Guide to the Auction House (Part 1)

By Darkgolem

In Lord of the Rings Online (LOTRO) one of the greatest ways to earn money is the auction house.  It is actually fairly easy to earn several gold pieces without too much effort if you know how to use the auction house well, and what items are valuable in the auction house.

While a large amount of people use the auction house, an even greater number do not use the auction house well, or even at all.  I personally was constantly surprised by what items I discovered were valued and not, in the auction house.

 It takes a deep understanding of how the game economy of LOTRO works, and how the auction house works, to make money quickly in the auction house.  Simply auctioning everything you have will earn you money, but you need to understand what is valuable and what rate you should auction things at to make money.

Determining the Value of An Item

The thing to think about when you are auctioning items is the difficulty and cost of making the item you are auctioning, the usefulness of the item, the number of these items that are already available, and the cost already listed in the auction house for the same item, and the time it takes to make the item.

The Cost of Acquisition:  Some items are just hard to get.  Yarrow root is a good example.  Yarrow root does not have a lot of use, it commonly is used to make gold dye.  However, you cannot grow yarrow root, you can only find it either as a farmer (using the crop radar) or as treasure.  Ironically, yarrow root is more expensive than gold dye, even though it costs more to make gold dye than yarrow root.

Usefulness of An Item: This probably the easiest thing to judge.  One of the most useful items in the game is food.  Food heals damage, power or both at once, something everyone wants, regardless of class or race.  Heavy armor is used only by a fraction of the classes in LOTRO. So food will be more valuable.  On the other hand, food is single use, meaning that if one uses food, a constant supply is necessary, while armor will last (if it is good) for several levels.  It is a complex thing to figure out how useful an item is, but when deciding how to price an object, it is a good idea to think about this.

Supply of Product Being Sold:  Craft items are almost always more available than other items.  Therefore, craft items are sold for less than a similar item that is not available except when found as treasure.  Interestingly, people know more about craft items, so often people will search for these items rather than browse or search for unique items, making it slightly less likely that someone will purchase a unique item even if it is better than a comparable item of the same level.  This particular fact will make it harder to price unique items.

The Cost of Items:  This refers to the cost of an item as listed in the auction house.  Often people do not know the value of an item in the auction house.  Rather than take the time to determine the cost of an item, they will instead auction the item at an estimated cost.  This can lead to items being auctioned at a lower price than their value.  In some cases, it can even be a good investment to purchase an item and re-auctioning it at a higher cost.  The effect that the price other goods of the same type has on your auction is the amount that your item will auction for.  Since other players will purchase items at a lower price than your own items first, your item will sell for less or not at all, even if priced reasonably.  If you have a good idea that the items being sold that you intend to sell are priced too low, you can purchase these items and then sell them again along with your own item.  If your product has a high demand for it (such as crafting materials), you can chose to sell your item at the correct price, and expect the other items to sell first.

The Time of Acquisition:  This is a cost which often forgotten by players, or at least not considered closely.  Every character has a set cost they can earn in an hour based upon how fast they can earn treasure by defeating opponents.  The minimum cost of an item you auction should never be lower than that cost.  As an example, if you go out and farm medium skins, and it takes you an hour to get a stack of 50 skins, than you should not sell those skins for less than the value you could have earned beating opponents for treasure.  It might be worth your time to measure this once in a while, just to give you an idea of how much your time is worth.

Rules of Thumb

There are rules of thumb for selling in the auction house.  These can assist you when your in a rush in figuring the price you should set for selling and item:

• Mats more than Products:  Materials will sell for more than other items because they can be used for gaining crafting ability along with their innate value
• Your Level Times Two In Silver:  As a very, very basic rule, sell nothing for less than the level you are when you acquire an item (in a same level area) times two.  This can lead to overpricing or underpricing, but if you have no other choice, this gives you something.
• Three and Four:  Sell nothing for less than three times the sale price of an item at a merchant, if it not sold in stores as a bid price, and set your sellout price at four times the sale price of an item at a merchant.
• Second Place is Your Goal:  Whenever you sell items that are already being sold in the auction house, if you don’t know the value of the item, sell it at slightly less than the value of the most valuable sale of the same item.  Remember that often someone has made a wild guess at somethings value, and set the price too high!
• Small is Good:  If you have many units of an item to sell, and don’t wish to lose money by selling at the wrong price, sell small amounts of the item at a lower price.  If it sells fast, then sell some more of the small amount at a higher price.  Continue until the sales slow down, then sell the whole block at the same price.
• Always Have a Buyout:  Buyouts are critical to the sale of anything but the most legendary items.  No matter what, set some sort of buyout for items, because the majority of people who buy things in the auction house want them right away.  Extremely rare and valuable items might be sold without a buyout, instead just a reasonable but high starting bid, because those who bid for these items will really want this item and drive the price very high. 
  
• Always Use Two Day Auctions: The difference in value for a 4 hour and 2 day auction is minimal compared to the value you get for items, so always set your auctions for 2 days.  Remember to set a buyout.

Remember to Think It Through

There are basics to become a premier auction house merchant.  If you really want to make yourself a czar of the auction floor, write down your purchases and remember to check your notes each time you sell stuff.  It will become second nature to do so, and you will eventually find that you have silver and gold flowing into your purse, much more than if you do your auctioning haphazardly.  The auction house is complex and does not fit perfectly into the way the real world works.  To get good at it, you have to learn how it works.

Guide to the Auction House (Part 2) can be read here!

Comment about this article in the forums!