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#1 Jan 11 2011 at 2:42 PM Rating: Good
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OK I know its the beginning of the Expansion and prices might be volatile for a bit. Thats all well and good but whats with all the selling crafted items for Less or WAY less then they cost to make?

I understand this might just be my server, or some weird trend. I run auctioneer and scan 2 times a day (Primetime/ morning).

while getting my engineering up most of the last few levels cast Hardened Elementium and a few of them. Going price is 189 a bar pretty steady for over a week now. So bows cost me to make something like 2k in mats. AH price (Drum roll please) 40g

Ok I can blow that off to many people leveling there engineering i guess. But Flasks are different they are useable, they need to be bought many times.
Lets take a look at Flasks of Wind:
-12 Azshara' Veil
-12 Whiptail
-6 Volatile Life
-Flask

Steady price on Veil 220g, Whiptail 200g, Life 6 g per

So to use a round numbers for less math I want to make 10 Flasks. SO i need 6 stacks of each herb and 60 Lifes.

220x6 = 1320g
200x6 = 1200g
60x6 = 360g
2880g Total

So take 2880/10 to get your base price at where you would sell flasks, right? 288gold each, Now i understand flask mastery if going to proc sometimes and get you a few more But it cant be relied upon enough to lower the cost to substantially.

Going price for Flasks of Wind on my server 198g avg. Each Flask is possible net loss of 88 gold ish(Not taking procs into effect.

So i ask what the heck is going on, something i don't know about or what? I understand Herbing can lower costs myself and i often herb Veil while waiting on q, or boredom. But I still dont see the point in wasting Herbs to make flasks when the mats sell for a higher profit?

Sorry i know this has ranted on a bit. Maybe someone could clue me in, or shed some light on the subject.



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#2 Jan 11 2011 at 3:18 PM Rating: Decent
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The same thing happens in real life.

People are able to offer lower prices because they are vertically integrated (they "own" their supply chain). Right now, those people are dominating the market and able to price out guys like you who need to buy materials. It's brutal, in that you have no chance to make a profit, and frustrating in that it seems they're throwing profit away simply to spite guys like you, but it is 100% realistic.

They're getting much less competition in the flask market, but trading off a loss of opportunity in the herb market.

Edited, Jan 11th 2011 4:21pm by boquaz
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#3 Jan 11 2011 at 4:06 PM Rating: Excellent
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Some thoughts:

- They're (power)leveling alchemy - flasks are the route from 500 to 510, and if you don't have a pocket JC but do have an herbalist, they might seem like the best route from 510 to 525. And as other crafters know all too well, naive people who make a recipe just for the skillup will then turn around and sell it for whatever they can get. See [Cloak of Beasts] for one egregious example, along with some of what should have been juicy enchanting scrolls.

- They don't understand opportunity cost. There is a pervasive opinion that herbs (ore, etc.) you personally gathered are free. So they don't include the cost of mats as a price floor, and list items priced purely to sell. Basically, they treat the finished cost as "found money", and don't care about the book loss they just took.

- They don't realize that there's a viable alternative. They don't even do the calculation of whether it would be better to sell the raw mats or the finished product. The same fallacious line of thinking that causes people to buy three Lesser Celestial Essences at 19.99 each rather than one Greater Celestial Essence at 50.
#4 Jan 11 2011 at 4:13 PM Rating: Excellent
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ElMuneco wrote:
- They don't understand opportunity cost. There is a pervasive opinion that herbs (ore, etc.) you personally gathered are free. So they don't include the cost of mats as a price floor, and list items priced purely to sell. Basically, they treat the finished cost as "found money", and don't care about the book loss they just took.


To add one more to this: Guild Bank.

Mats taken from the GB are free right? Smiley: wink
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#5 Jan 11 2011 at 4:23 PM Rating: Good
Yeah, most people just generally don't think about it, and it seems to have gotten worse. I'm really kicking myself for not selling the transmutes I did during the first week of the expansion then. It cost me about 230g per transmute for the Ocean Diamonds (or whatever they're called) and at that point they were selling for 200g a pop. I didn't want to take a loss so I figured I'd just bide my time and wait for the prices to go up. That didn't happen. Here we are a month into the expansion and people are selling them for 30g a pop. I'm also kicking myself for not making rare gems I could at least use.

Elixirs are even more ridiculous than the flasks are. Granted I haven't researched the cost of the mats since I'm an herbalist, but they're going for 2-15g a piece. I could sell any of the Cata herbs for that price for just one. There's a reason I haven't been making anything to sell on the AH, just farming mats makes a lot more profit while people are still trying to level their professions.
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#6 Jan 11 2011 at 11:12 PM Rating: Good
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Skilling up a profession and making money on the AH are two very different things.

When you're skilling up a profession, you make a loss. Especially if everyone else is also skilling up. There is one item that is orange and cheaper than the others, so everyone ends up making that and the price for it crashes. It has nothing to do with making money on the AH. It's clearing your inventory and recouping at least some of the costs. You expect to make some money back when your skill is high from the good recipes.

There are opportunities in this, though. For example, if the prices of the crafted items drop very low, snatch them up, disenchant and sell the mats for a profit. Not all JC/LW/BS/etc. have an Enchanter with high enough skill to disenchant the products of their skill-ups and dump them too cheaply compared to enchanting mats costs.

If you want to make money, sell the gathered mats. But that gives you zero skill points. If you want to skill up, shoulder the costs and dump the products at whatever price. Banking on prices recovering is risky, because most things devalue over time.
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#7 Jan 12 2011 at 9:21 AM Rating: Good
ElMuneco wrote:
See [Cloak of Beasts] for one egregious example, along with some of what should have been juicy enchanting scrolls.


Omg, this is a perfect example, I finally leveled my LW and buying mats off AH since I didn't have a skinner at the time, about 225g per stack of savage leather, when I finally made these to skill up to 510 they were going for about 40g on the AH at the time, in which they cost probably 900g to make, if not more.

I eventually did make some money back from the Bloodied pieces getting to 525.
#8 Jan 12 2011 at 8:21 PM Rating: Good
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Skilling up is the main reason I think.

Math is tough is another.

Losing focus in one's determination to sell can be another factor.

Giving up and simply wanting to get your cash back is probably also a factor.
#9 Jan 14 2011 at 5:03 AM Rating: Good
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Quote:
People are able to offer lower prices because they are vertically integrated (they "own" their supply chain). Right now, those people are dominating the market and able to price out guys like you who need to buy materials. It's brutal, in that you have no chance to make a profit, and frustrating in that it seems they're throwing profit away simply to spite guys like you, but it is 100% realistic.


Bang on the money. Or the gold XD.

I find making gold off the AH is a far better idea than trying to make gold from tradeskills. Sometimes, leveling a proffesion is almost irrational. Take the wrist stamina enchant back in wotlk. At the time the price to get learn to enchant that was in the region of 300g. I'm pretty sure I haven't enchanted dodge on writs more than 10-15 times. There's other, far more profitable enchants out there for very little gold.

Incidentally, since you are an alchemist, I've seen some people ask for a 5k fee for Vial of the Sands. I know it's a rare recipe, but wow, I wish I could try and farm for an item with such a potential profit margin.

Anyhow, back on topic. In my experience gathering proffesions make gold, crafting ones don't (Chaos Orbs now are unsettling this balance a bit, but I'm unsure about for how long).
#10 Jan 14 2011 at 7:41 AM Rating: Decent
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LGarth wrote:
Quote:
People are able to offer lower prices because they are vertically integrated (they "own" their supply chain). Right now, those people are dominating the market and able to price out guys like you who need to buy materials. It's brutal, in that you have no chance to make a profit, and frustrating in that it seems they're throwing profit away simply to spite guys like you, but it is 100% realistic.


Bang on the money. Or the gold XD.

I find making gold off the AH is a far better idea than trying to make gold from tradeskills. Sometimes, leveling a proffesion is almost irrational. Take the wrist stamina enchant back in wotlk. At the time the price to get learn to enchant that was in the region of 300g. I'm pretty sure I haven't enchanted dodge on writs more than 10-15 times. There's other, far more profitable enchants out there for very little gold.

Incidentally, since you are an alchemist, I've seen some people ask for a 5k fee for Vial of the Sands. I know it's a rare recipe, but wow, I wish I could try and farm for an item with such a potential profit margin.

Anyhow, back on topic. In my experience gathering proffesions make gold, crafting ones don't (Chaos Orbs now are unsettling this balance a bit, but I'm unsure about for how long).

I think the argument has been that the people that are benefiting from vertical integration could instead stop at step 1 and sell the raw materials for more than the finished products. The only benefit to losing money by crafting would be if the volume of sales of finished product greatly exceeds the volume on sales of trade goods, when you may be farming mats faster than they're selling.
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#11 Jan 14 2011 at 12:31 PM Rating: Excellent
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AstarintheDruid wrote:

I think the argument has been that the people that are benefiting from vertical integration could instead stop at step 1 and sell the raw materials for more than the finished products. The only benefit to losing money by crafting would be if the volume of sales of finished product greatly exceeds the volume on sales of trade goods, when you may be farming mats faster than they're selling.

Right. At every step in the chain, you have to decide whether it adds value or not. If you use 100g worth of mats to craft something you can't sell for more than 75g, you've cost yourself profit. The only way I can see in which this is a rational choice is if you're trying to convince the competition that the crafting step is permanently unprofitable, so that they give up.

However, since even on a backwater server like mine, there are 1) others who are vertically integrated too, 2) goblins who stockpile mats when they are low, and 3) guild crafters who draw from guild gatherers, a monopoly position can't stand for long without constant wars, since a) the real competition is just waiting you out, b) lots of people have alternatives if you jack prices /too/ high when you do own a commanding position.
#12 Jan 14 2011 at 2:32 PM Rating: Decent
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Also 90% of people use Auctioneer, or something similar, and just mindless undercut the competition with out realizing they are dipping under the cost to make stuff.
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#13 Jan 15 2011 at 11:40 AM Rating: Good
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You might be getting your herbs at 200g a stack, but I"m getting those same herbs for 75g a stack from my farmers who send their product to me directly so that they get an instant sale. Get yourself a few farmers and see your profits sky-rocket.
#14 Jan 18 2011 at 6:51 AM Rating: Decent
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FFATMA wrote:
You might be getting your herbs at 200g a stack, but I"m getting those same herbs for 75g a stack from my farmers who send their product to me directly so that they get an instant sale. Get yourself a few farmers and see your profits sky-rocket.

Standard YMMV disclaimer. Prices vary by server, blah blah blah. Stacks of herbs on my server are going for maybe 5g more than what the bulk buyers are offering, and sometimes much lower. What bugs me is when people sell a no-skill-up, high value item like a Winds or Waves card @ or near cost of mats and dump Stones cards on the AH for peanuts. Yeah, I get that people with Herbalism get their volatiles and mats with no out-of-pocket costs, but when you can sell the mats for ~1200g, more if you farm Whiptail or Twilight Jasmine, why sell the cards for an average price of very nearly that? The only thing I can figure is it's someone fishing for the Fire deck.
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#15 Jan 19 2011 at 5:58 PM Rating: Decent
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I have also been suspecting it might be Gold Farmers that have raided, read hacked, other accounts and have stolen the mats from the banks and used them to make items that people want. They under price cause in their case the mats are free and they just want to get the gold as fast as they can and get out.
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#16 Jan 19 2011 at 9:21 PM Rating: Default
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Nah - they'd be shut down too fast as Blizz traces the stolen goods - is not like RL where the trail can go cold or take months to trace - I'm sure it took me longer to type this then it'd take Blizz to track where stolen goods went.
#17 Jan 20 2011 at 1:46 AM Rating: Good
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rusttle wrote:
Nah - they'd be shut down too fast as Blizz traces the stolen goods
Not necessarily. It all depends on how quickly the person notices that they've been hacked. The hackers can have several days to do their work if the person is casual enough, and by then, the goods can be dispersed between any number of both legitimate and illegitimate players, complicating the effort to track them.

Edited, Jan 20th 2011 12:46am by Poldaran
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#18 Jan 23 2011 at 5:46 PM Rating: Decent
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You can level alchemy off flasks. At least 5 guaranteed orange points once you hit the skill range. Some people JUMP all over the chance to sell off their crafted leveling items ~somewhat~ close to the price they paid to skill up. I was lucky leveling my alchemy, I managed to sell off my flasks at cost for a "free" 5 points. But some people are just looking to get those points "as cheap as possible".


Also prices change constantly. If you watch the market for a while and learn the average prices, you can tell when something is high or low, like certain stacks of herbs. But if you just look at it like a snapshot in time your results will vary.

I generally just make level 525+ items for resale since, whats the point of losing gold on those? Most people dont.
#19 Jan 27 2011 at 11:21 AM Rating: Good
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Taking a different side of it....

The market price may not be "Right" but it's never "Wrong"

People say that selling pots at prices less than their respective mats is "Wrong" (I think at least one person said Naive) - but really it's not.

Assume a pot costs 10 mats and each mat costs 10G. Thus one pot = 100G if you go by input costs.

The logical person might say that anything greater/less-than 100 is wrong. It's really not.

Assume I have the mats. (If I bought them or farmed them doesn't matter - they have an market value of 1000G - thus I can make 10 pots). To me they do not represent 1000g - they represent 10 skill increases and whatever gold I can get for the pots.

If the pots sell for 500G - I don't look at it as me losing 500g. I see it as leveling 10 points cost 500G. Could I have sold the mats at market price and earned 1000G, yes. But that wasn't my goal. Could I have waited until prices normalized - yes, but 1) that wasn't my goal and 2) markets can move against you.

I'm frustrated when I see End Products selling for less than the mats (at AH) cost, but there's nothing you can really do...
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