For example, in Warband, the town of Halmar produces Bread, Ale, Wine, Leatherwork, Tools, Wool Cloth, Pottery, and Oil. Its only directly attached village is Peshmi, which produces Pork, Chicken, Bread, Grain, Sausages, Hides, and Wool.
Without the support of castle villages, and assuming Peshmi is not continually looted and raided, this means that four of the eight products of Halmar (Bread, Ale, Leatherwork, and Wool Cloth) are produced from raw materials produced by Peshmi, and as such, prices will generally be dependant upon how much Peshmi is raided, but usually fairly low for these finished goods. One of the eight products of Halmar (Pottery) is a direct product of Halmar, and needs no supply from trade to produce, although they produce more than they need, causing Pottery to typically be inexpensive in Halmar so long as it maintains high productivity. Wine, Tools, and Oil, meanwhile, are produced in Halmar, but the raw materials (Grapes, Iron, and Olives) are not, causing the prices for these raw material goods to become unusually high when Halmar has high productivity.
Meanwhile, neither Halmar nor its villages does not produce or use as a raw material Velvet, Raw Silk, Dyes, Linen, Flax, Furs, Date Fruit, Honey, Dried Meat, Smoked Fish, and other food items. The raw materials Raw Silk, Dyes, and Flax, therefore, will only have average or low prices, even though they are not produced there, because they are never consumed in the production of finished products. The food items and goods like spices and furs may have higher or lower prices, depending on how much of those products that particular market likes to consume, although consumption of these types of goods tends to be much slower than consumption of raw materials, so places where prices were once high can be brought down low if you try to exploit a trade route too frequently.
Halmar is a town that is frequently visited by caravans by virtue of its central location, however, which means that its lack of supply from its villages can often be mitigated by caravans trading at Halmar. A town further on the edges of the map will often have more extreme variations between the market supply modifiers of the goods it produces itself and the ones it must import than a town near the center of the map.
The nearby castle village of Ehlerdah, attached to Reindi Castle (initially owned by Swadia) will also provide Pork, Chicken, Bread, Grain, Fruit, Cabbages, Iron, Wool, and Pottery to Halmar if Reindi Castle is in the possession of the same faction as the one that holds Halmar. If this is the case, Iron will no longer fetch such a high price at Halmar's market, as Iron can be supplied to Halmar through one of its villages. Likewise, Fruit and Cabbages will become available, and Pork, Chicken, Bread, Grain, Wool, and Pottery will all become less expensive for as long as Ehlerdah can produce and supply Halmar with its goods.
In this way, the tides of battle can have an indirect impact on the layout of the most profitable trade routes.
Also, some of the most drastically cheap goods occur when villages produce a raw material, but towns do not make their finished products. Rivacheg and Jelkala are the only two towns that usually have villages that produce Raw Silk in their area, but Jelkala produces Velvet from that Raw Silk, and as such, Raw Silk can sometimes be more expensive in Jelkala than even in towns which do not produce Raw Silk at all (since they do not consume any of it, either). Rivacheg, meanwhile, will almost always have the cheapest Raw Silk prices in the game, as they produce quite a bit, but use none of the product.
Because, new to Warband, you can purchase land for your own industries to turn raw materials into finished products for your own profit, those locations where raw materials are produced but their finished products are not become the ideal location to set up the facilities that make those finished products, as your raw materials will be as cheap as they possibly can be, and you face the least competition for the products you sell. Rivacheg, then, is a great place to set up an extremely profitable velvet weavery and dyeworks (which can often produce as much as 1300 denars a week all by itself). Other towns featuring these opportunities are Dhirim, which has plenty of cheap grain, but no breweries of its own, and Curaw, whose villages produce iron but where there is no production of tools.
Some goods are very heavy and thus slow down your party. The weight penalty can be partially offset by keeping horses in your inventory (rule of thumb is to keep one horse per five units of *heavy* inventory, but experiment to find optimal level). The quality of the horses is irrelevant to their ability to act as pack mules; a Lame Sumpter Horse will give you the same bonus to carry weight/speed ratio as a Spirited Courser, so stock up on Lame and Stubborn horses (or better yet, just keep the horses that you take from Steppe Bandits for free) to save money.
As a final note, selling goods to the Book Merchant means that the book merchant will buy goods at the price that those goods trade for in that town. While it is perhaps a bug, he will continue to carry those goods in his own inventory to other towns, where the prices will change, potentially giving you a chance to sell goods to the book merchant and then buy those exact same goods back from him in a different town at a lower price, only to sell them back to him again in another town for even more profit. This also affects the local market supply modifiers, even though the "actual goods" you have traded never hits those markets, and the goods will leave town along with him.
In the actual trade screen, it is possible to make transactions with few Denars changing hands. Because transactions only occur once you click "return," you can first select items you want from the merchant's inventory, and then pick items to sell him back. In the middle of the screen, it shows who will have to pay who how many Denars once "return" is selected. In this way, you can in effect purchase goods with goods. This method is also helpful if the merchant doesn't have enough Denars to buy all of your loot, you can simply trade your loot for something of his that you like.