As of the July 30th, 2013 patch:
Alchemy Machines are located in Haven, Moorcroft Manor, and Emberlight. Haven has several Alchemy Machines which can be found in Guildhalls, the Bazaar, Arcade, and the Town Square. The cost of crafting an item depends on its star level, and generally doubles with each additional star.
★☆☆☆☆: 200 crowns
★★☆☆☆: 400 crowns
★★★☆☆: 1,000 crowns
★★★★☆: 2,500 crowns
★★★★★: 5,000 crowns
Usually, crafting is much cheaper than buying the item pre-made from a vendor, and also gives the added possibility of creating a unique variant (see below). Pre-made items increase in price as their star level increases. Thus, items with a high star level are generally cheaper to craft than to buy pre-made.