Today we will go to the absolute lowest level of gold making strategy. We will define what the goal of gold making is. This might seem completely obvious to most players, but it has some important ramifications. Setting the right gold will ensure that we can pick the right methods.
The goal of gold making
The goal of gold making is incredibly simple:
Maximize the total amount of gold on your characters over the long term
Now why is this an important definition of the goal of gold making? You always want to pursue the methods that give you the most gold earned. The reason why I am stressing this definition is that a lot of players focus on profit margins to a disproportionate degree. The profit margin is the relative profit on your activities. My definition focuses on the absolute profit.
A simple example
I’m going to illustrate the concept with a simple example.
Activity one: Materials cost you 10 000 gold. It sells for 12 000 gold. Profit margin is 20%, absolute profit is 2000 gold.
Activity two: Materials cost you 1000 gold. It sells for 2000 gold. Profit margin is 100%, absolute profit is 1000 gold.
Using my definition activity one is clearly superior as your profit in actual gold is double the profit from activity two.
The reason profit margin is important in real world investing and business is because capital is a limited resource. Most investors have a limited amount of money to invest and want to find the best relative profit. In WoW you will reach the point where your capital is not the limiting factor fairly quickly.
In my experience from starting again on new realms I find that once I reach about 300 000 gold capital quickly stops being a limiting factor for further gold making. I have elaborated on this concept before. What this means is that once you hit that level profit margin is no longer a useful tool for prioritising your gold making activities.
Why do we even have such an obvious goal?
Without an obvious goal there’s no way to choose the correct methods. For most of you time is going to be a much more limited resource than capital. For crafting and flipping you want to start with the big wins which means items with large profits in terms of absolute value. It will also give a better help when looking at the rate of sales in combination with the profit margin.
This is the basis for a lot of my opinions on gold making, some of which are unorthodox. Once we get into some more interesting areas of gold making the reason for this goal will make sense. I think the goal in itself is quite self-evident especially once you see it written down. The key part is that we are maximizing our total gold. This will help inform how we prioritize markets and what strategies we employ.
Time is money
Once we look at the time aspect of gold making the priority of total gold gets extremely obvious. If activities one and two above take the same amount of time, then Activity one will have double the gold per hour of activity one. That’s a massive difference! Depending on how strapped you are for time, this might not be a big deal. I am so lazy that I will always look to minimize my time per gold. This mindset will also help you identify the absolute best activities first and focus on them. Then you can diversify as soon as you have saturated your first choice.
In general this leads to a rough hierarchy of gold making methods:
I’ve already written about this in more depth. Going forward I will go into this from a more applied point of view as well, by giving examples of markets from the various levels and how I would prioritize them. I will also be highlighting a lot of tactics and tricks you can apply to your TSM auctioning operations to maximize your total gold.