Some stores, such as grocery stores, department stores, etc. have fixed prices. In the Old City and in some Arab areas there are no prices displayed and you are expected to bargain. The store owner will quote you a high price so you need to counter with a price that is considerably lower. You will go back and forth or even talk about other merchandise or buying several objects until you come to a common price somewhere in the middle.
To prepare yourself, take time to compare stores and quality before bargaining and know in advance what you really are willing to pay for an object. Keep in mind that the merchant also has to make a living. Don’t overlook quality in buying a “bargain.” (For example, cheap pottery will chip faster than better quality.)