The Red Gem Bubble

I was worried about the gem market crashing after giving advice to some people on my own server.  First let me say this, I don't mind helping people on my own server.  The information is readily accessible enough online as you my dear ready already know.   Secondly, I've been fairly dormant the last few months as is and simply talking about it gets me more interested in doing it.

So anyway, I was watching the gem market closely and of course elementium ore.  Sure enough, I noticed ore was crashing in price.  Ore was incredibly low from 30 to 40 gold.  I can speculate that people were eithe really farming or botting, but at the end of the day, that's Blizzard's issue not mine.  So I bought it all up.  I ended up dropping 35k on the market to prevent ore from rock bottoming and the entire gem market from going up in smoke with it--nearly 1,000 stacks of ore.

Prospecting this was beyond tedious.  Though, since I wasn't doing anything in the real world, I turned on the TV and started at it.  The one interesting thing I noticed was simply that while processing all this ore, I could simply camp the market and undercut like crazy.  Tuesday is a patch day and I exceeded my own expectations.  I sold red gems as fast as I could prospect ore to keep them up and literally brought in 32k.  That's outstanding.

Though inferno rubies have gone down by 50 percent, ore is has gone down by by almost 60 percent.  Effectively, by bailing out the ore market, I kept the inferno ruby bubble alive.  Unlike a real bailout, no one was aware of this but myself.  It created the illusion that prices were going to stay high.  Effectively, by using my massive wealth, I had my cake and could eat it too.

The price was the literal babysitting of the market.  I kid you not that I was posting 3 gems of each red type at a time every 3 to 6 minutes--I didn't even bother with the rest since I was trying to clear all the ore out.  Normally, I couldn't stand to spend my time that way, but since I was trapped on my druid breaking ore, I figured I really didn't lose anything watching it like a hawk. 

By looking at my totals, I've already made more money on gems than I have on inscription.

 Here TSM really shines again.  It does the accounting for me and lets me really understand what I am doing better.  I mean before, I knew I was turning a huge profit, but I didn't understand how much.

152 gold Delicate x 212=32,224
175 brilliant x 340=59,500
145 bold x 308=44,660

My grand total is 107,384 gold!

Gold spent on ore is  98,593.

With 223 red gems left to sell.  If I average the three cuts and assume they sell evenly (averaging I get 157 gold per gem), then I have 35,085 gold to earn before auction house cuts.  That's 45k...ignoring all the enchanting mats and other gems.

Jewelcrafting very well may be king among professions.

Failure

Sometimes our great plans fail.

The other night, I bought up around 60 maelstrom crystal for about 200 gold each.  Then I decided I'd put them up for 800 each.  I thought people had stopped running as many dungeons, but alts and such would still need to get weapons from Deathwing and the rest of dragonsoul.  It was a good gamble or so I thought.

Prices were still at 500, but by now the entire market has shifted to like it was before.  I didn't sell a single crystal for an inflated rate.

So my plan was an utter disaster.

I've converted the crystal to the higher end enchants...power torrent, landslide, windwalker, 50 Int to bracer, and lavawalker.  This diversification is my plan to overcome this failure.

Sometimes, you have to have a backup in case you fail.

Commodities

Commodities are essentially something tangible people want. In Warcraft, these could be gems, ore, glyphs herbs, enchanting mats, and so forth.

Controlling one of these markets is nearly impossible. No matter how many stacks of ore I buy, more can be farmed. Thus, if you are attempting to invade such a market...one must move...cautiously. You can manage to control one in the short term, but never in the long term.

A bad example of a short term market would be hypnotic dust. There's an endless supply and most enchants that people demand do not require massive amounts of it. Prime glyphs are likewise dangerous to invest in too heavily...since they are being removed.

A better choice would be maelstrom crystals. With LFR and normal raiding, many people don't do heroics anymore and the amount of these entering the game is greatly lessened. .On my own server there's less than 100 in the auction house, averaging around 200 gold each. If I bought the entire supply for 20,000 gold...and put them all up for 800...what would happen? Certain enchants that require them would spike up in value—if your pockets were really deep you could buy all the premade versions of every maelstrom crystal enchant and spike those as well. This is generally what happens before a big patch day with new raiding content. The same could be true of red gems or whatever else.

As a side note, is this against the eula? It is definitely not. This post talks about it. Blizzard operates in a perfect capitalist economy. http://us.battle.net/wow/en/forum/topic/4081812872

Let's look at other potential markets. The first to consider is new characters. New characters often will level gather skills and then switch to production skills at max level. If your corner the markets on materials from say 30 to 80, you can really stick it to them. Especially valuable are the 50 to 60 enchanting materials that are use on bind on account weapons and armor. Also, burning crusade materials and lich king are in much lower supplies and demand higher prices in the AH. The speed in which someone levels through TBC these days makes fel iron and the herbs of that expansion very easy to monopolize. These materials are often the beaten path for level 85's and their pandarians will surely need assistance (as do most death knights). Low level herbs can be used to craft high level glyphs, so these are another good choice. Cloth will be highly sough after as well, especially to create bags for all the new monks. One must again be patient and cautious about which markets are worth invading.

It is interesting to note that maelstrom crystals won't be highly sought after, after Cata is over—it is the dust and essences that people will need in the long term to level enchanting. If Blizzard maintains their model, enchanting will be leveled from 425 to 500 on cata mats, and new recipes will help new enchanters get to 525. This type of speculation means it will pay off to have a large stockpile of dusts and essences. Wrath was different because you could shatter abyss crystals into dust and essences....maelstroms only are turned into shards. This matches the TBC model, and if you investigate it, both crystals and shards from that expansion are nearly worthless.

Once you are an established gold guru, cornering a market is a risk you can potentially take. I did this with flasks right before Ulduar to great success. During the end of wrath, I gambled glyphs would increase in value immensely as gold became more plentiful and that people will still want them in the future. I spent almost 50k (almost 20 percent of my wealth) buying up 8 gold icethorn and would crank glyphs out when they took one ink each out for 1-2 gold and in turn resold them for between 200 and 275 gold each—a massive profit margin when I had 16,000 glyphs at my height.. But, the goblin must be wary...for grasping the wrong market can be like trying to hold onto lightening.

In The Black

So I am starting the 6th day of this case study; I am in the black as the saying goes, I've started to make profit.  I've included inscription in the mix because I invested quite a bit of cash during the darkmoon fair and maybe you guys will be interested in seeing how it turns out.  This type of information may be useful for the darkmoon fair in mop.  The big "if" is how good the trinkets are.  Tsunami and Volcano and greatness before have been the sort of trinkets that are exceptionally strong.  They perform way better than their item level suggests.  The new darkmoon trinkets may not be this good.  If the new ones are equal to the monsters they've given us in the past, then the fair is definitely worth investing in.
   
With my jewelcrafting this week, I've sold probably 2/3 of my red gems and most of my oranges, but raked in 22,626 gold.  This is a thrilling profit for almost a week.

I never really fixed or restocked my enchanting market, but my profit margin was a respectable total of 8,882 gold.  I definitely could push this one harder if I diversified.  The amount of dust I have left is woefully high and probably will not sell easily, if at all.  The enterprising investor, keeps it for people that might try to level their skill in mop.  Great if you have a few enchanting bags on an alt or a guildbank of your own to store stuff in.


I had mentioned I'd made almost 50k since my low point during the darkmoon fair between selling a few decks and glyphs.  With a constant flow of glyphs selling (already down to two bags of ink in the bank and have reduced my crafting amount drastically) and selling a handful of decks, I've pulled in 38,232 gold.  To be honest, I need to push the decks harder and I am alarmed about how few I've sold.  On the other hand, I am still confidant, they'll continue to sell over the next month.  I've resold about 7 stacks of volatile life as well.  I was buying them for 5 gold per and selling for over 12.  That's a great payoff.  Normally, I would stockpile life for making more darkmoon cards for the next fair, but I really am beginning to think I'll avoid doing the fair in the future.  My current stockpile of cards will likely last.  Admittedly, I've told myself this many times before and always find cheap whiptail that changes my mind.

My grand total is 69,740 gold!  The gems and enchants have turned about a 10 percent over what I invested in them.  From here on out, everything I get from the remainder is pure profit.  Glyphs and the fair continue to great cash cows, but this is partly due to the time I invested in them.

If you are wondering why I focus on these professions, I talked about in my early entries that inscription had strong barriers to entry.  The thing that should be noted about jewelcrafting and enchanting is you get repeat customers often.  The basic progression in Warcraft leads to a constant flow of upgrades.  Most players want to be "the best" so they will always gem and enchant their new gear.  Whether this is for pvp or pve, is irrelevant.  The desire to be strong is constant.  Thus, these professions are highly contested and highly sought after.

Anyway, happy selling...unless you are on my server!

Reset Day Profits

One of the most important things is when to sell. Usually, I have seen the weekends have a huge increase in sales (Friday Night/Saturday/Sunday) and Tuesday and Wednesday. On Thursdays, Mondays, and early in the AM on almost any day are the best times to buy. Weekends is fairly obvious since more people are off work, and Tuesday and Wednesday are when raid lockout reset, so you'll see fairly high profit. When the lockouts reset people get new gear from raids (either through drops or valor points which buy them drops) and in turn there's a frenzy for enchants and gems.

Using my example of the other day, let's see what I raked in on Tuesday:

My inscription reset was interrupted last night, it was split into two parts. 3,261 was my first log in for the day. After I got back to it, I had made another 920 was my second. I pulled in 1,584 this morning from over night glyphs. I didn't sell any darkmoon cards unfortunately, but I still pulled in 5,765.

For jewelcrafting on my first log in, I brought in 3,479. My late night gems included no reds, and was a mere 463. I was merely undercut and ignored in this market over night. I tend to stick to only the best selling cuts as opposed to inscription where I craft any glyph that is profitable. For a grand total for jewelcrafting over 3,942.

My shaman sells my caster leg enchants and enchanting. I really haven't made a large enough variety. Mostly because I want safe sure things and I don't really want to micro manage scrolls. On my first log in, I made 1,464 (not counting the two pvp rings I sold for about 500 total), so 1,964. I made another 1,842 over night bolstered by selling some of those way over priced enchants. This totally, my profit at 3,306.

5,765+3,942+3,306= 13,033 for my grand total for Tuesday.

I could have probably had a much stronger showing with jewelcrafting if I would have spent more time on it. My gut tells me I was just undercut too quickly. I am used to doing glyphs once or twice a day and that's it. Jewelcrafting isn't that friendly—there's huge competition. I did jewelcrafting in “waves”--I'd post two at a time and then repost. Each time, I'd gain more and more auctions. This tiered system, saved me some time on cancel and repost cycles.

For enchanting...I just wasn't selling enough. I mentioned It before, but only a few types of enchants doesn't really grab the whole market. I probably needed about 20 more.

Inscription did so well because I have 350 different items up as opposed to 10 or 20 like the other two professions. The one major difference is...all the glyphs are the same to craft. It doesn't really matter what it is. (This isn't entirely true because shimmering ink is much cheaper than other types, but relative to say enchants, it is easy to price glyphs in a range.) Jewelcrafting has this same truth within colors, but a red gem is very different than a yellow one. Glyphs are definitely easier to micro manage.

I don't know if I'd bother disrupting the status quo, but those would be the best ways to do so.  Knowing your market and putting your time in to do so are the strongest skills.

Jewelcrafting--A Case Study

In the previous entry, I talked about the theory behind jewelcrafting—it was more theory than anything else, but let's test that theory, shall we? Let's look at an actual example. Jewelcrafting takes much higher amounts of money to start with, but the principles remain the same whether you can afford 20 stacks or 2,000 stacks. The time to sell of course and the risk goes up the more you buy.

First, we invest in the market and buy ore. I bought 274 stacks for about 100 gold a stack or 27,400 k in costs for this example. That's a sizable amount but again you can do more or less depending on how your auction house is.

After watching the history channel and breaking the ore, I yield 37 red gems x300 gold each =11,100 gold. 

I transmute the carns into inferno rubies. This should yield 61 red gems (x300 gold each=18,300). During this process I procs 10 times for 71 gems total, adding another 3,000 gold. Included is one lucky 5 proc! This brings my total estimated bring it at 32,300 gold!

 

The profit rate is about 17 percent or for every 5 gold invested, we get 6 back. That's not too bad. Of course, we gained both common and uncommon gems of other colors too. These are all pure profit.

If we count in 70 oranges and 66 purples (at 15 each is 2,040).  This is a real low number--you'll probably get more than that.  I like to pad my margins some, just in case.

When I actually started selling, I didn't get quite what I had wanted, but they were flying off my virtual shelves.  That's one of the reason I like really big margins.  Of course this left me with a slew of common gems.  The theory says we make enchanting materials and then DE them.

 The jewelry itself is easy enough to make, but sending them all to your enchanter would be...tedious.  Thankfully, TSM has an automailer.  You just choose the item types you want send, add them to a list, and then the addon will send away.



The first screen shot shows you how to add them.  It is just like adding glyphs to your list.  The second screenshot shows the addon whisking the materials away to my enchanter.

I also decided to take a gamble and make some pvp jewerly.  I had quite a bit of volatile water around that I wanted to get rid of and amberjewels, so why not.  They always disenchant into 1-2 shards with the guild perk, so it seemed like a way to convert stuff I didn't want into stuff I could sell. 

 

On a whim, I put a few rings up and sold them for even greater profit!  The rings were going for almost 250 gold per.

Our  macro trick doesn't work with all the different jewelry names.  Doing it by hand would be tedious.  I don't want to spend my time looking around in my bags!  So I use the addon Panda to find the stuff I want to disenchant and make it easy clicking.

 I disenchant the jewelry and then scour the market.  There's plenty of profit to be made.

918 hypnotic dust x 1 gold = 918

69 greater celestial essence x80 gold=5,520

39 heavenly shards x 100 gold =3,900

This brings our enchanting total to 10,338! That's a combined grand total of 44,678 gold!

 Why sell the raw materials when we have an enchanter?  I want sure things, so I look for Int enchants mostly.

 Of course there's always more. Look at 50 Int to cloak. 9 gold in dust and 4 essences (320 gold) somehow equal 625 gold?

Int to offhand...4 essences of 320 gold and 6 dust is somehow 630 gold? These are almost 100 percent mark ups!

I found mighty stats and earthen vitality to boots to be great as well.  They took fewer mats and the later was a great way to move dust.

If we consider that most of the pricy enchanting mats will sell as enchants for double their price, we can project profit as high as 54k range...just over double our initial estimates.  Jewelcrafting is very profitable and even if we don't hit some of the higher ranges we were hoping for, it certainly offers great yields.

Jewelcrafting Overview

I am going to talk about the basics of jewelcrafting.

The first thing about jewelcrafting that is important is realizing that only your red gems really matter. When I was doing jewelcrafting actively, my reds would carry my entire inventory.

Why are reds so good? Every healer and every dps wants all or nearly all red gems. They are optimal. The only exception is when you can get a +20 bonus to your primary stat from a socket bonus.

Thus there are three cuts that are really good. +40 Int (brilliant), +40 Agi (delicate), and +40 Str (bold). Brilliant is the most important because every healer and every caster dps wants it. That means all 3 mage specs, all 3 warlock, 2 shaman specs, 1 paladin, 2 druid, and all 3 priests—or 14 specs. Delicate has 3 hunter, 3 rogue, 2 druid, and 1 shaman or 9 specs. Bold only has 2 dk, 2 warrior, and 1 paladin or 5 specs. It takes 9 days to get all three main cuts.

Purples and oranges still sell for those socket bonuses. Unfortunately, it is less clear cut what you want. Haste/Int (reckless) is really good, but some classes might want spirit/int or master/int or even hit/int. Of course hybrid str and agi gems are all good. I would get one of each color and then alternate until I built a good list.

I've had an awful time selling greens, yellows, and blues. Sometimes you can sell the tank oriented cuts here. Pure stamina, stamina/dodge, stamina/mastery, and pure mastery are all cuts that might sell. These often go for next to nothing and sometimes aren't even worth posting.

All the same things we've done with glyphs can be down with gems. I would make a different group for red (your high sellers) and then orange and yellow. Finally, I'd make one for blues, greens, and yellows.

So let's talk about how to get gems. You can make a macro, just like we did for milling herbs, merely change mill with prospect. If your server prices are favorable, then you can buy it and prospect through it. It is more costly to relist gems though. I recommend only posting 1-3 at a time and then posting more when you are undercut. The jewelcrafting market has huge undercutters and you'll only optimize your profit while watching it constantly. Constant vigilance is exhausting though.

You'll get common and rare gems. Let's talk about commons first because there's really not much to say about rares.

Carnelians are your bread and butter. These are great because with an alchemist you can transmute 3 of them and 3 heartblossom into an inferno ruby. There's no cool down on it and you get a 15 percent proc rate with a transmuter spec. If your prices are favorable, you can even buy the carnelians raw and transmute them. If you end up like me, keeping red gems in stock is your greatest challenge.

Jaspers (green), nightstones (purple), and zephrites (blue) are used in the daily. Zephrites can only be used on the daily—there's no other use besides leveling your skill up on them. I have stacks and stacks of these I can't get rid of.

Jaspers and nightstones can allow you to make jewelry as do hessonites (orange) and alicities (yellow), you can make jewelry. You'll rarely get a blue piece and always a green if you didn't get a blue. The greens are utterly worthless, but you can disenchant them into dust or if your are lucky essences. The blues might sell for several hundred gold each! If your server economy is depressed, you can turn them into heavenly shards. Furthermore, if your guild has the perk that allows for extra mats, this really generates large amounts of materials. If you are adventurous you can use this to full your enchanting business. (I'd highly recommend some enchants like 50 int to cloak, 40 int to offhand, the drop bracer enchants, or 15 stat enchants to chest.)

When I was doing this actively ore was only 30 to 40 gold a stack (but reds were only 50 each). These days I see ore for as high as 150 to 200 gold a stack and reds for 300 gold. I haven't dabbled it much lately, but I believe this could be extremely profitable, though it almost demands an enchanter and alchemist to make it really work. If you lack an alchemist, you can make carnelian spikes, which commonly de into 2-3 essences. This isn't ideal by any means, but it gives you a way to use them efficiently.

This was just a brief overview of how to make money with jewelcrafting. Hopefully this helps that are learning the trade.  Jewelcrafting requires heavy watching of the market, but you can quickly entry into it since it only takes 3 days to get the best cut.  It is very casual friendly.  In theory you could even manually put your auctions up or use a mod like auctionator--it would require little work.