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Monday, October 25, 2010

Making Gold Off Cataclysm: Guest Post by Inkobah

Cataclysm Is Nearing
Today I have a special guest post from Inkobah of Twinkinfo.com.  You may recall his name from a posting I reproduced here titled:  Cataclysm: The Rebirth of Twinking (Part 1).  Inkobah is one of my favorite writers and I am excited to finally have a guest post by him.  If you are interested in twinks, make sure to learn about twinking, how to make a twink, and what twinks buy and use over at Twinkinfo.com. 

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Making Gold Off Cataclysm

The World (of Warcraft) is changing drastically. Soon the two original continents will look much different than we’ve gotten used to over the last 6 years, skills and spells are changing, stats and items are changing, new content will be added, and others will be taken away.

Within this post I’ll be tackling a topic very dear to our hearts: Making gold off Cataclysm. There’s many ways to do it, but here are my suggestions:

The best way to make money in Cataclysm is anticipating the changes that will cause item prices to go up (and avoiding items that will go down as a result of Cataclysm). Below are a few categories to take a look at to maximize your earnings when Cataclysm hits on December 7. But before we go there I want to encourage everyone to avoid the inflation bat!

Avoid the Inflation Bat!
What is the inflation bat? Well every time Blizzard has raised the level cap there has been major inflation in the game. Those that played back in “Vanilla” WoW will remember that you were amazingly rich if you had anything north of 1000g (now you can buy that much from the Chinamen for like $2.50). In BC the amount of gold available to players went up due to the increasing gold dropped by mobs and given by quests. It got worse when Blizzard implemented Daily Quests to the game, making it easy to get 100g+ by just doing a handful of quests. Then, it progressed with Lich King and will again wreak havoc on the economy once Cataclysm comes out.

Perhaps the best thing you can do to prepare for Cataclysm, is to avoid the inflation bat the best you can. How do you do that? Well, you have to find the right items to “invest” your gold in until after things settle down. By buying items that will increase in value in Cataclysm, you’ll be avoiding the inflation that will take your liquid assets and shrink them just because they’re liquid. Think about it this way, if you have 50k gold right now and just sit on 50k gold for three months you’ll have 50k gold (while everyone else will be surpassing you because of inflation). But if you have 50k gold right now and invest a good portion in goods that will increase in value come Cata, you could have exponentially more than 50k gold in three months.

It’s cool to have the gold cap on multiple characters for looks but practically it makes little sense because inflation will make that gold increasingly less valuable. I recommend that you keep some liquid assets (gold) because you’ll need it to buy goods you’ll need or pick up some sweet deals you run across, but most of your gold would be better served invested in goods that you can sell for a profit later. Also when you go to sell these items later mark them up! For instance, let’s say a stack of Copper Ore goes for 10g right now. In Cataclysm, that Ore needs to be priced at 15g + to compensate for inflation and the increased amount of gold in the server economy.

The key to avoiding the inflation bat successfully is finding the right goods that you know will increase in price. Investing in items like Primordial Saronite will be a bad investment as the value in Cata (and in the coming weeks) will tank tremendously. Below are a few areas where I would recommend you invest your gold in for the next couple months or so. It’s certainly not all the goods that should increase in value but here are a few.

Categories to Target

* Mats
Two new races (and new class/race combos) added to the game means all kinds of new characters running around on our realms. This means that materials for professions like Blacksmithing, Leatherworking, Enchanting, Tailoring, Jewelcrafting, etc. will skyrocket in demand. The risk to this investment is small, but the payoff will be smaller than some other investments.

* Greens turning into Blues
There are a handful of items that are currently Green that will be changing to Blue. I know Cold touched on a few of these items already. (Refresh your memory about Twink BoE gear changing from green to blue).  As dumb as it may sound, these items will increase in price if only because of the item quality (many are getting buffed as well). Don’t believe me? Remember when the very rare Hyacinth Macaw changed in item quality from White to Purple? The price skyrocketed while nothing changed on the item itself. This is a very safe investment, with a descent return on investment.

* Enchants/Glyphs/Gems/Patches
With all the new characters running around, created item enhancements will also increase in demand with Cataclysm. Also, this expansion is also being called a Rebirth to Twinking by many (including myself) so you should see many twinks running around post-Cataclysm looking for these goods. The risk to this investment is also pretty small, but I believe the payoff could be a bit higher than other investments (especially for items in high demand by twinks).

* Leveling items
Everyone assumes that leveling Blues/Purples are worthless these days and in Cataclysm due to BoA’s. This is not true! I make most of my money these days just buying and selling these items. The reason why it’s wrong is that a lot of people like to have good gear at their level and don’t understand it’s almost always a waste of money. They fall into the ill-fated logic that having good gear upgrades all the time will mean that I’ll level exponentially faster. Those of you that have been around a while know that gear helps but it’s usually not worth the gold (but don’t tell our potential customers that!). In addition, there’s a lot of people that don’t have BoA’s still so all slots are still profitable. With this method, try targeting items that are clearly intended for melee classes that also have Spirit on them (as the Spirit will be changed in Cataclysm to a more useful stat making them more useful and more valuable). Also there’s always people that see Blues/Purples and just buy it because of the item quality thinking it’s an amazing item. The risk to this investment is a bit higher, but the payoff for the right items will be high.

* Twink items
There is certainly some overlap between leveling items and twink items but the big difference is the price twinks will pay for items that are Best in Slot. I’ve seen twinks pay 10k+ more for 1 stat so they make sure they’ve got the best they can get. The scary thing is that there’s a lot of changes happening to twink gear right now and all the stats on Wowhead Beta, the Beta, Armory, and MMO-Champion appear to be inconclusive on what’s really happening. Many items that are currently are BiS are not going to be BiS in Cataclysm which is good if you are able to target the new BiS items and avoid the ones that will no longer be BiS. The risk to this category is high, but the reward can be very high with the influx of twinks that I think we’ll see post-Cata.

Monopolies
Another way to increase your ROI (return on investment) is to create monopolies with other players. I know there are different stands on this issue and I’ve even heard stories about people getting banned for doing this. There is nothing in the Blizzard ToS that would make this illegal (though very clearly illegal in real life) and I’ve never heard from Blizzard when I’ve done it. The way you do this is get a few buddies together to invest in similar items and make an agreement with all of those buddies to set your prices at the same when Cataclysm hits.

This works best and is generally foolproof with items that will be in very high demand. I’m disappointed that there are no new professions with this expansion because that’s the easiest way to create a monopoly by targeting the raw goods needed to level a new profession. I made a killing off monopolies the last two expansions by targeting ore and gems when BC came out and herbs with the last one. I was crossing my fingers that archaeology may require some raw goods but that will not be the case unfortunately.

Still there are areas where monopolies will always be possible. Find people you trust that are motivated to make gold (and have some capital to work with) and you’ll be good to go. Don’t freak out about the undercutters because if you pick the right area of the economy, the demand will far outweigh the supply that undercutters are able to sell.
Wrap-up
I hope these suggestions will help you to make a killing off of Cataclysm. I know I’ll be raking it in within the next few months and can’t wait for the big day. If you have success stories or your own suggested categories to target in preparation for Cataclysm please leave a comment. It’s an honor to blog for you guys. Thanks Cold for the invitation!

Cheers!

-Ink

Be sure to check out other great posts by Ink:
Inkobah's Guide to Auctioning
Cataclysm: The Rebirth of Twinking Part 1
Cataclysm: The Rebirth of Twinking Part 2

7 comments:

  1. Great post! A few thoughts in response:

    INFLATION

    The inflation hit...a very important point which I think will not be given enough consideration by many who love their gold meters. (Quaaid and I also had posts last week on this concept of diversifying rather than carrying cash into Cata).

    FWIW, out of curiosity I'm putting together an index to measure WoW inflation from now on.

    GOTTA HAVE THE BLUES

    It doesn't strike me as irrational to spend good money on good gear while leveling. Profit maximization isn't the only goal of most players (nor should it be, IMO, unless one's job is farming WoW gold for sale in RL). Keep in mind also that compared to someone who has hours per day to powerlevel a toon - and for whom gear would be replaced superfast - there are many others who play infrequently and for whom the gear might be good for weeks or months in real life.

    You list lots of really good ideas, thanks! I'm quite intrigued by your idea of grabbing items with "morphing stats" ("of the Wolf" ftw!). Seems to me it might be a good idea to trawl through the AH and pick up cheap blue items with spirit on them...

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  2. Same thinking as leveling blues/greens: healing and mana potions. Most people will pay to level faster and spend less time eating/drinking. Right now they're dirt cheap but that won't last.

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  3. Generally I think the same way about gear... don't spend mega bucks on something that will be replaced soon in the natural course of your gaming. On the other hand, there are several peices of choice goods that you will carry with you for a long time. I'm carrying a the Hand of Anut'Sul (i think) which is a killer tanking mace from Zul' Farrak, that I got at level 40, and i'm level 56 now and haven't found anything better than that. My Blacksmith is working on getting mats for 'The Shatterer' to make a dual set for my enhancement Shammy at 42, that will be a blast.

    So, it may not be the most econimical way to spend your money on undergeared gear, but it really does help with leveling.

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  4. I don't believe inflation is going to hurt those who carry a lot of gold into cata all that much. As long as they start investing into the right new things when cata hits.

    For example the new ores will be expensive no doubt but if you buy out most of the new ores you'll be among the first to max JC, have plenty of patterns and you'll pretty much be able to set whatever price you feel like on rare gems for months.

    Later ore prices will drop so you don't want to stockpile ore early in an expansion of course. This will work with any mats as long as there's a high demand item you can craft with it and sell for a profit.

    Don't underestimate the advantages to being one of the first maxed crafters with all or most of the patterns in any profession. Even if it costs you a lot of gold to get there once you're there you'll make tons of gold until everyone else catches up.

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  5. Thanks for all the responses and for the opportunity to share with you guys. Posting as Anonymous because my Wordpress log-in won't work for some reason.

    @WoWMidas: I appreciate your thoughts on leveling blues being worthwhile in your opinion. My opinion is based on the idea that items get replaced too quickly (through quests, dungeons, or honor) to be worth the lost gold from BOE blues. Very few blues are worth less than 100g these days and I'd always rather have the gold than the item that will last a handful of levels. But I see your point that it would be worthwhile in certain cases (most notably twinking).

    @Anonymous: Yes you can make a killing if you are the first maxed crafter on your server, but it's probably a much higher risk than other things you could do to make gold. The problem is that there's an unknown amount of competition you have to compete with and you will have to spend ungodly amounts of that gold for raw materials (since they'll be ridiculously inflated in the first month or so). I've never been the first on a server to hit max lvl crafting, but I'd be inclined to think it wouldn't even be as profitable as other opportunities (and would probably be pretty time consuming in proportion to the amount of gold you'd make). If you do this, however, let us know how it worked out for you. I'd be interested in hearing how profitable it can be. I could be wrong, but I'm skeptical of this idea personally.

    -Ink from TwinkInfo.com

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  6. No other commodity enjoys as much universal acceptability and marketability as gold.

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  7. Well, these posts are old but I can't resist to comment that if you are really trying to turn the WoW economy into a real one (with all those tactics etc) get ready for a WoW economy crisis lol. I really can't relate to that.. FYI I can tell you that for the first time on my server, mythryll ore prices have plumeted down to around 6g a stack and saronite ore prices have gone really up because nobody bothers to mine it anymore. How does that fit into your WoW economy model?
    Time is the only real resource people. That is the only thing you can not buy or stack. You can only waste it.
    Remember to have fun in between tactics. Or change to chess.

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