Greedy Goblin

Wednesday, August 19, 2009

Alchemy summary

Aosoth collected more than 5K within 2 weeks, that's not bad. Most of it came from meta gems, a seasonal market. I doubt that in a "normal" week alchemy could make more than 1K and it would surely need more work than getting the same from tailoring or inscription.

After watching the alchemy market closely for more than two weeks, it slowly became visible why this profession is so unlucky: it's a mature market. The whole point of capitalism is that market regulates the flow of goods optimally, making sure that the outcome is just and fair.

Too bad that this statement is true only to the mature market and very much not true to an immature one. When I make 10K/week via inscription, that's anything but just and fair.

What describes a mature market:
  • several, competing suppliers
  • informed buyers
In case of inscription the entry cost is high. To be a successful scribe, you need several addons and a couple thousand gold to buy your first batch of herbs/ink. You need several weeks of inscription research to learn all recipes. To be a successful alchemist, all you need is a couple herbs, auctioneer addon and alchemy skill. This means that most scribe do not participate in the market. They are happy with their shoulder enchants and they craft glyphs for themselves and friends but not for the AH. On the other hand most alchemists try their luck in the AH.

Most people buy glyphs only a few times, especially since dual specs. They have no idea how much a glyph should cost, nor they really care. If you lose 30G every second week, you won't be hurt. On the other hand people either never buy flasks/potions, or use a lot every week. Losing 30G on a flask is not an option even for me. They know the materials, and in case of having unfavorable prices, they turn to a guild alchemist.

No other profession crafts such a product. Everyone else sell gear or gear enchantments, items that you buy when you change your gear. They are all one-time buys, you'll never-ever buy one more titansteel shield wall. Alchemy sells "consumables". There are other consumables with similarly low profit. Have you ever heard of "cooking market"?

Alchemy shows how markets would look like if people would try to use their profession instead of grinding and use their head before buying.

Aosoth's luck came with the patch when lot of people wanted metas for their newly gained T8 headpiece. For a week, alchemy was a "gear profession".

Alchemy can still make money, either by selling flasks in large quantities, using elixir spec, knowing farmers, knowing every kink of the herb market. Alchemy can also make profit on niche markets of:
But this profit is low (due to low quantities sold), and mostly comes from research of the field.

Alchemy is not a profitable profession. None should be. Money should only come from hard work or research. The money from trading comes actually from M&S.

Update: I've slacked with my mail (with the help of the mail provider slacking with their servers but still). So I missed Aosoth's mail, where he shown his results of the last two week. This is after "some of it reinvested to get enchanting up from 410ish to 450 too (and buying recipes) and I have been cautiously applying the principles to that too."


Congratulations! So while alchemy is the least profitable, it's still more profitable than mindless farming, keep that in mind!

41 comments:

Vlad aerie peak said...

''To be a successful scribe, you need several addons''
now iv sent a mail regarding this one but apperntly it got lost in the spamm- may i ask which ones exactly ?
caus im slowly maing my way with auctioneer bean counter and an addon which displays +/- the ocst to make any given glyph, but iv heard there are better ones

Anonymous said...

Don't forget transmuting epic gems with transmute mastery.

ZacharyPruckowski said...

That's an interesting idea - alchemy is harder to make money with (as a goblin) because the only buyers are non-MS raiders.

Another problem with alchemy is that there aren't many things to sell. Almost all raiders use Flasks instead of Elixirs, and there are only 4 Flasks to chose from. At least Cooks can try to sell +crit, +hit, +haste, or +arp food, but alchemists are stuck with AP, SP, health*, or MP5. Jewelcrafters may make most of their sales off of a few cuts (Runed, Bold, Delicate, Rigid, Solid), but they have plenty of alternative long-tail cuts as well. Similarly, Blacksmiths and Leatherworkers and Tailors have several tiers of blues and purples they can craft, as well as PvP gear. Enchanters have like 10 slots they can enchant and several enchants per slot usually. Inscription has hundreds of sellable glyphs. Alchemy sells 4 Flasks.

Additionally, alchemists use the same raw materials as scribes. With inscription being more profitable, it drives the price of herbs up, cutting further into alchemy profits.

Finally, alchemists lose out because people stock up Flasks in a way they don't stock enchants or crafted BoEs or glyphs or gems. Guilds frequently store multiple stacks of Flasks for their raiders, contributed by their guild alchemist(s), or purchased when prices are at their lowest.

* - and +health is way worse than +stam.

Yaggle said...

"The money from trading comes actually from M&S"

The grocery store which I work at would surely go out of business if people only bought what they needed.

Anonymous said...

I agree with this post, that alchemy isn't profitable like other professions.

BUT, especially if you are a raider, alchemy "saves" you money, therefore indirectly you make money. You use %50 less flasks/elixirs than non-alchemists, so even if you buy your flasks from AH you still spend less money on them.

Anonymous said...

I'm glad that even the Super Wow Business Goblin admits that alchemy is not profitable.

Blizzard needs to give alchemy the ability to craft permanent items that have a high demand. Maybe, some sort of brewed concoction that when poured on items imbues the armor with a stat. Idk.

Also, perhaps a special type of Inscription ink is distilled from elixirs and oils so some glyphs will need an alchemist. Some engineering items could use specially electro-plated metals though I think that's getting a bit too advanced for Wow.

One of the reasons that Inscription is so profitable is that to make a glyph all you need are herbs and some vendor paper. That's it. Imagine if glyphs required ore, hides, and engineering craftables; the market becomes more difficult to watch and glyph prices would be very expensive.

Not a goblin but a gnome said...

This "the market becomes more difficult to watch" actually draws the line between AH people. In my sector (mostly engineering) it can be seen very clearly via ammo prices - arrows are made of simple saronite bars, while bullets require additional submaterials (detonators=cobalt + crystallized water), net cost of which is actually less than that saronite. But lazy 1click-crafters skip this drudgery, leaving bullet sector to me. Bullets sold like candy for 150% price of arrows. Same goes for engineering pets - simple ones are cheap and overflooded, while nobody makes Yeties except yours truly.

Anonymous said...

Amonymous: gevlon is saying that alchemy is exactly where it should be! It's the other tradeskills which aren't. Being able to craft another item will make zero changes to alchemy: lots of crafters, lots of informed buyers will cut the margins.

Dan said...

One submarket of Alchemy that I've found is profitable - at times - is as a Potion master and making the combat potions. On occasion, health and mana pots are worth making, provided availability is low and Lichbloom is available in sufficient quantities. I personally have not needed to purchase Suckerfish due to having 2x 450 fisherman, leveling mainly from school fishing (and thus having Suckerfish coming out of my ears).

Anti said...

i cam across a problem today. Morons are to stupid to use the AH.

i had a perfectly good scroll of +stam to bracer on the AH and yet a 18 twink was spamming trade for 10 minutes looking for an enchanter.

once i got fed up of watching him spam trade and whilst i had time to whisper him because both my accounts were performing a 5 minute listing action on the AH i asked him why he didnt just buy the scroll.

after a long education session on how exactly scrolls worked and where to find them on the AH i got fed up and logged off that toon.

later whilst collecting the days takings i was happy to see the 99g scroll (300% markup) had in fact been bought by him.

just now i see him spamming trade WTB crystalised air for 500% of the going rate. perhaps i'm not hungry enough anymore with my current wealth but i didnt waste my time with him.

Anti said...

i'm tempted to give away a few hundred low level scrolls to try and educate the market.

has anyone considered trying to actively increase the size of in game markets as opposed to just increasing their own share of existing markets?

it works in real world markets why wouldnt it in WoW?

Mitheithel said...

@Gevlon

Alchemy is exactly where a profession in WoW should be. Inscription is clearly overpowered. In my server, a low population one and with few competitors, in a week I sell glyphs for 20k. Then why has Blizzard never-ever considered about nerfing it? I don't remember even one blue post about inscription being OP. It is still like a DK in 3.0. But Dks have gone through a pletora of nerfs.
I don't think that Blizz don't know this phenomenon. I presume that many Blizzard employees use this exploit when playing their own game. Why then are their mouths shut up as if we were in Sicily?
My guess is that Blizzard doesn't care about goblins. But I would love to see this topic investigated by you.

Basis said...

I like the train of thought regarding Alchemy. You explored both the lack of true niche markets that Alchemy lacks, and the difficulty progressive traders have to meet the rising costs of herb trends.

I think it could be added though, that the population of a server relates to the supply of Herbs inversely. I notice on higher-populated servers that have more gatherers; the auction house seems to have less available materials and for higher markup. Also consider that with higher player count, more gold is entering the system and available, adding to server inflation.

Therefore, on high-populated servers, if an alchemist is shrewd enough, could they possibly arrange trade contracts with individuals before bringing their wares to the auction house, craft flasks etc. below the median value, and be that acceptable price people desire when they check the AH before asking a guildie? You could make Tuesday nights your cash cow, and spend the rest of the week skimming the smaller profits.

Still, you're spot on that there are difficulties in producing 2-5k regularly.

Not a goblin but a gnome said...

It's common practice on my realm - selling large batches of raiding consumables via Trade channel on Tuesday and Friday nights. Both parties are happy - no 5% tax and palpable less price.

Aosoth said...

Just a reminder Gevlon, but Fel mana potion isn't one of those niches anymore ;) Blizzard removed the ability to use them in the Vezax fight in the last patch.

Anyways, aside from that, whatever folks may think of alchemy, I learned a lot the last two weeks and am grateful. Cheers.

Malstram said...

Anonymous (popular guy *grin*) said:

"Blizzard needs to give alchemy the ability to craft permanent items that have a high demand."

Epic gem transmutes anyone??? :) Otherwise, get a new profession.

Lee Quillen said...

I don't understand why you don't need an addon for either profession (considering the addons we are talking about). The research that is done without the addon could be done just as easily with inscription. I would even argue that Inscription is easier to manage and make profitable without Lil Sparky than Alchemy is.

Kauzmo said...

The simple difference between Inscription and and any other trade is this:

With inscription you are crafting the MAJORITY of your book. Meaning you are posting almost all of the item you know how to craft. No other profession will do that. All of the others are dependent on a select few recipes/item to compete.

@Vlad aerie
I am sure your email did not get lost in the spam, the nature of your question (around here anyway) is spam. All of the information you need is available to you, you just have to search for it.

Anonymous said...

on of my favorite things to do is to use my potion master and my scribe together. My scribe needs tons of herbs. So instead of buying adder's tongue wipe out icethorn and lichbloom.

Then use some of that to make runic potions. The price goes up because no one makes them. Competition will be low because you'll jack the cost to make up higher and most people don't spec potions.

And you will be turning the ink into glyphs so you won't waste your money buying out the resources.

GrG said...

"Most of it came from meta gems, a seasonal market."
"it's still more profitable than mindless farming, keep that in mind!"
Depends on how much actually comes from metas and epics. At least on my realm potions/elixirs/flask are sold below mats price (due to procs) and Aosoth, as you sad, is Transmutations specced. Any income stats break up Gevlon?

Vlad aerie peak said...

@ Kauzmo:
Does that mean i iwl have to actually spend time to incrase my proit ?
damnit.
im not used to that since i leveled inscription...

Anonymous said...

Since flask selling is fairly cyclical and attached to raiding schedules, I find it important to pay attention to the common start times and make sure there are plenty posted about 10-15 minutes ahead of those. I.e. 745pm for a 8pm start, and so on. Its not unusual to sell a dozen flasks per minute (mostly endless rage and frost wyrm) as the raids get set.

Additionally, the M&S folks do their failpug naxx/OS/uld10 siege raids. Often these are advertised in trade chat. When I see them appearing to be full or near full, I'll head over to the AH and drop a few dozen flasks up and watch them get picked up.

It is indeed a very aggressively undercutting market, but there is some gold to be made with little effort.

Lastly, I have a few buyers that purchase multiple stacks at a time for their guild runs. Modest discount to auction house prices (partially offset by the savings from not paying the AH fee) helps move stacks and stacks of inventory.

William said...

Good post, showing that a margin of profit is part of how complicated the gathering/crafting process is as well as the popularity and usefullness of the item.

It feels like the more unclear the gathering/crafting process the more margin of profit is to be had.

Between me and my g/f's accounts we are only missing Eng (the rest are 450) and we have a herb/alch each. Even though the profit is obvious in making flasks we generally dont make near as much as we do by sending all of our herbs to my inscription alt and I feel that it has to do with the blurry process combined with your ideas.

Not every player can make the herb -> ink -> glyph calculation and thus just pays what they feel is right (what they have paid in the past or they really need it and are willing to pay more because hey, u only need it once, until next patch)

Also for enchanting months ago dream shards sold so well for the cost of the items we de'd.

Where as with alch, its easy to look up the mats and determine that 30g is probably too high.

We have determined that our most profitable alts seem to be our JC and Inscriptionist. (though we do most of our own farming of mats unless the AH prices dive low enough)

Kulat/Kriyet said...

I found your comments on mature markets really interesting, because it describes the difference I've seen on the two servers I play on.

I made my main a scribe to cash in on the glyph frenzy I knew was coming back in the spring. Just as it was dying down, I found your columns, and used your suggestions to keep a steady 5K a week rolling in as prices fell.

I used your columns on transferring servers to bankroll an alt to transfer to another server so I could play with friends there, with no downtime for crafting. (It worked like a charm bringing in 26K so far listing once a day on a lvl 24 with no craft skills - thanks Gevlon!).

My main server fits the description of a mature market - we have a lot of sellers using Auctioneer, very competitive pricing, and the same sellers who've been in Inscription since the spring (and so have all the recipes). Since June, I've seen profits fall and level off to about 1.5K a week for about 3 hours of work. I'm happy with that - it's still enough income in minimum time spent to fund my raiding, but it's very evident what a difference it makes once you have 4 or 5 competent sellers in the same market.

By contrast, on the new server, I am still selling strong - few sellers, don't seem to be using Auctioneer, listing in goofy ways. I ran into another seller who I regularly undercut, who actually spit on my toon! Pissed he wasn't getting 100G for his special glyphs, but "only 60G" since I came around, "ruining the market." 60G for a glyph it takes 10 seconds to make and he's crying! Oh, wait, he's crying 'cause I'm getting 60 and he's getting 0. With sellers like this, I expect to make money 'til my stash runs out and it's on to the next plan.

Thanks for the insights and the advice Gevlon. It's made WOW a lot more fun for me - giving me more time to raid/quest/goof around because I'm NOT grinding and farming.

Darraxus said...

I still make good profit, but there are several goblin in inscription on my server and I dont always have the time to keep undercutting them.

I am still making 10-14k a week, but it is a far cry less than the 40-50k I was making a few weeks ago with little competition.

I dont even bother with my other trade skills unless I am leveling an alt thru Outlands and I make netherweave bags.

Willowbear said...

Alchemy is definitely a mature market. On my server it is better to play the market surges. You get a pretty good feel for sales patterns - when the flasks sell and for how much and when. Once you have that you can buy on the lows and hold to sell later when the glut is gone. The ebb and flow of frost lotus availability provides those gaps. My most troublesome competition is with one particular player who sits at the AH from 8:30PMish to 9AMish server time repeatedly undercutting flask postings. He is in the gem market as well doing the same thing.

Sid said...

It's true. The same happens with alchemy on my realm (and with almost all the professions, for that matter).

The problem is that my realm is full of morons that think "If I farm it myself it's free!" Damn can't these people realize that time = money?

But I'm glad to know alchemy is still more profitable than grinding elementals.

Strutt said...

@Gev,
When you say its more profiable than farming, you lost me on that. Where you refering to any farming? or just herbalism? As mining i can make 5k in 3 days, doing only a few hours a day, with minimal effort. besides the mind melting repetivness of it.

Kauzmo said...

@Vlad aerie

The investment of time will be more than worth it. In the last two weeks I changed the use of one addon, I now make 12 - 15k weekly in my Glyph business. The only thing I changed was an addon.

Nuisance said...

Gevlon, you have overlooked one of the most profitable transmutes for alchemy: Primal Might. You can read more about my success Here

Anonymous said...

@Vlad Aerie:
The addons I use are:
Lil Sparky's Workshop - lists glyph prices from auctioneer
Armory - lists total number of an item on any character
Auctioneer - allows automated price check and posting of glyphs.

There seems to be a bug with Armory where the item number on toon (a) is forgotten if you craft on toon (a). So, I store glyphs on toon (b) and craft on toon (a).

Bristal said...

Gevlon did not say alchemy wasn't profitable, just that it my not be as profitable as some other professions due to a lack of diversity of high-demand products.

But that lack of diversity also means the alchemy market is simple to enter and not as time consuming as managing glyphs. A few products which sell steadily, little time invested, return is decent to pay for raiding once/week, and I can make my own flasks as well.

Fits my playstyle nicely.

Elyoa said...

With about 10 minutes of work, I'm clearing easily 1k/day with just the epic transmutes, as an xmute master I usually get 2 gems per xmute, have them cut for a small fee and post in the AH for about 300g each, in about an hour they are gone. But why stop there, I pay for xmutes from other alchs, the mats are the most expensive for scarlet ruby + eternal fire = cardinal ruby, bam another 600g, I could keep going but I think at the moment the epic gem market is the spot to clean up.

Aosoth said...

You "usually" get 2 gems?? that's a better streak of luck than most get then!!it's a proc chance so unless you have some mysterious system that effects game mechanics, I wouldn't rely too much on the income from those "usual" procs. Currently if I get a double proc twice in 7 days, it's not a bad week, 3 times I'll be made up with. Me thinks your "usually" is more than a slight exaggeration!

Pike said...

Very interesting post and analysis, thanks for the writeup.

My main is an alchemist and always will be because I think it is a fun profession but I did notice that the profit margin is not particularly great... ah well... I have played with it a little but in the end I am not a superhardcore money-maker so it's okay =P

Anonymous said...

Good post gevlon, an interesting post since you've put together 2 things most of us here are interested in: wow and econ. Interesting to take a profession and analyze the type of products(one-time use or consumable) and the type of person interested(MS or non) btw, I was seeing some of your troll posts from this weekend complaining how much time you spend on AH< now I know you say you spend much time MAKING your products, but how often are you monitoring and undercutting??? shouldn't that be a part of your cost when you compare your work to farming?

Anonymous said...

I Sell about 5-10 of the +Crit meta gems each week (Chaotic Skyflare I think it is called) for around 60g, after buying the raw gem for 30g.

While all other meta gems crash around me, this meta still sells consistantly well for me.

And since 3.2 I've easily sold 50 or more of these gems.

mel said...

Most of what goblins seem to exploit are the lesser niches, for example, Netherweave bags, Frostweave are far better, but i can sell the cloth for more then the bag! and Enchanters +8 Stats over +10 Why? because +8 is cheep, costs notihng and +10 costs tons..

They made 2 major nerfs to alchemy that have destoryed it as profitable, #1 Battle Vrs Gaurdian Elixer, There was a day in time where you would and could use as many elixer buffs with your flask buff as you wanted thought you needed, But now its a choice, do i use Flask of frost wrym, or do i use a pair of elixers, and i cant have 2 Guardian elixers...

Change #2, they changed the Shared cool down on potions, So now when i use a mana potion, i have to wait until im out of combat and 2 minutes before i can use another, durring a 15 minute fight you might use 3 or 4 mana pots, And at the begining you might use a small one to top you off, now its only used for Oh shot moments.

And another change, they removed the viablity of protection potions, not only do they share this cool down timer with more valuable healing and mana pots but the effect lasts 2 minutes. Which 2 minutes of an onyxia type fight do you want fire protection for?

Any one ever used a Frost resistance potion to help them finish off Hodir?

Yazilliclick said...

Quote
"BUT, especially if you are a raider, alchemy "saves" you money, therefore indirectly you make money. You use %50 less flasks/elixirs than non-alchemists, so even if you buy your flasks from AH you still spend less money on them."

That is a really poor point in alchemy's favor. At most that's saving you about 30g *maybe* 60g a few times a week. Lets say you raid 4 days a week and save 60g a raid night that's only 240g per week.

You could much more easily take up another profession make a lot more money than that without breaking a sweat.

Argent said...

Actually, Gevlon, I think you missed the major market for diamond transmutes after the patch: Jewelcrafters who'd levelled to 430 or so jewelcrafting who needed to reach 450 JC to prospect titanium or cut epic gems.

It's possible to reach 440 JC or so by cutting rare gems of various colors, but you need to cut at least 10 or so diamonds of one type or the other to get the last 10 points in JC. I'd power-levelled Jewelcrafting on my main in 3.1 for raiding because of the self-only benefits, and I'd stopped at 433 or so because there wasn't any benefit for me to go higher. (I have a dedicated JC alt with almost all the patterns.) When 3.1 hit, I ended up cutting about 18-19 diamonds to max my JC skill on my main so I could get more epic gem cuts.

I expect a lot of these gems got cut into "unprofitable" gems just for skill levels. Fortunately, I had the tanking meta gem from a HoL run, so at least I was able to make some profit from power-levelling.

Hagu said...

I think people are missing the point on Alchemy needing new products: if there was a new flask of awesome that 100% of the players used several a day, and alchemists learned it at the trainer, then there would not be a lot of profit in it.

Profit comes from buyers but also limiting sellers: complicated/intricate (inscription), limited patterns (BoP in Kara/Sunwell), cooldowns (tailoring ew/sw/ms c/d, epic transmute, j/c daily). My feeling is BoE patterns tend to just transfer g to the pattern seller. Even if the pattern is very rare, that usually just increase the pattern cost. Say you spend the 10kg to buy a new 245 pattern today. I don't see How you going to recoup that.

In fact, a new Flask of Awesome would draw more people into alchemy, so the average profits might even decline.

If you make money on timing the potion market - that is not alchemy that is trading and non-alchemists could do that, although it is low margin. Although I have an alchemist, I find the market trading on fluctuations works about as well on frost lotus as the flasks themselves.

Certainly the person who was making 600g on getting others to use their transmutes (why would anyone do that btw???) is not making money as an alchemist. you could be a JC/scribe and still hire the gullible to undersell their c/d.

On my server the EFire+SRuby is 50-60 and CR is 150-160 uncut, another 10-20g if Runed, so the alchemist is making about 100g/day - say 130g/day counting procs but not a/h fees. ( BTW, if someone is producing more than 200g/day in flasks, they are better off *not* being transmutation specialist. )

BTW, You Netherweave bag pros, what are your economics - 4g/stack or slightly less for cloth plus thread and bags sell for 6.5 to 7. and enough competition so there are some relisting fees,