The term economic moat was coined and popularized by Warren Buffett. It refers to a businesses ability to maintain its competitive advantages over it competitors in order to protect its long-term profits and market share from competitors. 1The best way to look at it, economic moats are just like medieval castles that keeps the opposition at bay, the bigger the moat the harder it was for enemies to raid and infiltrate the castle. The same applies with economic moats, the larger the company's economic moat the harder it is for competitors to infiltrate a company's market share and profits.
After reading and understanding economic moats I begin to think how can this work for crafting? How can crafters develop their own economic moat to keep other crafters from entering their market share or profits? In the past, I wrote about how multi-crafts on the same character can provide more variation and usefulness to their tradeskill. If a player decides to level up a main craft and all other tradeskills along with it as secondary skills then it should allow the crafter to craft additional goods that are only available if he or she has leveled up X,Y, or Z skills to a certain degree. By doing this the crafter now has a competitive edge over other crafters who has not done the same.
But this is not all, there are other economic moats that can come into play such as making deals with player gatherers to purchase materials below market price, reducing traveling or shipping costs, increasing your crafting skill in order to increase the chance of producing higher quality or more items, and finally setting up barriers to entry making leveling crafts a slow and expensive process. Along with all these, a crafter, just like a business, can develop his or her own economic moat and the more the crafter spends time leveling up tradeskills the larger the economic moat and of course the large the moat, the harder it is for other crafters to infiltrate profits and market share. And like a business all this adds additional value towards MMO crafting and the crafting economy.
1Dorsey, P. (2008). The Little Book That Builds Wealth. Hoboken, NJ: John Wiley & Sons, Inc.