After working for the crystal merchant for nearly a month, Santiago convinces him to take advantage of the principle of favorability—or beginner's luck—and build a display case to improve sales. Soon after, he suggests selling tea in crystal goblets, which might entice customers into buying their wares. Although unwilling to expand their operation initially, the merchant eventually agrees, citing the principle of "Maktub," or destiny.  

The shop grows more and more successful with each passing month. Finally, Santiago decides he has enough money to buy a return ticket, over a hundred sheep, and even a license to import African products to Spain. He has forgotten about his dreams of finding treasure. While saying goodbye, the merchant declares that although he is grateful to Santiago, he also knows that the boy's destiny is not to go back to shepherding. 

While packing his belongings, Santiago picks up Urim and Thummim for the first time in months, reflecting on his Personal Legend. Finally, he decides to go to one of the merchant's suppliers and join their caravan to the Sahara desert. At the supplier's warehouse, he meets an Englishman who plans to go to the Al-Fayoum oasis in Egypt to seek out an alchemist who holds the secret to the Philosopher's Stone—a legendary artifact that can transform lead into gold. 

Although the Englishman initially ignores Santiago, he becomes excited when the latter brings out Urim and Thummim. As an aspiring alchemist, he recognizes the stones and interprets his meeting with Santiago as a good omen. Finally, the two join the supplier's caravan, which consists of 200 other people and 400 animals. Before their departure, the leader of the caravan declares that he needs the travelers' complete obedience in the dangerous desert. 

The caravan travels in the morning and late afternoon, stopping at noon when the sun is hot. While the Englishman spends his time buried in his books, Santiago observes with awe the sheer elemental force of the desert. He also pays close attention to the goings-on in the caravan. One night, he makes friends with one of the camel drivers, who shares with him how he lost his orchard due to flooding from the Nile. 

Hooded men called Bedouins monitor the desert and bring them news of warring tribes. To keep them inconspicuous, the caravan leader starts prohibiting campfires. One night, Santiago and the Englishman talk about a positive force called the "Soul of the World" that works alongside men to help them achieve their destiny. The two agree to switch places: the Englishman will start observing the caravan while Santiago reads his books. 

From the Englishman's books, Santiago learns that to decipher the Soul of the World, one needs to obtain the Elixir of Life and the Philosopher's Stone. However, he puzzles over the books' convoluted nature. Eventually, he and the Englishman switch back to their original roles. They then learn that the war between the tribes has already begun. Two nights later, Santiago wakes to the sight of rows and rows of date palms; they have arrived at the oasis.