Distribution

Today's lesson is about distribution. It is considered that an item that produces only a small profit, regardless of initial cost, is not worth the time. Even if you do the math for people and show them that they can produce 100%, 200%, even 300% profit from a single item and very little work, they are not interested in making 25 Silver profit for clicking once. Never mind that they click 400 times to complete 1 daily quest that rewards them 12 Gold (plus a repair bill) that takes 7 minutes. So that is something like 3 copper per click. And this is more profitable to them than 50 Silver per click?

So we know that their time is misspent, but their time is important to be spent on such worthless activity, because it adds gold to the economy. Some of them are intelligent enough to research before spending money, but many are impulse spenders. If a supermarket only sold the food that people need, it would quickly go out of business.

That being said, let's focus on a small part of distribution, and how it comes into play with this buyers market. Much like a supermarket, I buy herbs very low, and return the product for much higher. I have arranged semi-regular contracts with herbalists to purchase their herbs in bulk, for less than the AH of course. Here is an example:






















So I'm saving 32 Silver per herb. that's HUGE! Now, consider that I am producing hundreds of glyphs per shipment, that means I can reduce the prices of glyphs that I sell considerably and still be profitable. My competition can take a loss (which is good for me) and match my prices, or quit on auctions they can't match. Eventually I start to own certain glyph markets. The only competition then is individuals who farmed a few herbs last night, made the inks, and are out only papers Gold to post. Because of the size of my business, I cannot go out and farm for herbs and still make money. Bill Gates loses money if he spent the rest of his life bending over to pick up $100 bills.

So, by making my Tradeskill large in volume and managing it like a factory, I am able to make real profit from the 20-30 Silver that others don't want. The restaurant you eat dinner at did not raise the cow themselves, they did not Kiln the fine china you eat the steak off of. They (usually) did not build the building they are located in. They make a profit from their craft regardless of that. I would think that raising a Cow in Los Angeles would cost more than the meat does if you buy it from the wholesaler. And the Cattle Rancher maybe doesn't own a five star Restaurant in Los Angeles.

If someone herbs their own materials, turns around their glyphs on a similar volume as myself, and sells as much as me, he would have more end Gold than me. Consider, though, that he spent the 4-8 Hours to farm the materials, I spend maybe 10-15 minutes a day at it.