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It's useful if your favourite vendor has a low cash cap. You can boost it up, so you can sell them your higher value loot.
Generally the vendors with high caps have high Mercantile scores, so give you a worse deal. The big advantage to investing is you can boost the cap of a vendor with a much lower Mercantile skill, so get a better ratio on what you sell to them.
If you invest 500 gold, the vendor has 1500 and it will stay at 1500, so you can sell high valuable items with less / no loss.
You can not sell a 1.000gold item to a vendor who have just 800g, so you invest the 500, raise the vendors max gold to 2000 and now you can sell this 1.000gold item there.
It used to be, that vendors had limited cash, that replenished over time so you just could not sell an infinite ammount of items to the same merchant. now you can and this mechanic is kind of pointless.
Thanks again !