The exact process of crafting magic items varies widely from campaign to campaign and sometimes from item to item. It's up to the GM to determine whether crafting of magic items is allowed at all, and if it is allowed, the process by which it is performed. Some standard options are listed below, which the GM may choose to use or not. The options below are divided into two categories, initial requirements which must be met to craft the items at all and the actual process of crafting the item. The GM may apply any number of requirements, including adding new ones if they would like to and may set any process they prefer. However, these decisions should typically be made prior to game start and only changed if the options selected are presenting a major problem for the group or the setting.
Tool Requirement - In order to craft a magic item,the character must be proficient in a tool relevant to the construction of the magic item's base form. For example, a fighter wanting to create a Scimitar of Speed would need proficiency in Smith's tools, while a cleric wanting to make some Boots of Striding and Springing would need proficiency in cobbler's tools or leather worker's tools.
Feat Requirement - In order to craft a magic item, the character must select the ability to do so as a feat. At the GM's discretion, some other expenditure of resources could be allowed, such as trading out a background benefit.
Spellcasting Requirement - In order to craft a magic item, the character must be able to cast spells, including all spells that the item itself is capable of casting.
Recipe Requirement - In order to craft a magic item, the character must possess some sort of recipe. Typically, recipes will cost ten times what the item itself does, though this can vary widely from setting to setting. In some, researching recipes may be hugely expensive with a price on the final product to match, in others it may be so cheap as to be nearly free with the system mainly being there to prevent the desert dwelling druid who's never seen a river in their entire life randomly knowing how to make caps of water breathing.
Level Requirement - In order to craft a magic item, the character must be of a certain level or spellcasting level. A reasonably conservative set of recommended levels are included in the spoiler below(These will likely need to be adjusted if you adjust item prices). Alternately, the items could each be priced individually rather than by price range.
Level required|Cost of item
For permanent items:
Level required|Cost of item
Gold per Day - The character, through various complicated and arcane means, creates a certain value in magic items per day of downtime spent crafting. Items which cost more than the player can craft in a day can be crafted across many days, with the amounts crafted adding up linearly, though the GM may rule that diminishing returns decrease the production of particularly massive groups. Typically, they will also have to pay some amount of gold per day while doing so. Multiple crafters increase the amount crafted per day linearly. Some options for this are listed below.
Traditional: Each day spent crafting, the character creates 25 gold worth of magic items and pays 25 gold in costs.
Standard: Each day spent crafting, the character creates magic items worth 25 gold multiplied by their proficiency bonus. They must expend the same amount in materials per day. At their option, the character may instead craft 5 gold worth of magic items per day by paying only 2.5 gold per day in materials.
Fast: Each day spent crafting, the character creates 50 gold worth of magic items and pays 50 gold in costs. Both the amount crafted per day and the amount payed in costs is doubled at levels 5, 9, 13 and 17.
Special Ingredients - Magic items require some special ingredient to be created which is held in common between them, such as magic gems, elemental essences, pure hope or dragonshards. Unlike gold, multiple smaller ingredients can't be combined to form larger ingredients, nor can larger ingredients be broken down into multiple smaller ingredients. This is a good option for DMs who want the players to be able to do some basic item crafting, but would prefer for big ticket items to be entirely off the table unless specifically placed in the world. Generally, ingredients will have a "value" which determines the maximum price of item they may be used to craft on the above tables, though this value is not necessarily the same as what that shard or an item made using it will sell for on an open market. Ingredients may also have some further restrictions on what sorts of items they may be used to construct. At the GM's discretion, crafters may be able to disassemble items to recover their ingredients. The exact amount of time it takes to craft an item using an ingredient is up to the GM, typically it will take either however long it would take to craft that magic item using the gold per days rule or however long it would take to craft a mundane version of that item using the mundane crafting rules. An example for the world of Eberron is shown below.
Permanent magic items are made using Dragonshards. Dragonshards come in three types, Eberron, Siberys and Khyber. All permanent items require at least one dragonshard of a specific type with a value equal to or greater than the value of the item. Generally, only lower valued shards and the items made using them are available for a price in gold pieces equal to their value. Higher valued shards do exist in the economy, but they have major industrial applications which generally put them out of the reach of all but the wealthiest of individual buyers. Dragonshards may come in any value and they may be recovered from items unless the GM rules otherwise. Dragonshards of any type can be used to create magic items with very simple effects, like +1 weapons or circlets of blasting.
Consumables are created using the Gold per Day rules.
Players Choose Loot - A character can craft magic items by informing their GM that they wish to do so and going on some sort of quest to gather the materials needed to do so(The exact nature of these ingredients does not actually matter). The rate and frequency at which these items may be created is controlled by the GM. This is a good option for players and GMs who mutually trust one another not to abuse the system even in the absence of well defined rules for how the process works and who have common standards about what rate of magic item acquisition is reasonable. If you are not certain that this is true, avoid this system. An example is shown below.
The Barbarian Bronor wants to make a Flame Tongue Sword. Bronor's player talks to the GM about this and the GM, thinking that that is a reasonable sort of item for Bronor to have given how long it has been since he has last gotten a magic item, designs an adventure for the party. Next Session, Bronor and his party delve deep into the underdark to forge a sword of solid iron in a forge heated with the molten stone of the earth below, fighting off drow and giant spiders as they do so. The session ends as the party hunts down a Fire Elemental so that Bronor might plunge the sword into the Elemental's heart, stealing its fires.