Sunday, May 10, 2009

Staying In Business: Eanin's Gem Emporium

I promised a few posts on WoW business, so I thought for this one I'd tell something of a story. If you're from my server, you probably know a little bit of it. Of course, you probably won't share my actual situation, but it's about how to take a crippling business situation and turn it around into an opportunity. Something happened on my server that drove almost every other jewelcrafter out of business. If I hadn't thought outside of the box, it would have driven me out of business, too, and my posts would be all about alchemy. However, I considered my options and managed to actually profit off of what would otherwise have been the end of my business, like it was of just about everyone else's

This is about how I managed to keep my jewelcrafting business afloat and even highly successful in the face of a...highly enthusiastic other player. This other player had the amazing ability to be online nearly 24 hours per day in Orgrimmar, cornering the jewelcrafting market. If you put up an auction, he would immediately take his down and repost it for a silver less. I have no idea where he got such stamina. He must have had endless energy and time (which must be the explanation, correct?). However, what happened is that it became impossible to sell any jewels unless you were him. You simply couldn't have the lowest priced auction for more than a couple of minutes before he undercut by a silver.

This drove everyone else out of business. However, I sat back and thought about it: how can I keep myself going in the face of this enthusiasm? I'm a casual player who only really does crafting every day or two. I don't have time to stand here by the auction house reposting my auctions for hours. So, brainstorming I thought to myself, "Wait a second, he's only undercutting by a silver, right? What if I can offer more than that, but outside the aution house?".

So, I came up with the solution: rebates! I'll offer a rebate to anyone who buys my gems in the mail. Not everyone will know about my rebates, so he can't defeat this strategy using his...enthusiasm. I'll offer 10% back by mail. People who know about the rebate will buy my gems because he's only undercutting me by a silver, anyway. But, he can't start undercutting me by more than 10% because then he'd lose all that money on the people who don't know about my rebate. So, he's stuck and I'll sell my gems.

In order to do this, I needed two things: advertising and a reputation. I put up a post on the boards, explaining my offer. I also put together a simple macro I pressed whenever I was in a city:

"Eanin's Gem Emporium™ is now offering a 10% REBATE on all rare cut gems! That's right! Buy a rare cut gem (including metas) from Eanin on the AH and you'll receive 10% GOLD BACK by mail! At Eanin's, the most important sparkle is in your smile!"

The goal was to be funny and direct. Of course, I was flamed immediately in /trade chat, largely because it is filled with angry sociopaths. It was all right. I didn't really expect people to believe it at first. However, then I started sending out the rebates. It was a trickle at first, because it was just those I could slip past our enthusiastic friend. However, as it went on, I picked up many customers. People started defending me in trade chat and sending me "thank you" e-mails. One day, I remember after some bitter loner attacked me in trade chat, someone replied, "No, he pays them. He's a good businessman". That made me really proud.

Within a couple of weeks, I had a thriving jewelcrafting business, while everyone else was bankrupt. Because Mr. Enthusiasm had basically created a monopoly, prices were very high, and 10% less of monopoly prices was actually quite a bit of gold. I managed to turn this situation into one that actually made quite a bit of money, developed brand recognition and a reputation as a good businessman on the server.

When our enthusiastic friend suddenly and completely disappeared without a trace (I suppose because he found some other hobby), I cancelled the rebate, letting my customers know both on the forums and in /trade. While I enjoyed the recognition, at the end of the day, the rebate was a business decision. However, it remains one of my proudest moments as an online businessman and a good example of how to take a tough business environment and turn it into profit.

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