I know a lot of different guilds run tons of loot distribution styles. In our guild it's mostly towards fairness and open rolling with a few caveats. Essentially, it's MS first, with people expected to know what's a better item for them. An example would be the haste/str trinket from Will of Emp encounter dropped: The Fury warrior wants it, but doesn't roll because it is way better for the Ret. Next week it drops, if the Warrior hasn't found an upgrade comparable he will get it, otherwise it would go to the DK for Off.
We are a small (mostly) stable guild that has been going for 2 expansions and people are good about letting others have a better upgrade. I guess you could call it loot council, but only so much so that it involves only the people who are even able to use it. We occasionally will need the Hybrid casters to switch to heal, have our Blood Tank go dps, or our Warrior go prot spec, but only as last resort because some one can't make it.
I say all this to get what people think is fair, or perhaps how you guys are dealing with blood spirits / crafted items and Tier. Now that people are starting to get a lot of the same gear out, we've gotten to about 10 blood spirits. We are a bit behind in progression, but we're clearing MsV 6/6 in 1 night, spending 2 nights on HoF now. Tier isn't a huge issue yet, but it will be soon as we progress.
Essentially, I have it figured to a 3 roll system. If you want Off Spec gear, you shouldn't be getting first dibs on Crafted gear. If you want Crafted gear, I'm not going to let you roll on a tier "side-grade". I'd rather you wait your turn since you've already gotten a 496. If you don't want OS and you don't want Crafted, you should get the 1st chance at tier, assuming its your token. Does this make sense? I know it seems a bit structured for us since we usually just do rolls, but I'm trying to be efficient with our gear. We have a nice make-up in our guild with little overlap on gear.
Conq- Pally, Priest, Lock x 2
Prot- Monk, Sham x 2, Warr
Vanq- Death Knight, Druid x 2
1st thing I'm asking the guildees is, is your 4 set awesome or just kinda nice. I'm not 100% familiar with which sets are getting good bonuses so I will rely on people to figure out ahead of time, if off tier will give a better stat allocation than a bonus would. Assuming they want tier over a crafted item, it would go like this.
Pass on Crafted > Gets 1st priority on Tier.
Wants Crafted > Waits til other get their Tier.
This also brings up the problem of off-spec. Since the only way we can get Blood Spirits is De'ing stuff and if people want OS, we won't get those mats. So it gets a little clunkier.
Wants OS > Wants Crafted (waits for others) > Tier (when?)
Wants OS > Doesn't want Crafted > Tier (when?)
Maybe I'm over-thinking it a bit, but maybe someone else could give me their insight on how they're doing it.
It sounds like you already have a pretty cooperative raid team when it comes to loot distribution, so just make it simple. "Decide whether crafted or tier is better for you because whichever one you go for, you're last in line for the other one." Your plan is basically doing this already, it just sounds a lot more convoluted the way you're describing, but it's the same function.
This sort of announcement shouldn't cause too much controversy. Your raid probably already knows that it's more efficient to priotise upgrades to the players for whom the upgrades are large and/or BiS, rather than giving them to someone who expects to shard it in a week when they get the better thing they really wanted.
Off-set shouldn't really be a factor right now until everyone has main set taken care of. If you're swimming in blood spirits and everyone already has their main tier or crafted, then you can open them up to offspec. Otherwise people should just be filling their offspecs gear from drops no one needs for their main set.
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Also, I'd probably have people hold off on even being able to get off-spec gear unless they're players who you regularly have change specs in raid for the guild. If they're not using that spec in raids there's really not reason for them to be taking the gear from raids until you don't have need of the gear anymore for main specs.