There were basically two ways to make money in the [World of Warcraft] Auction House: be a supplier or be a commodities guy.
A supplier would be the person that used professions (leatherworking, blacksmithing, gathering, fishing, etc) to gather or create valuable items and would then sell them on the AH. Most people start here, and few ever do more than this. Much like workers in real life, these people create all of the economy’s value.
Commodity traders exploited that value to inflate margins and make profit.
Capitalism and the finance industry explained… WoW-style.