Wandering vendors are special vendors that appear randomly when walking along roads on the world map. These vendors usually have a very high shop rank (between 20-60+) and therefore sell rare, very expensive, and often powerful equipment. They will only sell equipment.
Choosing to attack them ("Prepare to die!") will cause numerous mercenary warriors, archers, and wizards to appear, each at random levels roughly the same as the vendor's shop rank. Killing the vendor among them will cause a -10 Karma penalty and make them drop a shopkeeper's trunk(Temporal), which looks like a suitcase or heir trunk and holds the items that were for sale. It cannot be picked up ("You can't carry it."), but can be pened in place--for another -10 Karma drop--to loot the items. Be sure to grab all of the items at once, as you will get a -10 karma penalty every time the trunk is opened.