Do the Math

Today I was approached by a friend who asked me how he could make money. He showed me that he has two recipes that are for high-end raiding. He said he is one of two people with these recipes, so how can he make money. He already has a lot going right for him, but that does not mean he will automatically make profit.

So let's think about this and decide if he should craft this item.

We have 3 tasks to complete before we even think about making this for profit. We have to figure out our profit margin to see if there even is any profit to make. We have to estimate our customer demographic, or else why make something that no one wants? And we need to verify this 'niche' is in fact not taken, or else we may end up with an expensive item we don't want and cannot sell.

The crafter has no reserve stock of the two main craft reagents Spellweave, and Ebonweave. If he wants to make money as a tailor, it's up to him to keep his inventory up to be able to produce items on demand like this. Many times people will come to him with materials, but when this happens then the crafter's profits are 0% - 5% of possibility. Maybe a small tip. Forget that! Since we have no stock to make this item, we have to do the homework for AH prices or /trade seller prices for CD of these cloths, estimate the total cost to produce, and then estimate our final selling price. if there is a small difference, then this 'niche' isn't very profitable regardless of it's potential and should not be pursued. If he can get materials under the AH price though, he's being a Goblin and turning a larger profit.

We also need to figure out 'who will buy it'? Just because we have a recipe, we know it's not instantly profitable. Is this item 'Best in-Slot?' Will non-M&S raiders that have the gold to purchase gear want this? Does it exist on any lists made by people on Elitist-Jerks for 'get this item not to suck' ? We need to guess the demand for this item before we make it, or make demand. several ways to do this:

• Ask in trade on an alt 'Anyone Making this X item? I really need it for raiding'.
• in the process of purchasing materials to make it, buying out supply makes this item rare.
• Your realm forums have info of people who want to sell their recipe skill, post there.

This last step goes with process #3, and that is making sure this 'niche' is not taken. My friend already said he thinks he is only one of two people with this recipe, but we have to be sure! With so much investment for only 1 item, it can be very risky. Scan the ah for 1-4 days looking for this item crafted. Run scans or write down on paper the quantity of the rare cloth materials that exist on the AH, if it is even possible for someone to buy out auctions and manufacture one. And of course your realm forums often have businessmen posting their abilities.

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After we have done all of this, we have our answers. Cost vs. Profit. Demand for the item. Competition weighed. After we do these things, we will know if it is safe to make this item for a nice profit, or not worth the time / gold earned.

(in this case, only 3 total people were able to craft the item, and cloth supplies were low If he is able to gather the resources, he could make these with little to no competition, and basically set his own price. This turned out to be profitable for him!)