Greedy Goblin

Wednesday, March 10, 2010

Peacebloom and copper

Ganking update: We have 110 members, but of course recruiting endlessly. Currently only below or at lvl 70, can be transferred with any gear.

There are many-many low-level characters on ally side now on Maghteridon. It's common that our guild gives 20-30% of the players online. Most of us are lowbies, so the lowbie:80 ratio is seriously twisted. Since most of us are dual or at least single-gatherers, copper ore, peacebloom, light leather and such are listed in huge quantity on the AH.

But who will buy it? Low level raw materials can be used to create low level gear and consumables (directly, or as a side-effect of leveling a profession). But is there demand for low-level gear? The LFD, and the ridiculously easy low level dungeons rain blue items on everybody, so we are way overgeared for our level. We can smash monsters 2-3 levels above us. So why bother to spend those few silvers on gear or consumables?

On the other hand the horde side is aged. When I log to a horde alt to check the horde population in a zone, I often see more lvl80 gankers in Ashenvale than leveling lowbies. As gathering professions are not the best for PvP or raiding, most high level character has two crafter skills. Those who remained gatherers are farming titanium and frost lotus, not copper ore and peacebloom. Yet, they need it to level their professions. They have gold and want high level profession fast.

If there is supply somewhere and demand somewhere else, a businessmen will arise to make these meet. So here I come, buying all the 5-10s/piece herbs and ores, transferring them to horde side and sell it for 40-80s/piece. Really profitable business for me. The lowbie farmers may lose on most of their potential profit, but getting 2g for a stack of peacebloom they harvested while questing is huge income and can make the difference between buying a new spell rank or not.

Since the transportation of gold is highly taxed (15% AH cut), I don't bring gold back to the ally side. I rather buy high level items that the hordies can easily create and sell them on the ally side. While I make huge profit on this too, my transported wares are still cheaper than the existing ones, since the efficiency difference of the horde and alliance markets gives me enough room for profit. Ink of the sea, enchanting materials, cloths for bags arrive in huge quantities.

If there is big difference between the two factions, there are always items that are in abundance in one side and demand in the other. You can transport for profit and to make the life of everyone easier.

Appendix: transportation between sides. It needs two accounts, can be owned by you, or you and a cooperating player. It also need 4 characters from you, (called Ally, Horde, BootyA, BootyH) and one from the cooperator (called coop).
  • Ally is in an ally city, buying stuff cheap on ally side.
  • Mails it to BootyA
  • BootyA is an alliance character, standing in a neutral AH, typically booty bay. If you are ganked a lot, roll a druid alt, level to 10, get teleport moonglade, corpse-jump to Everlook and be there.
  • BootyA lists the items on the neutral AH, for cheap, since gold is 15% taxed.
  • Coop is a horde char, standing a the neutral AH, buying the auctions instantly, before someone else grabs them.
  • Keep the names of BootyA, BootyH and Coop secret, or someone gets you to his friend list and when you get online, he logs to an alt next to the neutral AH and buys your cheap auctions
  • BootyH is a horde char, at the same neutral AH as Coop. Coop trades the items to BootyH face to face.
  • BootyH mails everything to Horde
  • Horde sells them on the Horde AH.
The opposite way:
  • Horde buys
  • Horde mails to BootyH
  • BootyH trades to Coop
  • Coop lists on neutral AH
  • BootyA buys them
  • BootyA mails to Ally
  • Ally lists them on Alliance AH

PS: let's be a bit philosophical and ask, why does it not work in the real world, with Africa and US/Europe, where the poor Africans (alliance lowbies) create low value items (peacebloom) with their cheap labor and sell it to US/Europe (rich hordies) for high level items (Ink of the Sea)?

The answer is: protectionism. While it's cheaper to farm grain in Africa, I can't bring it to US/Europe because they kill my business with high tariffs to protect their own farmers (against their own customers).


Azzur said...

In terms of Gevlon's philosophical perspective:

It is indeed easy to see that Gevlon is providing good service to the alliance. Materials cheaper than what the alliance themselves can produce are arriving in the alliance AH.

Despite all these benefits, a lot of countries make the mistake of implementing protectionist policies.

P.S. There are some advantages of "small" levels of protection but many countries make the mistake of overprotecting.

Purplezorlak said...

Unfortunately, at this hour is my usual gameplaying in the EU servers (except for weekends) So tuesday is no ganking game for me. But I hope I'll login tomorrow to find a lot of gold from you buying my stuff!!!

Anonymous said...

Yes, this is the concept of foreign trade. So even as the Horde is able to fam the all good cheaper (because they have faster mounts) both sides profit. A nice artice to read is:

Trooze said...

The real world has transportation costs. Grain is very expensive to transport overseas compared to its value, so we generally don't import much grain. We do get a lot of other goods from cheap labor in other countries though, e.g. clothes from China.

Gevlon said...

@Trooze: WoW also have transportation costs. If you read the appendix, you see how much time does it take to make the transport. Also, transporting gold has 15% AH cut, so I must find some item and transfer it back. In-country transportation also have costs. I'm 100% sure that transporting grain from an African harbor to a US harbor is cheaper than transporting it between two US cities on road for 300 miles.

Anonymous said...

I've been thinking of this too, but I don't have two accounts.
I suggest you transfer big load of books of glyph mastery. There hasn't been any of those for sale the past week and I need them :)

Anonymous said...

Gevlon, this was a wonderful post with a really good explanation for why AH arbitrage can be a stable source of income. It makes me very happy to see you again doing some very solid posting about the wow economy once again. In particular, I really liked the following passage:

"If there is big difference between the two factions, there are always items that are in abundance in one side and demand in the other. You can transport for profit and to make the life of everyone easier."

This explanation makes the situation so clear; it seems obvious now!

As for your question about farming grain in Africa, I suspect that the answer is not as simple as protectionism (though I acknowledge that this is a serious problem - consider, especially, the American laws regarding sugar imports). While the costs of farming grain in Africa and elsewhere may be quite low, in some cases the transportation costs just to bring the product to market (ie, the nearest major port) can be prohibitive.

Anonymous said...

About the ganking project, I'm missing one thing: the plan, in terms of time. You have stated the project goal: the mission, you have stated the way you will accomplish this (revitalizing ally economy, creating a social group levelling together) but what about the time frame (e.g. we will start ganking horde by the end of this mounth, or by the end of spring …) ? Personally i would not join a project without a stated goal in terms of time. Maybe this project has not the goal to gank horde but also to study this social experiment ?

Anonymous said...


How does making it easier for the Horde (Salute to the horde) to level characters and thus easier in general benefit your cause of trying to get them to leave?

So the alliance do the work and the horde get cheap materials? Good :).

If the cheap materials are going to be removed from the alliance what side it will make leveling professions harder. Is that good (for the alliance)?

Thanks you your support anyway. I need lots of silk and wool possibly mageweave when u get high enough to farm it. Soul dust. Outland herbs.

Does Coop accept orders from horde? I'll tip him generously.

Bernard said...

There's also a trick to camp the neutral AH and pick up bargains when people are moving items between horde and alliance.

It's Christmas when they you pick up a Primordial Saronite for 20 silver...

Nextweek said...

With very little money in the whole alliance economy you cannot charge a lot for goods. My char has about 7g at the moment with selling some pots and greens on the AH. (Just turned 19 last night)

However a rare green that would have gone for 5-10g on my old server is lucky to get 1g because of the lack of liquidity in the market.

Its not just the LFD tool as there are some items that are rarely in there at low level (for example: shoulders).

With a limited supply of actual gold its hard for the prices to rise.

With you planning on selling goods back to the alliance side I think you will find it very hard because of the money that the average player has available to spend.

Of course once a majority get to 80 and do the daily heroics we will start to see the cash flow and prices rise.

Anonymous said...

Good insightful post.
I've been doing something similar but with only one account. As I can't buy my own auctions I've had to improvise. Instead of posting of the neutral AH and hoping for random sales I've recruited a horde who was regularly buying my previous auctions. I now have a list of items (much like Gevlon's peacebloom and cooper) which I sell to him at an agreed price.
People might say I'm dealing with the enemy but as result I have plenty of gold for skills etc.

Slightly off-topic:
Maybe this project has not the goal to gank horde but also to study this social experiment?

I'm in the guild and I believe the initial purpose was to gank the horde. Gevlon creates these projects for a reason, to show people that something they believe to be difficult or impossible can actually be done if approached and tackled in the right way. I don't see this project as being any different.
However, if since then it's given Gevlon inspiration for posts regarding making gold or if he's decided to 'study' the members then that's fine (for me at least, as long as 'study =/= exploit').

Everyone in the guild joined to take part in the project to gank the Horde fanboys, and they'll stay to do exactly that.

Coldroger said...

I'm missing another reason why protectionism isn't as bad people would think.

It's not only about quantity, but also about quality. In the US/Europe many diseases don't excist anymore due to klimat, medication etc.
In Africa there are still alot of diseases that still remain (mostly because of high temperatures). Some of them are even 'stronger' than they ever were in US/Europe, so people could not have build up (enough) resistances against these.

Diseases can easily be transfered back to US/Europe by importing grain for example (food and animals are the fastest/best way to achiev this). Even if it may not cause any damage at start, the disease can evolve, making it a real threat to the populations of many countries.

Ofcourse there are enough methods to secure the quality. But if people are honest, they wouldn't build an office or send people down there just to secure health or some people they don't know. Since that costs extra money, money people would rather spend on a new sportscar.

P.S. sry, there may be some bad english in this post, did my best to translate it.

Gevlon said...

@Last anonymous: you are right about the mutual benefits of the trade. However you miss the main point of the project. I believe that 90% of the horde side is M&S. Benefiting them won't make horde stronger as they are a waste themselves. If JhonnyUKlol can level his LW to 375 to get the achievement, that won't make you any stronger. On the other hand the horde items we get makes us stronger.

Also being lowbies we are unable to efficiently produce gold, that we'll need to train riding.

Anonymous said...

Interesting insights on the WoW economy. However, I think you are quite off on the efficiencies of American agribusiness. Machinery, fertilizers, pesticides and seeds can overcome the labor cost differential.

Okrane S. said...

I like the ironical way of using the resources on the horde side to finance your project of ganking them.

Okrane S. said...

I'm trying to actually understand why, for both of your projects, you have enforced the leveling of new chars from people as nearly a requirement for participation.

In undergeared you specified a class never played before, in this one you inderdict players above lvl 70?

What's your hidden motive? Or do you just like leveling yourself?

Seems to me the project would be sped up quite a bit if level 80 already in pvp gear would be welcome to join.

Gevlon said...

@Okrane S: lvl80-es WILL be accepted as soon as we have 20 lvl 80 ourselves. The reason is to prove that one CAN level in this environment, CAN dodge being ganked, CAN live without lvl 80 daily quests in the near-dead economy.

The statement "enough max geared and rich players transferring to a server can change the faction ratio and the economy" is trivial.

Anonymous said...

Whats interesting though is the fact you can transport goods like Diamonds since they are small and their value is large per square inch, the same for weight so smuggling becomes very easy.

The same goes for drugs like cocaine which has dense value in that its small, but has large value.

It is interesting that we will protect farmers but not our own drug growers/farmers!

You can say that drugs are more harmful, but if we look at the damage and obesiety rates in euro area/US it is painfully clear which does more damage ( damage to the government in terms of healthcare is more important here as we are measuring on government protection policy)

Perhaps we should ration the amount of food that people may eat to save money. Perhaps if we ration food, people will smuggle in caviar and lobster?

Razzleberry from Mag

Anti said...

we have a few people arriving on Cho'gall for the US version of the ganking guild.

i personally am rasing capital with Ammo sales and other similarly minded people are getting their funding set up as well as leveling their toons.

some promotion of the Cho'gall project couldnt hurt.

Gevlon said...

@Anti: If you want promotion, do it. Start a blog and write the stuff. I'll link it of course. But don't expect me to work on YOUR project.

Ratshag said...

Reasonable analysis of how to take advantage of trading imbalances in-game, but the real-world comparison is dead on arrival. I don't know about Europe, but the reason you can't grow grain in Africa to export to the US is because it is in fact much cheaper to grow and harvest on large mechanized farms supported by a well-developed infrastructure than it is to grow it on small manual-labor farms. As a result, the US exports huge quantities of cheap grain to developing nations like Egypt, which cannot produce enough to feed their own populations. (Egypt consumes 14 million tons of wheat per year, but can only manage to produce 8 million tons.) There are some tariffs on some food products here and there, but they tend to be on niche products. You don't need a tariff when you are already the biggest exporter. Being "philosophical" works a lot better when you don't let dogmatic assumptions get in the way of facts.

Oxymustard said...

@ Trooze
It has nothing to do with costs of shipment nor the quality or diseases in/of the foods, because the majority of the plantations are owned by Western businessman.
(eg South Africa, Brazil , Colombia)

They actually still dump containers filled with food in the Atlantic and the origin of the food is third world countries; destination West. They do this to keep the demand and prices high. The food dumping still happens, my uncle is an engineer on a Maersk containership and has seen many times containers filled with bananas, pineapples, mangos etc being ditched into the ocean.

Reversion said...

Funny how many people think the real word comparison is no realistic. Why not? Oh, they cite more efficient farming in the 1st world versus the 3rd... Oh really? That does not apply? How much easier is it for a lvl 12 to mine copper while walking, and dodging same level critters? That compared to an 80 with an epic mount. And how much does the little 12 really get between quest mob kills compared to the high level farming who is only out for the ore? This disparity mirrors the real world one. Maybe the efficiency ratio is not the same but it is certainly analogous.

Draturg said...

Great tip:
If you're alliance at Magtheridon, do like I do. Level two crafting professions, buying the cheap mats from AH. If you follow the levelling rate (buying Iron Ore when the majority of the rerollers are level 30-ish), then you can keep the expences very low. This also means that you can sell products for cheap without losing much profit.

The levellers have money because you brought their materials, so they will afford to buy your cheap potions and armor.

You may even want to take upon f.ex. leatherworking and enchanting. Buy cheap leather, craft stuff, disenchant it.

The supply is endless. Levelling a crafting profession has never been easier. Again: Make sure you follow the levelling rate. Start now before it's too late and Copper Bar bumps from the current 1-2g stack to 10g/stack!

Bloodshrike said...

Gevlon, I'm not sure if you've noticed this or not, but there really doesn't have to be a 15% neutral AH fee.

Whatever you post, post for one (1) copper. Sure, you get charged a deposit, and with high level mats that can be pretty hefty, but 1 hour after your auction sold, you get everything back. The neutral AH is not going to charge 15% of one copper, so it merely returns your full deposit.

Sure, your Booty Bay alt needs to have a large supply of gold if you're doing a ton of business, but you should never lose a single copper if you're selling to yourself.

God said...

Gevlon, it would be a help if you could do something as simple as mention the toon name of someone people could contact on Cho'gall after coming over.

Although I'm pretty new to the server, I'm intending to stick it out, and if enough interested people come over, it would be worthwhile for me or somebody else to start a guild for all of us. Certainly not as organized as what you've got going, but just something to let us meet up with other people that came for the same reason as we did.

My characters name is "Mylittlepwny", that would be somebody any new players on the server could get a hold of. Please mention that in a future blog post, it isn't much to ask and would be useful for people trying to replicate (to some extent at least) what you're doing on EU servers.

MomentEye said...

The protectionism is even more apparent when you look at the poor Afghan's cash crop: Poppies.
High demand in the rich countries but massive Govt. intervention to stop trade.

Noak3 said...

You don't need two accounts to have both an alliance and a horde character, even on PvP realms. You've been able to make cross-faction characters on PvP realms since Ulduar.

Anonymous said...

You need 2 accounts so that you can buy each others AH. Unless i'm mistaken, you can not buy your own AH off the neutral AH, you need a different account.