In Tibia, merchanting refers to the reselling of products and can be a method to obtain gold. There are two main ways to merchant in Tibia, one is the transaction from player to player, the other is from player to NPC.
For player to NPC transactions, players will buy items from players and sell them to an NPC. Select NPCs (mainly Djinn NPCs, Rashid and Grizzly Adams) require premium or quests before trading with them is enabled. Players who do not meet these requirements may sell to other players for less than their NPC value, who will in turn sell them for a net gain. The benefits of player to NPC transactions is that there is no risk involved, outside of the exceptional case of CipSoft adjusting NPC prices.
Player to player transactions, on the other hand, involves buying items from players and selling them to players for more than they were bought. This method has risks as there are fluctuations in 'street value' from server to server. It is popular with addon items because the economy of most other items is on continual decline.
Another means is to buy from NPCs and sell to players. For instance, only NPCs will sell Crimson Swords and Demon Backpacks, both of which have requirements to purchase. This method is not nearly as popular as the others but can be used as well.