Friday, April 3, 2009

Opportunity Cost

I got a fantastic email from someone, we'll call him Dave, regarding my profession conundrum.

You specifically mention farming low level dungeons for greens to DE to skill up enchanting. Its a common mis-conception but this is not "free" materials. Likewise if you mine your own ore for JC the materials there are not "free" either.

If you can get cash in any other way that is faster than this then mining is NOT a money making profession, it is in fact a money LOSING profession. It is my experience that just doing dailies is better cash/time than mining/herbalism and therefore Mining is note "Excellent" at gold making, it is horrible. Quite literally the only reason to have mining is for smelting and on an alt this works just fine.

If you need mats to skill up, check what they cost, figure out how long it would take you to farm them, and then figure out what your gold rate per hour doing dailies is. 99% of the time farming them is a money loser...just buy em.

What Dave is talking about is opportunity cost. The time it takes you to farm instances for mats to level up Enchanting or mine ore to level up Blacksmithing, is by definition, time you could be spending doing something else. Most of the time, according to Dave, that something else will yield more gold per hour.

He is correct, but that only tips the scale towards mining. Mining is still a great money maker. Let me explain.

Let's say a stack of saronite ore sells for, on average, 20g on your server. Let's say that it takes you 30 minutes on average to farm a stack of ore. You now know that mining is worth 40g an hour. If you can get cash in any other way that is faster than this then mining is NOT a money making profession, it is in fact a money LOSING profession.

That would be true if you were spending that 30 minutes 'farming', that is flying around the Basin looking for stuff to mine.

On the other hand, if I'm out doing dailies and happen to see a Saronite vein, and I walk over to mine it, I have lost only a few seconds. I don't have the same opportunity cost, because the gold I make from selling that ore/bars didn't cost me any time.

Another example would be last night where I was flying over to Wintergrasp to do Vault of Archavon, and a I passed a Saronite vein. If I was a miner, I would have stopped to two seconds and gotten the ore. It wouldn't have cost me any time, or had any opportunity cost.

I have decided this much. It's down to Mining or Blacksmithing. The ring enchants from Enchanting are nice but they come in AP and Spell power flavors. Those don't scale with any buff. Blacksmithing sockets provide raw stats like STR or STA. Those do scale with buffs.

There have been two changes to Engineering that make me want to wait until after 3.1 hits to change professions.

First, there is a rumor that bosses in Ulduar are going to be 'skinnable' by Engineers and that the drops from that 'skinning' will include the parts for the motorcycle. I need to give it a week or two to see if that is true or not.

Second, the Engineering pets Lil Smokey and the Pet Bombling are going to be drops in Gnomergran. I want to farm them both up before I drop the profession.


Darraxus said...

Well, his numbers are absolutely wonky. It takes less than 10 minutes to get a stack of saronite ore. You can sell the ore or bars for a nice profit or prospect the and hope for some decent blue gems. You can also fo your JC daily and seel the Dragonseye for around 100-150 gold.

You can make a lot of money from mining. His suggestion that dailies are more gold per hour are laughable. Maybe if you are on a 60 percent ground mount. I have made as much as 1k gold per hour mining. Lest see that made doing dailies.

Chickenpox said...

Actually there is a +24 Stamina ring enchant.

Joe said...

Doing pure farming in the Basin for about two hours will nearly fill a 28 slot mining bag. I am, as an Extractor-wielding engineer, filling several of those slots with Primals of course. I haven't bothered to calculate the efficiency because I'll only go on a farming trip once every 3 or 4 weeks.

Not being a blacksmith, I do not chew through the ore too quickly. But with an Alchemist friend transmuting Titanium, I am able to crank out my daily Titansteel with no problems.

Maybe I'd make more money doing dailies, but at this point I enjoy the rat race in Sholazar. As busy as it is, it's faster than any other zone has ever been. To me it is more fun than playing at the AH.

Anonymous said...

Because I raid as ret I have skinning and enchanting as proffs. Not the best for min/maxing dps, but relatively easy to level up and very efficient. I spend a half hour in the hibernal cave and do the quest for polishing hodirs helm, and skinning the jormungar. On average I get an arctic fur per day. All the borean leather I have switched into heavey borean by a guildy. In addition, I get a lot of greens and blues from running heroics, which I disenchant. So the end result is that I sell on the AH: icescale leg armor, heav borean leather, and armor/weapon enchant scrolls.

Wankster of Magtheridon

Anonymous said...

People love to use that opportunity cost argument as a reason to do dailies rather than farm. What they inevitably forget to consider is the personal preferences, like say if you absolutely HATE doing dailies. Say hypothetically that you can make 99g an hour farming and selling ore or 100g an hour doing dailies but you have to do it while someone is punching you in the face (can you tell I hate dailies?), what would you choose? That's obviously a pretty extreme example but you get the idea.

Duht said...

Well, I don't quite go as berserk as Darraxus with mining, but I'll agree that you can get a stack of saronite in about 10 minutes. I'll usually head out with my daily JC and come back with nearly a fill stack just going a slightly roundabout way.

Matter of fact, tonight I ran across 3 titanium nodes going out and back. I got nine titanium on that trip out, they run 10-15g a piece on my server. Not too bad a haul.

Anonymous said...

Don't forget that as a raider if you are an enchanter, each bit of gear upgrade is free cash, sharding the old gear. If you really are only going to choose between mining/BS choose mining. Blacksmith is a pain/really expensive to level, and as you prefer tank, the bonus suits perfectly, The mining bonus is the same, the BS bonus has to be reapplied on every set of gear (similar to enchanting, but without the profit from your old gear that you can get from enchanting).

Anonymous said...

i dont think enchanting is as much of a money maker as people try to say. it is not free drops when you run an old instance, it is your time. even steam rolling through an old one takes time. lvling my enchanter i was broke all the time. the mats required to get a skill point are ridiculous. my engy,miner made over 2k gold lving 70-80, my enchanter was broke the whole time and had to borrow money for cold flying from my miner.

Thorned said...

Sure if you assume that it takes half an hour to farm 20 pieces of ore when up to 7 of them can be in one rich node mining seems like a waste of time.

I am a tankadin and my professions are mining and jewelcrafting. Sure, it is not as overpowered as it was in the first few weeks of raiding where people would pay 250 for a 19 spelldmg ruby but it is better than doing dailys anyday.

My main area for orefarming is the wintergrasp zone. I farm mostly at the borders to the other 4 zones so i can use my flying mount a lot and in a normal hour i get around 12-15 stacks of saronite, 1-2 stacks of titan, around 15 full earth and shadow, 5 fire n water, 2-3 air and maybe 1 life. on top of that the random gems which are in the ore itself..

Sure.. the prices are getting lower any day but atm its still okay to mine.

If you have an enchanter alt you can also use it to create enchanting mats via the ring made of shadow and earth =)