World of Warcraft Auction House Economics

Welcome to this guide on understanding the economics of the World of Warcraft Auction House. This page will help you grasp how profit is calculated, the impact of the Auction House cut, and provide an example to solidify your understanding.

Understanding Auction House Profit

Profit in the Auction House is not simply the difference between your selling price and your buying price. You must also account for the Auction House's commission, often referred to as the 'AH cut'.

The basic formula for calculating your net profit is:

Net Profit = Selling Price - Buying Price - Auction House Cut

The Auction House Cut

The Auction House charges a commission on every successful sale. This cut is typically 5% of the selling price for most items. However, for certain items like commodities (e.g., crafting materials, consumables), the cut can be lower, often 0% in the modern Auction House.

It's crucial to factor this percentage into your calculations to ensure you are truly making a profit. If you sell an item for 100 gold, and the AH cut is 5%, you will only receive 95 gold.

Example Calculation

Let's walk through a simple example to illustrate the profit calculation:

• Item: "Shiny Epic Sword"
• Buying Price: 1,000 gold
• Selling Price: 1,200 gold
• Auction House Cut: 5% (standard for gear)

Step 1: Calculate the Auction House Cut

Auction House Cut = Selling Price × AH Percentage

Auction House Cut = 1,200 gold × 0.05 = 60 gold

Step 2: Calculate Net Profit

Net Profit = Selling Price - Buying Price - Auction House Cut

Net Profit = 1,200 gold - 1,000 gold - 60 gold = 140 gold

In this scenario, your net profit from selling the Shiny Epic Sword would be 140 gold.

Understanding these basic principles will help you make more informed decisions when buying and selling on the World of Warcraft Auction House.