For upgrades, you need to buy stuff. Dark Souls has different merchants (sellers) that will sell you items for a certain price and the price will be in the form of souls which actually serve as the currency in the game.
The items you can buy from them include armor, weapons, spells, consumables and ores etc. Not every merchant has every item so you will have to mark their locations in case if you need something from them. Following points are important to remember while shopping:
Don’t spend you souls for an inferior item. Wait a little more and come back when you have enough souls for some classy product. You can also sell your items for some souls. You can find these NPC after ringing the two bells.
Try not to make any merchant furious as he/she can stop negotiating with you. Merchants don’t like the hollows so you will be welcome only if you are a human. Always buy the item that has resale value so that you can sell it again to get something better.
You will find smiths throughout your quest who can repair your items including armor and weapons. Obviously, they won’t be doing it for free. So you will have to gather some souls as some of them are quite expensive.
You can also ask smiths to upgrade your weapons to increase the damage. The materials required for the upgrades are also available at their shops. Like merchants, all smiths don’t accept every item so you might have to travel to some other place for the desired upgrade.
Dark Souls Merchants and Blacksmiths
You can trade with following merchants/Smiths in Dark Souls:
Undead Merchant (Male) Location. You can find in Undead Burg near the first bonfire.
You can get access to it by breaking the boxes blocking the stairs downwards. He has variety of item including Keys,armor,weapons and ammunition. If you beat him, you will have Key, Humanity, Orange Guidance Soapstone and Katana but considering the resources he is providing, this is not a beneficial option.
Undead Merchant Female Location. You can find her in the lower section of Undead Burg.
You can buy some useful throw-able weapons and special ammo from the lady merchant.
Snugly (Barter) Location. You will find this trade merchant in the north section of the Undead Asylum and will be available after you complete the first tutorial.
You should exchange the goods that are not being used with the ones that will benefit more.
Crestfallen Merchant Location -You can find it in Sen’s Fortress in the boss section. After reaching the rooftops of the fortress, you will find a broken path (before the shortcut, elevated cages). If you jump across to the other side, you can find this man inside the building.
Blacksmith Andrei Location. You can find him in the Undead Parish section. He can also sell you ores.
Blacksmiths can transcend the weapons into something amazing. He will repair your damaged items including weapons and armor for free.
Blacksmith Behemoth Location – He has almost the same items as the above one. You can find this guy in Anor Londo.
Blacksmith Rickert of Vinheim
This adamant blacksmith can be found in New Londo Ruins. When you leave the elevator coming from Firelink Shrines, head down the stairs and stay at the right side. You will spot an undead beside which is a staircase that can lead you down to Rickert.
Blacksmith Vamos Location – You will find him in the catacombs. After the first bonfire continue forward and look for the spiral case the breaks off at the end. Drop down carefully and you will reach the smith ultimately.
Shiva Merchent Location – You can find it in the Blightown under the water wheel. If you can’t find him there then you must not have joined the Forest Hunter’s covenant by talking with Alvina in Darkroot gardens.
Catacombs Blacksmith Location. Their is also a blacksmith at the bottom level of The Catacombs, although he is difficult to get to due to the abundance of enemies. He does not sell items, but he will repair and upgrade weapons should you have the materials. Thanks @ Arthur
You will find a Merchant near the Gaping Dragon Boss fight, past a broken fence and close to the door leading to Blighttown. After the boss fight he moves under the bridge that connects Firelink and Undead Burg. He sells armor and weapons/shields – that cannot be repaired. Thanks @ Arthur, chadachada, and Steffen
Teachers can teach you skills and magic tricks. Magic and faith are the two pillars attributes of your character.
Caged Wizard Location. You can find this NPC in the lower level of Sen’s Fortress. IF you free him, he will move back to Firelink Shrine to teach you a spell.
Petrus of Thorolund Location – You can find this blonde man in Firelink Shrines. When you head upstairs to get to the elevator (that takes you to the church in Undead Parish), just before fighting the gargoyles. To unlock the elevator, you should take the elevator down form the church first.
Griggs of Vinheim Location – You can free him in the lower undead burg (slums). You can open the locked room by purchasing the resistance key from male undead merchant. You need to turn right from the second set of stairs. Head to the alley where you will find a torch carrying undead. The door where Griggs can be found in the second room to your left.
Big Hat Logan Location – This man with a big hat (as the name says) can be found inside a hanging cage in Sen’s castle.
Laurentius of the Great Swamp Location – You can free him in Depths. He is help captive inside a barrel just after you encounter the first butcher. You should not break the barrels by any weapon. After being rescued, he can be found in the Firelink Shrines if you take the stairs upwards and the then turn left. You can find him sitting on the ground.
So which merchant/smith/teacher you are going to shop and why? Let us know if you know any other trade person we might have missed.