Stupid Basil, those Pyrite will eventually provide epics
There's a school of thought among a bunch of the armchair economists whose comments I've read that states: Since epic Wrath gems were prospectable from Titanium Ore when Blizzard introduced them, Blizzard will make epic Cataclysm gems prospectable from Pyrite Ore when they're introduced. The supply of Pyrite will be severely strained to match the demand for epic gems, so stocking Pyrite now is the best possible use of the ore.
Allow me to rebut. First, assuming you're in it for the gold, you have to compare gold now versus gold later differently. Long term investments are okay when they pay out, but since it usually means you have to dedicate free cash and inventory slots to the investment, you have to weigh that cost against the potential reward. You can often make money by immediately prospecting Pyrite, so if you choose to speculate on Blizzard's future patches, consider offsetting your risk by also taking advantage of the current profits in case you're wrong.
Second, risk is a serious factor. I am not nearly comfortable enough forecasting Blizzard's trade skill development decisions based on past behavior to risk any serious amount of money on bets one way or another. I am willing, however, to bet against betters. If Blizzard decides to never change the prospect table for Pyrite and introduces epic gems some other way, I'll be sitting on the AH buying up panic sales all week. You can never lose betting against panicky betters.
Okay, tell me how to shuffle now
Right, back on track. You're going to have stacks and stacks of rare and uncommon gems, as well as maybe Volatile Earths. What do? Well that depends on what additional trade skills you have access to. I'll start from the base processing that you can already do and then talk about what additional processing might possible if you have access to a specific trade skill.
Green-quality gems, including Alicite, Hessonite, Jasper, Nightstone, Carnelian, and Zephyrite, can always be cut and vendored for 9 gold each. This is the reason people talk about price floors for ore. Blue-quality gems, including Ember Topaz, Inferno Ruby, Amberjewel, Demonseye, Dream Emerald, and Ocean Sapphire, can all only be cut and vendored for 3.75 gold, so the only way you're getting money from these is if it comes, ultimately, from a player. Let's look at both types of gems now.
Since we have so many of these, let's look at them first. Depending on how many of these you have, it may be better to just cut and vendor. Some of the additional processing markets can get flooded easily, and the vendors don't care how many gems you dump on them. You always need to avoid flooding the market, and your fallback will always be the vendor. I do as much of the following as I can before defaulting back to the vendor.
- Carnelians can be transmuted into Inferno Rubies if you have access to an alchemist. The demand for these this expansion is again head and shoulders more than any other gem, so it's probably not possible to flood this market. It is a player demand-based market, though, so eventually we may find the flooding point. Be aware that Heartblossom can be expensive, but also be aware that at some point in the recent weeks, the supply for this herb skyrocketed, possibly because of an undocumented Blizzard hotfix to the node spawn rated.
- Zephyrites, Jaspers, and Nightstones are sellable to other jewelcrafters doing their daily when it's one of the quests that need three of these to be cut. Be aware that this is the most easily saturated market of all of them, as everyone else who has stacks of these uncut green gems will likely be trying to get more than 9g for them at the same time. Also be aware that the more something is worth at the vendor, the more it costs to list. I'd suggest using a 12-hour list with a stack size of three, and don't put more than a few stacks up. You'll get undercut, and they'll expire. Every expired auction is profit from the sold auctions that has to be made up for. Also, remember that the vendor doesn't charge a 5% AH fee on that 9g for cut gems, and the AH does.
- Jasper can be made into a ring that can be disenchanted if you have access to an enchanter. The price of enchanting mats is usually already through the floor on most realms, so calculate whether this is worth it before you do it. For the calculation, you can assume that each ring will give you one and a half Hypnotic Dusts and half a Lesser Celestial Essence. You'll only get one or the other per disenchant, but after you do enough of them, that's what you'll get on average. The reason I didn't mention all the other rings and necklaces here is that they all take two raw gems and a setting, whereas Jasper only takes one. All these greens have a chance of proccing a blue BoE that might be worth 50g on the AH or at least the price of the shard from DEing it.
- Carnelians can be made into Carnelian Spikes, which despite what the Wowhead disenchanting table claims, prospect most of the time into one to three Greater Celestial Essences. Check if this is more or less profit than Inferno Rubies, but this is a basically unfloodable market. After you DE enough of these, you can expect them to yield an average of 2 GCEs and just under one dust each.
- Last but not least, you can make two Shadowspirit Diamonds with an alchemist and three of each green gem. Before the transmute procs, this means a raw (if you vendored the greens) cost of 162g for two, and it's higher when you consider the lost profits from the other businesses here like Carnelians being worth 20-30g when transmuted into Inferno Rubies. Also, contrary to what I said in a recent post, the transmute mastery for these actually does yield 20%. I haven't seen a 10-proc like I did for Wrath flasks, but I have seen 7- and 8-procs. This is allegedly because the game calculates the proc twice per craft, once for each meta.
The difference between these markets and the cut/vendor sink is that there's no limit to how much you can cut/vendor. The price will always be 9g, and it's not affected by massive supply. The other markets, in addition to needing other trade skills, are subject to player demand. The money entering your bags is coming from other players, not the vendor. If you push the supply hard enough, you can push the price down. This is most obvious on the daily gem market but is certainly visible in the enchant mats market too. Once these spikes became common knowledge, the price of the celestials plummeted. It's only a component of the supply, but it became a huge part of it.
Incidentally, every time you use the lowest common denominator and vendor cut greens instead of processing them in some way and selling them to a player, the server's economy inflates a little more. A large portion of the money your miners are getting from you ultimately comes from the vendor, and when they spend their money, they inflate the economy. This isn't necessarily a bad thing, but it's certainly a change. The big sources of real new gold in the economy until Cataclysm
were quests and monster kills. Vendoring cut green gems and maybe the new guild perk
are certainly on that list now.Blue-quality gems
The interesting thing about blue-quality gems is that they have very little residual vendor value. It's certainly possible to get so many that the only way to turn them into money is at the vendor, but you'll be doing it at 3.75g each after the cut.
The gems that have the most demand are:
- Inferno Rubies, which provide agility, strength, and intellect cuts
- Demonseyes, which cut into some of the more popular combination gems (like int/spirit)
- Ember Topaz, which cut into some of the other popular combination gems (like int/haste)
The rest of them will settle in at an uncut price of about 10% of an Inferno Ruby, 30% of a Demonseye, and 50% of a Ember Topaz.
Remember that when you're liquidating these, there are two primary outlets for them: cut and uncut. If you decide only to sell cut gems, you might in theory make a higher profit margin; however, you will certainly sell fewer of them. If, however, you sell the uncut as well, you'll move more. Based on the number of rare gems I've been working my way through, I decided to sell uncuts as aggressively as I sell cuts, not not the three above colors. I don't care about profit percent on the other three less popular gems; I'm just trying to avoid vendoring them.
I know that every time I sell an uncut gem, it may prevent a sale of a cut gem, but there are a few things to remember:
- I don't have all the cuts, so I might be taking a sale from my competition instead.
- If my competition buys uncut gems from me, they're still going to have to compete with me for the cut sale, and I'm guaranteed to have gotten my profit in already.
- If my clients buy my uncut gem and have a friend cut it, at least I got to avoid vendor a blue-quality gem.
The real value of a gem when you have too much stock is the vendor price. If your market doesn't have the ridiculous quantity of ore on its AH as mine does and you're paying a lot more for it, all the math changes. Rest assured that you'll still be able to make money, though. Unless you're just missing all the cheap stock that your competitors are better at buying, you simply have to put more emphasis on the higher-priced, player-generated markets and vendor fewer cut greens.
Maximize your profits with more advice from Gold Capped, plus the author's Call to Auction podcast. Do you have questions about selling, reselling and building your financial empire on the auction house? Basil is taking your questions at firstname.lastname@example.org.