Wednesday, July 29, 2009

The Moron's Guide to Money Making in WoW

Having recently compared Gevlon's social commentary to watching a train wreck, I do have to give him props on one thing: the dude knows how to make money. And he is correct in that it seems to be a skill that is lost on a large number of the people who play WoW.

I recently maxed out my enchanting skill, and decided to dabble a little bit in the market of selling enchanting scrolls on the auction house. This experience has led me to reinforce my belief (which I think Gevlon and I share) that the world is full of morons. Allow me to share my experiences, and hopefully educate a few morons along the way.

For those of you with short attention spans and/or lukewarm IQ's, here is the good news: there is only a single rule you have to understand to maximize your profit.

RULE # 1: If you are selling an item for less than the market price of the materials used to craft that item, you are an idiot. Period.

Maybe you farm your own materials rather than buying them off the AH. And maybe you think that this allows you to sell the crafted item at a reduced rate, because your materials were "free". Clearly you are not a Rhodes scholar, and you probably even lack some very basic mathematical skills. So allow me to help you out with an example.

Let's take the example of "Chest Enchant #1". Let's pretend that this hypothetical enchant requires 10 Infinite Dust (ID) and 5 Greater Cosmic Essence (GCE) to craft.

Let's further assume that the current market cost of ID is 4G each, and the market cost of GCE is 8G each. (Results may vary on your server and at differing times, folks! This is just an example! Don't use my numbers to go out and calculate all of your costs!)

This means that the cost of making "Chest Enchant #1" is:

10x4G + 5x8G = 80G

So the absolute minimum you should be selling this enchant for is 80G and 1 copper. This is true EVEN IF YOU FARMED YOUR OWN MATERIALS! Why? Well let's say you, the enterprising young gnome, went out and disenchanted a bunch of world drops or quest items in order to get your 10 Infinite Dust. These essentially cost you nothing to acquire. So you have recalculated your base cost as follows:

10x0G + 5x8G = 40G

Now you think to yourself, "WOW! I can sell Chest Enchant #1 for 60G, vastly undercutting the other sellers, and still make a 20G profit!"

And if you think this, here is why you are a moron. Because you could've simply sold the raw materials and made 40G profit with less effort! That stack of 10 ID that cost you nothing will sell for 40G! And you don't have to craft a single thing!

This is why it never, ever makes sense to sell something for less than the current market price of the raw materials. You're doing more work for less money.

Maybe you didn't farm your materials. Maybe you just caught the market on a low day, and you bought a boatload of infinite dusts for only 1G each. The same theory still applies. If you sell a crafted item for less than the current market cost, just because your cost was lower, you are cheating yourself out of free money. You'd be much better off just relisting the materials you acquired cheaply at the current (higher) market rate.

Of the 20 enchants that I am currently trying to sell on my server, fully half of them are now selling below the materials cost... and in some cases, substantially below; like 50% - 75% less. And yet I feel powerless to stem the tide of stupidity that has invaded this market... and that I suspect pervades most markets on the AH.

I understand that not everyone plays the game to make money (I sure don't), but why would you go through the trouble of doing more work by producing enchants just so you can earn 50-75% less than if you had done nothing at all, and simply resold the raw materials?

Wake up people!

[Note that for simplicity, I've purposely ignored several variables that I think would just make people's minds explode, like including the cost of the AH fees, or the enchanting vellum. If this additional calculation is beyond your grasp, you should definitely stick to farming and selling raw materials, rather than crafting.]


Topher said...

Our server is full of idiots. Unfortunately, it really does some damage to us non-idiots. Nice post. :P

Zaphind said...

Think of my post as a public service announcement. Feel free to send the link to someone via in-game email. I know I will be. :)

Darraxus said...

Every server has its fair share of retards in every market. In my glyph market, there are a few novices that arent really a part of the whole glyph economy. They just throw up a bunch they they made to level. Instead of putting them up at the market price, they list them at like 20 percent of the market price.

MomentEye said...

There is one reason to craft that you've missed:
Leveling your skills.

That's why most of the midrange leathers are sell for more than the stuff you can make with it. People don't want Barbarian Shoulders of The Hooplah they just made 50 of them and want to recoup some costs.

So your infinite dust has two values: gold and skill. When you're maxed out the skill drops to 0 but there's always someone else out there.

So by crafting it, the market says you suck out some of the value, but you gain the opportunity of the higher skill.

Shy said... mention Gevlon. But he and his minions seem to approve heavily of undercutting, as long as you make a profit.

So buying materials for 30 and selling the item for 60 is fine, even if the market price is currently 80. You made a profit, and you're driving the other out of a service which in turn makes it easier for you to make a profit next time.

I don't like these tactics too much, but hey, I'm prolly of the category of M&S. (minding others and social)

G-Rebel said...

You can't stop idiots from their idiocy, but you can buy all their cheap crap and re-sell it for profit as long as the market will bear it. They will think "cool, I just sold a bunch of stuff", then see it re-listed by someone else for twice as much. But it can be tough to sell stuff when there are so many idiots out there.