The essentials of the WoW Economy, and how to dominate it

[zealot505]

I do not think this is a repost, and I hope you become enlightened! Please do not remove, if it IS a repost, as I have put everything that I know about the WoW economy in this small guide :P

The Essentials of the WoW Economy

All economies are based on value, and the most neutral value being money, or in WoW, Gold. Gold never raises or falls in value, like items, that are 'worth' value. An economy is the trading of values, for example, you can sell things for its value's worth, or buy things with the value one gets from what ever they have sold, be it services, time or a product.

There are ultimately four ways to make money in WoW.
1. Collecting from nature (trade skill mats, pets, the like) = time + service
2. Auctionhouse flipping = time
3. Crafting = product
4. Begging/working for others = service + time

The WoW economy essentially works on these four ways of making money. way #1 brings mats into the market, which lets way #2, 3 and even 4 to work. But, way #1 is most important, as there must be gold for an economy to run, that is, the few copper or silver you get from each kill, or the money you get from vendors, or quests.

The crafters are especially essential to any economy, as without crafters, there is no need for collectors, and without the crafters, there is no 'gold' for the workers, as well as the flippers, who need money to start off on their flipping business

It is essential that there be an equal amount of collectors and crafters, as more crafters make the mats more valuable, as there is more demand for it, so, the server's economy inflates. If there were more collecters to crafters, the mats would be cheap, but the crafters would have a monopoly that will make the 'product' prices inflate. This will also make the economy inflate.

Flippers and workers are a different kind of way to earn money that does not involve direct contact with the economy. Flippers buy products or mats in the AH, and sell them at different times for profit, it is similar to speculation, in real life. Flippers, even though they are not directly involved with the process of manufacturing, they are nevertheless important in the economy. These speculators are the main buying force in any market. That is what makes them so powerful.

If someone buys out all of a certain, ore, or a certain item, and posts one at a time, at an inflated, price, then, what can anyone do? The only items that are available are the ones that the flippers have, and therefore it skyrockets the value of that item that no one has. Then, you ask, why can't the collectors and crafters drasically undercut them? But, it is simply a matter of personal greed then. Why sell something for your original price, when you can sell it for more, since, only you, and the flipper has access to that item? These flippers drastically make a sector of the economy either boom or die out easily.

Then, there are the workers. these guys are the ones that do not have much money, and are simply trading their time for money. They do not have much impact on the economy, as they are only selling their time, and not anything else.

How to abuse your server's economy

The way to abuse your server's economy for your gain is to have access to the most desired and needed items. Items that the crafters need the most. It is easy to argue that the collectors can simply put up more, but then, it is essential to put up key items that are hard to get, (Primordial saronite, Cobalt-Titanium ore/bar, Frost lotus, Orbs, Frostweave, Elementals, Infinite dust, Cosmic essences). For the crafters to make lots of money, they must craft items that are rare, and much in need, these items are harder to craft, and have a much smaller population of crafters for them. This makes the crafting of rare items even more worthy for crafters. For example, there would be over 100 people with 450 of any trade skill, but only a handful with all the ICC patterns and the like.

Many desire these rare, and high level products, but, there are only so many that can be made, as the reason the product is expensive is because the mats are either hard to get, or very rare, which therefore makes the product that is made with the rare mats just as rare. Imagine controlling the bakery in communist Russia (no offense any Russians). You have access to all the people's food, but you can only decide to give it to a few, as food is scarse. This means that, that few is the ones that pay the most for the bread. This makes the price of the bread become higher, and therefore only the rich that can really buy them. In this analogy, the bakery is you, controlling all the essential mats/bread, and the rich are the crafters with the ICC patterns.

Since the crafters depend on mats to make anything, if you raise the prices of your mats, the prices of the goods that the crafter creates become higher. So, try and dominate your high end materials and control the prices of the goods for the rich.

The reason why it is not good to dominate low-end mats is that it is incredibly hard to dominate this kind of market, as anyone, with a bit of effort can farm a bunch of it and therefore easily ruin your market. It is only the high-end mats that only a few people have access to, and is much easier to control.

These were simply my thoughts on the WoW economy, I hope you have enjoyed my guide on the WoW economy!

[zealot505]

154 views and no comments? i feel sad...

[warnoz]

To be honest. It's a nice summary but if you have been around wow for some time, (as most people have) it's rather obvious facts.
I think people are more intressted in how to make the gold than the general idea of the economy

[zealot505]

ahh nice pointer

[Remus]

As warnoz stated. A more in depth analysis would be prudent, exploring the caveats of the economy and the theory crafting behind how to dominate.

[volkzero]

Nice guide, thanks +rep