Gold Capped: Cataclysm launch is the best time to farm
by Basil Berntsen 
Sep 15th 2010 at 6:00PM
I've taken a bit of comment flak for ragging on farmers before. Yes, I read the comments! In a mature economy where there's lots of competition for farming and crafting, I still believe that crafting and using the auction house is the most profitable use of your time. Farming does not benefit from an economy of scale that you can use to make more money with crafting; no matter what, you can only farm a certain amount of product in a given time. However, you can AFK process many parts of the crafting process. Especially when I started writing this column, farming was something that would never make you as much money as investing in leveling a profession and learning how to use it (two-handed, dual-wielded) on the AH.
This, however, will not be the case when Cataclysm drops. The people making real money will be the ones out there happily gathering the new ores and herbs so that the poor crafter saps like me can pay a huge premium for a very small supply.
Economy of scale?
Yes, economy of scale. A complex operation with 10 steps will take less time per unit if you do each step 100 times in a row, especially if all you have to do is fill your bags from your mail and click "smelt all" or some such. When you farm, you have to perform a highly specialized task that demands your almost complete attention. I can't farm effectively while I do anything else; whenever I stop staring at my minimap to reply in guild chat, I miss a node. I certainly can't watch a movie like I do when I'm milling. Still, if there's enough money in farming, I'll farm.
Cataclysm changes things
In addition to the fact that gathering ore and herbs now gives you experience, there will be a huge group of auctioneers racing to the new professions skill cap. These are people who believe that being among the first to get there means that they won't have to deal with competition and that they will be able to make insane margins on their goods. They're partly right, but if they were doing their math correctly, they'd realize that these margins had better be pretty stupendous if they're to offset the ridiculous prices on farmed goods right after an expansion launches.
I remember seeing Cobalt Ore for several hundred gold per stack when I started mining in Wrath of the Lich King. And this was before the massive increase to the number of people who played the auction house with a crafting trade skill. I predict we'll see an initial price for goods of at least five times what they end up selling for in a few months, simply because that's what I saw in the last expansion. I suspect it may be even higher, now that there are so many more auctioneers who will be competing for farmed goods and trying to buy stock for resale.
Good times to be a farmer
Assuming Blizzard keeps the glider bots away, the launch of Cataclysm will be an amazing time to be a farmer -- until the initial gold rush dies off, at least. The amount of time this lasts will depend on how much farming is being done, as well as how many people are trying to level crafting skills. I suppose that it's actually more accurately stated that it'll be a bad time to be a crafter. Basically, crafters will be caught in a situation in which the mats for their goods will be expensive but gradually decreasing in price. This means that everyone who waits a little longer than they do will have, on average, a price advantage. Also, buyers know this and often end up waiting on purchases of finished goods because they know it's just a matter of time until the prices go down, especially since very few people will be forced into buying endgame goods until they're at level 85 and raiding (or whatever).
So during this gold rush when everyone is buying farmed goods for a premium to get a leg up on their competition, I'd recommend farming to anyone. I'm planning on doing it, and so are some of the people I compare notes with about this stuff. I'm going to go ahead and caution people on one thing, though: If you decide to farm during the launch, you would be well served not to use your own mats to level your professions. If you've made the decision to wait until materials prices lower a bit, you're losing the current inflated value of your goods if you don't sell them.
Again with the opportunity cost? Really?
Yes, really. If you farm a stack of Cataclysm ore that's worth, say, 500g that day and you use it to raise your professions by 10 points, those 10 points cost you 500g. If you wait a week and a half and the prices (while still spiking up to 500g) bottom out some days at 300g, you just "made" 200g by waiting a week. If those 10 points opened up a recipe that would be worth 200g (in the week, not overall), then they're worth it. Otherwise, just sell your stack and use the money to buy one and a half stacks in a week.
Maximize your profits with more advice from Gold Capped, plus the author's Call to Auction podcast. Do you have questions about selling, reselling and building your financial empire on the auction house? Basil is now taking questions for a special series, "Ask an auctioneer," at basil@wow.com.Filed under: Economy, Cataclysm, Gold Capped
Reader Comments (Page 1 of 3)
Cyno01 Sep 15th 2010 6:11PM
Yeah... i remember paying 1000g for my first Frozen Orb to craft my epic engi goggles @ 74.
Im working on getting goldcapped before the expansion (bout 3/4 there) with plans to be realm first engineer again. With flying mounts im guessing prices wont be as bad as they were in wrath. I remember being the only person in Icecrown @ lvl 72 those first couple of days, but i was a rogue. Maybe ill try to find a druid whos going for realm first miner to partner with or something...
Cthulu Sep 15th 2010 6:29PM
Didn't blizzard say they are removing this realm first titles that encourage people to pee in a bottle for 3 days straight?
Cyno01 Sep 15th 2010 7:38PM
The titles, yes, but the feats of strength are still there.
Myk Sep 15th 2010 6:15PM
So what I think I get is this: the launch week of Cataclysm will be the time when farmers are at their prime in making big money, whereas crafters during this time should sit and wait?
Less time spent as a crafter in Cata launch week = More money made
More time spent as a farmer in Cata launch week = More money made
clundgren Sep 15th 2010 6:26PM
Yes, though it'll last more than a week. Think of it as a standard graph: at the start of the expansion the profit on farmed goods will be at the top of the graph, declining steadily as it moves through time. The profit on crafted goods will start at the bottom of the graph but rise steadily as it moves through time. At some point, those lines will cross...probably a month or more into the expansion. That is the point at which you switch from farming to crafting.
Good luck!
PS: This column is fantastic. My bottom line has more than tripled since I've been following it!
mark Sep 15th 2010 6:19PM
The other thing to considder of course - is what youll be spending the money on
I know that sounds a bit odd, but if your mining/making gems and using them to buy your main some new gear.... then not only will the prices of what your crafting change (get as much profit here) but the price of whatever your buying will to.
With most people waiting for 85 then buying gear it wont just be the supply that increases a lot, but the demand once people not farming levels hit 80 too.
this should leave the price of your gear more stable (once it stabilises of course) than the price of what your selling.
In which case it will almost definitely be worth leaving it for a while.
Alternatively if you want to grab your levels as fast as possible, then spending your materials on gear might be worth it.
It will help you on your dungeon farming, and heroics, and Ilvl requirements for randoms, and get you in there faster (more read up obsessive players, less randoms).
If your planning on getting raidgeared fast, then the little boost the gear will give you might save you a lot of hastle.
Aris Sep 15th 2010 6:22PM
I've been slowly accumulating stacks of ICC herbs. I'm trying to decide between selling them now or after Cata drops. I wasn't in this position when BC or Wrath dropped (this is the first time I've had a max level alt with a gathering skill). What's the market like for current top end mats when expansions drop? Any last minute buyers of that stuff or is it better to wait out the rush of new and then capitalize on the fact that nobody is farming "old Wrath herbs" any more and posting at a premium over what's available today?
clundgren Sep 15th 2010 6:31PM
I would say if you are going to save them, you will have to wait to sell them well after Cata drops -- months, most likely. They will become profitable once people start leveling new skills on alts, but for the first while most people will be focused on their mains, who almost certainly will have Wrath skills at 450 already and thus no need of your herbs.
Also, this may not be as profitable as it currently is with old world herbs, simply because flying makes Wrath herbs so much faster and thus cheaper to gather. So I would say sell now, or be prepared to hold onto your herbs for a long time before moving them.
jonas Sep 15th 2010 7:44PM
On the other hand, the quickest way to powerlevel your tradeskill is to use stockpiled 'old' mats to get to the point where your 450 skill recipes are grey, and only then focus on the new recipes. That's largely the path that people who hit realm first 3 hours after the servers go live follow. Additionally, my guess is that there will be more alt leveling than ever before, and so mats for tradeskills on the alts may be in high demand.
Also, kind of related, note that in the new tracking system, you can track herbs AND ore at the same time. So, for maximum farming fun, have a druid miner/herblist ready!
wutsconflag Sep 15th 2010 6:24PM
Opportunity cost question:
"Yes, really. If you farm a stack of Cataclysm ore that's worth, say, 500g that day and you use it to raise your professions by 10 points, those 10 points cost you 1,000g."
Why did it cost you 1000g and not 500g?
Aris Sep 15th 2010 6:29PM
Because you not only didn't get 500g from selling it, you essentially spent 500g by using it.
raspybunk Sep 15th 2010 6:40PM
You've effectively become your own purchaser. You paid yourself 500 gold for what you farmed rather than making 500. The diference between -500 gold and +500 gold is 1,000 gold. It sounds odd but by selling it for 500 and buying it when it hits 100 or re-farming you have to account for the time spent and the change in economy as far as a one time chance goes. If you re-farm the mats later when they cost 100g you've paid yourself 100 gold for that time since you could have simply bought them for 100 in a split second (perhaps with the hundreds of gold you made off the people willing to pay for the mats early)
He's saying it's worth your time at 500, but rarely later on once it's 100, since you could have simply bought it at 100 and made your product worth _____ with it with no real time lost.
Basil Berntsen Sep 15th 2010 7:16PM
Typo, actually. I'll fix it.
Hollow Leviathan Sep 15th 2010 7:24PM
It doesn't seem like it should be 1000g, because yes, you spend 500g by not selling them, but you also made 500g by spending it on yourself. The difference should be 0 and +500g. Am I missing something? You don't lose money you have, just money you could have had.
Also, alchemists who don't skill up and crank out thenew mat we can make that everyone needs is a fool. Those things are gonna be gold mines!
Heilig Sep 15th 2010 7:26PM
No. This is a huge fallacy. The difference is not +500 and -500 = 1000. You've neglected the income that you pay yourself.
The correct difference is between +500 and (-500+500) which is a difference of 500 gold. No matter how you slice it, if you can sell something for 500 gold and you don't, you're down 500 gold, no more, no less, no matter what you decide to do with it instead. If you use it to level, those levels cost 500 gold. If you trash it, your stupidity cost you 500 gold.
Opportunity costs are real, but you have to include the reverse of opportunity income as well.
raspybunk Sep 15th 2010 7:56PM
I had this explained to me poorly then. I thought it was used as a mythical number to explain time lost vs. other ways that same 500g could have been made, but it's a real number used to simply say if you farm or make it yourself you pay yourself what you save for your time spent? Well that is a lot more reasonable and plain, though it doesn't compare other ways it could be made the way I was told it was for. Guess it leaves up to you what your time is worth, or to measure it against anything else in a gold per hour of work manner.
North Sep 15th 2010 6:24PM
Please correct the following question if the logic is wrong but.....
Wouldn't the massive amount of people going through the new zones make high-end ore and orbs plentiful while making the cost of low-end mats skyrocket? Here is how I thought it would be: Most people will be leveling their 80s, and to that extension, their gathering professions. There would be huge competition for Pyrite (Cata cobalt) in zones like Hyjal and Vashj'ir because they'll be packed with people.
Since a new node will probably be devoured by the mob of people doesn't that mean farming will be more difficult while all these acquired ores and herbs flood the AH?
I'll be the first to admit that I'm not an economics master. If someone could correct this logic I would be greatly appreciated. This is how I thought it would be but the article says otherwise so now I'm kinda confused >.
North Sep 15th 2010 6:28PM
WTB Edit Button: I made a mistake in the first sentence and said 'orbs'. I meant to write herbs. I understand that orbs from level 85 dungeons will be very expensive, I meant herbs from level 80-81 zones.
clundgren Sep 15th 2010 6:35PM
Farming will be more difficult but nodes are a scarce resource, and the supply will take a long time to catch up to demand, even with everyone and their dog vying for each node. That's exactly what happened with Wrath, anyway -- I remember when even a stack of frostweave cleared 40 gold easy.
Brodi Sep 15th 2010 6:49PM
In previous expansions at least, the demands for items has always vastly exceeded the supply so prices have been astronimical for the first few days but that might be different in Cataclysm as unless I'm mistaken, flying will be available from 80, which means gatherers can probably go around efficiently gathering to their hearts content. Depending on day one prices, I might put off levelling in lieu of herbing or mining myself.