Casting ain’t easy: Potential structures in the market for wizards

by lyletealeaf

A wizard wishing to conduct spell research and live well will need to earn money. Even a seasoned adventuring wizard could easily spend his his entire convertible wealth (62,000gp) researching spells in two years.  To sustain a career in research, much less outfit a suitable wizard’s tower, a wizard will need money.  This post looks at the Pathfinder rules about the magic business and tries to infer what world building implications there might be.  How is wizard’s work organized in terms of institutions, trade links, and product lines? 

We have a handful of observations about prices and work opportunities for wizards:

1. There is no margin to make money manufacturing or distributing magic items because the price to make them is the same as the price the retailer will pay for them.
2. The retail spell casting market does not settle near the marginal price of casting, which is 0. Instead it is 10gp x caster level x spell level.
3. A day’s earnings for a wizard using his class abilities (e.g. casting spells) to earn money is surprisingly low: only d20 + character level+ best ability score modifier -5 sp per day (may take 10). A 10th level caster would earn only about 14gp per week.
4. A day’s earnings for wizard using his skills to earn money is modest, half your skill check in gp per week.  A 10th level caster might earn 14gp per week without special equipment or feats.
5. A small magic shop (800gp wholesale of merchandise or less) dealing in magic items, spells, magical remedies, and perhaps spell components produces 19gp per week of profit before random events for a non-absentee owner with a purchase value  of 1590gp. This is a 62% annual profit on the initial investment (again, before random events).  
6. The retail price for magic items starts at 12.5gp for the cheapest scrolls and 25gp for the cheapest potion. However, even the smallest settlements (< 20 people) have a 75% chance of magic items under 50gp in retail price being available for sale.

These findings paint a picture of a business in magic items that has no margins in manufacture and distribution paired with very large profits at the retail scale. Magic items and presumably the shops that sell them are very common in Golarion, since even small settlements have selections of potions available.   One caster working full time for a year could supply more than 150 magic shops worth of inventory by working 5 days a week, 50 weeks a year. Even if a magic item shop goes sells through its inventory 4 times a year, the caster can manufacture supplies for 39 shops (250,000gp retail). In this 39 shop example, the 250,000gp gross would be divided:  50% on magic item raw materials, 15.4% in dividends to the non-absentee store owners, 11.3% to store managers who ensure things go well for 2 gp per day per store, 2.4% on unskilled shopkeepers (based on 1sp per day per unskilled retail person at 39 stores), and 0.2% for the caster’s labor to make the magic items (generously assuming he were paid as a 10th level caster). That leaves 10.7% paid by the retailers for taxes, dues, transportation, depreciation, rents, interest, and other miscellany.  One complicating detail to my explanation is that the return on investment in the downtime rules for starting a shop is really good (greater than 50% per year before random events) for all kinds of shops, not just magic shops.  I will explore that in a future post.

The low share for the caster’s artifact making labor does not depend on the assumption I made about turnover per store. With higher average sales per store, the owners’, managers’, and unskilled laborers’ portions would decrease, and the miscellaneous category would increase by the same amount. The share paid to the maker of the magic items would be changed. 

I say all this to point out that there is a lot of money to be made, and only a sliver of it is going to the wizard despite the fact that in most settings the wizard is a rare kind of person.

How can a GM explain this conundrum in the most entertaining and fun way possible? In order of descending likelihood that could cause wages for magic item making to be so bad:
* Magic shops tend to be owned and run by by casters who make most of the wares. This might be with the imprimatur of a sanctioning organization (e.g. a guild). This has the advantage lower inventories, providing a store front for retail casting, socialization with and respect for magic-users,  and giving magic-users something to do other than make trouble when they don’t have an adventure. The sanctioning organization gets its power from its partnership with the state or community.

* A force in the market such as a guild, nobles, religion, law, or popular custom prevents heroic classes from charging more than a few gold a day for their skills.  For example, perhaps the ruling powers don’t want heroes freelancing in the towns. They either want the heroes to work for the ruling powers or leave town. (likely some of the time)

* Housing magical energy in the body is dangerous.  A wizard who memorizes spells on a daily basis will die an early death by demonic possession, magic worms, madness, or worse. The only safe way to memorize spells or keep them memorized is to discharge the energy buildup into specially prepared inanimate objects. This was how arcane magic items were first invented. Wizards are desperate to find work making magic items, so they will accept the meager fees listed above so they can safely keep their spells memorized. The wizard guild is not just a cartel – is a public trust to keep wizards from endangering the community.

* There is a large organization that sells magic items at-cost as a loss leader for something that makes even more money. (unlikely since magic items are so expensive you would expect something else to be a loss leader for them). One possibility is that it is a loss leader for the army in order to keep a large stable of magic-users occupied when they are not needed for other missions.

* A cabal of wizards/casters in Golarion has discovered a new metamagic feat or other means to make magic items on a large scale for lower cost than standard price.  They are using this to take over the market, and crafters can’t make a good living making items any more. (this could be a fun adventure hook).

* There are so many magic items in the market that there is no money in making new ones (unlikely, but depends on setting)

* There are so many casters in the market that their wages are low.

* I’ve made a mistake in my calculations.

* The rules are inconsistent or not meant to be used this way.