buy up all the undervalued goods. In order to reduce the capital you invest in the reset, you want to look for a market whose volume has bottomed out. To perform my reset, I only had to buy a little over a stack of buckles. There is a correlation between price and volume that indicates a market is ready for a reset. As the price is driven down, many competitors will leave a once lucrative market for greener pastures, lowering the volume available to consumers. If you are comfortable spending a little extra, the best case is when people liquidate their stock as they leave, giving you an opportunity to expand your own stock in the process.

Price. There are a few factors to consider when deciding a market is undervalued. In the graph above you can see an olive line that represents the materials price, which indicates that the price of belt buckles is just insanely close to the cost of [Living Steel]. As a blacksmith, I want a profit margin over and above the added value of smelting ore, transmuting bars and using my daily alchemy cooldowns. So, I double check the living steel market, which has been pretty consistent. I'm ready to declare belt buckles are undervalued.

Market factors. Belt buckles are an essential (yeah, I said it) enhancement for every player in end game content. Forget you know the word optional for a second. If you have time to level, you have time to buckle! So there's always going to be demand for these items, reasonable competition and some volume. Resetting lower volume markets (e.g., craftable epics) have other considerations. Take anything with [Blood Spirit]s in them for example. The price of spirits have fluctuated wildly since the start of the expansion. Firstly, because they are a depreciating asset (they start scarce, but as time goes on more content is cleared, more are produced and demand goes down as more and more characters no longer require them for gear). Secondly, sadly, because of duping which has a chaotic effect the markets it touches. So the two keywords here are depreciating and unpredictable. For other lower volume markets (e.g., BoEs, pets, mounts) the value of items are a lot more subjective, so experience with the market is key before attempting a reset.

Risk. Once a market is understood, and ripe for resetting, take another moment to understand the risk you are taking on before performing a reset. I like to consider the worst case scenario and work backwards from there. The hypothetical worst case is that you buy up a bunch of stock, and the items you bought were hotfixed overnight into vendor trash. You just just lost your entire capital investment. Scary, huh? So in my example, I spent over 7k on buckles. For me, where 7k is less than the average increase in my liquid gold per day, it is very low risk. Working up from that, consider how you would feel if the market crashed (e.g., if Blizzard changed the availability of [Golden Lotus] while you were resetting flasks) and what you would be prepared to do to liquidate your stock. Also consider how quickly you expect to get your investment back, particularly with high value, low volume markets. Depending the demand on your server, it can take days, weeks or months to offload goods, that are depreciating every moment they sit in your bags.

WHAT TO EXPECT AFTER A RESET

Expect a correction. It is naive to expect the market won't respond to a reset. The goal is to get a return on your investment before the price settles back down.

Don't be greedy. I'm all for pricing a product at 'whatever the market will bear'. However, when resetting a market, resetting it too high will just invite exponentially more competition looking to get in on the action. I know, do as I say, not as I do. I was a little greedy with my reset, and you can see the almost immediate correction from 580g to 470g. I also didn't sell a single buckle for over 470g in the reset.

Ride the price all the way down. A successful reset will see you make a return on your investment before the price falls down to pre-reset level. If you're lucky, the market will stabilise at a higher price, but you shouldn't count on it. Be aggressive and make sure you get the sales you want as quickly as possible. The beauty of resetting a market you are active in is that you have your original stock, plus the cheap stock from your competitors, so you can make sure to have plenty of volume for peak demand times (e.g., raid nights).

Record your result! In my example, I sold my stack of competitors buckles from 450g down to 420g before I started in on my own stock at 40g higher than pre-reset prices. A good result will give you the confidence to use this approach in all your markets. More importantly, a bad result is an opportunity to try and figure out why your assessment of undervalued was wrong. When I say record your success, I mean have the actual figures available! I highly recommend TSM accounting, which records both purchases and sales for easy reconciliation. When a fellow gold maker starts talking in with vague hyperbole and insipid estimation my eyes glaze over and I reach for the [Binary Brew]. I beg of you, a little gnome can only drink so much.

What markets do you actively reset? Be sure to comment with your victories and horrific failures in the comments!