Diablo III Crafting Overview
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To provide your artisans with the ingredients necessary to perform their work, you'll salvage items, breaking them down into components. You can salvage the majority of loot you find while exploring. Salvaging is an effective way to manage your inventory so that your bags don't fill up, but it's also a means to recycle items you don't want (as opposed to selling them for gold).
The components you'll get from salvaging items are fairly predictable, but there's a small degree of luck involved with each salvage attempt. In general, higher-quality items will provide you with more valuable and rarer salvage than lower-quality items -- but the rarest materials are always found in treasure chests or beside the corpses of your foes.
With your pack full of salvaged components, you can set your artisans to work crafting for you. These crafted items are utterly unique -- with a few exceptions, they won't drop anywhere else -- and, like many rewards in the Diablo series, there's an element of randomness to them.
For example, let's say you ask the blacksmith to forge Fist Blades of Dexterity for you. The weapon's damage values and dexterity bonus are visible in the crafting menu, but so is a new phrase: (two random properties.) You know you want the weapon, and the attribute bonus supports your play-style -- but what are the properties? That's determined randomly as the item is made, after it's paid for.
The power and diversity of crafted items improves as your artisans do -- and their training is placed directly in your hands. To train an artisan, you allocate gold and materials to their practice, and they expand their shop -- honing their craft, enlarging their facilities, and leaving the mark of industry upon your caravan as they research new items. It's up to you to decide how you want to divide your resources among the artisans who travel with you. You might want to contribute to all of them evenly, or you might want to focus on one individual. Your class and build will undoubtedly affect this decision.