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Added info about initial cost and 'tax'.
Personal Merchants only sell items that the owner gives them. You cannot sell any items to him/her, only buy from them. The owner of the merchant sets the price that the merchant sells it for. The merchant also takes a small cut of any money taken from a sale. You can buy a personal merchant contract from a trader for 10 silver coins.
If you dismiss the merchant from his post by selecting the option "Dismiss", you will still hold the [[Personal Merchant Contract|contract]] to place him again, you will not lose the merchant.
