Haggling is a widely used way to get traders to give better prices, and customers to offer more money. When a customer wants to buy an item in your shop you can try to haggle to increase the price the customer offers.
Sometimes a customer offers an item to you and you can use haggling to lower the price asked, so you have a bigger chance of making profit when selling it later on.
The Beginner's Guide also has some details on haggling.
Not all locationsEditHaggling works best when the price offered by a customer is more than 15% under the market price, and if your Silver tongue skill is high.
If you want to make the most profit though, you should put points on both Silver Tongue and Mercantile. However, players report that the Silver tongue skill barely affects the haggling chance, unless you have quite an investment in it, and even then, those points would be more useful in Mercantile in the long run.
An item is 60% under market price and you have 84% chance on a succesfull haggle: with enough points into Mercantile the price could raise up to 80% of the market price. The 84% haggle is still there even for the now 80% item.