Using your jeweler to make money on the D3 AH by combining gems….or not?
The commodity market is up again! You can now once again buy and sell gems, but should you actually bother doing this or is it just a waste of time and gold?
You used to be able to make money in Diablo 3 by combining gems, but that was way back in the end of May. Two weeks later and a lot has changed:
- More and more people have hit Inferno and have been hit by the truck that is act 2 Inferno.
- The fact that act 2 is so much more difficult than act 1, means people need to farm act 1. This also means they have been getting flawless square gems like there was no tomorrow. Gems more or less drop like candy and there is no variety in their stats.
- D3 commodity AH has been down and you have not been able to sell your gems. The cost to combine them is huge and while I do think some people have combined their gems, I think more people have stockpiled them in anticipation of the commodity AH coming back up.
- Patch 1.0.3 changes the jeweler and the loot system. Lower level gems will be an option, since you only need two gems to combine to a higher and the crafting cost is effectively gone.
The most important factor right now, is the fact that people have been hoarding gems and dumping them on the market. This means you can’t take the current price as the “normal price” and any gems you decide to sell, you need to sell ASAP, since I believe we could see a further drop in the price of flawless gems.
The current state of the Diablo 3 gem market
I love the gem market, because there is no variance in the stats of the items, so you know what you have and you can get to know the market quite well. Sadly, people don’t seem to be able to do basic math or they just don’t like to make money or gold on the AH. But maybe, we can use this to our advantage?
A quick tour of the EU AH, gives these price for flawless square gems:
- Flawless square amethyst: 1420 gold / 47% of highest price
- Flawless square emerald: 3000 gold / 100% of highest price
- Flawless square Ruby: 1200 gold / 40% of highest price
- Flawless square topaz: 1550 gold / 52% of highest price
As we can see, there is a lot of variance in the prices with emeralds being the most popular. For perfect square gems the prices look like this:
- Perfect square amethyst: 42,000 gold / 89%
- Perfect square emerald: 47,000 gold / 100%
- Perfect square ruby: 41,000 gold / 87%
- Perfect square topaz: 42,000 gold / 89%
We now have a much tighter price spread, but this is mainly due to the fact, that the crafting costs are such a huge part of the price of the final gem:
- Perfect square gem (rank 9): 30,000 gold, 3 tomes of secrets
- Radiant square gem (rank 10): 50,000 gold, 6 tomes of secrets
- Star gem (rank 11): 80,000 gold, 9 tomes of secrets
- Flawless Star gem (rank 12): 100,000 gold, 12 tomes of secrets
- Perfect star gem (rank 13): 200,000 gold, 15 tomes of secrets
- Radiant star gem (rank 14): 400,000 gold, 20 tomes of secrets
About 31,000 gold of the perfect square gem is the crafting cost. Then you need to factor in the cost of the flawless square gems, and of course the commodity tax of 15% to Blizzard. This is where the chain snaps for people.
Buying 3 flawless square emeralds will cost you 9,000 gold. Combining them will cost you 31,000 gold. Total cost is 40,000 gold and then you sell it for 42,000 gold…..and Blizzard takes 15%, netting you 35,700 gold, effectively losing you money!
Buying 3 flawless square amethysts will cost you 4,260 gold plus the 31,000 to combine them. Total cost is 35,260 gold and you sell it for 42,000 gold. Blizzard takes 15% netting you 35,700 gold. A profit of a measly 440 gold! With the variance of the prices in the market, you are basically not making money on the gems, but only taking on risk! Stupid and pointless.
And it gets worse with the radiant square gems. If you buy flawless square gems and combine them up to radiant square gems, you losing between 10,000-30,000 gold on each gem.
But why are people losing money like this on the D3 AH?
My theory is that people are either totally oblivious of the 15% commodity fee or they are crafting their hoarded gems and then selling them. The being oblivious makes sense, but not on a continued scale. Sooner or later people are going to realize they are losing money….and either stop doing what is losing them money or raise their prices.
If they are crafting their hoarded gems, sooner or later the supply is going to run dry or they start to realize, that they are actually much better off selling their gems as flawless square gems. They make about three times more, if they would just sell the flawless square gems.
Long story short, I think the market will start to notice that it is losing money by doing both of the above. This also means a correction is coming and the prices of the higher level gems will rise. However, we also need to get rid of the huge amount of flawless square gems people have hoarded before we start to see a stable market. The prices will fluctuate wildly over the next few weeks so I advise you to stay on the sidelines and focus on reduced level weapons and attack speed increase weapons.
Make money on the Diablo 3 AH with reduced level weapons...and they also help you level faster!
Find the bargains amongst these and make your money on the D3 AH by flipping instead.
When you say talk about the “radiant square gem” costing about 31k gold to craft, you meant the “perfect square gem”, right? Radiant square gems cost 50k plus the cost of buying 6 tomes of secrets (if you haven’t found a bunch of them on inferno that is). If you want to determine what the minimum price of a gem needs to be after taking the 15% tax into account, you need to divide the total cost it took to craft the game (that includes the cost of the secret tomes too) by .85. Then whatever amount of profit (say 500 gold/gem profit) you want to make you add that to that after-tax result.
e.g.
Crafting and selling Perfect Square Topaz
35,260 / .85 = ~41482.35 gold
Crafting and selling Perfect Square Emerald
40,000 / .85 = ~47058.82 gold
The 35,260 and 40,000 amounts are the estimated costs of crafting those items and the result is how much the price would need to be in order to break even without any profit. Anyway, thanks for the research on the gems market. Just remember to divide by .85 and you’ll know how much profit you want to make.
Correct. I was in a bit of a hurry to write the last of the article, since I had guests coming over
A slightly old idea here but I was considering buying out a lot of the Square gem market in order to take advantage of the changes in 1.0.3. If the price of Star Emeralds for example remains at around 600-700k (670k currently) then you can expect to make around 30-40k per Star emerald sold simply buy buying 54 Square emeralds at around 400g a pop, and combining them into the star for a total cost of 520k. Selling at 650k taking into consideration the 15% commodity fee you are looking at a gross profit of 552.5k. Giving you a net profit of around 30k. Viable or not? I need opinions!
This could very well be viable. Just don’t tell anyone yet….it’s our little secret
I am doing an article on it this weekend.
Not sure if I post went through or not! Fast recap, buying out a lot of the square gem market before 1.0.3 goes live and taking advantage of the dramatically reduced combination cost into flawless squares?