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One example of a spell that has a material component of non-negligible cost is True Seeing. Basically, this can be read as the spell costing 250 gp a pop. However, a player could suggest that they can save most of this cost by making the components themselves with the Craft skill. As the rules for the skill are written, they would only have to pay 1/3 of the component's written cost. What I'm wondering is whether such a cost-saving measure shortcuts the intent of setting a gp value on some spells in the first place.

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Sure. So long as the players meet the requirements, they can definitely do this.

Obviously, players can't just craft things out of thin air, but if your PC has the resources and time to create material components, that's totally within the intent of the spells.

By the rules as written, it's actually probably still balanced, too. Player pays 83GP, 3SP for raw components, and it will take a decent number of weeks to complete. I would suggest using High-quality item or Complex/superior item at your discretion, with my personal preference leaning toward the latter.

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    \$\begingroup\$ Note that reliably crafting an expensive material component will usually require ranks in an appropriate craft skill; Any player who claims they can use one single craft skill to mix unguents, cut gems, carve ivory figurines and magnetize iron rods is probably pushing it. \$\endgroup\$ – GMJoe Dec 3 '15 at 6:32
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Cost of item 2500sp, high Quality item dc15 Say their check gives a them a twenty so 20 x 15 =300 So they will take 8.3 weeks to make the lotion, but will only cost them 83gp

The rules for crafting an item say (emphasis mine):

Make an appropriate Craft check representing one week’s work. If the check succeeds, multiply your check result by the DC. If the result × the DC equals the price of the item in sp, then you have completed the item. (If the result × the DC equals double or triple the price of the item in silver pieces, then you’ve completed the task in one-half or one-third of the time. Other multiples of the DC reduce the time in the same manner.) If the result × the DC doesn’t equal the price, then it represents the progress you’ve made this week. Record the result and make a new Craft check for the next week. Each week, you make more progress until your total reaches the price of the item in silver pieces.

Source:d20srd.com

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  • \$\begingroup\$ The question is tagged for D&D 3.5e, so it would be more appropriate to cite the d20 SRD instead of the Pathfinder-specific SRD. \$\endgroup\$ – AgentAquarius Dec 5 '15 at 18:55
  • \$\begingroup\$ Ah, it got edited by a fellow user on this site to include the hypelink. The info is correct as I copied it from the 3.5 site. I have changed the link \$\endgroup\$ – Scott Hardy Dec 6 '15 at 23:10

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