For those that don't play, one of the most lucrative "industries" in World of Warcraft is a profession called inscription, in which you make glyphs, little pieces of paper with magical runes on them that enhance player abilities. These magical sticky notes can be sold and traded in the in-game economy.
There are 3 items I want to highlight that teach 3 different lessons.
Bleached Jawbone. This is a peculiar little relic that you pick up from a vendor in the Twilight Highlands. It's needed to make a highly-sought item for players who enjoy player vs. player combat. Unlike most inscription supplies, you must be a certain level of character in order to obtain it, and it's located outside of a major city. There are two market opportunities with this item:
1. You have to go out of your way to get it. People will pay a premium for convenience. In your own marketing, what things do your customers need that they have to go out of their way for, and can you offer the convenience of those items at your business?
2. You have to be a certain level to get it. In many cases, people who are leveling up their professions need this item, but because they haven't reached the character level they need to be in order to buy it, it's inaccessible except on the in-game marketplace. As a result, you can charge a premium for it – lack of skill or advancement in your customers creates a niche. What products or services can you offer to people who haven't reached a certain skill set yet? If you're selling marketing services, for example, can you offer advanced search engine optimization tools to people who are ready to make use of the tools but can't yet obtain them?
Glyph of Deadly Throw. One of the interesting things about the inscription profession is that you don't learn all of the products you can make at once. You have to do daily "research" to discover new glyphs you're capable of making, and if you don't do your research, you don't have new products or services to offer.
This glyph, which is used by rogues, was one I just learned last night. What's powerful about this is that your average, lazy player isn't going to remember or be diligent about their inscription research, and so the number of players who can offer a full suite of products to the market will be surprisingly low, a tiny minority of players in the game. There will be glyphs that only a handful of players can actually make, ensuring a near-monopoly on those niche markets.
The logical extension to the real world marketplace is obvious: those who continue to research, innovate, and find little niches will be far more profitable and face less competition than those who settle for the same majority of products and services that everyone else settles for. Everyone starts from the same basic tools, especially in niches like social media. Everyone can tweet. Everyone can make a page on Facebook. None of these things will create a profitable niche for you. Only through actual research will you create the innovation that will drive your profits.
Glyph of Death and Decay. In my inventory management software, I can see that another player has listed this glyph for 10 gold, whereas I listed at a fallback price of 197 gold. At first glance this seems like an incredibly bad move on my part. Here's why this isn't.
First, I know that the cost of materials to make this particular glyph is about 15 gold. I've told my software never to sell for less than the price of materials, because that's a guaranteed way to go broke.
Second, I know my market. The market for this particular glyph churns very frequently, which means the money-losing seller will have their product bought, leaving only mine left unsold. I know this particular seller doesn't play very often, so the risk of getting undercut by him is fairly low. When the next buyer who wants this enhancement for their character checks the marketplace, mine is the only item left for sale, and I get to earn 197 gold instead of losing money.
There are two lessons in this particular item. First, know what your costs are (including time) so that you avoid selling at a loss. Second, if you know your market well, if you know how your customers and prospective customers buy your goods and when in the business cycle you can obtain a lock on their business, you don't have to compete on price; you can simply sell at whatever the market will bear.
The business lessons of these 3 items may seem basic, but as with all basics, they can be incredibly powerful if you master them.
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Christopher, thanks for sharing your lessons with us!