Blacksmiths can’t make gold?

If you have a character with Enchanting who can DE Northrend greens, this most definitely isn’t the case.

My wife used this method to amass gold until she felt bored. It’s practically a cheat code for infinite gold. I used it as well while I was notching Blacksmithing.

The “secret” lies in the almighty Notched Cobalt War Axe. You learn this recipe from the trainer at about skill level 400 (not sure the exact point, just wowhead the item to be sure). It costs 10 cobalt bars to make one axe.

On my server, cobalt ore/bars go for roughly 1g apiece on the AH. If you’re careful, you can probably build up quite a stock for lower (50-80s per ore) since cobalt generally isn’t in high demand (jewelcrafters prospect saronite for better results). 1 cobalt bar is made from 1 cobalt ore so they are equivalent if you have a miner as well.

So, 1 axe costs 10g tops.

The axe disenchants into the following:
75% chance of 1-2 Greater Cosmic Essence (so average = 3/2 = 1.5)
20% chance of 2-5 Infinite Dust (so average = 7/2 = 3.5)
5% chance of 1 Dream Shard

On my server, Greater Cosmic sells for about 12g, Infinite Dust about 5g, and Dream Shards for minimum 15g.

So, your expected value from disenchanting a single axe is:
(0.75*1.5*12) + (0.2*3.5*5) + (0.05*1*15) = 17.75g.

This means that you can expect a minimum of 7.75g profit per every 10g investment. Furthermore, note that you can never lose money with this since the worst possible results from the disenchanting already sell for above 10g (1 Greater Cosmic/2 Infinite Dust/1 Dream Shard).

So, just buy up all the cheap cobalt, make tons of these axes on your blacksmith and de them all. Send the resultant mats to your AH character and sell them off whenever the market is good. Enchanting mats don’t even have a list price so feel free to put whatever price you want for 48 hours, and enchants are always in demand especially with all the free gear available nowadays. As usual check the price differential between Lesser and Greater Cosmic Essences and split/combine them accordingly.

Why farm when you can almost double your gold with a few clicks?

Profession guides are da poop

As I’ve been levelling my cute little midget of destruction a.k.a gnome death knight, I’ve also been trying to keep up with his professions. Since my wife has stopped playing, I’ve chosen to go with Blacksmithing and Mining since I don’t have those two professions on my active characters now.

Mining was initially tough to level up from 1-300, but once you get it up to the same level as where you are questing it generally goes fine. Outland/Northrend are both very mining-friendly compared to Azeroth, so it’s pretty easy to max it out.

Blacksmithing however remains a royal pain. As expected most of the low to mid range crafted gear is worthless and you can only disenchant them in an effort to partially recover cost. Also, it takes a multitude of materials to make an item. The ores also have to first be smelted into bars, which can only be done if you’re a miner. The whole process is just time consuming.

This is largely true for most crafting professions, except Blacksmithing is exceptionally expensive. So it’s not surprising that many people ask for profession guides to level up their crafting professions. Just do a simple search on google and you’ll get tons of sites offering 1-450 guides for all professions.

Except that the vast majority of them completely suck.

You can break down 95% of guides into the following format:
1) At each skill level, list all the recipes that are orange.
2) Pick the orange recipe that is the cheapest in terms of mats, and make that.
3) Go back to 1)

This is exceptionally dumb, because first of all I have eyes. I don’t need a guide to tell me which of my skills are orange and therefore are guaranteed to give me a skill up.

Secondly, I’ve found that unless you are really close to the threshold where a recipe goes green, you are usually MUCH MUCH better off making yellow recipes since you get a skillup pretty reliably anyway.

And lastly, it is extremely short-sighted to simply craft orange items without any regard as to the market value of the item. I believe that this is the single biggest reason why most people complain so much about the cost of levelling up a crafting profession. If I’m making profit from an item, why does it matter if it is a green recipe? I could make 100 of them for 1g profit each compared to losing 50g on an orange skillup, and I’ll probably get a skillup anyway.

Another example is choosing between 2 items to craft for a skillup, one of which has a cheaper material cost. You might think “well duh, it’s a no brainer which one I choose to make then, I’ll make the cheaper one!” Unfortunately, you are not a beautiful and unique snowflake and it is very likely that every other person levelling the profession made the same choice, meaning that the item has next to no market value due to oversupply. Meanwhile, the other more expensive item may cost 20g more to make but sells for 50% profit (an example of this is the savage saronite pieces for Blacksmithing, everyone makes the cheaper pieces…) The initial cost doesn’t matter, what matters is the profit/loss per item. What does it matter if it costs 2k gold to make, if you can reliably sell it for 2.5k? (Don’t tell me you don’t have 2k gold in the first place…)

So this is why I would rather just open up wowhead or thottbot for a listing of all recipes instead of following a profession guide. There are of course some guides which are exceptions and provide extra information, such as estimated materials required (useful for advance shopping, though potentially inaccurate if the rest of the guide is just recommending orange items as usual…) or information on where to get non-trainer recipes which provide cheaper skillups.

Of course, if you are only interested in powerlevelling it to the skill cap in as short a time as possible, then just make anything orange and vendor it. But don’t complain later about spending 10,000 gold to level up blacksmithing when good old-fashioned research and planning could have made it a profitable enterprise instead.

Where is the best place to farm…

Arctic fur? Frost lotus? Titanium? Any other non-bop item?

How many times have you heard your guildies ask this question? Every single time someone asks me this, I give them the same reply…

The Auction House.

This is especially true when the item in question is a “rare drop”, like those mentioned above. You could farm for hours without seeing one. In that same time, you could easily have done a couple of daily quests which give some rep as well as gold, and happily picked it up at the AH. In the meantime, you will eventually find such an item in your daily adventuring anyway, at which time you can just sell it on the AH for the same price as you bought it (or better). Net result: you get to use the item you wanted earlier, without any change in your total gold amount.

Always remember, any non-bop item is basically convertible into gold. If you are going to farm for it, you are basically farming for gold. And if you are farming for gold, just do whatever gives you the most gold. Why do something that gives 50g per hour when something else will give 200g per hour?

We have a pally friend in our guild now who constantly respecs and buys boe epics for all his sets. He’s now grinding gold to repay a 1.5k gold debt to another guildie as well as return some abyss crystals for an enchant. Where is he farming gold?

He grinds Karazhan.

I kid you not. He is literally killing mobs in Karazhan mindlessly, to vendor their trash and pick up their coins. He is not an enchanter, so he can’t even disenchant the boss drops. When I tried to convince him to actually use his professions (alchemy) he complained that he doesn’t make a profit unless he procs flasks from his elixir spec. Apparently a 20% profit for standing around making an unlimited number of flasks isn’t enough, he’d rather incur repairs and pick up silver from mob corpses. When I suggested daily quests, he said he does not like questing.

I guess there is a reason he is in debt in the first place >.<

A new milestone has been reached… and best Heroic Nexus ever

With the coming of a new year, comes the breaking of new records. This weekend, a new milestone was quietly reached amidst the wave of new players.

Yannie has surpassed the 100,000 gold mark >.< And she did it by levelling up her warrior’s blacksmithing to 440 in order to craft a Titansteel Destroyer for my rethuntardin, as well as notching enchanting on both my shaman and her druid (apparently she forgot that you’re supposed to LOSE money notching up professions…tsk tsk). She then made another 5,000 gold for good measure, so that she doesn’t have to suffer the horror of a bank account with less than 6 digits after she buys epic flying for her little warlock who is now 68…

Shouldn’t her bank toons be collapsing under that weight? When we were playing DurisMUD, coins carried by players had weight and if there were too rich, they couldn’t move. If that was applicable in WoW, Ironforge would be gone and in its place would be a black hole in the fabric of the universe caused by excessive concentration of gold.

In other (less exciting) news, we did a bunch of heroics with a friend whose feral druid had just recently dinged 80. It was very fun to play with friends, and just goes to show once again that gear is really secondary to some basic intelligence. We did Heroic Draktharon with a rogue and a mage, and at the end of the run me and my wife were wondering how come it seemed a bit tougher than usual. Turned out that the mage was specced 71 points frost, and the final damage meters had the rogue at 30%, me(tanking) and the mage tied at 26%, and our feral druid friend at 18%. But hey, they were generally willing to listen and it was still fun and perfectly doable rather than just /facerolling through as usual.

But the highlight was the funniest heroic nexus run ever. We formed a group with a bunch of friends comprising of Mikitty(the feral druid), Psin(warlock) and holy-turned-ret pally. The pally shall remain nameless to protect his identity. On second thoughts, just call him Rufian. Such awesomeness deserves recognition.

Everything was fine until we started clearing the way to the 2nd boss (wraith-thingy that summons chaotic rifts). One of the trash packs has a rift that can be dpsed down at range before engaging the rest of the dragonkin standing around it. So as Yannie and Psin started shooting it down, I was hanging a bit back to skin the previous dragonkin (so soft and leathery… mmmm…) when it happened.

I think Rufian must have been watching DVDs or something and not really paying attention when we said we were going to range down the rift first. With the rift at about 50%, he suddenly charged into the whole pack, jumping as he went (he’s a dwarf). Right in the middle of them, he jumped in mid-air and gave a graceful twirl as he hit Divine Storm… and then got 2-shot while the rest of us stood there in stunned silence.

I immediately ran in and popped challenging roar and we killed off the pack, but for the rest of the run I couldn’t stop laughing everytime I thought of that little dwarf going LEEEEROY JENKINNSSSS and bouncing happily towards certain doom. In fact, I think Blizzard couldn’t stop laughing either and it caused the server to crash while we were fighting the wraith boss at 50%. After lagging for 15+ minutes, Psin and Yannie were booted to Dalaran inn, but the other 3 of us ended up falling in limbo in an endless loop somewhere in the sky near Dalaran. Eventually we hit some invisible wall and died and had to put in GM tickets because we couldn’t rez. Of course, my body ended up in Crystalsong, Mikitty ended up in Darnassus, and Rufian… apparently got lost again because his spirit was in Crystalsong but his body was nowhere to be found. Maybe Blizzard put it in UBRS as a tribute to the original Leeroy Jenkins.

After rezzing up we continued our Nexus run, including clearing trash again because they mysteriously respawned even though bosses were dead. Rufian ungraciously declined our request for an instant replay at the same trash pack (I was hoping for a screenshot). Of course, after laughing at Rufian, Mikitty then committed suicide by falling off the platform after killing the wraith boss 😛

(She Says) Paying for Skillups = Paying for Torture

Jerks and idiots make me really dislike the human interaction aspect of WoW. So when I see people advertising in trade that they would pay 50g if an enchant gives them a skill up, I can only imagine it to be equivalent to paying someone to give me a slap on the face.

The trauma of levelling up enchanting previously to 375 via trade/ guild mates makes me very reluctant to provide such services. That was before inscription was in the game and enchants cannot be saved onto scrolls, so to skill up, you’d have to find people to put the enchants on or burn your mats enchanting your own armor over and over again. I’ve enchanted for people who doesn’t have the correct mats even though I explicitly said I have none; people who asks me “so what hunter enchants do you have”; people who make me travel to Stormwind or Ironforge and burn my hearthstone; people who make me wait 10 minutes while they log on/off their alts to get the mats after they finally decide what enchants they want. Best of all, these are the people who go “lol, i spent da money on da mats. now i’m broke” and do not even tip even when I’ve gone through the hassle of traveling, waiting and have to use a 1-hr CD to hearthback. So after that, I have lost my appetite to talk to random people. Business is best left impersonal.

Whereas enchanting was previouly a synchronous trade process, i.e both parties have to be present at the same time, the new changes that allow enchants to be put on armor and weapon scrolls have finally enabled asynchronous trading via the AH i.e I can create an enchant scroll and list on the Auction House at noon, and you can buy it at 3pm even when I’m logged off. The tips and crafting fee are included in the price so you won’t have to go through the awkward social dance of “how much should I tip you” and “how much should I ask for” and if it costs too much you can walk away without feeling like you wasted each other’s time.

The other misconception that people have is that levelling trade skills will cost gold, which is the main idea that leads to paying others to get your skillup. On the contrary, I’ve actually made decent profit skilling up blacksmithing and enchanting by doing some research, making useful items and listing the crafted items on the AH.

I’m just really, really glad I don’t have to go hawk my wares in trade ever again.

Opportunity cost: Part 2

Gevlon at Greedy Goblin has a series of posts up about how to help the “middle-class” of WoW earn more gold. By this, he means those people who are constantly poor but are at least trying to actively learn ways to increase their gold resources. His first post was to advise them to download and learn how to use Auctioneer, and the second touched on the concept of opportunity cost (which I had previously posted on).

My own view is that Auctioneer is a useful tool, but in the end it is only a tool. I would not recommend ever trusting the prices given by Auctioneer – they can serve as a guideline, but when posting auctions I would never simply go by the -10% rule used by Auctioneer. Firstly, the prices are simply a statistical average, and as such they are based on historical data. It doesn’t tell you what the price is now, it tells you what the average price has been since the time you started scanning. And with the way prices fluctuated wildly during the initial month of WotLK, those aren’t likely to be very accurate. Furthermore, it doesn’t matter if Eternal Fire’s average price was 60g, if someone is putting it up right now for 30g. Your 54g auctions simply won’t sell. On the other hand, even if the average price is 60g, it doesn’t mean you can’t sell it for 70g on some days when there isn’t any up for sale.

So the moral of the story is, you should always have some knowledge of the goods you are selling and you always have to check the current price anyway regardless of what the Auctioneer price is. Plus, you don’t have to undercut by 10% when -1 gold will do 🙂

But one lesson which I think is very very important is the concept of opportunity cost, which not only covers selling BoEs instead of equipping them but also many other activities both in-game and out. Understanding this alone will allow you to spend your time in a much more efficient and pleasant way because you won’t be wasting your resources.

He mentioned the most common fallacy, which is the thought that “it’s free because I farmed it”. The cost of a herbalist levelling alchemy, is exactly the same as that of any other person levelling alchemy because even though no gold changed hands, the value of goods used up remains the same. It is this idea of something having value even if there is no monetary transaction that can be applied elsewhere.

For example, I also previously mentioned that if you need Eternal Fire, there’s no real reason why you have to farm Eternal Fire (skipping the obvious point of why you have to farm in the first place…). Just do whatever gives you the most gold and buy the materials you need! If you are 80, then perhaps you should do some easy quests or dailies. Each quest normally gives about 13g. At the going rate, that translates to 3 quests = 1 eternal fire. At the same time, you can vendor quest rewards for even more money and you get some faction reputation too.

The funny thing is that people do very strange things because they are extremely reluctant to part with gold. They fail to realise that anything has a value, even if no money changed hands. If spending money gets them even more money in return, then not doing so actually incurs an opportunity cost.

The other day a guildie asked if anyone had Autumn’s Glow, and he would trade any other rare gem for it. To someone who understands opportunity cost, the solution is very, very obvious: sell your high value rare gem e.g. Scarlet Ruby on the AH for 100g, and buy Autumn’s Glow for 50g. Instead, he thinks that it somehow doesn’t cost anything because he exchanged it for something he already owns, without realising that by doing so he foregoes the profit on the Scarlet Ruby->Autumn’s Glow. Of course it goes without saying that this person is dirt poor and also thinks 70g frozen orbs are expensive since “you get them for free by running a heroic”. (Must be something about priests, CoH rotted their brains.)

Another example is how there are many people now relentlessly spamming trade, offering to sell their cooldowns. This is again a big mystery to me. As a miner, why would you sell your titansteel transmute cooldown for 30g? You can easily go to the AH, buy the mats at the market price, do the transmute and make quite a bit more profit selling the titansteel bar yourself. You do exactly the same work, with the exception of a few clicks at the AH that takes less than 1 minute.

A similar situation exists with tailors and their cloth transmutes. Each of the specialisations gets a 100% chance to make an extra cloth when they do their specialised transmute. In TBC, shadowcloth easily sold for 40-50g. But there are still many tailors who will sit around shattrah, filling /trade with “selling shadowcloth spec cooldown, 5g”. Even if you give him all the mats, he still has to fly all the way to shadowmoon valley and do the exact same thing. Since a single cloth already sells for a profit, he is suffering a serious opportunity cost by giving away 2 shadowcloth for 5g. I wouldn’t even fly from Shattrah to Zangarmarsh for 5g…

The common reason why people do this? “I don’t have time/am too lazy to farm for mats to do the transmute myself”. Why oh why do they have to farm when it sells perfectly well with materials bought from the AH? The only possible valid reason why they cannot buy their own mats and use their cooldown to get a bigger profit is because they don’t even have ~150 gold in capital to buy the mats. In which case there is already no hope for them (see the priest who cannot afford 70g for a frozen orb but will run 7 heroics trying to get it…)

(She Says) Deflation in Wow

Many bloggers have noticed that deflation is depressing prices in the WoW Economy and they have offered several theories of why it is so.

Tobold thinks that easy access to raid gear means fewer people bother to spend on items to improve their current gear. A low demand theory.

The WOWEconomist theorizes that while the producers of the goods are level 80 and supplying, the consumers (i.e levelling alts) are not in the market for shinies yet. High supply and low demand = lower prices. He expects inflation to kick in Jan09 when people gets into the thick of levelling alts.

The Greedy Goblin believes it has to do with how the rich is swimming in money while the majority of players are poor and are unable to pay for crafted items/ repairs/ consumables.

Indeed, prices of many items on our server has fallen as well. Eternals, ores, cloth and herbs have come down from its prime. While supply has increased, demand has not caught up with the rate of increase. Let’s start by looking at the supply factors.

Firstly, more players are now level 80 and are farming raw materials.

Secondly, players are getting more efficient at farming as they find the best spots to maximize their farming. Wintergrasp for example is packed with ore, herbs and gas clouds. I’ve found much more titanium ore there than I’ve ever seen in Icecrown and Stormpeaks combined. Players can also use their flying mounts to swoop up all the mats. Essentially, this means they get more raw materials per hour of “labor” compared to at the beginning of the expansion.

With lower material costs, profit margin on value-added goods such as BOE gear, flasks and gems should have increased. However, competition is stiff so the fierce undercutting forces prices to fall back and reduces profit margins. Let’s take trollwoven spaulders for example. Last week, material cost used to be 520g and sells for 1200g. Last week’s profit margin = (1200-520)/520 = 131%. This week with lower mat prices, the same item costs 410g and sells for 900g. The profit margin is 120%. As in real life, profit margin will continue to fall as cheap raw materials means professions are cheaper to level (low barrier to entry) and high profit items lure them to enter the market.

On the supply side, BOE gear also have new competiters — Blizzard vendors. In the Burning Crusade expansion, rep vendors did not sell much gear that was worth buying. Even the rare pvp set was added much later in the game. Rep was also very difficult to obtain. In Wotlk, this has changed. Vendors now sell varying levels of gear – rare to epic. And the tabards make it easy for you to reach exalted with the faction of your choice. I’ve personally seen many new players garbed in mainly reputation gear. So that’s money taken out of the system instead of circulating in the economy

On the demand side, I believe players are still buying items. Enchants, gems and leg armor will still sell as prople upgrade their gear. However, WotLK crafted items appear to require less materials compared to TBC. Take the spellthreads for example, Shining spellthread costs 3 Eternium Thread, 2 Crystallized Life and 1 Iceweb Spider Silk. The cost of the vendor item of 3 Eternium spellthread is already 9g(i think?) which is half the cost of the spellthread itself; In comparison, old TBC runic spellthreads were 5 Primal Life and 1 Rune Thread. By reducing the number of mats, demand for raw materials decline even if demand for the end product remains the same.

For BOE gear, it is as WoWEconomist points out, the main consumers of such items, alts, are not there yet. Alts are usually geared up faster in order to close the gap with mains. Getting rep from each faction is a significantly slower process.

The impact of deflation is that things get cheaper and cheaper which increase the value of gold. It also encourages people to save and spend later since they can get more value out of their gold at a later date. Why buy Titansteel bars for 220g now when you can buy it for 180 tomorrow? This may result in a deflationary spiral as players spend less, resulting in furthur decreases in prices. I wonder if real life recessions in many countries have any impact on people’s spending mentality as well. Do they save more in game because they are in conservation mode in real life? Or perhaps lacking the cash to pay for real life excesses, people may be more likely to splurge on some virtual luxuries instead?