Spirits of Harmony - Determining Value

The most common question I've been asked on my server is what the value of a Spirit of Harmony is. Some people want to know how much to offer, the others want to know how much to sell theirs for. It's a question many people are starting to ask now that eyes have turned on professions and gearing up.

The short answer that I give them:  "I don't know."  But let's get into the long answer too.

Right now Spirit of Harmony is a Bind on Pickup crafting item.  When looking at the value of a Spirit of Harmony you have to think about the way the seller values the Spirit.  This is affected by a few different factors:

1. What professions does the seller have to use it with?
   Faid is a Blacksmith/Engineer while, for example, my friend Altrien is a Miner/Engineer.  This means that he can only spend his SoH on Engineering while I have a choice to instead spend them on Blacksmithing.
   
   
   Blacksmithing has many recipes to buy with Spirits of Harmony while Engineering doesn't require any for the purchase of recipes. This means that Altrien can immediately start funneling his Spirits of Harmony into crafted items to sell while, despite having Engineering as well, my next twenty six Spirits are earmarked for buying Blacksmithing patterns.  Because of this you'll have much better luck asking someone like Altrien to make that scope instead of someone like me.
   
   
   Beyond buying patterns it also comes down to usefulness. Not all Spirit of Harmony uses are created equal. Let's look at the Long Range Trillium Sniper which, due to its scope requirement, essentially costs two Spirits of Harmony.  If I do not spend these two Spirits then this gun does not come into existence, I cannot make and sell this gun without these Spirits.
   
   
   Compare that to an Alchemist/Herbalist with Spirits of Harmony. They have only one use at this point, using three Spirits to create an extra Living Steel that's not on the daily cooldown.  In the Engineering example it's a question of "Do you want a gun or not?" while in the Alchemist situation it's "Do you want that today or do you want it tomorrow?" Because Alchemists and Tailors don't actually make anything new with their Spirits, only create something they can already make, sans cooldown, professions like Alchemy and Tailoring will likely see less value in their Spirits of Harmony.
   
   
2. How hard is it for the seller to farm Spirits?
   A level 86 Disc/Holy priest will find it much more difficult to farm Spirits of Harmony than a level 90 Fury Warrior. Anecdotal evidence seems to suggest a better drop rate of Spirits from higher level mobs (because of this I'm working on a new SoH farming video for level 90 players, stay tuned!) and the faster a player can kill mobs the more Spirits they get.
   
   
   That priest may look at ever Spirit as a sacred crafting ingredient as they might see only one a week while the Warrior can farm several in a single play session and so the priest will probably value their Spirits much more.
   
   
3. What is the going rate of Golden Lotus on your server?
   I've seen a lot of players on my server falling for this one. (Also, it's a gold tip I suppose!) For one Spirit of Harmony you can buy three Golden Lotus by visiting Danky for Horde or Krystel for Alliance.
   
   
   This means that the floor price for Spirits of Harmony should be three times the value of a Golden Lotus. I've seen people in Trade offering 300g per Spirit of Harmony. They bring you to the vendor, tell you to buy the Lotus and then they pay you 300g for the 3 Lotus which, on my server, they then put on the AH for 300g a piece, tripling their gold off of your Spirit.  
   
   

At the end of the day some people will be selling theirs for dirt cheap (because there's always that guy who thinks he farmed it so it's free) and there are people who won't be convinced to part with their Spirits at any price but until Blizzard shows mercy and makes these Spirits non-soulbound these are some important things to consider when trying to place a value on Spirits of Harmony.

From the Vault: 1c Undercuts

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From the Vault:  Every Tuesday and Friday we'll be shining a spotlight on some of the most popular and timeless posts from Nerf Faids here on ClockworkRiot. Folks who missed them the first time around can enjoy some of the best pieces and folks who have seen them can maybe be reminded of a trick or two that they'd forgotten.

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I'm not sure what's caused this to come up so often all of a sudden but I've heard about 1c undercuts one way or another nearly every day for the past week or so. 

On the one hand I hear competitors yelling at me about  my 1c undercuts or guild members saying that 1c undercuts piss them off.  On the other I've got people complaining about how stupid it is for people to undercut by 10g+ and just cut everyone's profits down.

I don't pretend to know what's "right" in the realm of economic theory. I always just sort of assumed that this was a personal preference and everyone thinks that their way is right.  Well, let me tell you what my way is and why I think it's right.

The Supposed Case for >1c Undercuts

I've heard a few reasons for undercutting by more than 1c, or to put it another way, why undercutting by only 1c is not a smart decision.  Usually it's one of these beliefs:

● My item will sell faster if I undercut more because people will see that they're getting a better deal.
If there is an item that is usually 20,000g and I see it for 10,000g I have to admit I would be getting a deal and I may buy this item to flip it.  However, that is usually not the case.  Usually the 1c undercutting is happening in markets like gems or glyphs when the price tag is often under 100g.  When I look at discounts I look at them as a part of the entire cost of the item. Getting 10g knocked off a 20,000g item is a lot less of an appealing discount than getting 10g knocked off a 20g item, you see?

I will dare to say that most buyers are similar to me: We don't care if you're cheaper by 1g or 1c, if your item is at the top of my list (aka cheapest per unit) I'll buy yours.  Why? Because it's at the top.  Hell, with TSM_Shopping I don't even usually see a price comparison on many commodities, the items are just queued up by cheapest automatically.

● My item will sell faster if I undercut by a larger number.
Yes, I just rehashed the previous belief so I can discuss it from a different angle.  I want to discuss more from the speed angle here.  I am not a patient person.  Most people I know aren't particularly patient when it comes to buying things off the AH.

Understand that in WoW there really isn't a lot of window shopping and impulse buys, particularly for trade goods and consumables. Rarely are people going to stumble upon your great deal on flasks just on accident.  If people are looking at your item on the AH they probably went to the AH and typed in that item in particular.

I just powerleveled Jewlcrafting today.  There's this hellish area in JC when you need Large Opals, Azerothian Diamonds, and Blue Sapphires.  There were about 20 Large Opals on the AH, some were at 3g and the others were at 15g.  You know what? I bought all of them.  I didn't care that the 15g Opals were five times the rate of Mr. Undercut. I wanted opals so I bought opals.  Don't get me wrong, I love cheaper goods, but Mr. Undercut could have easily recieved 15g for his Opals as well had he not undercut so aggressively.

Remember that if your item is popping up in a search most people are specifically searching for that item. They already want it, you don't need to sell them on it by kicking sand in your competitor's face.

● Undercutting by 1c is a dick move.
This one's certainly opinion based so difficult to argue against.  To those who hold this belief I merely must ask you to look at it like this:  I can undercut you by 1c. You can then choose to undercut me by 1c. You've lost, at most, 2c of value off your original sale price and will still be selling it for Original Asking Price Minus 2c.  Or I can instead undercut you by 50g.  You can then undercut me if you want, and given your opinions on 1c undercut you'll probably undercut me by at least 1g.  So now you can, at most, sell your item for Original Asking Price Minus 51g just because you didn't like 1c undercuts. Who's the dick now?

The Upstanding Individual Who Fights 1c Undercuts
A phenomenon in all of this is the buyer who will buy a more expensive item if they see someone's been undercut by 1c.  For example, if you're selling a Glyph of Innervate for 50g and I post mine for 49.99.99 this "Upstanding Individual" will buy your glyph just because they don't like 1c undercuts. I know a few of these people.

But you know what?  For every one of these people I know I know about ten people who don't even look at the others on the AH, they buy the top if it's within their price range.  If you want to "fight the man and his 1c undercuts" by buying more expensive items that's fine; I'm sure the sellers appreciate it.  However, decreeing your moral strength in Trade is rarely a deterrent for us 1c undercutters. The 1c Undercutters are still swimming in gold without needing yours. No skin off my back!

At  the end of the day there are multiple stances you can take on the issue. I don't particularly mind if someone takes one over the other. As you can see here I clearly am in support of 1c undercuts but I don't mind if my competition wants to rob themselves of potential profit. 

From the Vault: I'm Faid's Bank Toon

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From the Vault:  Every Tuesday and Friday we'll be shining a spotlight on some of the most popular and timeless posts from Nerf Faids here on ClockworkRiot. Folks who missed them the first time around can enjoy some of the best pieces and folks who have seen them can maybe be reminded of a trick or two that they'd forgotten.

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So I just glanced over The Gold Queen's post over at her blog and it's basically a great list of ways to remain "unseen" when posting your auctions. There's some great benefits in remaining "unknown." I bet a lot of us have competitors on our friends lists and track them to easily keep them undercut and such things.

But being known isn't necessarily a bad thing.  I use an AH alt but I make no secret of who it is; I've listed Liquidate's name many times here and if anyone on my server asks who my main is I will tell them.  This can definitely have some drawbacks, but I don't really mind all that much.  You see, there are benefits to being known as well.

It's the closest you can get to "branding" in WoW.

Before the Apple cult was formed one of Apple's biggest marketing ventures was that they would offer discounts to schools. I believe they still do this. This is why almost all schools have Macs in their computer labs instead of PCs.  The concept behind this was that if kids grew up and learned to use computers while using a Mac that child would then go on to buy a Mac when they had grown up and were shopping for a PC. It was familiar to them and they had the name Mac in their brain associated with computers. (Granted, our Macs broke down about 90% of the time so it just made me not ever want my own!)

You can copy this a bit by having a character known for selling a certain item. It doesn't have to be your main, as long as it's a constant character selling the same item.  If I know that Cardmaster sells Mysterious Fortune Cards at 10g a piece and all that's up on the AH are for 12g a piece I will probably wait for Cardmaster to log on and ask if I can buy his stuff directly.

This has happened to me a lot with rare items, craftables, etc.  People have seen Liquidate posting +4 Stats to Chest scrolls and if they all sell out they will come to me because they know I can do the enchant. (I, of course, charge them the same profit I'd make off a scroll on the AH!)  I've had people whisper me requesting glyphs, fortune cards, and crafted PvP pieces before.  Had that item been constantly posted on different throwaway toons I would never have received that business.

By posting on the same character you will, in some players' minds, cause them to associate you with that item and this can pay off in your favor.

Loyalty

I've been making bank on the cut gem market the past few days, I intend to make a post about this in the near future.  But from this comes a story. I've been controlling the Inferno Ruby prices since the patch hit and have been able to keep the prices stable and high.

I offer cuts free to my guild members but often they're not patient enough to wait for me to cut it, which is cool.  I was on Vent with a guild member last night who warned me that I'd been undercut by a ridiculous amount.  While I went off on a huge spiel about how that person was stupid since demand was so high they were just harming their own profits while not hurting mine at all apparently my guild member purchased a gem. Did he buy the undercutters? Nope, he bought mine. He paid more for the exact same item because it was mine and he wanted to benefit me and not some random undercutter.

If your AH posting alt is not associated with your main this may not crop up much, but if you have a reputation on your server, either as your bank alt or as your main, you can capitalize on that in the AH if you post on known characters.

So which  is better? Transparency or Anonymity?

Both of them have their pros and cons.  You will probably see more of a benefit of anonymity, especially in markets like glyphs and cut gems. But one glance at The Gold Queen's list in the post I posted above and all I can say is . . . that's a lot of work.  Even with addons that auto mail or a shared guild bank that's a lot of toon swapping, character slots taken up, white lists and black lists . . . just a lot of work!  I think this is a beneficial practice if you go through all the motions.

I just wanted to post this and say to those who, like me, aren't going to go through all these motions to remain secretive: There're benefits for us lazy people too!