Monday, January 12, 2009

Thoughts on Business

One can argue that aside from selling things that we find (I include equipment, farming proceeds, and cloth in this category), we either gather materials to make something that exceeds the value of the base materials or we break something into pieces, which are more valuable than the item that we broke.

Most times the making/breaking action is one way. If I DE an item, I can't use the Enchanting mats to recreate the item. If I smelt ore into bars or make Borean leather into Heavy Borean leather, I can't reverse the process.

I have found a couple of these one way markets that are somewhat profitable (plate armor, titanium rods, armor kits). Most of my created items that are meant for equipping present a risk in that I depend on someone needing to equip or use the item.

But one of my better ideas for the one way markets is simply gathering up mats and making them into higher level mats and finally listing them in small groups. Specifically, I buy Borean Leather for around 8 gold a stack. It takes 6 stacks to make one stack of Heavy Borean leather(HBL). That represents about 48 gold invested. Now, one stack of HBL sells for around 90 gold on my server - 42 gold profit! Not bad.

But where I am able to really get all that Heavy Borean leather sold is my strategy to list them in groups of four instead of twenty. See, most people who want to buy HBL don't need 20, so by listing the stacks of 4 I provide them with what is closer to what they need.

I end up charging, if I listed them as a stack of 20, 100 gold for 20, but because I break up the stack, I'm not affected by people selling that same stack for 90 gold.

So, it turns out that some crafters would rather buy two of my stacks at a higher cost/HBL rather than one of the 20 stacks that has a lower cost/HBL. The crafter saves money, I make money, and we all smile, except those trying to sell full stacks of HBL....

Now, if the Leatherworkers were a bit more saavy, they'd just go grab the Borean Leather and make their own HBL for cheaper than I'm listing it. But thankfully, they don't...

Next post is on the other side of the make/break issue: The two way market - 10 Crystallized -> 1 Eternal and 1 Eternal -> 10 Crystallized.

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