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Handicrafts, clothing, antiques, etc.: Haggling is the way to go.
In Pakistan, haggling has to be done in all the markets. All the shopkeepers are quite conversant in English. Price quoted is over 100% higher. Confidence is what matters.
Never buy anything from a standalone store, except if you know the benchmark prices from elsewhere.
Go to a market and first of all do a survey to see how many shops are offering the same stuff. Show least interest in the item(s) you actually like and want to purchase. Keep asking prices of the other items, keep quoting half the price for the items that you are casually looking at. Finally, quote half-price for the item you actually liked as you act to move away uninterested.
As you begin to move away, the chances are that the shopkeeper will quote you his last price affordable to him. This price becomes your benchmark for the next shop, where you should be talking with much more confidence. This next shop should be located couple of stores away so that the proceedings at the previous stores are not known to the new shopkeeper.
I do not buy anything from markets, which have fixed prices (they are very rare in Pakistan in any case), for I believe there is no such thing as fair prices in those markets. I go to reputable stores with fixed prices only to buy imported items, such as cosmetics. Reason: in all the 3rd world countries, there is a parallel black market of fake products.
The goods for routine daily consumption can be bought at the Government run Cooperative stores located at convenient locations everywhere. These offer fixed prices, which are fair.
Regarding bartering, I tried to barter a few things at some shops (CD's, items of decoration from IKEA, etc.), but the returns offered were of so low a value that I lost all interest.
What to buy: Antiques, local art, jewelry, leather and textile garments and finished products. Pakistani leather and cotten garments are really trendy.
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