I Don't Care About Your Opportunity Costs

Posted by Markco at 8:00 AM

Your comments following the guest post published here were fairly interesting and thought provoking. Some of the commenters called for my thoughts on the matter and I'm happy to supply them here today.

For starters, I don't give a damn what you think opportunity cost means. Now I don't mean this as in 'You' the person reading this, but rather as in any player who opposes me on the auction house. I don't care what my competition thinks their time is worth nor do I care what they think their scrolls of X enchant should sell for. All that concerns me is improving my opportunity cost, my ROI and my enjoyment. So let's stop with this talk about he's undercutting me or he's selling for too low or he's losing money on his investment so he's a moron or a slacker.

WHO CARES WHAT SOMEONE ELSE IS DOING.

A lot of goblins feel that they are special because they analyze their competition and are somehow smarter for applying economic principles or concepts better than their opponents. This isn't a pissing contest people, who really cares anyway? Look, if you feel smarter and better about yourself because you feel you are winning an AH battle then all the more power to you, but I could care less. I don't believe that this mind set does anything except give you a false sense of superiority. A goblin who pisses away their life reposting multiple times a day in their pajamas for a measly 500 gold with inscription is not someone you want to be like. I would be PISSED if I only made 2k a day from inscription let alone 500 (check out the JMTC forums for great ways to make gold with inscription). The reason I've never gotten along with goblins in general is because, although they say they don't care what anyone else thinks, everything they talk about and profess is focused on making themselves seem better or smarter than the players around them. What I want you to do is stop thinking like that, stop trying to compare yourself to the person next to you and focus more on improving yourself instead.

You may think that I'm being harsh, but the comments in the guest post which fueled this post were full of the pissing contest, know it all mentality. Now, please, do not take this as me being angry or trying to poke fun at you if you left a comment. I am merely trying to open your eyes in order to help you, and sometimes that takes a little kick in the butt. And to the guy who said Mageshadow published a popular guest post because he ran out of things to post... I will restrain myself and not reply.

Opportunity Cost is About Acquiring Items

Many players focus on the selling aspect of the auction house, but they fail to realize the single greatest factor in determining their income: the cost of their items initially. Having a good ROI is about acquiring items as cheaply and efficiently as possible. In some cases, farming may be the best ROI in exchange for a loss of time. If you enjoy farming and want to play that way then good for you. All I ask is that you investigate the possibility of automating your process through addons by purchasing on the auction house instead of farming. You are not 'wrong' for farming and you are certainly not a 'moron or slacker' for having your own opinions about Opportunity Cost. I'd like you simply to investigate all opportunities for decreasing the price of your purchased items, both in terms of gold and time invested. If you manage to free up some time, are you then able to access other markets you never could before because of a lack of time?

But! ... What if Someone Screws Up My Market?

Didn't I just get done saying how it's all about self improvement, not worrying about what someone else is doing? I had a twitter follower ask me what to do since obsidium ore was down to 22 gold per stack. He said that he couldn't sell cut gems because they were worth 5 gold each. I told him to buy out all the underpriced gems, vendor them and then buy all the stacks below 54 gold and vendor those gems after cutting them as well. This was not necessarily the best way to handle the situation as there were definitely additional options for a jewelcrafter, alchemist or enchanter given the items involved but that's not the point. The point was and still is that the auction house is about the relationships between items. There is always a balance of supply and demand, just that some people view a shift in this balance as being 'wrong.' Nothing is WRONG on the auction house. If demand is high and supply is low then, guess what, prices will rise. That's not to say that someone is trying to control the market, which might be their aim but I don't care what their aim is. If they want throttle a market that's their problem, when I see low demand and high supply I'm only posting one item and it's going to be right at market value or slightly higher. Maybe they'll buy me out, maybe they won't and the item will come back in the mail unpurchased, but I don't have the time to base my decisions on their decisions. If the reverse happened and they were posting for far too little, then I would buy them out and relist at the appropriate values as well as amounts.

Some may say that I'm not a good auctioneer because I don't play auction house pvp, others consider me a genius because I free up time to be in thousands of markets at once and make ridiculous amounts of gold through logical automation. The opportunity cost of auction house pvp is sadly too low for me and therefore I'm better off diversifying and automating my process as much as possible.

That's not to say I don't enjoy the occasional epic battle over silver leaf for the hell of it when I'm bored...

These are "king" Markco's thoughts on the matter, what are yours?

NOTE: Friday is the last day to get the gold guide at $27. I look forward to helping you more in the members area of 20k Leveling.

30 comments: on "I Don't Care About Your Opportunity Costs"

Add Your Comment Subscribe to Comments

Ven said... February 9, 2011 at 8:58 AM

Hello Markco welcome back to comments, and yes I know you didn’t just disappeared.
The thing is ,that we as human beings want ALWAYS to be right, always want to win ,always want be on top, always want to tell others what to do, we want to be listen to , that’s our competitive nature.
People understand this, but what they choose to do its up to them. Its so easy to point the finger to someone wend you think they are wrong, but to have a “original” idea, to say something about something and defend your point of view its takes courage no matter the flack or hate you take. The reason I like your posts, Kammler´s post, Alto’s post, Smudger´s post and some many others ,just to point a few ,its just because you share your opinion, you do not “IMPOSE” you opinion on anyone ,You share what you know and people are free to make there own mind. Our post makes us think for our selfs
We do what we do in Blogging because we love to do it right?
Even the so new to this Blogging business like myself, and even if I can’t make my opinion so easy to understand I will still share it.
And just to finish a ass hole in real life its also a ass hole on the internet.
holyground said... February 9, 2011 at 9:31 AM

Amen, Markco!

I've been following the goblin scene for about 3 months now and the care some people put into knowing their competition amazes me. I took some of the easier tips (obsidium, MFCs, etc) and make about 1-2k a day, if that. I always undercut, don't use auctioneer (I use auctionator for ease of posting). I don't care that I could be making even more money.

What I'm making is enough for me.

Because as a poster said yesterday, oportunity costs aren't just about gold. I'm not at the point where the only fun I have is making gold.

I love the jmtc community for all of the help and openness that's there. Thanks for creating something so awesome.
Anonymous said... February 9, 2011 at 10:12 AM

Great article that was obviously written with passion. I don't care about my competition, if they want to undercut me fine there are enough buyers out there. If they want to drastically undercut me, I become a buyer (on an Alt).

By the way I have two stacks of Silverleaf for sale
Anonymous said... February 9, 2011 at 10:14 AM

"The reason I've never gotten along with goblins in general is because, although they say they don't care what anyone else thinks, everything they talk about and profess is focused on making themselves seem better or smarter than the players around them. "

"These are "king" Markco's thoughts on the matter, what are yours?"

Irony much?
Markco said... February 9, 2011 at 10:28 AM

@anonymous the king comment is a reference to a comment made yesterday asking for "king" markco's thoughts on a post entitled "king Arthur and opportunity costs."

No irony, just a joke that over your head sorry.
Markco said... February 9, 2011 at 10:30 AM

Ty for the comments so far everyone, yes I did write this with some degree of passion. It's a topic that has been annoying me for quite some time.
Unknown said... February 9, 2011 at 10:32 AM

Thanks for your response to Kammler's guest post, which I enjoyed reading btw. I think you brought up an excellent point in that the opportunity cost for every player is going to be different. Some players are much more focused on gold making from a "business" standpoint while others are just looking at gold making as a way to make enough money to buy that new mount or epic weapon. Only the individual player can decide whether or not crafting, shuffling, flipping, and playing the auction house versus farming their materials then crafting, flipping, shuffling, listing and forgetting about the AH works best for them. Not everyone out there is only concerned with making as much virtual gold as possible, some prefere to make what they can and spend the rest of their time foucsed on actual gameplay and enjoyment.
Justin said... February 9, 2011 at 10:42 AM

"If demand is low and supply is high then, guess what, prices will rise"

Isn't this backwards? Seems that if no one is buying and people have tons to sell, the prices would plummet. Hopefully, my basic economic understanding didn't fail me here.

As a side note, thanks for the rebuttal of those comments. I try to think about my opportunity cost, but sometimes find myself farming during a slow period. Especially when certain item prices are just too high in comparison to the crafted items.
Markco said... February 9, 2011 at 10:51 AM

Bah Justin I goofed Ty! I will correct it in a second here. Lol I wrote too fast and didn't catch that proofreading it. Haha no one else seemed to notice!
Nev said... February 9, 2011 at 11:05 AM

I caught that Marckco! but I didn't say anything 'cos I already had visions of you typing at 90miles per hour, with steam coming off the keyboard, so strong were the emotions in this post.

I didn't used to be quite so gold focussed until my guild imploded & I was left alone in game. Now, we have rebuilt but we don't raid & there's only so much questing or farming I can do but I can craft, analyse/watch AH for hours on end & count my gold all day quite happily thank you! Getting involved in gold blogs & starting my own has expanded the game for me - now I'm not alone anymore - I have a whole new bunch of friends & even an audience.

I do what I do, in game, in AH & in my blog - yes, I try not to undercut friends but the rest are fair game.
ScreamingVoice said... February 9, 2011 at 11:16 AM

Bitching about the market has the opportunity cost of not getting bitched at about the market, also the smug sense of satisfaction that comes with that.
Jason said... February 9, 2011 at 12:34 PM

Well said Markco. It seems many people are so willing to shoot holes in others thoughts and theorys that they forget what any facet of WoW is about. Fun.

We as a gold blogging community share our ideas, ancedotes methods because it's fun for us. unfortunately for some of the readers of these blogs, it's like trolling trade, "so and so did this ? well I don't, it's stupid."

Good for you, have a coke and a smile and hush.what I do works for me, what markco does works for him. I read a lot of markco's stuff and apply it because it makes sense to me. Some of I can't adapt or it doesn't work (for me), so be it. Take what you can use and leave the rest. Don't be a Jackass about it.

Kammler, Markco hell everyone on markco's blog roll and all of us on those blog rolls genuinely want to help. To call us down or be negative is just childish, immature, and needs to stay in /2.
Anonymous said... February 9, 2011 at 1:15 PM

This comment has been removed by the author.
Grogar said... February 9, 2011 at 1:15 PM

I have to say one of the best posts I have ever read, brilliant. I constantly get people whispering me about how I am ruining the Market for everyone including myself and all I reply with is "50g profit for me is alot better than 150g for anyone else". People don't understand playing the AH is a completely selfish part of WoW and if I am making profit I couldn't care about how you are doing.
Anonymous said... February 9, 2011 at 1:29 PM

Since Cataclysm, I've taken to farming as my primary source of income. Some of it was Auction House burnout - so tired of flipping the same goods, of doing the same shuffle - and some of it was because I found that I wasn't having fun playing the AH anymore.

But a bigger part of it was getting a treadmill, building a computer desk on top of it, and learning to farm while walking a few miles every day. I get on a gathering toon and spend my exercise time chasing yellow dots on a map.

Is it the most effective way to make money in WoW? Hell no (though it's certainly profitable.) Is it something I enjoy, and is good for me to boot? You betcha.

Is there an opportunity cost? Sure, I could be sitting in SW crafting during that period of time. But then I'd have to focus on what I was doing, and probably not have as much fun.

And I'd probably fall off the treadmill, which would be funny. But only in retrospect.

It's my time to spend. If I want to spend it flying circles around Hyjal while getting a workout, other people's criticisms about efficiency aren't going to change my mind.

(They might make me change my farming spots, though.)
Geargrinder said... February 9, 2011 at 1:32 PM

Markco, please feel free to comment on my statement about mageshadow, you have my email address as I've signed up for both this blog and the forums.

To Mageshadow, I do sincerely apologize for the nature of my comments to you. They were extremely inflamatory.

In rebuttal to statements in this post, opportunity cost can be applied to everything. That includes blogs and forums. Almost all people are double capped in life. We are all capped by the number of hours in a day and most of us are capped by the amount of money we can earn in a day. The economy is in the crapper and many of us are trying to exist (we won't be able to live for a few more years). Without getting into too much detail I'm trying to move from financial existence to financial living. To that end I have 1 career, 1 job, and a fledgling business that may succeed or fail at any given time. 'Free' time for me is at a premium. If I can play WoW read forums and read blogs for 10 hours a week I'm doing well. My blog roll has been cut to the bone. I don't waste time on ineffecient ideas or employees. So when I look at a blog and see nothing new has been posted I eventually stop going to the site. The same applies to a blog that has been rerun. It might be an awesome idea I understand that it might be the penultimate idea of the blogosphere but if I'm reading the exact same thing for the third time then what's the point. I gain nothing reading the same thing repeatedly. You need to give it a new spin or approach it from a new angle. If you think it's awesome and everyone should read it that's cool. Give it a nod and a link. Read this from Kammler it's cool. In closing, defending my privledge to expect quality is something I covet immensely. That is why I have given up game time to respond.

Markco and Mageshadow as I said at the outset you have my email as I've registered on the 20k forums with the same username.

Geargrinder
Anonymous said... February 9, 2011 at 2:03 PM

Enjoyed the post. My comment got so long that it actually turned into a blog post.

You made me think today, Markco - thanks for that. Hope you don't mind me dropping a link.

http://venturellt.blogspot.com/
Admin said... February 9, 2011 at 2:07 PM

This type of post is what got me reading JMTC in the first place...

Welcome back Markco, it's good to see you come out of "retirement", if even just for one post.

Now this isn't just gonna be a tease for us is it? Alot of your readers (I imagine they have the same thoughts as I do here) didn't want you to go, as you can see from the action on your "comeback" post. Whether they hate your opinions or love them, JMTC has been missing this action since you stopped posting.

How about a weekly post from you? Or commentary on Mage's posts? What about telling us your "two coppers" on guest posts? Give us something, we want/need you back.

This isn't a bash on Mage, I enjoyed him at The Gnomish Coin, and I enjoy him here. But this is your site. Still. Give back to the community that has given to you. You can't just leave us high and dry, you are still needed in the WoW blogging community.

Or you can just tell me I am wrong....
Anonymous said... February 9, 2011 at 3:38 PM

very passionate post Markco

i can just imagine you siting down with smoke coming out of your ears :)

for me opportunity costs are like opinions everyone is allowed to have one, it pays to consider others and examine possibilities but at the end of the day the most important ones to me are mine.
Kammler said... February 9, 2011 at 3:59 PM

Over 80% of my site's traffic comes from JMTC. That's a huge number of folks who get exposed to my blog from one place.

When JMTC says 'hey, I want to feature this as a guest post', I absolutely want that to happen.

I appreciate Markco's thoughts. From my perspective, I wanted only to explain a concept that I felt had not received enough discussion anywhere else. I have read a few references here and there but not anything specifically about Opportunity Cost. And nothing that broke it down to a transactional example.

To the extent that we all have choices to make in game (or about playing the game), yes--all true.

The 'I farmed it therefore it is free' mantra was a specific area I wanted to address as well.

Reading the comments on the original post, there were some folks who felt they had learned something new. That outweighs all the /2 trolls who flamed me or the idea.

Anyone who puts out content should be ready to accept the consequences, which includes taking responsibility for poor grammar (guilty) and spelling (guilty). Let's move past that and focus on the idea--that's all I ask, and all I suspect many of my fellow bloggers want as well.

I have no hate for farmers--as an avid buyer I need them to supply mats I can use. I have no hate for deep undercutters. But to those who say 'I can afford to list this price because the mats were free: I farmed them', well, I want to just say 'please rethink that position'.

I began blogging specifically because of Markco and his encouragement. I don't post every day. When I do post, I try to find a new perspective or fresh angle.

When I fail, I flame out like a Ford Pinto in a Destruction Derby. When I succeed, well, that just makes all the flame-outs forgettable.

Regardless, thanks again to Mage and Markco, and to others who have had my back.
Anonymous said... February 9, 2011 at 5:00 PM

Thanks for this post Marcko. I really came to these conclusions myself recently. During Wrath I spent a ridiculous amount of time controlling the enchanting mats market, fighting off a couple of key players as well as a gold farmer type who was in guilds with random looking nonsense names just for the bank access. At that time I felt that if I didn't watch the AH like a hawk, I'd be out of pocket, anxious for my investment to return. It preyed on my mind when I went to deal with other things, even going to bed thinking about it. It was no good.

I eventually felt pretty disgusted with myself, the time I'd wasted (despite making a good bit of gold) and ended up quitting. I gave about 140k away to friends in the form of choppers, elite elementium signets and portable holes.

I eventually came back to the game with about 5k gold left over but made a nice bit of cash selling netherweave bags after 4.0 (thanks for the heads up) and set myself up for some more AH fun. The competition started to hot up once a few people on my server had maxed their JC which really leads me to the point of this post.

One Saturday a few weeks back I found myself in an undercutting war, with both gems and enchanting mats. I decided that I'd see how low someone would go in order to be the cheapest. Eventually I'd got down to about 5g per cut gem with two other guys. Then it hit me.

"screw this - this is not dignified. I've got better things to do"

Now I list once every 24 hours and still make around 10k a day, which more than covers my investment. All for about 20 mins a day, and perhaps an hour or so every few days to create the items. I've made over 300k since 4.0 but as far as a return on my time, not spending all my time watching the AH and not caring about other auctioneers gives me a better quality of life.
TENSUITE said... February 9, 2011 at 5:24 PM

That article was money. I enjoyed every word of it. Thanks!
The Gold Queen said... February 9, 2011 at 5:58 PM

Woah! I didn't read this until after I posted my own blog post about ethics in gold making today! How interesting that we're all thinking about the WHY of making gold in WoW!
River said... February 9, 2011 at 6:35 PM

Markco, Nail met your hammer...you hit on the head.

I'd like to ad my two cents...

I think one thing in business, and markets you have to be mobile. People yell and scream about destroying the market. Don't like it move, innovate, change.

The businesses that refuse to change with the times, are the businesses quickest to fail.
Markco said... February 9, 2011 at 6:51 PM

@Altolycus I have given the community quite a bit actually and I continue to give when I have the time to do so. The 'community' itself exists because of the giving I've done, and I'd like to get to the point where it can survive on its own without my constant supervision.

That's me making it better, not leaving it because I'm always going to be here to some degree.
Mcmokka said... February 9, 2011 at 6:59 PM

@ the last anon:

I find your situation the same as the one I'm in at the moment. The problem with the AH is to maximize profit, you often have to camp the AH in hours on end just to undercut some players to protect your profit. By doing that, your GPH plummet, especially if you, as I, only play on a few markets. I've gotten my fair share of sales on the JC market with the shuffle, but have seen lately that 4-5 people constantly undercut me on the green gems, making almost any sale a bidding contest. I know that a true goblin would suck it up and play along, or leave the market. But this brings me to my next point; a point that has been pointed out several times: We all value things differently. I'm sure that this (albeit in a vastly more complex version) is part of the "game-plan" of Blizzard. Know thy customer. "Fun" is an arbitrary size. Could it be, that some players don't care about gold? I know I don't put too much into it, since I mainly play the AH for the experience and not for the profit. These days it doesn't take a lot to satisfy the needs of a casual player, even if he/she's a raider. For repairs, flasks/elixirs/potions, the occasional gem, a 200-300 gold per day will suffice. There are so many ways this can be done, dailies (which grants reputation or tokens or whatever) and farming. How long should you be farming to get 300 gold? If it's over 15 minutes, you are doing it wrong. Combining for example the 2 dailies in Uldum with herbing or minging and you'll get there fast.

Applying real life principles of the market to wow isn't wrong, but the assumption that gold is an end to means is flawed. In the real world money isn't an end, but it's close. You can buy almost anything (not true love, but health and security and a host of other advantages). All the gold in the world (wow-wise) can't buy you that sweet Battlemaster title.

This is I believe the main reason we still get the "I don't care about the opportunity cost". Out of a strictly gold making theory (and practise) this is clearly wrong, but unless we go back to the dark ages of UO and the sort, where money could buy you almost anything, for the vast majority moneymaking will be about supporting a basic need and nothing more. Maybe quite a few will grind gold for their Vials, but it still doesn't make gold an end, only something to be spend.

This post wasn't made to defend the stance of deep undercutting etc, which is definetly wrong, but simply to point out that you preach to the wrong choir.
Anonymous said... February 10, 2011 at 2:14 AM

Strong in you, the emotions are.
Anonymous said... February 10, 2011 at 8:51 AM

Finally someone wrote it down. I am sick and tiered of all the whiney boys in /2 crying "unfair prices" and "xy is ruining our profit". It's called competition for a reason.
Anonymous said... February 14, 2011 at 12:02 AM

@Kammler: "Reading the comments on the original post, there were some folks who felt they had learned something new. That outweighs all the /2 trolls who flamed me or the idea."

It's a very dangerous line to classify disagreement as trolling.
The strawman goes something like: They disagree with me, therefore they are a troll, therefore they and their opinion are sub-human, therefore they and their opinion are worthless.

If you wish to preach your idea and not have it tempered in the fire of community; then disable comments or delete all you dislike.

If you wish to learn from the comments coming back, then accept that others will disagree with you. That doesn't make them - or you - wrong. Or a troll.
Heh, it could just as easily be argued that you were trolling the readers of JMTC purely to get page hits to your own blog. I jest, but hopefully you see how this sword is two-edged.

Lastly, don't assume that because someone disagrees with you, that there weren't concepts in your original that they both agreed with and/or learnt from.

fwiw, I didn't feel you got trolled at all; just raised a very contentious topic and hence the arguments and opinions raised in response are strong. Shrug. Cest la vie.
Anonymous said... February 14, 2011 at 6:21 AM

People who flame trade about them not selling anything are lazy. They don't want to calculate the price of raw mats for an item. They don't want to make an Excel spreadsheet, they don't want to research better ways to obtain raw materials, they don't want to have to work at it. In a world of instant oatmeal, instant movies, and instant tv dinners, they have grown accustomed to instant everything.

Case in point, I had a glyph seller who listed over me every time they got a chance. I spent a few days of my three week vacation hounding him to the point he exploded. He listed every single glyph he had for half of his break even point and sent me messages about how he was going to bury me. I promptly used Auction Wizard to buy every single glyph he just posted (around 20k). Soon after, he left the market.

The end result for me was less milling, less crafting, prepared for a change if it happened (ex:mage armor), and vastly more profit. Was it a risk? Nope. I knew he couldn't sell for what he was, and his selling only for principle made him go bankrupt.

Top Site Nav

Just My Two Copper - WoW Gold Guide