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So what is happening is that that your artifact level weapon is being sold following the same business practices they use to buy that stack of 10 goblin spears you also just walked in with. The blacksmith knows that most of what he will buy from you is just going the the trash heap and that selling your good stuff puts his relationship with his blacksmith in jeopardy; so, he offsets the risk and waste of buying your stuff by only paying you a tiny fraction of its worth.

So what is happening is that that your artifact level weapon is being sold following the same business practices they use to buy that stack of 10 goblin spears you also just walked in with. The shop keeper knows that most of what he will buy from you is just going the the trash heap and that selling your good stuff puts his relationship with his blacksmith in jeopardy; so, he offsets the risk and waste of buying your stuff by only paying you a tiny fraction of its worth.

I don't agree with the accepted answer in the context of the genre. In many games, the best weapons are the ones you craft yourself; so, there is some assumption that your character either is a capable artificer, or you can at least level up that skill to become one.

The shop owner is perfectly happy to pay a fair wholesale price on any artifacting reagents you bring in because adventures ARE the expected wholesalers of these materials. If you want a gryphon's feather or a hydra's venom, then everyone knows you buy that stuff from adventurers; so, the shop owner does not want to undercut your profits here. He knows 100% that he can quickly and easily sell them to the blacksmith. So he pays you the wholesale rate of \$200 for the materials, which he then retails to the blacksmith for \$250. It's easy pocket money for the shop owner, and it does not actually cut into his weapon sales. Then the blacksmith uses those materials to make a sword he wholesales back to the shop owner for \$700. Then the shop owner retails it for \$1000. Everyone has made a profit, and more importantly, no one has risked thier supply chain in doing so. In business: safe repeatable, low-profit transactions are called your "bread and butter" and they are way more important to staying in business than the occasional wind-fall transaction.

I agree with the accepted answer in most settings, but not in the context of the genre. In many games, the best weapons are the ones you craft yourself; so, there is some assumption that your character either is a capable artificer, or you can at least level up that skill to become one.

The shop owner is perfectly happy to pay a fair wholesale price on any artifacting reagents you bring in because adventures ARE the expected wholesalers of these materials. If you want a gryphon's feather or a hydra's venom, then everyone knows you buy that stuff from adventurers; so, the shop owner does not want to undercut your profits here. He knows 100% that he can quickly and easily sell them to the blacksmith, and that he can only buy them from adventurers. So he pays you the wholesale rate of \$200 for the materials, which he then retails to the blacksmith for \$250. It's easy pocket money for the shop owner, and it does not actually cut into his weapon sales. Then the blacksmith uses those materials to make a sword he wholesales back to the shop owner for \$700. Then the shop owner retails it for \$1000. Everyone has made a profit, and more importantly, no one has risked thier supply chain in doing so. In business: safe repeatable, low-profit transactions are called your "bread and butter" and they are way more important to staying in business than the occasional wind-fall transaction.

However, when you look at the shop systems of most games you will notice that most items sell for WAY less than you could buy them for. A \$1000 sword only sells for \$100, even when you are selling it right back to the guy you bought it from that same day confirming that craftsmanship is not the guiding principle here. However, wholesale is typically 50-85% of retail meaning that the guy who actually made that \$1000 sword was paid by the shop owner \$500-850 to make it.

So the real question is, why would the shop owner pay the blacksmith up to \$850 for the same sword that he would only pay you \$100 for? You see, the shop owner can not keep high quality wares in stock without the blacksmith; otherwise, adventurers would just always buy his best stuff and fill his shop with worthless junk they are selling, and his shop would very quickly be filled with nothing but a giant pile of worthless goblin spears.

However, when you look at the shop systems of most games you will notice that most items sell for WAY less than you could buy them for. Most video games do this purely as a balancing mechanic, but there is a real world explanation for how this kind of thing sometimes happens.

In many games, a \$1000 sword may only sell for \$100, even when you are selling it right back to the guy you bought it from that same day. This confirms that craftsmanship is not the guiding principle here. However, in the real world, wholesale is typically 50-85% of retail meaning that the guy who actually made that \$1000 sword was paid by the shop owner \$500-850 to make it. Videogames general do not define these values so we will assume the real-world values here.

So, why would a shop owner pay the blacksmith up to \$850 for the same sword that he would only pay you \$100 for? You see, the shop owner can not keep high quality wares in stock without the blacksmith; otherwise, adventurers would just always buy his best stuff and fill his shop with worthless junk they are selling, and his shop would very quickly be filled with nothing but a giant pile of worthless goblin spears.