Wednesday, November 4, 2009

The Auction House Goblin Part 2

Todays article is going to be a more in depth view of the formulas mentioned in part 1. I'll show you how I come up with the numbers I use and how you can find those numbers yourself.

Inscription Ink Cost

Yesterday I showed you how to find the cost of your ink. I gave you the formula but I left out a few key details such as how I came up with those numbers. First, let's bring back the formula and I will show you why and how it works. The formula is designed to find the average number of pigments you can expect to get from a single milling. In yesterdays article we focused on Tiger Lily, today we will do the same. Wowhead provides the numbers we will use for every formula I will discuss here today. Each herb has a milling tab. The milling tab is found on the herbs main page, for Tiger Lily the milling page is here.

Click the image to see a clearer version. As we can see, Tiger Lily has a 100% chance to proc (MUD speak for procedure or chance for the procedure to run thus giving us the item) 2-4 Azure Pigment and a 25% chance to proc 1-3 Icy Pigment per milling. Since we are dealing with a range of numbers, 2-4 and 1-3, we must find the average of those numbers. I use a spreadsheet for this so that I can reference it later and modify my numbers easily. Google docs works well if you don't have Excel or Open Office. To find the average you add the numbers together and divide by the numbers used. For Azure Pigment the numbers are 2, 3, and 4. 9 is the sum of those numbers, we then divide 9 by 3 since we used three numbers to come up with that sum giving us an average of 3 ((2+3+4)/3=3). With Tiger Lily, we have a 100% chance to get 2-4 Azure Pigment, that average is 3, so 3*100%=3. We can then assume that over the course of many millings we will average 3 Azure Pigments per milling. Icy Pigment is a bit different, 1+2+3=6, 6/3=2, so we know that our average is 2 when the milling procs. The milling only has a 25% chance to proc and give us our Icy Pigment. We must then multiply 2 by 25%, 2*25%=.5, now we know that for every milling attempt we can expect to average .5 Icy Pigment.

A stack of herbs works out to 4 millings, 5 herbs used per milling, and 20 herbs in a stack. 20/5=4. Since we know that for each milling of Tiger Lily we can expect 3 Azure Pigment and .5 Icy Pigment, we can multiply those numbers by 4 to give us our average per stack. 4*3=12, and 4*.5=2. On average we can expect to get 12 Azure Pigment and 2 Icy Pigment.

It takes 2 pigments to make an ink, 12/2=6, and 2/2=1. 1 stack of Tiger Lily is = 6 Ink of the Sea, and 1 Snowfall Ink. We can buy Snowfall Ink from Jessica Sellers for 10 Ink of the Sea, therefore we must assume that 1 Snowfall Ink = 10 Ink of the Sea when we mill. Our total Ink of the Sea for 1 stack of Tiger Lily is then 16. (6 Ink of the Sea, and 1 Snowfall Ink which is the equivalent of 10 Ink of the Sea) To find your Ink of the Sea cost you must divide the purchase price (or AH price if you gathered the herbs yourself) by the Ink of the Sea value. If Tiger Lily cost 19 gold per stack on the AH I would then divide 19 by 16 to give me the Cost Per Ink. 19/16=1.1875

If Snowfall Ink is selling for 11.875 or more(1.1875*10=11.875) then sell your Snowfall Ink and make a profit. However, if for some reason the market for Snowfall Ink is in the tank on your server you must add the loss to your initial cost. For example, with Tiger Lily we average 1 Snowfall Ink per stack, that Snowfall Ink only sells for 10 gold. We experience a loss on our expected value of Ink of the Sea. We calculated that our Ink of the Sea cost us 1.1875 each, 10 of those would be 11.875. (11.875-10=1.875) That 1.875 is now part of our cost, to cover our costs we must then calculate that loss into the cost of our ink. Since we have sold 10 ink already at 10 gold we subtract that ink and gold from our calculation. 19-10=9 and 16-10=6 We must then divide 9/6, 9 gold left to break even and 6 ink left to sell. Our new ink cost for IotS is 9/6=1.5.

I already touched on mark-up and AH cut in yesterdays article so I won't reiterate. So you might be asking why I am re-doing much of yesterdays article. The answer is that a lot of people didn't understand where the numbers came from and why they were important. I also want people to know how to use them because they are useful for all sorts of things when it comes to WoW professions. As an example, let's look at a common practice, Enchanting/Jewelcrafting.


Ever wonder what to do with all of those green Northrend gems? Well, you can make items to help you make gold with enchanting. There are 4 items that produce very well and are extremely inexpensive to make. Bloodstone Band, Crystal Chalcedony Amulet, Crystal Citrine Necklace, and Sun Rock Ring. Each one of these is identical in our eyes except for the green gem used to craft them, they each take 2 Crystallized Earth and one green Northrend gem. In this article we will focus on the Sun Rock Ring.

Cost to manufacture is simple to figure out. First, find the cost of Eternal Earth on your server. We'll go with 7 gold. Break the Eternal Earth into 10 Crystallized Earth. (7/10=.7) Find the cost of green Northrend gems, we'll use 20 gold. (20/20=1) It take 2 Crystallized Earth and 1 gem ((.7*2)+1=2.4) to find the cost to manufacture 1 ring, 2.4 gold. The money is not in selling these, the money is made disenchanting these.

Each time we D/E one of these 4 items we have a chance to get Infinite Dust, Lesser Cosmic Essence, and Small Dream Shard.

1-3 Infinite Dust, (1+2+3)/3=2, (2*75%=1.5), each D/E should average 1.5 Infinite Dust. ( NOTE: Infinite Dust proc rates have been increased, rumor has it that the numbers are just slightly different, 75% chance to get 2-3 Infinite Dust Instead of 1-3, changing the average to (2+3)/2=2.5)

1-2 Lesser Cosmic Essence, (1+2)/3=1.5, (1.5*22%=.33), each D/E should average .33 LCE.

1 Small Dream Shard, (1*3%=.03), each D/E should average .3 SDS.

The overall D/E value of one of these 4 items is then 1.5 Infinite Dust, .33 LCE, and .03SDS. To find out what the value in gold is, find the AH price for Infinite Dust and multiply it by 1.5 (or 2.5 if that's the new correct average). Do the same for LCE and SDS then add the value of each of those together. (1.5ID+.33LCE+.03SDS=D/EValue) If for some reason the market for Infinite Dust is poor on your server you can always buy Armor Vellum III and craft Scroll of Enchant Chest – Super Stats or some other scroll that uses Infinite Dust and Lesser Cosmic Essence and sell those for profit.

I hope this helps you make better business decisions and in turn increases your profits. Good Luck.

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