Profit margin doesn’t matter (as much as you might think)

The other day I talked about something I like to say, which is that profit margin doesn’t actually matter that much.

Profit margin assumes that capital is limited

The entire point of even measuring the profit margin or return on investment is when you do not have infinite money to spend on profitable things. So you want to make sure you spend your money or gold on the most profitable things.

If you have more gold than you can effectively spend on materials or items then profit margin does not matter much.

What matters?

Most people care about making gold. This means getting the largest possible raw gold profit long term. That should also be the goal. Usually you will eventually hit a point where the biggest constraint is no longer your gold, but the time you have available.

At that point you need to prioritize your gold per hour.

How can you scale your effective gold per hour?

Many ways of course, but the main ones will be familiar. You can focus on faster selling items, but that will increase the crafting commitment as well. The better way is focusing on more expensive items. If you can choose between two items, where they sell equally fast and one sells for a profit of 20k and the other for 10k, then the first one has double the gold per hour, assuming everything else is equal.

Flipping expensive items is the end-game

Flipping expensive items will always be the most time-efficient goldmaking method. It is also generally better to me on multiple realms. This means you can focus on only the most profitable markets in terms of raw profit on multiple realms. If you are on just one, then you would have to supplement with less profitable methods and you would make less gold.

Unless something actually limits you, it should not be optimized

If you want to do as well as you can you should always primarily focus on optimizing whichever aspect is limiting you the most. Nothing else will move the needle enough. Think about what is the biggest limit on you growth and find ways of limiting the effect from that.

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