Written by 
- Specialization within a profession
- Specialization of professions
- Diversification within a profession
- Diversification of professions
Specialization within a profession
This essentially boils down to focusing on 1 single item or market, or a small group of items within an individual profession. An example of this would be a scribe who only sells glyphs, or to take it even further – one who only sells specific glyphs. Now, let’s talk about why, and how you would do this. Usually, you would only narrow your focus to this extent for two reasons: you have a short amount of time, or to take advantage of a unique and often limited opportunity.
If you don’t have much time, small-scale specialization can definitely be a profitable venture. It allows you to really get familiar with that specific market, to get a feel for the trends and nuances – which is knowledge that will be 100% transferable should you have the opportunity to expand and diversify later.
The other reason for specialization within a small market or individual profession is because of a limited opportunity. The limiting factor here is usually time, such as a holiday event, the darkmoon faire, or the release of a new expansion or patch. What most often happens with these opportunities is that there is a small window where you can make big profits until either everyone else catches on and the supply/competition increases or the demand dries up. These opportunities can often be quite lucrative and there are many people out there who simply “jump” from one event to the next. I’m more of a “routine” kinda guy, myself, but I suppose that’s another post for another day.
Now that we’ve established why you might choose to specialize like this, let’s take a look at how to do it effectively. The most important thing about specialization within a profession is choosing the right market – you really want to ensure that you are getting the most “bang for your buck”, and that there isn’t something more worthwhile you should be doing instead. This is where the Goblin Index Rating can really come in handy. (It isn’t a shameless plug if the post is still on my site, carnival or no carnival). For anyone that is a first-time visitor, you can get more information by visiting the page dedicated to it, or by checking out previous posts I have written about it and my plans for where I would like to go with it. Allow me to summarize for you – essentially, the Goblin Index Rating works like a PAWN scale does for evaluating your gear. It uses predetermined weightings in key areas to compare individual markets or gold-making opportunities against one another. So, in a situation like this, when you might be thinking about narrowing your time and effort into a single market, the Goblin Index Rating will basically tell you whether it’s a good idea or not. If you have limited time or resources available, it will help you determine where your time will be best served. If you are trying to cash in on a limited opportunity, it can help you to see just how worthwhile it might be.
The bottom line is that there is a time and a place for specialization within a profession, just like there is a time and a place for diversification, you just need to learn the right timing.
Well, this post is plenty long already, so I’ll leave the rest of the discussion for later and turn this into a series. Part 2 will cover specialization of your professions, and then we’ll talk about diversification in part 3 and part 4. If you haven’t done so already, be sure to check out the subscription options that are all over the site so you won’t miss the rest of the series.
-Kathroman
I like your site. I’m glad I found it via the Carnival. I find your analysis of diversification vs. specialization generally accurate; I agree with most of what you have posted on this topic today.
However, the Goblin Index Rating is an interesting idea. I’m not sure how viable it is on a broad scale just due to the volume of data that would have to be managed. Ekg, I perform 3 full scans of the AH each day. During the week there are normally between 22k and 24k auctions. On weekends this total balloons to 34k-36k.
Keeping track of the relative value of each item would involve millions of calculations. For example, Rugged Leather is a component in 103 recipes (Wowhead at http://www.wowhead.com/item=8170/rugged-leather#reagent-for). To determine the GIR for Rugged Leather your program would have to calculate the materials cost of the Leather, the overall materials cost of every craftable item and compare total number of each item based on a projected ROI. Repeating this for each of the possible 103 crafted items is a large task. ((sure, you can remove the 20 or so BoP items from this list but you get the point)). Now repeat this process for each of the items in the AH that can be used to create other items. Even if 1/3 of the posted auctions would fit this criterion you still have 7k+ auctions during the week and 11k+ on the weekend. The permutations for each of these items involves myriad calculations–quite literally, millions of them.
To get real time data you would have to do a comparison multiple times during the day. I believe this would be too burdensome for an automated system.
There have been efforts made with current addons to address this need. Skillet and Gnomeworks both have a feature that pulls the current AH scan data and adds up the materials cost for everything a character can craft. Then in a very simple interface each addon shows the materials cost in one column and the most recent AH price in the adjacent column. If the sales price is greater than the materials cost, the item is highlighted; if the materials cost is greater than the sales price, the item is muted in color.
When you queue several items the addons keep track of total materials you need, and in Gnomeworks’ case, shows you whether you have the mats in your bags, bank, mail or if you need to buy elsewhere. Skillet shows the same info but in less detail–but does give you the added convenience of being able to look at all materials for queued items for all toons in one window.
But I digress.
The concept is good. No doubt it would be very useful to have this type of tool. However, the one piece of the GIR that cannot be calculated is that of demand. Current pricing and recent trends can give an idea of what is selling well or not. But these conditions change as players level characters, have more or less gold today than they did yesterday, whether their guild can help make an item for them, etc. These are the intangibles that a goblin has to predict when making value judgments on what to make and what to avoid.
Your Index definitely identifies all the factors that need to be considered. I just think managing this information is the art of being a goblin. As such, I’m not sure art can be produced technologically–it requires the human element that a goblin provides.
Kammler. I really appreciate the feedback. I usually agree with most of what I say also…
As far as the GIR goes, I would recommend you check out the post I wrote about What I want to do with the GIR. One of the things I mention in that post is that I would like to use the information from The Undermine Journal to populate the information in my GIR database, either manually or automatically.
I have also been running some tests on the “sold” data that TUJ gathers – comparing it with “sold” auctions through my armory, and have been extremely pleased with the results so far. By utilizing that information, I believe it IS possible to calculate demand.
As far as the size of the database, allow me to provide some further explanation. With regards to the example you provided – rugged leather, the GIR would not take that same approach. Instead of starting from the beginning and working through every single avenue, I will make some assumptions about which recipes are worth comparing and then use the scales to evaluate the best ones.
If you were to look at leatherworking, what I intend to do is utilize the information in the post I wrote about Buyer Awareness and eliminate probably 75% to 80% of the recipes within the profession, leaving us with only the ones that are worth producing on a regular basis.
I have used both Gnomeworks and Skillet in the past, and have since migrated to TradeSkillMaster. If you are familiar with TSM, what the GIR essentially offers is both a filter and means of sorting your profession queue. It narrows the list down to a more manageable size and then shows you where to spend your time.
I hope this answers some of your questions, thanks again for your comment.