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Some thoughts on The Price of Magic Items

by barna10

How much does a +1 sword cost? How much can you sell one for? Is there even a marketplace for magic item commerce? These questions have persisted for decades and are a part of the background of every fantasy campaign, ever.

It is completely realistic for the Dungeon Master to decide to not allow magic item commerce. Most fantasy worlds are full of a depressed populace with barely a pot to pee in. In this economy, who has the spare change to buy a +1 sword, even if it’s 50 gp? A realistic wage for a serf or other medieval working-class member is about 1-2 gp per month, or a few copper per day. Tradesmen and mercenaries might make a silver piece or more a day. Assuming a 6 day work week, this means a tradesman might make 24-25 sp a month (in profit), which translates to about 30 gp…per year. Even at 50 gp, that’s a year and a half of profit!

More modern version of D&D have price lists for items. 3rd edition puts the base price of a +1 sword at 2000 gp…or 67 years pf profit for the average tradesman or mercenary! So, the average populace is clearly out of the running when it comes to buying magic items.

A merchant may consider buying an item from adventurers, but he or she would have to consider the market. How is the merchant going to turn around and sell this shiny thing. The utility of the object does not matter if no one can afford it. Imagine this, a seller comes down your street with a new prototype sports car, a one-of-a-kind. It’s the fastest land vehicle ever, goes several hundred miles or kilometers before needing a recharge, and you can even put AA batteries in it and it’ll run for a few hours! It’s got the latest navigation, and even a defense system with lasers and a force field. What’s the price of this thing? Only a few billion! You may want it, many people may want it, but who can afford it? Sure, there a few people in the world that could afford to drop a few billion on a sports car, but a few people does not a market make.

This is where the problem with a fantasy magic item economy enters the picture. There needs to be MANY buyers with enough disposable income for a merchant to want to sell magic items over something more profitable. Beets would probably be more profitable than +1 swords in most worlds.
There will be an occasional noble or guild master with enough disposable income to drop 2000 gp on a sword, but they are as few as the real-world billionaires able to afford a prototype worth 2-3 billion.

PCs should destroy local economies, just like Bill Gates could destroy your local economy if he came in and started buying everything in sight. Having disposable income in the 100s of gp when the average person will never even see that much gold would make inflation skyrocket!
That’s the problem, now here’s the solution: start low. One day, an adventurer comes out of a cave with a shiny new sword, and later finds out it’s magical. However, this sword killed his partner and he wants nothing to do with it! He thinks of throwing it in the river, but instead decides that he’d like to afford a hot meal and goes looking for a buyer. There’s no doubt this thing is special, it glows!

He heads into town and finds a weapons merchant. The merchant can tells it magical, and has probably run into one or two in his lifetime. He wants it and thinks he can find a buyer, but he can’t afford to lock up all his free cash with one purchase. He offers double the normal asking price for a sword! 20 gold pieces! Remember the example from above? That’s nearly a year’s wages for a tradesman, about 9 months’ worth…for one item!
The adventurer can hold onto the sword and wait for a better offer, or he can take the best offer he has, right now. If he waits, no harm is done. If he sells, we have the possible start of something and a benchmark has been set. This merchant will probably try and find a buyer that will pay 40 gp for this +1 sword. The merchant could look in the rule book and see it suggests a selling price of 2000 gp and get money signs in his eyes…or he could be a good business man and unload it as soon as possible.

This establishes the magic item economy: sell at double normal price, buy at 4 times the price, and this is totally controlled by the amount of buyers and the supply. The more buyers, and the leaner the supply, the higher the price.

This could naturally advance into the hundreds of gp per item, but that would mean there are enough buyers around that can afford to pay that (not many in the average campaign world!). A balance would be achieved at some point where prices and expectations are set.
One must consider these prices in relation to other goods. A merchant that profits hundreds or thousands of gp on a magic item sale is going to spend at least some of that money. He might buy up all the potatoes in town to trade far away, or several horses, or a bunch of fine cloth. Regardless, he alone is going to reduce the supply of the good he just bought which means prices for that good will go up.
What this means for your fantasy economy is other prices will stay in-line with magic item prices. If there are buyers and sellers for magic items, normal goods will cost more as well.

In a world where someone will pay 2000 gp for a +1 sword, a normal sword would probably cost 500 gp or more. This isn’t based on supply and demand anymore, this is because the cost of living and doing business for the blacksmith or weaponsmith would have raised with the cost of magic items. Milk, potatoes, cloths, rent, everything would cost more and the merchant now needs to pass that cost onto his customers.
Inflation would run rampant through medieval societies. We saw this in the real world in the gold rush in the American west in the later half of the nineteenth century. In San Francisco, prices were insane compared to the rest of the United States.

Take a look at this article

This article describes first-hand accounts. One author described getting a bill for basic breakfast of $43, or about $1200 in today’s dollars! A slice of bread could cost a dollar, $2 if you wanted it buttered..or $56 today! In equivalent dollars, a dozen eggs cost $90, a pick-axe $1500, and a pair of boots $3000. Some gamblers had hotel bills of $10,000 per month…or over $300,000 today! This was not a supply problem, it was inflation due to the influx of disposable income ie gold!

Imagine how this would affect a fantasy economy with adventurers coming to town with sacks of gold. Suddenly it costs 5 gp for a meal at the tavern, 1 gp to stable the horse for the night, 10 gp a night for room and board, etc.

It is far better to have an economy rooted in poverty than one rooted in wealth. Keeping prices low benefits everyone. The older I get I’d rather allow my players to buy and sell those items, but at reasonable prices. Buying magic swords for 50 gp makes sense if we honor book prices for everything else. I’m planning on splattering low-cost magic items into the inventory of merchants, especially around adventurer hot spots. The characters may find a random wand, magic shield or weapon, or something even more exotic, for sale on random days. There won’t be readily available items (ie they cannot count on there always being wands of magic missiles available down at the corner store). It will make going shopping an adventure in itself! Prices will be 4 or 5 times what a normal item would cost (hundreds of gold maybe, but not thousands).
And why not? Magic will still be rare and mysterious. This will simply add more depth to the town experience. Also, I’ll be more likely to put less items in treasure and more money in the pockets of monsters, which is a step towards more realism.