Friday, July 30, 2010

Glyphs, Market Value, Gold Per Hour, Goblins Oh My!

I was very intrigued by a post from yesterday, over at the Greedy Goblin, that discussed the reason why we can make so much gold on the auction house is because of the large amount of idiots in the WoW community. I couldn't agree more with this point because it is very true. The M&S are buying ridiculously marked up goods and have no idea that you can buy a vanity pet from a vendor but will pay double for it on the auction house. They also sell items for much less than market value so what do wise players like our selves do? We buy them up and resell them for a profit. The M&S will still be happy and oblivious to what happened because they just got 100 gold for something that should have sold for 200g. So they are happy they got the sale and are like a toddler who gets a toy and is patted on the rear. They walk off thinking they got rich and they are on their way till the next time they make their 15 minutes of fame on the auction house.

What I didn't agree with in the post is that Gevlon claims that he will not work for 1000g per hour. So he will not sell glyphs below his threshold of 7g. So let's say he does post 300 glyphs and they all sell at least at his threshold that would be a total sales of 2100g. Cost of glyphs is 1.8g x 300 = 540g, so that is a profit of 1560g. Now let's say he drops his threshold to 4g and he ends up selling another 100 glyphs that he normally wouldn't be selling, with a 2g profit per that's 200 more to add to his totals. (Just an example, not that he would sell every glyph anyways and there is close to 500 glyphs available to make) He claims that crafting these additional glyphs will drop his gold per hour but yet he says this, "You can use addons for posting and getting mail, making these processes AFK, costing you no time." You are spending almost the same amount of time crafting and posting these lower selling glyphs so this would only boost your gold per hour.

"However it shows the reason why capitalism is good: it decrease(s) prices." This quote doesn't explain for simple supply and demand. There are many factors that can apply here and paying 60g for a glyph is not M&S. Sorry, just don't agree. There can be scarcity in the market place where a certain glyph can have a limited supply and large demand. When this happens you will have the large price upswings. Just the same you can have a flood of supply and no demand. That is where real price thresholds should be put in place, not "I don't want to waste my time with these lesser glyphs". Really? I'm pretty sure the companies that make the value brand foods at the grocery stores are making a pretty damn good profit.

If the above statement about capitalism was true, WoW Capitalism != Real World Capitalism. There is too many missing factors in the comparison between the two. There is no differentiation between quality of goods. We all sell the same goods and there is no difference in quality or branding. The only thing we fight for is supply and cheap materials. That is about as realistic as it gets.

Actual equilibrium is for example, when supply and demand meet. There is plenty of supply to meet said demand. But when a disequilibrium happens and a shortage is created either in demand or supply then prices are adjusted. If demand spikes and supply does not meet that demand then prices increase. So Gevlon is right for the most part with equilibrium point except, that saying that if there are goblins working in every market then prices would fall, that is where I disagree. This still doesn't take into account for limited supply, depending on the market or materials, these goblins are fighting for at specific times throughout a month. Demand can only be speculated and hopefully predicted. It's easy when you know a new raid dungeon or expansion is coming out that you are going to make a killing and you build up a stock pile to prepare for such a killing spree.

Thanks for checking in!


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