Bad: The craftsmanship of these goods is so horrible that they are barely functional. 75% of the time, they will break during use. This breakage ruins the item forever.
Poor: The work done in making this item was sub-standard in some way. Either a bad alloy was used, just didn't come out right, or maybe the wood wasn't quite cured properly. This work is typical of a novice apprentince. Cost is usually 1/4 list price, but item will break 20% of the time. This breakage may be repaired 50% of the time, returning the item to working, if only barely, condition.
Average: This work is typical of the craftsmen in any world. Prices are normal list price, and breakage only occurs 5% of the time. In 90% of the cases, repairs can be made.
Excellent: An expert craftsman made this item. Cost is usually double the list price, but breakage only occurs 1% of the time, and repairs are possible 99% of the time.
Superior: The item is an example of a master craftsmans best work. The item is suitable for use in creation of a magical item. It will never break under normal usage. Cost is normally at least 10 times the list price.
These are the basic grades of quality. The exact game mechanics varies from item to item. Typical modifications are in the area of weight, to hit and damage bonuses.