Guide to the Gold Auction House in Diablo 3
With experience in US stock and game markets, the gold auction house has presented itself as a particularly fun mini game to compliment Diablo 3 and my efforts flipping items have made farming completely unnecessary. I haven't replayed an earlier boss once, simply by playing the game as normal and then buying low and selling high - and my gear is pretty dang good. On my first day at the Auction House, I took 20k and ran it up to 2 million. On day two, I profited 10 million. On day three, another 10 million. Overall, roughly 12 total hours have been spent playing the Gold Auction House. After that, I've managed to outfit my character with powerful weapons and armor and now still have a pretty large balance.
Any weapon or article of armor you can equip to a character in Diablo 3 can be found in the Auction House. More often than not, at a low enough price a player is better suited buying from the AH compared to spending hours, days, weeks, and months farming (playing the same area repetitively) for a similar item. As of right now, every single item my Monk is wearing has come from the Auction House and I believe it has been essential for me to progress past Act 2 of Inferno, when the difficulty is so much higher compared to Normal, Nightmare, and Hell.
Starting with basics - when buying or selling, reference the buyout price, not bid number. When selling, don't list your bid way too low in case it goes 36 hours and someone snipes it at a massive discount. Also, all advice here is specific to level 60 players as those characters often have the money to actually buy and are more interested in upgrading. To search, start with a maximum level character and type in various 6 or 7 digit numbers in the maximum buyout space to refresh one hand weapon listings (12321, 22222, 33333, 434241, etc.). Look for extremely low priced weapons compared to the other listings. Also, if you search for single handed weapons with a maximum buyout of 100,000 and everything is similarly priced but the top weapon is much stronger for the same price, that item may be flippable. For instance, if that 100k search yields 10 weapons between 770 and 786 dps and the top item is 902 - that 902 dps weapon is almost definitely a profitable purchase.
Armor is occasionally profitable but there is a much slower turnaround because there isn't a single static number to judge items by. Once you get a character to level 60 and are trying to compete in Inferno, look for ideal combinations of stats on armor for a specific class and if something is significantly underpriced compared to other items of similar quality, it's likely that item is flippable. I have found a handful of amazing and profitable items like this but that is with a lot of extra searching.
When pricing your items for sale, search for various escalating buyouts until the top item is close to but weaker than the item you have for sale. Then, discount roughly 10% on a magic/blue item or price it comparable on a rare/yellow. A rare of similar damage can be priced comparable or above other listings and should sell fast but magic/blues should be priced at a discount so they sell immediately. Rares can obviously be priced much higher than comparable listings, assuming those extra modifiers are actually helpful. Intelligence and Strength on a Fist weapon has much less value than Dexterity, IAS, or Life on Hit - all of which can increase value by a significant amount. To price those items, I often limit the search to the modifiers and reduce the value by around 20% to get an idea what is similar. Then, I set the price around 5-10% below the next weakest item. For instance, I sold a 940 dps, IAS, +100 Dex, 900 LoH fist weapon this morning for 26m that I bought for 14m. I priced it against a similarly strong weapon that did 920 dps and cost 28m. You can only have 10 auctions active at once, and if you are active and fast at buying profitable items, you can quickly hit that maximum. If a weapon doesn't sell, with weapons declining in price daily, you may lose almost all value within 36 hours - but with enough experience most pricing will be intuitive.
Personally, I like to list so low that it looks flippable but isn't really due to the 15% cut blizzard takes. Get a good idea about what margins equal profit. For instance on a 350k weapon (below) you could buy it and then sell it quickly for 384999 (being the best price for that dps by a fair amount). This (384999 * .85 = 327,249.15 - 350,000 =) would net you a LOSS of 22,750.85. These sort of errors can both cost you money and lock up your gold during a time you could be buying and selling profitable items.
With nearly every market, never commit your entire bankroll. When you run out of money, you're out of the game until you get more. If you have 4 mil and there is an underpriced 4 million gold epic weapon, it is probably much smarter to leave it alone compared to guaranteed profits flipping cheaper items. Conversely, big ticket items can have the best result in terms of whole-dollar profit. Despite bankroll and diversity considerations, it is easier and yields more money to buy a single weapon for 400k and resell it for 999k (+449150) than it is to buy ten 50k items to sell for 99k (+341500). Also, I have found that I don't need the fastest trigger finger to purchase high cost items - so if someone continually beats me to items within the 100k to 500k range, I will move up to searching in the 1 to 15 million range. Here are some example profits I have made within a 30 minute timespan:
Triumphant Heaven Hand of Conflagration - bought for 115,000 - sold for 226,666 - profit of 111,666
Another important consideration is time left to purchase. Look for 1d 12h listings or 1d 11h listings as they are newest. Older listings are likely poorer deals in some way as they would have been purchased if priced low enough for the market - use the cheapest older listings to understand the ceiling for your pricing and therefore you should offer around a 10% discount on the lowest comparable older listing.
Overall, I wish you luck playing the Gold Auction House! Hopefully I haven't created too much competition for myself, but I have noticed that things have been getting harder and harder in the last couple weeks. It's likely this is caused by weapons declining in price rapidly with a rough cap on the most damage an item can do per second. Therefore, what may be happening is that if someone is going to inaccurately price a 600 dps weapon, they're much more likely to incorrectly price it on the high end than too cheap. Also, common sense is likely to tell a player of any calibre that selling a 1000 dps weapon may deserve some research.
What do you think?
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