WoWMidas

Musings on minting money on Malygos…and more

“Free:” Point of contention

Foo and I have talked (thought?) at cross-purposes recently.  Now, I doubt we actually disagree on the actions one should take, but we do describe situations differently.

Specifically, I claimed that the materials cost of glyphs was “free,” in the context of Blackfallow Ink being a byproduct of a profitable Inferno Ink crafting enterprise.  Foo wisely offered to take the ink off my hands for free.

The issue here needs to be parsed.

My point was that you can cover herb costs entirely through milling and selling resulting Inferno Ink stuff.   (I suspect you’d cover labor costs, too).

Now imagine a world where Blackfallow Ink is instead just a healing potion with no other potential use.  In this alternate world, even if Blackfallow sold for 1g per ink, you could sell at that price and make a profit, assuming you were profiting in the Inferno Ink crafting market.   (Foo: just because I could profit at 1g does not mean I would be willing to sell it that cheap when the market price is much higher.)

“Cross-subsidy” as used by Foo is accurate though a bit harsh (the entire “profit reduction” exercise is theoretical, after all, I’m not going to sell an 8g Blackfallow for 1g, ever); a reader might infer that you’re taking the profits from one product line to sell glyphs below mats cost.  Which is not the case.

Now back to our world, what I’m saying is you could make a “mats cost” profit on 5g glyphs.

Of course, none of us would bother with that.  Because goblins value their time, and at Foo’s pay rate, or mine, 5g per glyph would be stupid.

(Note: I’ve seen places where Foo has alluded to having “up to 18g / glyph” costs.  Seems extremely high to me…as if he might… just… be thinking of the Inferno Inks as if they were “free.” I’ll take those off your hands, Foo! >;P)

Perhaps we goldmakers should adopt verbal shorthand to differentiate between economic loss (to include the value of our time, i.e., opportunity cost, so we’re making money but it’s not worth doing cause we’re not getting paid enough) and accounting loss (where we tally up mats costs but don’t really count labor, and still show a negative return).

I’m really talking about accounting loss, and Foo is correctly focusing on economic loss (particularly in his post today about the misperception about “free.”  Farming ain’t free.).

Yeah, I’m being kind of mean to “accounting” with my usage here, since true accounting would factor in labor costs, but have you ever seen a mmorpg financial enterprise accounting statement factoring in labor? I certainly haven’t.  Besides, the actual “goblin pay rate” varies wildly depending on the activity, day of the week, the competition, and what cereal people had for breakfast.

4 Comments

  1. My glyph price is based on current market prices for blackfallow ink. If the ink sells for 5.8g, and parchment costs 50s then my price is 5.8*3 + 0.5 or 17.9g.

    If I cant sell a a blackfallow based (or converted) glyph for that, then I would rather sell the ink. Sell below this, then you *are* selling below mats price.

    Similarly for inferno inks. If I can sell my inferno inks for more than I think I will sell trinkets for – out they go.
    There have been darkmoon fair cycles where I have bought inferno inks for 20g, and sold them for 40g.

    I price herbs, inks and glyphs, cards, decks, and trinkets. If I can make more gold from stopping at one point, and starting again later in the chain; then that’s what I will do.

    However, I don’t sell pigments. With the possible exception of starter herbs, there is no market for pigments.

    • I’m confused. Do you mill or just buy inks?

      I’ve stipulated many times over that you sell all the pieces so as to maximize profits.

      There is substantial markup in the chain post-Blackfallow, which is probably why I don’t see it moving in large volume in that form.

      I’m looking for what your *accounting* (production) cost is. Not what market value is.

      • From my experience.. the “milling” activity is for someone else, current markets and prices/ROI on milling just seems dismal to me. Having successfully played for a long while at the milling market in early cata, The values of BFI was 10-15g, and Inferno Ink was 100g-ish much better ROI (time) for milling then compared to now IMO…

        Something on a side note, though I do not see myself preparing and piling for it, consider getting ready to scribe some new relics for the new PVP season, past trends taken into account, new gear from the same mats and paterns.. could prove to be profitable if you get cheap mats now and sell the relics early in the new PVP season..

      • I mill, I buy inks, I sell inks. I pay (gold) for people to mill inks for me.

        When buying herbs, I will also check ink prices. If inks are grossly overpriced, I will sell my ink stockpile. If inks are grossly underpriced, I will buy inks.

        There is *often* a substantial markup post blackfallow ink; but not always.

        I make a markup going from herbs to ink. I make a different markup going from inks to finished goods.

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