As it stands right now, smithing is pretty much broken: even if you aren't trying to use exploits, crafting javelins with naturally stronger metal parts will results in insane prices, which is hard not to sell. Meanwhile, some two-handed sword with insane secondary damage is still less than a bunch of wooden sticks with slightly sharpened metal parts attached to them, just because those wooden sticks have more kick to their first damage type. Plus pretty much any character can take up on this: you could be the dumbest person with the worst physical state, but you are still be able to learn smithing pretty fast.
In Warband, the money-making were toned down to a level where it was more balanced: while dyeworks gave you the most amount of money, it's cost was pretty high and was just a side business to keep your army afloat. While there was another method of making money (which could be compared to smithing), which is stealing cattle from a village, slaughtering them, then selling their meat. It might have been considered broken in early game, it became pretty much obsolete later. Plus it decreased your relations with the affected villages.
This has been a problem since release, and this, in my opinion pretty much invalidates/makes any other money-making methods pitifully bad by comparison.
There is so much in the game that just doesn't work and isn't balanced. I think they need to make smithing a zero sum game but leave the function of it in as follows-
#1 Get rid of all the ores and wood in the game as trade goods. Just eliminate it because they can't ever balance anything and they already have so many trade goods that aren't balanced well. Simplify it. If it's too much trouble leave iron ore and wood in the game but remove them from smithing process. Make smithing not use materials of any kind. It is a cool idea but the game is already so far behind and broken in so many areas. The devs of this game need to realize that they are not managed well as a team or talented enough individually to have the game do half of the things they are trying to do. Smithing can stay in if they remove the complication. End of story.
#2 Smithing now allows you to make any weapon you have the design for or to scrap weapons for money. Scrapping regular weapons gives you 10% less gold return than selling in the store but levels your smithing and gives you new designs. Smithing allows you to make any weapon you can imagine with a set cost. These weapons can not be sold to the regular stores, instead they can only be scrapped at a 10% gold loss.
Leveling smithing gives you access to better designs but it costs gold over time. The more you smith the more leveling and designs you get. You keep all the options to smith whatever you want like it is now. They could add more designs or armor etc. later if ever they fix all the other broken stuff which probalby never happens in 50 years but it would be less problematic by removing materials and refining et.c etc. from it and simplifying mechanics (and balancing much better).....
Also they should remove stamina but instead have time pass as you smith and scrap. the stamina perks that deal with smithing stamina could instead just speed up or slow down the time it takes. Let's say 30 minutes to scrap and 1 hour to smith. In reality smithing an item can take up to a couple days but lets face it, in the current model you can have your party whip out like 50 javelins in a split second so it's already super unrealistic....
They could have a queue where you set up a bunch of things to be scrapped and smithed and then it takes a few days and those items are finished but let's face it they don't have the competence to code something like that so they should just forget it....
To make the game realistic guys running around fighitng and trading and so on don't have time to smith in medieval tech levels. Smithing weapons is a full-time skill intensive job that requires a lot of specialized equipment and materials. You can't just walk into some town and barge into the local blacksmith's shop and whip out a few dozen weapons then leave the next day.. COMPLETELY KILLS ANY SENSE OF IMMERSION OR REALITY.
In reality you would be very unlikely to be welcome in someone else's shop unless you were their lord and in order to efficiently make weapons you would need weeks to months of day-in and day-out training and whatever specialized stuff you were trying to make you'd need time and preparation to put it all together before just spitting out your weapons. You'd need to time to get the right tools and materials etc.....
anyway this smithing thing is beyond the competence and resources of current devs to balance and make realistic. It should be just simplified. Less is more.