(filler) Flipping auctions

Flipping auctions is stupid. Many people make a lot of money doing it. It is a task for morons and is not rewarding. Yet I wanted to explain how it's done for the purpose of belittling the practice.

You sit at the AH and scan categories of goods being sold. Some 'advanced' flippers use mods to run differential price scans for them, and find potential profit margins by re-listing under priced goods. Here is a visual example:

Here we see someone selling an herb priced to sell at 33 silver each. His competitors all are selling the same material for 88 silver and up. If I buy out his auction, I spend 5 Gold. I could re-list the 15 items in various stack sizes for a cumulative amount of 9 Gold, making 4 Gold profit for minor AH processing.

The average individual would say 'This is GREAT! Free money for doing nothing!" but hopefully by now you know this is a false statement and not true. This person is doing 4 different things: Spending time scanning the AH to find this item, giving away Gold for an item he has no use for, walking to his mailbox to collect the item and back to the AH, and then re-listing it in hopes of the sale and 'profit'. In truth, this is a profit-negative process. The amount of time and effort spent to achieve this 4 Gold profit (which is only a possibility) equates to similar to 2-3 Gold per 5 minutes, inconsistently adding up to 60-80 Gold per hour of this intense labor.

In contrast, I earn upwards of 500 Gold per 15 minutes.

The potential risks of such an operation are also very great. You are looking in as small a window of possibility as possible if you are only looking at the Gold amounts. Does this item sell? Who will buy Wild Steelbloom? Does someone else have 400 of this item and is about to unload all of it at once, devaluing your 5G investment to 1G (thus losing the amount you invested). If it doesn't sell today, will you remember your original investment costs tomorrow? Do you want to invest your Gold into items that you cannot craft anything with, if they potentially fail to produce profit? And what time frame for this sale are you willing to set in order to receive this potential profit?

You see how many more factors can come into play from your simple scheme? Most of these you cannot even control. If you were to run into a large distributor (like me) you would give me all of your Gold for items you could not sell due to my practices. You would take a loss earning your investment capital back, and I wouldn't be phased whatsoever. And the market would benefit from your pricing items back for a loss.

It might make you a quick buck 50% of the time, but your potential for loss is too great (Anything more than 0% chance is stupid activity), and the effort put into making this quick buck has to be weighed against your profits (realistically reducing them to minimum wages).

And last food for thought: When this 'flipping' becomes popular, as it has become on Doomhammer, everyone is doing it and gaining 1 Gold or so per auction flipped, minus AH fees. The prices of these flipped goods skyrocket into laughably inflated prices. The demand goes down horribly due to the inflation, and the only way these stupid investors can profit is by raising inflation prices even higher until they crash. I've watched the herb markets steadily climb as flippers dominate categories of herbs. And watch as the quantity of herbs being sold never changes (mod says they expire without being sold). This is a loss for this investor! Only a matter of time until he lowers prices at a loss, or a young entrepreneur takes his market away from him! This is inevitable. Pyramid Scheme fails because it is not logical.