In this multiple part series, I'm going to go over my thought processes and how I think about concepts in gold making in World of Warcraft, and why I do things the way I do. Today I'm going to spotlight the Buying aspect, because in my opinion, it's the hardest part of gold making for new gold makers to nail down, as well as the most important.
The Logic Behind Buying Crafting Mats
Although it may not seem so from the outsiders perspective, there is indeed a certain logic behind purchasing items in WoW, and it's a key to making massive piles of gold. Whether it's raw mats or an item to flip, I always focus on one question when buying: "How much am I earning by making this purchase?" This may seem counter intuitive to some, but purchasing is actually when you make your gold. Just think about it. Yes, you may have to do intermediate steps such as prospecting and cutting gems, but your profit is going to be determined by how much you paid for the item to begin with, and how much you sold it for, because what it boils down to is: Profit = Psold - Pbought, where P = Price. Are you buying at a reasonable price? Could you get it cheaper? Could you get someone to farm this for you? Minimizing cost is more important than maximizing selling price. How much you buy raw materials for is something that you can have MUCH more control over than how much you sell an item for.
Some items that you use in bulk would be great if you could get a farmer to get them for you, but is it worth the time invested and annoyance to maintain farmers? Yes. Farmers, in my experiences with them, come in cycles. The legitimate ones soon get sick of the game, as farming is a menial repetitive task, and soon get bored and stop playing for a while. What I've personally found odd is that when they do return, they usually will contact me to see if I want to continue receiving ore/herbs. Gluttons for punishment, the whole lot! The illegitimate ones usually soon get banned, but provide you with mountains of ore/herbs that you will be able to whittle away for long after they're gone.
How Much is Too Much?
Another thing that I see new gold makers hesitant about is buying more than they can reasonably prospect within a short time frame. The hesitation is understandable, and the future price of the mat is uncertain, but if you're getting what you see as a great deal, odds are it's worth stocking up. Say for example GIO is normally 50g on your server, and you know there's profits at that price. On the AH is a couple hundred stacks for 35g all of the sudden. It's not time to panic and wonder if that's the new price for your server. If you watch your mat markets, and where the price should be, if you think it's a great deal buy it up. The worst thing that could happen in 99.99% of the cases is you break even. There's very little risk involved when you make smart purchases.
Learning to Estimate Value
One thing I do a lot when I buy, is estimate. I don't need to know I'll make 41g 93s 64c off of a stack of ore, but I might be able to do some quick calculations to figure about how profitable it is. These estimations are key, and a big part of understanding your purchasing. Sticking with the ore example and going back to the logic in this post, I know that for every stack of Ghost Iron Ore I buy, that I'll get on average 1 rare gem and 6 uncommons, spread equally. I know that if I'm buying at 40g, the minimum I'll get from the uncommons is 16g back (see the other post for reasoning), therefore rares are costing me 24g at most, which is a price point I can definitely profit quite a bit at.
Alchemy (Xmute) is another great example, 6 Trillium Bars -> 1.2 Living Steel, that means on average it's 5 Trillium Bars to one Living Steel, so compare those prices. You could even go further down the line with this one. You can transmute the Trillium from Ghost Iron Bars, requiring 50 bars, or 5 stacks of Ore. So compare the prices of 6 Trillium, 50 GI Bars, and 100 GI Ore to find the cheapest mats for your CD, and whichever is cheapest is the optimal way to go!
I will be continuing this series later this week, keep an eye out for the post!
Sunday, January 5, 2014
Thinking Like a Gold Maker (Part 1)
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Thank you for starting this series -- I think it's going to have invaluable information for us beginner and intermediate goldmakers. I'm looking forward to the next installment!ReplyDelete
On the Living Steel, one great thing that TUJ does is do the math for you for all the possible ways to make an item down the bottom. Use this if you are wondering which way is most profitable!ReplyDelete
Nice post, this is pretty much what I do. I enlist farmers and have "gone through" more of them then I want to count. There are a few things I have found, most of them you have mentioned here, but I’ll mention a few more.ReplyDelete
One thing though, when we are talking enlisting farmers/doing the shuffle/undercutting the AH like a beast, we are talking about a longterm commitment to making gold. Setting up this kind of network is not something that is done in a day and requires a lot of maintenance.
1. Finding new farmers can be a hard(not impossible though) when you have been on a server for some time, especially if you have already used a lot of them. At that point, it becomes this game of trying to keep them for as long as possible. As Phat mentioned, botters will be booted so enjoy the stacks while they last but normal people can be kept longer by being treated more “fair”. Don’t pricegouge, let them farm at what pace they want to farm at and make sure you buy everything they farm(if you don't want anymore, tell them that and buy what they have, don’t waste their time). Helping their motivation by providing bonuses are great.
2. When it comes to estimating things, this is what will prevent you from burning out. It is very helpful to do the exact calculations yourself a couple of times to get the understanding but after that, its estimations you will be living of. This means that you won't “really” know how much gold you are earning and exactly from what and when. All you will know is that your pile will grow and what TSM tells you.
3. Accept that you won’t the be most efficient goldmaker day 1 and that you will make deals that are so horribly bad that you will pull your hair out. Don’t let this bring you down, take it as a learning experience and become better for each day.
Going to keep an eye on this series, keep up the good work.
This is excellent and for me this actually clarified some confusion I had with linked earlier post. I just wasn't thinking about it right.ReplyDelete
Thanks for doing this. I've been reading the blog and the reddit for months now, and its starting to make more sense to me. Please keep it up.ReplyDelete