The Archery Potion is a buff potion which grants the Archerybuff when consumed. The buff increases both damage and velocity of arrow-firing weapons by 20%. This lasts for 8 minutes / 4 minutes, but can be canceled at any time by right-clicking the icon (), by selecting the icon and canceling it in the equipment menu (), by double-tapping the buff icon (), or by canceling the buff from the buffs screen ().
Unlike other items, it directly adds 20% of the overall damage of bows and repeaters; in other words, it multiplies with other damage boosts (including the damage boost from Shroomite Headgear and Magic Quiver).
Despite the tooltip saying it increases only the arrow's damage, it increases the combined damage of the bow or repeater and the ammo.