Just like any other situation where people are able to trade among themselves for goods and services, MMOs like World of Warcraft rely heavily on an internal economy. Fortunes rise and fall based on variables like supply, demand, new content, and individual players' dexterous auction house maneuver
The Bare Bones
The most critical concept for new players to understand is that of market value. The market value of any item or service is simply the price that a buyer and seller agree upon when they trade. Average market value, then, takes into account the reality that the price will fluctuate. It's important to understand that NPC Vendors' prices do not change, reputation discounts notwithstanding. A very common trade channel message is that a certain item is not "worth" whatever the person advertising has suggested. The concept of market value means that the item is in fact worth whatever buyers are willing to pay.
The Auctioneer addon is a huge help when trying to work the Auction House. You most certainly want to download it and use it to the fullest.
The other concept that is important to succeeding financially is that of supply and demand. The basic formula to keep in mind is that whenever the demand exceeds the supply, prices go up. When there is more supply than demand, prices go down. An easy way to describe this is if several guilds on your server are progression-raiding, but no one is taking the time to farm and fish, an enterprising player will be able to command a hefty price for his stacks of Deepsea Sagefish.
Shake Your Money-Maker
The big changes in game, including new content, are always good for a WoW-treprenuer. Tradeskills are frequently a great opportunity. For instance, when the Black Jelly recipe was first introduced, stacks of Borean Man o'Wars were selling for more than any other type of fish. It isn't that the recipe was that much better than anything else, but just that it was new.
Many players love working the tradeskills in WoW. Many other players loathe them, and only take a crafting profession for some rare bind-on-equip item that isn't available otherwise. This second group of people creates an enormous gold-making opportunity for the first. Players who enjoy roaming the world, farming up stacks of herbs, ores, and leather while doing so, will be able to unload their wares on anyone interested in power-leveling a profession.
Flying Lottery Tickets
Novelty items are another big seller in WoW. For instance, the Battered Jungle Hat, a gray item that can show up in the daily fishing quest reward, sells for a good chunk of gold on most servers. It isn't that rare, but it can require days and days of fishing quests before it shows up for any one player. While it certainly isn't worth farming for, its relative worth is a good thing to know should Lady Luck happen to smile upon you.
Even more than cute and clever apparel, players love rare pets. The most common of these include the four whelplings in red, green, black, and blue colors. Countless hours have been spent in the grind for these pets, and many more have dropped as the result of happy chance for players who were "just passing through." Because they aren't bind-on-pickup, they can be sold for huge amounts of gold on just about any decently-populated server. Certain baby raptors like the Deviate Hatchling and the Leaping Hatchling are also big fun - and big money.
Hey, Where Does That Drop?
A startling number of players are able to supplement their gold incomes simply by visiting NPC vendors who are inconveniently-placed or who sell limited-quantity items. For instance, the goblin in northern Hillsbrad sells a recipe for Frost Oil, and that is the only place to get it. Players must be willing to park a toon at that NPC's location and check on it every few minutes. Then the recipe can be sold in the auction house, and often is, for considerably more than our Goblin friend charges.
One of the best examples of making tradeskills useful is the Robes of Arcana pattern. Every young Warlock gets a class-quest that concerns this piece of gear, which must be crafted by tailors from a rare, green-quality pattern. The pattern drops off in Thousand Needles randomly. Savvy tailors in the know will grind for this pattern as soon as possible, since the Robes themselves sell incredibly well in the Auction House. Additionally, the Trade channel frequently sports the pleas of a poor warlock in search of someone who can craft the Robes in exchange for mats.
I Made It the Old-Fashioned Way
Gold is infinitely accessible in World of Warcraft. Any player who puts his or her mind to it can easily assess a fortune of thousands of gold simply by assessing the current market of the server, being aware of trends, and intelligent use of both gathering and crafting tradeskills. Even the secondary trades of cooking, fishing, and first aid can become a consistent source of income if one bothers to level them. For those who struggle to keep up with all of the necessary information, there are even player-developed addons available that can simply the entire process and streamline the steps to accumulating wealth.
Of course, money isn't everything. There are plenty of poor toons running around Azeroth right now, with fresh, new Auction-House gear and no trades to speak of. But if having your mounts at the minimum levels and being able to splurge on the perfect epic BOE being advertised in trade is important to you, this advice will do much to bring you up to speed on managing your funds in World of Warcraft.