TSM Discussion: Valuing you crafting materials

Today we will be somewhere between practical TSM tips and the theory of goldmaking, as I look at how you should value your materials in TSM. 

TSM material values

TSM has a price source called crafting that represents the crafting cost of an item. This source is incredibly useful, and I rely on it for all my crafted items. It is essentially just the sum of the material values for the items required to craft an item. 

I want at least 20% profit margin so I sell items for 120% crafting at a minimum. For this to work we need to value the materials correctly. 

There are two main approaches to this that I’ll cover today: 

Market value 

Your actual cost

The default: Market value

The default material cost source will be dbmarket for most tradeable materials and vendorbuy for anything that is sold by a vendor. This is of course quite simple to use, and the obvious advantage is that the price always follows the market. 
You can usually just go buy materials at dbmarket or below and if you post items for 120% crafting with this material value you will get 20% profit margin if you buy materials right now and you can sell the item right away. 

In real life of course the purchase of the materials can be as far as a week or more in advance of when you sell it though, so the prices could change so you don’t actually make a profit. 

Your purchase price

The main alternative to dbmarket based material pricing is avgbuy, your average purchase price. You can use this either with a smart average (which is the price of the X last purchased auctions where X is the number of materials you have) or the normal one that uses all the materials you have ever bought. 

This will be closer to your actual cost, so it will be safer as far as making sure you always profit. It can get out of sync with the market though when the price of a material changes significantly. You also have issues that it can be unstable, particularly with smart average if you spend a lot of materials. 

Why I use market value

I use market value personally. There’s nothing wrong with using avgbuy, but I prefer DBmarket for several reasons. 

  1. It always follows the market. I’m happy taking a loss if a price moves against me. There’s nothing you can really do if the price falls, so better to just keep crafting at the new level if it’s profitable. Avgbuy will set your crafting cost by looking backward. 
  2. Opportunity cost. To optimize your time you need to consider opportunity cost. If a craft is only profitable if you buy the materials cheaply it may be better to just flip those cheap materials and spend time crafting something else. If it’s not profitable at market value, I’m generally not interested as I prefer to volume craft. 
  3. It makes purchasing decisions really easy. When buying materials you can usually find a lot from 80-120% dbmarket. I can go as high as 120% for smaller volumes as long as I buy a lot of cheap ones as well and you can always find that. 
  4. The value isn’t arbitrarily set by whatever prices I personally could buy. I don’t shop too often, so my average buy would not be stable enough as a single batch could really mess with it. 

Every once in a while I will take losses when a shift happens, but in the long term this has always worked really well for me.

The case for avgbuy

Even though I don’t use it, I’ll share some advantages to averagebuy pricing. 

  1. You can get away with lower prices, which gives you more volume. If your average price is 90% dbmarket you will have a lower min price than me, so you can actually compete better on price in certain situations. 
  2. It is your actual cost, so it is more accurate and will give you a more accurate profit margin as long as you purchase materials often and the price does not change significantly. 

Changing it

To change the material value in TSM you head to the settings page. The default material cost method is a string, and you can simply swap out dbmarket for avgbuy in the string that is there if you prefer that. You should keep the rest as it is to ensure it works for vendor items and intermediate crafts. 

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