Not Stocking Up: Enchanting Materials and Scrolls

I’ve been following the tide in the blog-o-sphere lately and writing a lot about stocking up for Mists of Pandaria.  It’s almost dishonest of me, because it’s not in line with my normal gold earning philosophy.  So I thought I’d write today about my reasons for not stocking up in general using the example of enchanting materials and scrolls.

Enchanting scrolls have become my main source of gold income lately, not by design really — it just naturally happened after I hit my last gold goal.  I eased back the intensity of my market presence and it just turned out that scrolls took less time to keep doing.  The glyph market on my server goes though periods of heavy competition. I had been shuffling ore but that business suffered from the introduction of epic Cata gems, plus it’s just plain a lot of work to do correctly.

Given that enchanting is a main money making market for me right now, you might think I’d want to stockpile materials or scrolls as a way hedge against anticipated demand driven price spikes.  I have to admit that perhaps I could make money doing this.  But my business process for enchanting is set up as a lean manufacturing operation, and building up inventory is against the basic principles of lean — it is in fact considered one of the “eight wastes“.

I use a pull system with one piece flow for my enchanting process.  To start, I maintain a list of possible scrolls to make.  Once a day or so I scan the auction house and identify the scrolls that will make a minimum profit based on the materials costs and market price.  From this list of potentially profitable scrolls, I plan to make one of each only if I’m currently completely out of stock.  (Make sure there aren’t expired auction scrolls sitting in your mail box when you determine what you are out of.)  This is called a pull signal.  Being out of stock on a profitable scroll “tells” me to make one, otherwise I do nothing.

Based on this production plan, or queue, I purchase the materials I need.  I don’t maintain any inventory of materials beyond the inevitable few leftovers.  I use TSM: Shopping, just like I do for herbs, to get the lowest materials prices.  Often I can get the materials for below my scan-based cost estimate because TSM allows me to find good deals to disenchant, and my guild has the perk bountiful bags.  This creates a profit estimate cushion.

Then I simply make the scrolls and post them at a moderate undercut to the current lowest price.  Of course I also repost any auctions that have expired or have been undercut.  I can increase my profit by restocking and reposting more often.

The frequency of sales determines a natural “heart beat” for each scroll’s pull signal.  To maximize my profit in theory, my process needs to match that “heart beat” as closely as possible.  In reality my process frequency is determined by my time availability and an average market “heart beat”.  You can adjust to a higher stock level to partially compensate for outlying scrolls that sell much faster than most.

I find it hard to anticipate exactly what will happen as we approach and experience the expansion, and this means that stockpiling creates risk.  On the other hand, my process pretty much guarantees I won’t lose money — I’m paying a potential opportunity cost to buy that guarantee.  But mostly my reason for not stockpiling boils down to the fact that I like this process.  It’s fun, it’s easy, and it’s proven over time to make gold.  I’ll be the first to post here when/if I end up regretting my decision to stay on the enchanting stockpiling sidelines.

Stocking Up: Ink

This topic has been covered at length by a number of bloggers, but they each take a slightly different approach.  I thought I’d let everyone know my thoughts and what I’m doing regarding preparing for Mists of Pandaria and Inscription inks.

For those who don’t remember or who didn’t go though it, ink trading undergoes a transition around the time of the big pre-expansion patch.  Now you can trade in blackfallow ink for all the lesser common inks used to make glyphs.  However in Mists blackfallow ink will be replaced as the “currency” with ink of dreams, which is created from new herbs. Right after MoP goes live, ink of dreams will be scarce and expensive.  So if you don’t have some of all the inks you need for glyph making stockpiled, you will find them hard to come by.

So what inks will you need?  Looking over what Wowhead knows so far about inscription, most glyphs in MoP will be created either from ink of dreams, or from the same set of inks used now, namely: ink of the sea, ethereal ink, shimmering ink, celestial ink, jadefire ink, lions ink, and midnight ink.

Currently, blackfallow ink is only used to create one glyph, and it doesn’t seem like that will change in MoP.  Its other uses are limited.  If you sell mysterious fortune cards, of course, you will need it.  But I don’t sell mysterious fortune cards, so I have to be more careful about how much blackfallow ink I stockpile.  (One important detailed note: Wowhead currently doesn’t show that you can trade ink of dreams for blackfallow ink.  I’m going to keep my eye on this, not sure if it’s just not there yet or if you really won’t be able to get it.)

Storage space is of course another issue.  My general stance against stockpiling in the past means that I don’t currently have access to a private guild bank for my main server/faction.

One option if you have a lot of storage space would be to stock herbs themselves.  This would give you the ability to use the herbs in other ways later, like for alchemy.  However, remember at some point you’ll lose the ability to use blackfallow ink to trade.  So if you stockpile thousands of whiptail, you will no longer be able to create lion’s ink from it at some point around the pre-expansion patch.  You would have to stockpile the lesser herbs to guarantee the later ability to make the lesser common inks.

Taking all this into account, here’s my plan.  I’m creating a stockpile with a smallish fixed amount of blackfallow ink, probably around 200.  Then I’m building up roughly equal supplies of the other  7 common inks used to make glyphs, with some extra ink of the sea and ethereal since they seem to be most widely used.  I’ll stop when I’m out of storage space.  To ensure I make all this ink for the lowest possible price, I’m using the process outlined in my recent post about how to use TSM: Shopping to buy all my herbs.

I’m also keeping my eyes open to any new news regarding MoP inscription because things always change as the release date approaches.

 

Stocking Up: Dreamcloth

After thinking about it, and blogging some about it,  I’ve decided to dip my toe into the Mists of Pandaria stockpiling pond.  I have a few ideas to try, the first of which is dreamcloth.

There are six ways you can create dreamcloth, and five of them are on a once per week cooldown.  Dreamcloth is BoP, so once created by the tailor it can only be used to craft other items, it can’t be traded or sold in its raw form.  While this may be less than ideal in terms of options down the road, it means that only tailors can have a ready supply when demand jumps.

The way I’m approaching building up a ready supply is to set a ceiling crafting cost based on the materials required to make dream of destruction, which is the method that has no cooldown.  The materials required for this method are 8 x bolt of embersilk cloth and 4 x chaos orb.  Based on the advice of others, I’ll hold onto these materials in their raw form, and I’ll be able to make the dreamcloth on demand later as needed.

I’ll use the other methods only when their material costs less than my ceiling.   Each of these other methods require 30 volatiles instead of the 4 chaos orbs, so when I can get volatiles for less than 1/7.5 times my ceiling cost for chaos orbs, I buy them and produce dreamcloth whenever that cooldown is available.  In other words, to get the lowest overall cost for my dreamcloth stash, I’ll have to hold some of it already made to exploit the cooldown availability.

When Mists of Pandaria starts I’ll need to be able to craft and sell items that use dreamcloth for my investment to pay off.  Of the 17 items crafted with dreamcloth, four require living embers, and four require essence of destruction, so I may pick up some of those when their price is low.  But there are eight items that require no additional materials, including the illusionary bag, the luxurious silk gem bag, and the two spellthreads for caster pants.

This all makes me nervous.  I’m just not sure if the demand for the items I’ll be able to craft will really be there.  At least I’ll have some of the materials saved in raw form if there is not a huge demand.  I’m going to be conservative and see how it goes.