In my opinion, farming is terribly inefficient. When you farm, your productivity is limited to how fast you can kill things, the loot that can potentially drop, etc... You're also at the mercy of luck. You can luck out and find a $4m item, or you can go four runs without finding a single useful drop. Basically, your earning potential is restricted by the mechanics of the game. However, when your source of income is from flipping items on the Auction House, you becomes the master of your own luck and the sky is the limit.
The day before I killed Diablo, I made about 20m in about 6 hours on the AH. Since then, I've been earning roughly 10m per day (@ 3-5 hours a day). I made 3m this morning while brushing my teeth. The majority of this was done over the weekend when there was tons of traffic, and I've otherwise been pretty lucky with some of my purchases so I don't know how long I'll be able to sustain this level of success. In any case, flipping items on the Auction House is the real deal. I've never been good at making money in MMO's, so I definitely don't possess some extraordinary business sense. If I can do it, literally anyone can do it. 2-3m per hour is quite a bit, but even at an average of 500k per hour, I'm sure that's better than most people's current farming rate.
I obviously can't share all of my methods in detail because if everyone did exactly what I did, it would no longer be profitable. However, I can provide a little bit of insight for you to create your own methods. To be honest, I probably shouldn't be sharing any of this, but I've taken a lot from the Barbarian forums so I'd like to contribute something. Plus, I know it's pretty rough to be a Barbarian in Inferno. This is the only place I'm posting this and I really hope someone can benefit from it.
-The concept of flipping items is pretty simple. Player A is trying to purchase the best possible upgrades he can afford. Player B is trying to sell his drops so he get money to buy things. You're trying to be the guy in the middle. There are always items on the AH that are significantly cheaper than they should be. Making money off them is a matter of finding them before anybody else does, and reselling them at market value. Keep in mind that you also need to take into account the 15% transaction fee and the risk of not being able to sell the item at your projected market price.
-The first thing you need to learn is how to use the item Search function. You can search by level range, rarity, item slot, three stats, max buyout and by name for Legendary/Set items. Pretty self-explanatory. Make sure you know how to use it.
-You can search for Legendary/Set items by name. However, if you search this way you won't be able to use the stats fields to narrow your search down further. You can bypass this by not searching by item name. Instead, input the item's level, select "Legendary" for rarity and add whatever unique stat that the item has. Take String of Ears, for example. Strings with Melee Reduction of 17% or more are highly sought after. If you search by item name, you have to sift through hundreds of crappy Strings to find the good ones. If you search with "Reduced Melee Reduction: 17", you only see the best belts, and you can further narrow your search with the two remaining fields. This gives you a considerable advantage over people who aren't using this method. You can get to the best versions first, while they are looking for a needle in a haystack.
-Not inputting a max buyout and sorting by buyout in ascending order allows you to browse items that don't have buyouts. Bidding on them at the last seconds sometimes works and you'll get valuable items at amazing prices. Make sure to set your max buyout to about 70% of what you think the item's actual value is. That way, if someone challenges your bid, you can still make a profit. If you lose the auction, no harm is done. Keep track of these items on a notepad or set an alarm on your phone if you have to. I've gotten some absolute steals this way.
-How much do you know about Witch Doctor end game itemization? How sure are you? Do you understand Witch Doctor stats at the same level as you understand Barbarian stats? How much do you think the average Witch Doctor knows about Barbarians? My point is: most people are pretty ignorant about classes other than their own. As a result, buyers will naturally know more about what they're buying than sellers know about what they're selling. You can make a lot of money from this. A lot of sellers' knowledge of other classes is limited to: Str = Barb, Dex = Monk/DH, Int = WD/Wizard. Other stats are often undervalued and sometimes outright ignored by sellers. If a stat is undervalued, the item will also be undervalued. If an item is undervalued, it is an opportunity for profit. Hint: Life% is more valuable to Barbarians than any other class. It appears on Shoulders, Chest, Helm, Belt, Shield and Jewellery. Another Hint: For a Barbarian, a socket on a Helm is much more valuable than a socket on any other piece of gear. Reduced Melee Damage (Bracers) and bonus damage to Frenzy (Belt) are also pretty popular with Barbarians. Sellers don't know these things, so they'll sometimes put these items up for less than they should. Meanwhile, buyers realize her value and will pay a reasonable price for them. Targeting these misunderstood stats is a good way to find undercosted items. Keep in mind that the examples I used were strictly for Barbarians, so we're really only scratching the surface. Find out about other classes. Read their forums. Know enough about their itemization so that you can expand the type of items that you can make money off of.
-As a reverse of the above, sometimes you can profit from a knowledgeable seller and ignorant buyer. Some people just love bad items. There are certain types of items that will sell for much more than they should, just because bad players seem to absolutely love them. It's not hard to figure out what these items are. It feels weird buying an item for its true market value with the intention of selling them for more, but when it works, it always puts a smile on my face.
-What kind of player do you think is easiest to make a lot of gold from? The obvious answer is also the correct answer: Players who have a lot of gold. Rich players usually have tons of awesome gear. However, you can bet that they're still looking for upgrades and they're willing to pay top dollar for them. Suppose there is an amazing item going for $3M and it's one of the best of its kind available on the AH. Would it unreasonable to believe that it can potentially sell for 5-6M? Spending 3M on an investment seems like a huge risk, but what's the worst that can happen? If you can't sell it for your asking price, you should still be able to make a small profit off of them once the 1d12h expires. Just make sure that you have money left over to make other purchases in the meantime.
-Magic Find is a strange stat. Sellers will often ignore it and dismiss it as an extra random stat like "Life on Kill". Meanwhile, some buyers foam at the mouth for items with Inferno-caliber stats with Magic Find on them, even if they're pretty mediocre. Items with good stats are dime-a-dozen. Items with Magic Find are also dime-a-dozen. Items with good stats AND Magic Find are more rare, and a lot of crazies will pay top dollar for them. It's ironic how you've gotten more money from that Magic Find piece than the buyer ever will. =)
-Another overlooked stat is "Reduction to Level Requirement", especially for weapons. The thought of wielding an Inferno Act 4 weapon at level 46 is absolutely irresistable to someone with a ton of money and working on their second or third character. A weapon can do up 5x as much damage than other weapons at that level. Sellers will often ignore this stat and simply price the item based on its value to a level 60 player. However, there is a hidden value to these items for people love their alts.
-Other general advice:
...don't be overambitious with your selling prices. You don't want a logjam in your AH slots. You also don't want to be out some cash for 1d12h.
...don't be afraid to try new methods and diversify your targeted items. As long as the risk isn't too high, you can afford to make a bad purchase here and there trying new things.
...don't bite off more than you can chew. If you spent 80% of your gold on one item, even if the deal sounds good, you run the risk of not having enough money for other good deals. There is a risk involved with every purchase you make, so make sure you pick your shots.
...try selling big-ticket items in ways other than the AH. Avoiding the 15% tax is huge when it comes to multi-million dollar items. Offer them to friends. Advertise them on forums.
...take a break if it stops being fun. Kill some monsters. Hang out with friends. Just don't obsess yourself with your success and feel like need to keep going because you're on a roll. The AH will still be there when you return.
Again, while I can't share all my methods, this is basically about 30% of it, and all of my tactics are more or less just an extension of the above concepts. I'm sure each of you can develop your own methods and have a lot of success with it. Good luck.
Thanks for reading!
Edited by Bokchoy#1328 on 6/6/2012 2:44 AM PDT