Alchemy is NOT, as is commonly believed, a magical discipline. Rather it is knowing the properties of natural substances and how to combine or process such substances to exploit those properties in a useful manner. It is in effect the first tentative steps in the sciences of chemistry and biochemistry (and yes, there is a considerable overlap with herbalism here). Thus, for example, the alchemist not only knows that willow bark has the property of relieving pain; he also knows how to prepare it in order to achieve the best results.
Of course in a magical universe some substances are inherently magical, and therefore have magical properties. The alchemist can utilise these in much the same manner as he utilises mundane properties. Thus the alchemist might know how to make a healing potion from the blood of a cave troll.
Note that the one thing an alchemist CANNOT do is to imbue the power of a spell into a potion. Thus in order to make a healing potion he must include something with naturally regenerative properties (such as the blood of a cave troll) in his recipe since he cannot capture the magic of a healing spell.
What is a Potion?
The term "potion" covers a whole range of consumable substances that provide chemical, alchemical, magical, or pseudo-magical effects. These include: potions or elixirs which are drunk; salves, balms, ointments, oils, or greases rubbed into the surface or things (or people); incenses that are burnt; etc. The list is limited only be the GMs’ (or indeed the players’) imagination.
In theory any potion can be made in any of these forms, in practice potions are made in the form that is most convenient or useful. Thus the form in which a potion is supplied is dictated by the manner in which it is intended to be used.
As a general rule a potion must be applied directly to the area or item it is intended to effect and this tends to dictate the form the potion takes. For example healing potions tend to be produced as balms, salves or ointments since they must be applied directly to the wound while poison antidotes are normally supplied as drinkable liquids since the poisons they counteract effect the entire body.
The shelf life of mundane potions varies depending on the ingredients used. As a general rule, although this is by no means definitive, potions made from organic ingredients normally last about a year while those made from mineral ingredients can, in theory, last indefinitely.
Magical potions are a lot more unstable and tend to last only a few weeks (a month or two is probable about right) after which they degrade into worthless muck.