I am not an accomplished crafter in any MMORPG but recent posts on Tobolds blog about crafting in WOW and LOTRO got me thinking. There seems to be a fundamental problem with many crafting professions in mmorpgs that it is impossible to make a profit from crafting untill you reach the highest levels. Typically the raw materials you need cost more on the open market than the products you can make for them. This seems entirely contrary to normal market behaviour - if an item makes a loss why would anybody produce it? A contributor to Tobolds blog called Gnomersky very insightfully pointed out that the root cause of the problem is that crafting an item gives two rewards - it gives the item you produce but it also gives the skill advance. People who wish to advance their skills in crafting are forced to make many many low level items in order to advance to a higher skill level. They then offload the products of their skilling up onto the market and are happy to take what they can get. These "dumped" items effectively flood the market for lower level goods eliminating any opportunity for profit. It is only when you get to the highest level of skill that you can make a profit. There is no incentive to produce a highest level item to sell at a loss because there is no skill up benefit from doing so.
My proposal to fix this is to seperate crafting products into two kinds:
i) practise products give a skill increase but no saleable produce.
ii)saleable products WILL NOT GIVE ANY SKILL INCREASE but the products will have genuine value.
Skillling up a crafting profession will still cost time and money - one will still have to produce many useless practise items to do so. The most important point which I have bolded is that there will be no secondary reward (skilling up) for producing saleable products. At every skill level there will be a choice of practise recipes and saleable recipes. Even at low levels as long as the saleable items have some intrinsic value market forces should ensure that the market price for the end product is more than the market price for the ingredients. If it is not then there is no incentive to produce that item and supply should fall increasing the price.
As a further refinement I think that the ingredients for practise items should be decoupled from the ingredients for saleable items. This should help to lower the market price of ingredients for saleable products which in turn will lower the selling price and encourage a greater volume of sales. Even if this is not done I would still expect selling prices to be higher than ingredient prices but high ingredient prices resulting in high selling prices will result in lower total sales and less overall participation in the market.