March 28, 2010

A Quick Take of World of Warcraft's Herb Economy

Currently, on Azshara, the Herb Market is in a state of Supply > Demand. This means that it is a buyer's market, and sellers must compete or "undercut" to spur demand. Demand will be created by three factors; lazyness, a game mechanic change, and undercutting. At the same time, one must also remember that if buyers come to this "buyer's market" and begin purchasing herbs, demand is increased. Once the demand increases beyond the supply capacity, we have scarcity. In times of scarcity, prices will go through the roof, i.e. "inflation".


It's hard to swallow, but you have to look at the economics of running the AH, your opportunity cost, and how much you COULD be making doing one thing over the other. I tried farming rhino meat, and auctioneer told me they sold for around 3g 25s a piece. Added up, should it all sell, I would make over 800g an hour. When I returned two days later, I received all that Rhino Meat back because it did not sell. Someone undercut me, and I don't even know if he sold much. That market is saturated, and it's gonna be tough to sell anything there. So with the gray items I sold, farming Rhino Meat, I made about 3g an hour. Farming herbs, I have a somewhat steady income at 267g an hour. This gold per hour rate will increase as demand increases. If I farm only so much, which I can only farm so much, the market will demand more of me. In this way, I can measure the demand of the market. How do I measure supply? Just look at all the crap I am gettiing back, and how much crap is on the market.

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