Wilson had done manual labor because one of his hands is larger than the other, suggesting years of hard work. Wilson tells him he had been a ship's carpenter. In those days of wooden sailing ships a carpenter would have plenty of hard work to do on the hull, rails, decks, masts, yardarms, and riggings. Holmes won't bother to explain how he knows Wilson takes snuff, a finely powdered tobacco which is usually inhaled. The reader can surmise that there is plenty of evidence on the man's coat and vest. Later Wilson will give visual proof that Holmes was right on that count.

“Your experience has been a most entertaining one,” remarked Holmes as his client paused and refreshed his memory with a huge pinch of snuff.

Holmes explains that he deduced that Wilson was a Freemason because he was wearing "the arc-and-compass breastpin." As far as China is concerned, Holmes tells Wilson:

“The fish that you have tattooed immediately above your right wrist could only have been done in China." 

The most significant aspect of Wilson's appearance reveals that Wilson has been doing a great deal of writing lately. Holmes explains why this was obvious to him.

“What else can be indicated by that right cuff so very shiny for five inches, and the left one with the smooth patch near the elbow where you rest it upon the desk?”

Jabez Wilson is amazed at first, but once Holmes has explained everything he loses his amazement.

Mr. Jabez Wilson laughed heavily. “Well, I never!” said he. “I thought at first that you had done something clever, but I see that there was nothing in it after all.”

The author, Arthur Conan Doyle, stresses some other aspects of Wilson's appearance. Watson notices them immediately when he comes in and sits down.

I HAD CALLED upon my friend, Mr. Sherlock Holmes, one day in the autumn of last year and found him in deep conversation with a very stout, florid-faced elderly gentleman with fiery red hair. 

During Wilson's lengthy discourse about his involvement with the Red-Headed League, he mentions that his new assistant, Vincent Spaulding, is extremely interested in photography and is always diving down into the cellar to develop his photos. Conan Doyle knows the reader might wonder why Wilson never goes down into his own cellar out of curiosity to see what Spaulding is up to. The reasons are obvious from Wilson's description. He is old. He is overweight. And his florid face suggests that he has high blood pressure. Such a man would be unlikely to venture down a steep flight of wooden cellar stairs and then climb back up again. Watson mentions Wilson's age and stoutness several times throughout his tale. There is also the fact that Wilson is a heavy user of snuff. Like all tobacco, snuff must have a deleterious effect on the lungs over time.

So there are four reasons that Wilson would not care to go down into his cellar. It is fortunate for him that he has never done so, because Vincent Spaulding is really John Clay, "the murderer, thief, smasher, and forger." Clay would not hesitate to kill his employer with a shovel if Wilson ever came down and caught him digging a tunnel. Wilson would have been buried in his own cellar.

Watson does not describe his own reaction to Holmes' offhand deductions about Jabez Wilson, but Watson has been impressed so many times by his friend's analytical genius that he is no longer amazed but only more admiring.

Holmes details several "obvious facts," noticing that Watson has been personally unable to deduce anything from his own perusal of Mr. Wilson. He says that Mr. Wilson

1. Has done manual labor at some time in his life;
2. Is a taker of snuff;
3. Is a Freemason;
4. Has been in China at some time; and
5. Has done "a considerable amount of writing" at some time in the recent past.

Watson, as usual, is astounded by these deductions, but Holmes explains that they are fairly obvious to somebody who pays close attention. Because Mr. Wilson's right hand is larger and more developed than his left, this indicates that he has been a manual laborer. Holmes doesn't actually explain how he can tell that Mr. Wilson takes snuff, but he does say that he wears an "arc-and-compass breastpin," which is a symbol of Freemasonry. Meanwhile, his right cuff is "shiny" and his left sleeve has a bare patch by the elbow, which Holmes deduces is from the position Mr. Wilson takes when writing at his desk. Meanwhile, there is a tattoo of a fish above the man's right wrist, which Holmes deduces must have been done in China because of the way its scales have been dyed pink; similarly, there is a Chinese coin hanging from Wilson's watch chain.

When he explains himself to Mr. Wilson, Wilson laughs, amazed at how apparently simple it all is, which prompts Holmes to observe that perhaps he should keep his reasoning to himself in order to preserve an air of mystery.

At the beginning of the story Holmes tells Watson:

“Beyond the obvious facts that he has at some time done manual labour, that he takes snuff, that he is a Freemason, that he has been in China, and that he has done a considerable amount of writing lately, I can deduce nothing else.”

Jabez Wilson expresses considerable surprise because all of Holmes' deductions are correct. He wants to know how Holmes drew such accurate conclusions from his appearance.

Holmes explains that he knew Wilson had done manual labor because his right hand was noticeably larger than his left, showing that he had done considerable work with it. Wilson tells him he was ship's carpenter. Holmes could see that Wilson was wearing an arc-and-compass breastpin, showing he was a Freemason. The detective refused to explain how he knew Wilson used snuff because the signs of snuff on his waistcoat were too obvious. Wilson later takes a big pinch of snuff, showing he is a heavy user.

The fact that he has been in China is shown, according to Holmes, by the delicately colored tattoo on Wilson''s wrist which could only have been made in China. Wilson is also wearing a Chinese coin on his watch-chain as a souvenir.

The author, Sir Arthur Conan Doyle, does not use these particular deductions solely to show off his protagonist's powers of deduction. In the days of sailing vessels, Wilson must have been out of the country for many years working on ships and spending time in China. This would explain why he would not have heard about the formation of the fictitious Red-Headed League, which his assistant told him was big news at the time.

When Watson first sees the visitor he describes him as "a very stout, florid-faced elderly gentleman." This would explain why Wilson would have been extremely unlikely to venture down the steep steps of his own cellar to see what his new assistant, who calls himself Vincent Spaulding, was doing down there. Wilson is grossly overweight. The fact that he is "florid-faced" shows that he has high blood pressure. He is elderly and also a heavy user of snuff. Snuff is a finely ground tobacco, and it would have the same deleterious effect on his lungs as tobacco that was smoked.

Vincent Spaulding (John Clay) is digging a tunnel right under his employer's nose, but Wilson thinks his assistant is an amateur photographer developing films. Clay is a very dangerous man. If Wilson had ever ventured down there and seen the tunnel and piles of dirt, Clay would not have hesitated to murder him with his shovel and bury him in his own cellar.

So Holmes' deductions from Wilson's appearance serve a dual purpose. They display the great detective's analytical powers, and they explain how John Clay could have been digging a tunnel right under his boss's nose. Evidently the two thieves needed to hurry up the tunnel-digging because there was some danger of the French gold being moved; so they invented the Red-Headed League to get Jabez Wilson out of the shop six days a week for four hours a day plus travel time, thus making it possible for both men to work unimpeded.