Saturday, June 18, 2011

Musings Post-Cap: Gold-Making Universal Truths

So it's been over a month since I hit 1mil, and just about a month since I wrote for my blog. You may have been wondering where the hell I went. Well, aside from exams, journal write-on, and starting an internship, I've just really had nothing to write about.

I more or less stopped the gold making grind after the cap. There wasn't much point to it. After basking in the glow from that huge mount of gold, I went to work spending it. Bought all the vendor mounts for my main, and a Traveler's Tundra for my lvl 40 druid. Started working on the pet achieves too, which cost a fair amount of gold to do. Almost have all the Argent Tourney pets, on both sides, as well as the rather rare Hyacinth Macaw, Disgusting Oozeling, and Firefly pets. Still keeping an eye out for the whelplings, but haven't seen many. Gave away a ton of the shiny stuff too, to various people for various reasons.

On the gold making aspect, I've done little else than glyphs, which I now love for their relative ease. I have a huge stockpile of glyphs and inks that I'm working through. Also selling off some some random items on my main bank alt that I got either pre-cata, or through snatch lists. I am, however, gearing up for 4.2, which I'll likely write about in a few days. I've been largely silent because, as you can see, I haven't been doing much gold making myself. I like to write about what I do, and my thoughts on such, so if I'm not really doing anything, there's not anything to write about.

I have, however, been thinking a lot about making somewhat of a meta gold making post. Just a few observations on making gold that I've come across on my way to the cap. So here they are, the universal truths about gold making:

Making Gold is Really Easy
Some may argue with me on this, but they're wrong. Making gold is easy, making tons of it is a little harder (and will segue in to the next universal truth). When people ask how I do it, I always condense my answer in to this little sentence: "I buy stuff, do something to it, then sell it for more." That's all we do. That's the very essence of gold-making. We take stuff from the AH (or vendors, or players, or from farming, but  that's less likely), run it through our professions, and then sell the completed product for more than the sum of its parts. Nowhere is this principle more easily illustrated than with Jewelcrafting. JC was the reason I got in to gold making, and it's still my favorite. The easiest way to make gold from JC is to buy a raw gem, cut it, and sell it for more. Doing that is how I got my start. None of the silly "shuffle," just going in to the AH with auctionator, checking the prices of raw gems, checking the prices of cut gems, buying the raw gems, and making profitable cuts to sell. It was absurdly easy gold. And it still can be. JC is the perfect example because it's so obvious how it works. Barely takes any math at all, just a simple understanding of which of two numbers is higher. Any other profession is really just a slightly more complicated version of this with a few extra steps. What they all come down to is taking something, making something new, and selling the new thing for more. Easy as that. If you can sell the finished product for more than the sum of its parts, you've made gold. It's as simple as that.

Now, you can make it more complicated by trying to squeeze out extra coppers. Buying from suppliers instead of the AH. Watching trends to buy when supply is abundant and sell when it's low. Selling on raid nights, buying on the weekends. Dealing with competitors. Etc. But again, in the end it's all about selling for more than you paid. If you can do that, you can make gold and reach the gold cap.

It Takes Money to Make Money
I think this is the most important thing to realize. Like I noted earlier, making gold is easy, but making tons of gold is a little harder. A week or so ago, a guy on the Consortium Forums made a post lamenting his inability to rake in thousands of gold a day like some of us could. He was doing everything right (aka, selling for more than he paid, see supra), so why wasn't he fabulously wealthy? Well, because he only had about 20k to work with. The thing is, the only reason some of us can pull thousands from our mail each day is because we're spending thousands in the first place. I could make thousands a day from JC, but I'd likely have to first spend many thousands on ore or raw gems. If you don't have that kind of gold to invest, you're not going to see that kind of return. Rather than focus on the raw numbers, you should be looking at your percent return of investment (ROI). Myself and our friend could have a 50% ROI, but he might not make the same as I can simply because he's not spending as much as I can. For example, we can buy widgets at 100g each and sell them as gidgets for 150g each. He can only buy ten of them (spending 1k), but I can buy a hundred (spending 10k). He'll make 500g, I'll make 5000g. But we both made the exact same 50% ROI. The sole reason I made more was because I spent more. Not because I'm "better" not because he's doing something wrong, but because I had more I was willing to spend. And hey, now I can buy more, and make even more! But so can he!

So how do you get to the point where you can make thousands in a day? By starting out making a few hundred a day. Again, it takes money to make money. That could easily be amended to say, it takes more money to make more money. You're not likely to make thousands daily if you're just starting out. You have to build your way up. Focus on one market, start a steady income, then start expanding. As long as you're getting decent ROI, you'll start to see more and more gold come in each week. The more you have, the more you can spend, and the more you can get back. Simple as that, which leads to the last universal truth.

Gold Making Takes Time
It's very very unlikely that you'll become a millionaire overnight. But it's not an impossible dream by any measure. It'll largely depend on how much time you're willing to put in. Not just in having enough toons to have a huge crafting army, or time spend leveling those skills, but in how much time you want to spend playing the AH. Things like milling and prospecting are time consuming, but the more time you spend on them the more you'll make. This is tied in to "it takes money to make money." If 10 stacks of ore nets you 500g, 100 stacks should net you 5000g. But you have to do the rather tedious shuffle to get through it in the most cost effective manner. There's also dealing with the AH itself. If you're able to spend tons of time babying your auctions and almost always being the cheapest seller, always replenishing your stock, you'll likely make a lot more than those who set and forget. But you'll also spend a lot more time to do so.

The time factor isn't just about the day-to-day AH activities, it's also about how long you've been at it. Back to "it takes money to make money," if you start out small, you can only make so much in a day. But as the days go by, you'll be able to make more and more as you keep reinvesting your profits. Eventually, you'll find a nice nexus between time spent earning, and gold earned. After that, you can basically calculate exactly when you'll hit the gold cap, barring unforeseen circumstances.

In Conclusion...
That's pretty much it. All gold making is is selling for more than you paid, but it takes time (and gold) to start raking in the big bucks. Just find something profitable, start small and work big, keep doing it, don't get frustrated, and eventually you'll start pulling in thousands and hit the cap.

2 comments:

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  2. I agree with your "Gold-Making Universal Truths " : gold making is easy but needs a lot of time... And time, only few gamers have !

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