Croda's Inscription Gold Guide - paid version, only $5

Some beautiful music to read the blog to . . . . . . (i first heard on PowerWord:Gold podcast)

Saturday, 10 December 2011

Cash margin vs profit margins


. . . . . . . or how accounting can disguise what really you should do.

Take this scenario:

You craft a glyph for 15 gold and sell it for 60 gold.  Cash margin is 45 gold (60 – 15) and the profit margin is 75% ([60-15]/60].  Or, looking at the profit margin another way, the markup was 300% (60/15 -1).

You craft an enchant for 3 gold and sell it for 18 gold.  Cash margin is 15 gold (18 – 3) and the profit margin is 83% ([18-3]/18), or the markup was 500% (18/3 -1).

So, do you focus on crafting and selling the item with a profit margin of 83% (markup 500%) vs the other item with a profit margin of 75% (markup 300%) – and lets assume you can always sell the above items?

Well, i doubt any gold makers here would fall for that.  Of course, you would focus on selling the glyph because it makes a 45 gold profit every time vs the enchant that makes 15 gold profit.

Worth remembering that when walking the road to serious gold in World of Warcraft.  Crafting an item for 5000 gold to sell it for 8000 gold (i.e. darkmoon decks) is a better bet than crafting the item for 2 gold and selling it for 8 gold.  Every time.

Assuming you research your markets and know you can make the sale, and can afford to have the capital tied up for a while, then think big.


for other ideas on the glyph market please follow the link to the free Croda's Inscription Gold Guide

2 comments:

  1. That's only part of it. The goal is always to maximize gold/hour. I agree trying to sell 1500 items at a 2g profit each is a lot harder than one item at a 3000g profit. However the peak return/hour might be selling 20 items at a 200g profit each.

    ReplyDelete
  2. yes, good point made there.

    ReplyDelete

Note: only a member of this blog may post a comment.