I had no intention of returning to this but here goes....

Seems another storm brews in another teacup. And still the comments roll in. So today, rather than the post I was going to write about how I got a new staff and how happy that made me, I feel I must return to some recent posts to once-and-for-all put this chestnut to bed.

OMG WALL OF TEXT ALERT!

The topic is obviously that glyphs cost nothing to make. Now firstly I think this itself needs to be clarified. This is not a discussion about glyphs. Nor is it about ink. Nor inscription. It's a topic about the wow economy and how you make money out of it. Glyphs/Inks was just the topic we were discussing at the time, but the same conversation could be made about a whole range of items in the game. But I get ahead of myself, for those who need a catch-up here's the background (as I see it):

1. I wrote a post called "Do shapeshifters dream of electric sheep?" I thought it an interesting topic about how I intend to invest more deeply into the horde side of my server, but the struggles I face with only a single toon and a less than ideal combination of primary professions. Responding to a comment I said

With whiptail being the new fall back herb, and it being around 80g a stack horde side - basically we can make glyphs for free (1.5 infernos per stack plus 6 blackfallow).

We just need to get you through the next stage Bell - currently you can just mill and make profit :)

2. All hell broke loose. Foo started it (surprisingly) when he responded:

No. Glyphs can not be made for free.

A blackfallow ink sells for say 7g. 7g*3 + 50s for parchment makes a blackfallow ink based glyph cost 21.5g

Anything less and you would be better skipping the glyphs and selling inks directly (or making fortune cards etc)

But there were other comments about losing money and people got sidetracked on where the greatest profit margin was. This bemused me, as there was never any comment made by me that you HAD to make glyphs, just that it was possible to make glyphs for free.

3. Sunday arrived and I'd had enough of the comments so wrote "Once upon a time - a story about when Puraa met some dumb people". Oh how the comments flowed! I intend to pick the majority of those comments apart later, but I got one overnight from Fiesty:

The post was not only condescending, but here it gets donwright insulting.

I was nowhere near the posts you mention, but responding in the way you did speaks volumes.

If you care for the unbiased portion of your readers I'd think on it. Not that you should, it's your blog after all.

To clarify (my word of the day), the post was meant to be condescending! I would have thought the sock puppets would have given that away.

4. Evidently feisty took specific offence to "Now Puraa had to decide what to do with her FREE BLACKFALLOW INK but thats a story for another day isnt it children? But rest assured Puraa lived happily ever after whilst the stupid people were poor."

I can understand that this would upset some people, but for clarities sake the term 'stupid people' is referring to those who wont listen - it DOES NOT mean the people who don't know these about these things but are willing to learn. This blog always has been written to explain concepts about gold making in WoW. Its never been about 'Do X and Y and sell Z and you will have gold". Its about the bigger picture. It's about empowerment. The Apprentice should have shown that.

But when I get so called 'goblins' who claim you cannot make glyphs for free, then yes, I consider those people stupid, because the fact you can is as obvious as the nose on their faces.

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OK so thats the background on this post, so now to resolve the actual message of these posts.

Every action we generally has an end goal we are trying to achieve. For example we cook to give sustenance to the body. Cooking takes time and materials and the end product is a meal that had a cost to make but the end product meets the end goal - to give the body energy. Sometimes we have dinner parties, sometimes we are preparing lunch for the following day, but ultimately the end goal is putting energy into the body so you continue to exist.

Wow is the same - everything has its end goal. For a goblin this end goal is to make gold, but there are many other end goals - gear, achievements, trolling etc.

But this is a gold making post so we will focus on increasing wealth. There are some very very basic concepts here:

a. Production Cost - everything has a cost to create. These costs can be in terms of time or money or materials.

b. Sale Price - the amount an item brings in when sold.

c. Profit/Loss - the difference between production cost and sale price. If sale price>production cost = profit, if production cost>sale price = loss

As a goblin we are trying to ensure that primarily we make profit as often as possible, and ideally that the profit we make is as large as possible. This second point can be achieved a number ways, 1. lots of sales, 2. big profit per sale 3. cheap production cost etc etc etc

Now I am not trying to take the piss here - this is not meant to be condescending, but I have to make sure I lay out my argument clearly to ensure there is no misunderstanding because this really is going to be the last time I focus on this topic for a while so I might as well cover every base.

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So to maximise profit we can look at different points in the process. We all know that the point of sale is the most competitive point in the process. AH PvP some people refer to it as, but its not just the Auction House. The competition are other sellers, because rest assured, whatever you did to have the goods in your possession, someone else can do as well. There is always competition for sales and generally cheapest wins in the selling game.

Of course there are times that you are the only seller in a particular market, where you control the market and can set the price, but these are the exceptions not the norms. Most of the time you will be competing, and competition will decrease profit.

Therefore a sensible goblin will also look at the other end of the process. Production costs can vary wildly depending on how you personally decide to do it.

Lets take a simple example - selling a Gnomish X-Ray Scope

Now lets say for the sake of simplicity that we have someone who is willing to buy a scope from you for 300g. The only trouble is, you do not have a scope to sell and must acquire one. There are a whole range of ways of doing this:

1. Buy one. This is the simplest method. As long as you can purchase a scope (either from the AH or from another player) for less than 300g then you can sell it for profit. Lets use as an example that you pick up a scope for 250g - that's 50g profit for doing nothing more than running to the AH and then the mailbox and finally finding the purchaser.

And of course you don't have to purchase the scope there and then, you might have snagged one for 100g the day before. This is the basis for 'buy cheap, sell normal' way of making gold.

2. Make one and use raw mats. You must have access to an engineer for this. The scope requires two hardened elementium bars and two dream emeralds to make. Now this is where it gets interesting because these mats may or may not be available to you. But the raw materials are always available to you providing you have time and the inclination to get them.

In its most basic form you need two things to get all the materials you need to make a scope. You need a miner and a JCer. With those two you mine a ton of elementium ore - the amount you need is non-definable because you need to find volatile earth to make the hardened elementium bars. To make two hardened elementium bars you need eight volatile earth, and with about a 10% chance of getting VE out of a elementium node you are probably going to be farming for a while.

But hey you are going to need a butt load of ore anyway to get the dream emeralds anyway. With a 4% per prospect of getting one - to find two is going to take roughly 12 stacks of elementium ore to get both the emeralds you need and this dependent on lady luck and the RNG.

OK so we need 12 stacks of ore for the gems, two more stacks to make the 20 elementium bars needed to make the hardened elementium bars (need 10 bars for each one). That's fourteen stacks of ore in total.

Providing the averages pay out you will have the mats to make the scope. Send this to your engineer to make it and then sell it for 300g.

Now this process the cost in gold was actually zero. The only cost to you is time.

Of course you would have other materials left over - other gems from the prospecting etc. These would sell or could be thrown into another profession (JCing/Enchanting for example) to increase your profit per hour, and this is worth remembering.

3. Make One From Processed Mats. This is somewhere in between option 1 and 2. You can wander off to the AH and buy two hardened elementium bars and two dream emeralds. Make the scope and sell it. This takes far less time than option two, but more time than option one. Profit here is determined by the cost of these mats.

As an extension of this you could buy the 14 stacks of elementium ore and the 8 volatile earth and make the bars and prospect the gems yourself. You save yourself the time cost of the farming . However you do it everything you buy is going to cost you gold. The ore, the gems, the bars, the earth - and investing in the production of the materials means that your profit at the end is smaller.

Say you just bought the hardened bars for 80g each and two emeralds for 10g each. To make a scope would cost 200g in mats. You sell the scope and make 100g

4. and 5. Get someone else to make the scope/raw/processed mats - similar to 2. and 3. but you use a third party(s) to make the scope and/or materials. These people will need to be paid, and for simplicities sake I will exclude these options from the discussions

Gold v Time

Most goblins have a figure somewhere in their minds about how much their time is worth. Each of the first three options have varying time and gold commitments to the making of the scope. But in all cases the sell price is the same 300g. Using the examples above:

Option One - Gold Investment = 250g. Time Investment - visit to AH, visit to mailbox, make sale = 5 mins
Option Two - Gold Investment = 0g. Time Investment - farming, prospecting, smelting, engineering = 2 hours
Option Three - Gold Investment = 200g Time Investment - visit to AH, visit to mailbox, engineering, make sale = 6 mins

The Profit varies as well
Option One - 50g
Option Two - 300g
Option Three - 100g

Profit per hour also varies:

Option One - 600g/hour
Option Two - 150g/hour
Option Three - 1000g/hour

Now please remember these are examples - and quite possibly bad ones. Costs of mats, time to farm ores etc are all rough estimates based on experience. But they are just numbers to give clarity what I am saying.

What we can see from the above examples option three is the best return when it comes to gold/hour. If we had managed to snag a cheap scope for say 200g, then option one would be the best rate of return. Things vary, but what doesnt vary is that farming generally ISNT the best time investment when it comes to gold/hour.**

**This wasnt true when Cata first released. Farming was an awesome way to make gold. And if you do it right you can still make a reasonable amount of gold but generally by selling the raw mats (ore, herbs etc) rather than farming for specific items like we were in option two (dream emeralds etc)

However the gold/hour argument is somewhat flawed. In the above example we had a very specific item we were making - the X-Ray Scope. But we aren't just sellers of scopes. We make gold where ever we can make it.

To use another example - we can make gold doing the obsidium shuffle. Get ore, prospect, then either cut gems to sell or make jewellery to DE. To give us numbers let us make an assumption - we can create 100g worth of goods from a stack of obsidium ore.

Now lets just look at two options:
1. Buy ore for 50g a stack. We can buy, prospect and process the ore/gems and each stack takes 5 minutes to process. Therefore each stack gives 50g profit for 5 minutes work = 600g/hour profit
2. Mine the ore. This time the cost are zero, but each stack takes 15 minutes to mine, prospect etc. Therefore each stack gives 100g profit for 15 minutes work = 400g/hour

So everyone buys the ore and does the deed cos 600g/hour is better than 400g/hour right? Well yes. Until you run out of ore....

You can farm all day and all night and make 400g an hour. However you can only buy ore and process it until the supply runs out.

Say there is 60 stacks of ore on the AH all costing 50g a stack. You buy the lot and process it. It takes you 300 minutes - or 5 hours to process it. You sell everything and make 3000g. Profit is still 600g an hour

You farm for the same 5 hours - you make 2000g. Profit is still 400g an hour. But then what?

This is where it gets interesting because there is no ore left on the AH. But there is still ore in nodes all across Hyjal. So you get the following

Graphically it looks like this

After 7.5 hours mining becomes the better way to make gold!

Looking at gold per hour across the 10 hour period you get:

Therefore you must be careful claiming that 5 minutes work to make 100g is 1200g/hour. But its only 1200g/hour if you can do it all the time. Important thing to remember :)

Once again, these are just crude examples because its unlikely that ore will ever run out on the AH - however you wont be able to purchase it for 50g a stack forever so the argument is very valid.

OK now onto the crunch of the argument - making stuff for free

With your professions you manipulate something generally to create something else. Mining you manipulate a node to create ore/gems/volatiles. With tailoring you manipulate cloth and other materials to make clothes/bags/etc.

We have already defined that profit/loss is the difference between production cost and sale price. If sale price>production cost = profit, if production cost>sale price = loss.

Now let us look at whiptail.

For the sake of consistency I am going to use the same numbers I used in the sock-puppet story:

Stacks of whiptail cost 80g. Inferno inks cost 80g. (Blackfallow inks will cost 8g).

10 stacks of whiptail will mill into 10 inferno inks and 60 blackfallow inks.

OK so those are the numbers. In the example I gave, Puraa bought 10 stacks of herbs. She milled them and sold the inferno inks.

At this point she has spent 800g, received 800g and now has 60 blackfallow inks.

OK next point of clarification

Was selling the inferno inks for 80g the best thing to do? Who knows. Who cares? It was an example. Maybe it would have been better to make darkmoon cards or make a relic - it doesnt matter because it was an example. It was just to give an idea to the stupid people what I was talking about.

Back to Puraa and her Blackfallow inks

At this point Puraa is sat with 60 blackfallow ink. She has no more money (and no less) money than she started with. She just has these extra inks.

Right now Puraa has a profit. But not in gold. Remember than if sale price>production cost = profit

800g + 60 blackfallow ink > 800g.We currently have profit of 60 blackfallow ink.

OK another point of clarification

The amount of profit (in gold) that Puraa makes, depends totally on what she does with the blackfallow inks. There are many options - turn them into inferno inks (480g profit), sell them as blackfallow inks (480g profit) or use them to make something such as glyphs, fortune cards etc (profit unknown). Its irrelevant. Puraa has 60 blackfallow inks - and has the same amount of gold she started with. They were free and they are also her profit.


So are the inks free or profit Breevok?


I guess this is the crux of the argument. And it is a very valid question. Puraa bought herbs and sold infernos and now has 60 BFIs that cost her nothing to make.

Now if a random stranger had opened a trade window and put 60 BFIs - I dont believe anyone would argue that they were free. Someone gives you stuff for nothing they are free right?

But is the situation any different when you mill them yourself? The only difference is you spent 5 minutes milling them. But remember our profit per hour model above - how often is someone going to give you 60 BFIs in trade?

Every time you make an item you should be minimising the production costs, as this increases profit. In the case of milling herbs you know you can actually make inks for free because you can sell part of the items for the same amount you bought the herbs for - and still have stuff left over.

Same goes for ore - buy a stack of obsidium ore for 45 gold. Prospect it. Worse case scenario you will get 6 common gems. Cut five and vendor them (at 9g a pop) and you have one free common gem in your backpack. 45g out, 45g + 1 common gem in.

The concept of free BFIs (and therefore, yes free glyphs bar the cost of parchment) isnt a new one.

Gevlon posted about it 18 months ago before he went mad. A couple of examples can be found at  Equilibrium Point and The glyph industry but there are many many other such posts across the blogsphere if you look far enough back. Here they talked about milling northrend herbs and selling Snowfall Ink to offset the costs of making Ink of the Sea. The price of making glyphs had to take this into consideration if you consider the glyph wars when prices were 2-3g and people were still making money. The fact that IotS had minimal/no costs to make allowed the wars to continue.

And that's the whole point, trying to offset production costs by selling the by-products when producing what you actually want is a great way to increase profit.

When making glyphs you want BFIs. You cannot make glyphs with Infernos. Many process have such by products - and in the case of milling cata herbs its inferno inks.

Now infernos are a rare case where they can actually cover the entire production cost of the BFIs, but this is how things currently are. Whether it will continue forever  I doubt, but the price of infernos will always offset some part of the cost of making BFIs.

Now finally to respond to one more comment

Anabella commented in detail to yesterdays post and its well worth a read. In response I say that I couldn't agree more. Glyph prices are dying, and the future is not bright. As glyph production drops so will the prices of inks etc etc. Agreed. However there are other influences that must be considered - if ink prices drop, less herbs will be milled (due to limited/no profit) therefore herb prices will drop too. Remember we are just offsetting our production costs. If whiptail falls to 40g a stack, we only need to sell infernos for 40g each to cover our costs.

However there will get to a point where the profit to be made milling herbs (even with offsets) doesn't compensate for the time investment. Gold/hour remember? At that point the goblins have moved on. And for now on Cael Alliance that point has been reached. However on Horde where Infernos are still 100g+, whiptail is 60g a stack and glyphs still sell for 200g+ there is money to be made. Every market is different, and each player has to focus on the cards they are dealt. You cannot worry about the economy on Rexxar if your toons live on Caelestrasz

You must react to YOUR market - the techniques you apply to make gold will be similar, but the specifics will vary. No doubt there are markets out there where whiptail costs 100g a stack and infernos sell for 50g. For those poor buggers I wouldn't advise milling :)

Epilogue

I believe this is possibly the longest post I have ever written. I have nothing left to say on the matter except, by my definition, if you can produce something and the result being that you have spent zero gold in the process of creating them then they are free, when 'free' uses the meaning of without cost, payment, or charge.

Puraa had 60 blackfallow inks. They cost her nothing to make after selling her inferno inks. She acted crazy and made 20 glyphs. The glyphs cost her nothing to make - they were free...