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Monday, December 12, 2011

Gems: Selling an Item, Not a Service



First off, allow me to do a little dance in honor of this, my 200th post.  /dance Okay, now on with the actual post.

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With epic gems being so heavily gated at the  moment the supply is very limited and prices are quite high.  Now, as a relatively wealthy raider I've spent a fair amount of gold on these gems to give myself stat boosts here and there in my new gear.

But I have a problem, and it looks something like this:


Let's say I'm a frost DK.  Frost DK's look for Strength/Haste with their orange gems, aka Fierce Lava Coral.  While there are four orange gems for me to choose from on the AH three are completely useless to me.  I have to buy the uncut piece for 9.8k if I want to buy a Lava Coral while the Fine, Reckless, and Deadly sellers have completely missed out on any opportunity to sell  to me.

This is mostly a plea to those who have cut these Fine, Reckless, and Deadly Lava Corals and to any JC who is pre-cutting their gems to sell: Please don't.

I am currently in the market for two Queen's Garnet since I owe them to a friend who traded me some gems I needed on the first day of the patch.  I would pay 10k each for these Queen's Garnets just to pay my friend back promptly.  But I cannot because he is a warrior and everyone's pre-cutting their Queen's Garnets to Brilliant and selling them for 5,000g. That person could have had 10,000g per gem but instead, by pre-cutting their gem they missed out on every bit of my gold.

When there is a plethora of supply and JCs to cut that supply you are effectively selling the service; the gem is more expensive cut because anyone can go get an Inferno Ruby but not everyone can cut it.

When the supply is this low you are no longer selling the service. The service is an afterthought, a 10g tip in Trade for most people.  The value is not in the cut or the profession to cut it, it's in the item itself.  It's this value that you diminish drastically by cutting the gem. By pre-cutting a gem into anything you are narrowing your pool of potential buyers significantly and completely alienating many buyers like myself.

Please give a thought to this for any item you selll, but particularly for hard-to-come-by item enhancements and consumables like this.  While cutting a gem isn't necessarily the worst idea it's important to recognize just what you may be doing to your buying pool by doing so.

5 comments:

  1. I see a similar problem when people stockpile Inferno Rubies for big patches. Too many make the mistake of pre-cutting them into like 50 of each type or something in order to "save them time".

    Honestly to me this is silly, almost always you will end up selling one type much faster or for a much higher price than another and then you are just missing out of opportunity like how most goblins are at the moment.

    Similar thing happened when they implemented the hyjal dailies. Everyone went out and pre-crafted weapons 2-5 of each at a time. I only crafted one of each and barked in trade other not-yet-crafted ones so that I could easily meet demand.

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  2. Love the bruce!

    But i do completely agree! I've been listing my uncut gems and advertising the cuts I bought in trade. Seems fairly successful so far.

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  3. Good post! Waiting for the 500th =)

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  4. @Eric Chowles

    Anyone who cut their Cata rare gems prior to Patch 4.3 is an idiot, because cutting them after the patch made them auto stack was way more efficient of a strategy.

    Secondly there is nothing wrong with cutting your gems ahead of time, just as long as you aren't cutting them ALL ahead of time. Then you are seriously risking losing out on the opportunity to sell the better cuts.

    @Faid

    My question is this:
    Why the hell are people cutting gems to lose gold? Raw selling for 9k, but here lemme cut this Fine gem and post it for 3.5k. WTF?

    The only issue I have with your request is that it would work with intellegent crafty types like yourself, but I doubt it would work on most players.

    The JC holds onto their uncut epic gems, which costs them any sales outside of their normal play time (unless they sell their epic gems raw)since they aren't precutting and posting. Then the JC finaly barks long enough to get a buyer of an epic gem cut to order. Then toolbag buyer runs to the AH and sees the prices of the other gems and expects you to match the lowest priced pre-cut gem on the AH or match the lowest priced raw gem, if it is cheaper. Either that or they come to you and want their epic cut for a measley 20 gold tip.

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  5. I need an opinion. Since the 4.3 patch dropped I've been aggressively selling gems, belt buckles, leg armor, mining and LW bags and some BS rods. My guildmates hae noticed and I have taken my gold holdings from 50K to about 250K. Now my guildmates are mad at me accusing me of forcing them to buy high priced gems and complaining that they cannot list anything themselves to make gold since I keep undercutting on all the goods I'm selling. What is the best way to handle this? I tried to explain that there were 20-25 other JC's competing and driving prices but the message did not seem to register with my GM.

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