Is It Really Better to Buy Ore than to Go Mining?

     "Only Noobs mine ore." We've all heard it a million times in various forms. The more experienced and less snobbish goldmakers will tell you that it's just more profitable to do just about any other gold making action in-game. Personally, I've had at least one gathering toon for years and enjoy it immensely. For me, it's relaxing to just fly around mining while listening to Alanis Mori... I mean Snoop Dogg. Unfortunately, many new Jewelcrafters or Blacksmiths who choose mining as a secondary profession will still occasionally be hazed on goldmaking forums, since "it's OBVIOUSLY much more profitable to buy ore off the AH." While there's been a lot of talk from different screen names I haven't seen anyone do a breakdown of whether or not the above statement is actually true or not, and I like testing game-changers analytically, so let's do that now (note: general consensus is usually correct, but I learn a lot with my testing). This is hopefully going to be a little more mathy that most of my posts, so for anyone who doesn't want to read all the mumbo jumbo, just scroll down to the conclusion at the bottom for a nice, easy wrap up. Ok, so, once and for all, is it really cheaper to buy ghost iron ore or bars off the Auction House, or should you mine them yourself?

 "He sure has the reach advantage, and she has...What the?!...Is that a rack of blunderbusses and greatswords?!"

Guess:
     While a bunch of people say that it's always more profitable to buy ore off the AH, I'm gonna have to go with a hypothesis of, "It depends." The times that I would rather be lazy and buy ore are the moments when I don't have very many gems to cut; the miscellaneous flight time seems more weighted when you're only farming 5 or 6 stacks of ore versus the massive 200-stack grind sessions. So, I naturally feel that it's better to farm ore for bigger stacks than smaller stacks. But enough guess work. On to math!

Calculations:
     First off, we'll start with the basic profit equation of Profit=Revenue-Expense. In this case, our revenues are the gold earned from selling gems or armor. The expenses are going to have to be monetary, but the big problem with mining, or the blessing, depending on how things turn out, is that it is pure profit from trading in time and prospecting ore. So, we'll turn the time spent mining and prospecting on both sides into an expense. Jewelcrafting should be more fun to play with than Blacksmithing, so let's focus on that profession, ok? The process for buying will be 1) purchasing ore for gold, 2) spending time prospecting which we will convert into potential gold lost, and then 3) selling cut gems. The process for mining will be 1) mining ore (Duh), 2) spending time prospecting, 3)and then selling the gems. Alrighty, here we go duhn du-duh-duhhnnnn: when is it more profitable to buy ore?

Profit(Buy) > Profit(Mine)

Revenue-Expense(Buy) > Revenue-Expense(Mine)

GemSales-[(#Stacks)(Price/Stack)+(#Stacks)(ProspectTime/Stack)] > Gemsales-[(#Stacks)(MiningTime/Stack)+(#Stacks)(ProspectTime/Stack)]

     Gem Sales (the only revenue) are the same on both sides, so that cancels out. The awkwardly named MiningTime and ProspectTime are in terms of "gold/stack." We can put in variables to make all this shorter and easier to read as well. Also, the inequality flips when we subtract out Gemsales and divide by the -1, my least favorite algebra trick that I always forget to do.

GemSales-[(#Stacks)(Price/Stack)+(#Stacks)(ProspectTime/Stack)] > Gemsales-[(#Stacks)(MiningTime/Stack)+(#Stacks)(ProspectTime/Stack)]
X: #Stacks,  Y: Price/Stack, Tp: ProspectTime/Stack, Tm: MiningTime/Stack
XY+XTp < X(Tm+Tp)

X(Y+Tp) < X(Tm-Tp)

Y+Tp < Tm-Tp
Y < Tm
Ore Price < MiningTime/Stack

     So there ya go, we have a surprisingly simple and obvious answer after almost everything cancels out. in short, it's cheaper to buy ore if your time is more valuable than time it would take you to farm. That's not 100% the right interpretation though, as we'll go over quickly in the conclusion. Also, I'm ignoring small miscellaneous time costs like buying from the AH, mailing between characters, and flying to the Valley of the Four Winds, since most of those can be reduced to almost nothing with addons like TradeSkillMaster. Basically, this should answer a bunch of the questions you might have been having about the process.

Either way, when you mine, lookout for that one stupid tiger that always freakin aggros.

Conclusion:

     It is only more profitable to mine when ore is more expensive than other alternatives. It essentially comes down to the age old question of "is mining a good profession." Assuming, you know what you're doing and can farm up 40 stacks every hour, at current US prices of 3.49 g/ore that comes out to about 69g per stack or 2,800g per hour. There are many other farming options and dungeon runs that can net 4k+ per hour, but the question is, are you going to do them? Mining remains a fantastic option for trading time for profit. 

      To give an example of this all, one hour of mining would yield 40 stacks of hour, giving you about 7 of each rare gem and 40 of each uncommon after prospecting (for values, hover over the number in the % column on any prospecting tab of WoWhead). Prospecting takes about 13 seconds to work through a stack of ore (2 second cast w/avg 1.25 seconds of looting), so at least 8 minutes just doing that in this example.

Profit(Buy) > Profit(Mine)

Revenue-Expense(Buy) > Revenue-Expense(Mine)
11,400g - [(40stacks)(69g/stack) > 11,400 - (4k+)
11,400g - 2,760g > 11,400 - (4k+)
8,640g > 7,400g
[Buying ore is 1,240g/hr more profitable than mining.]

     The trick to all this though is that if you DON'T go run dungeons, or if you just buy up ore on the AH, prospect it, and log off, when you would have been willing to go and mine it, you're losing that potential profit, and mining would have been the way to go. Here's why. That opportunity cost varies according to what you would have done in that specific hour. In other words, if you would have sat around in /G talking about how overpowered holy pallies are, then you're making zero gold and MiningExpense/OpportunityCost/last-part-of-the-formula, changes considerably.

"Logging off after Buying n' Prospecting" Scenario

Revenue-Expense(Buy) < Revenue-Expense(Mine)
11,400g - 2,760g < 11,400g - 0g

8,640g < 11,400g
[Mining is 2,760g/hr more profitable than AHing.]

     So, as you can see, either course of action can be more profitable depending on the mining expense - whether or not you make gold in ways other than Jewelcrafting. My concluding thought of all of this is that it's only better to buy ore if you, in the same session (or some scheduled time), go out and make up the debt you've accrued by purchasing that ore rather than farming it, because you've cost yourself 3k in potential profit if you do nothing. Don't be that guy. On the other hand, if you're super busy, raid's about to start, you have four other professions to manage, and you just don't have that much time to spare, then don't worry about it, you're still making 8,000 gold for 8 minutes of prospecting, a little bit of gem cutting, and a quick cntl+scroll on TSM 2.0. So, grats!

     Thanks for reading my little WoW blog here! Subscribe to my Twitter for future updates, and until next time, remember that there's no secret to making gold in the World of Warcraft, all you have to do is just

Search. Craft. Post.
Ever Day.

     P.S. For anyone calculus inclined, I apologize, I was hoping the math would get exciting, too, but it all just cancelled out all nice and purdy. If you really want to play with derivatives or whatever, find the minimum hourly profitability of a dungeon run to make buying ore better. Honestly though, the answer is right there on the other side of the equation. Whamp whamp. I'll find something more fun next time.