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I recently played a bit of the Witcher 3 and Dragon Age: Inquisition and found myself a tad disenchanted with the items and by extension with the vendors. In contrast the Dark Souls franchise and games that have modeled themselves off of the success of the franchise handles item identity in a way that, I feel, draws the player in a bit more than most. There's something about the way the Souls franchise ties items into the narrative of the world that makes seeking them out so much more enchanting. There is, I feel, a deeper relational rapport with items in the souls franchise for a number of different reasons. In the first place, making items part of a unique set of course gives them a more impressive identity, but when Dragon Age Inquisition bombarded me with so many item sets out of the starting gate, even though they were all very shiny and impressive I found I really didn't much care for them. The only one that stuck out to me had dragon in the name and I was sold simply on that account but even so had very little attachment. The other big factor besides relationship to an impressive looking and impressively named set is the lengths required to obtain the item. The further I have to go to get an item the more precious it seems, but of course the bigger my expectations. If I had to ascend Mt F.u.die and defeat General Killzyu then I'm expecting to receive an item that makes me feel like a legendary warrior, especially if the item was mentioned to me before stepping foot on the mountain and has been hyped up in my imagination. Of course, not every item in the game can be some legendary epic end game item, but there are other ways to build up the player's relationship with the item such as customizability and upgradability. 

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Very many games have accustomed players to picking up items that will most assuredly be discarded forthwith for the sake of better items which in turn will be discarded for still better items. This is fine, perfectly understandable of course but it prevents much value from being placed in the item when you know it is doomed to a sad fate locked away in some chest as a piece of forgotten memorabilia or sold to a vendor for some quick scratch because it's no longer needed. At the end of the day this is fine except the less intimate the relationship between the player and their weapons and armor, the less value they place in spending time thinking about their weapons and armor and the more burdensome of a chore it becomes to make the player have to consider their weapons and armor in the first place. Now, there might still be many min-maxxers out there who are so in love with having the best numbers that the numbers themselves create value but even so that means that for any given level or stage in the quest chains there is one optimal loadout for the build and every other item is basically so much junk. Some people like sifting through junk to find the precious gems, that's one of the big reasons why thrift stores exist. Even so, I imagine the primary appeal for most people isn't the fantasy of looking at spreadsheets all day, and if nothing else it certainly doesn't contribute very much to the fantasy of being some legendary warrior. Maybe when working for a major corporation finding optimal efficiencies makes one feel like a hero but the tale of Sir Efficient the Wise, master of spreadsheets does little to inspire. 

There is value to showing some of the relevant stat values so that people can make judgements about their builds and loadouts and get to feel smart and prudent, for sure, but sorting through mounds of junk to gain a few percentage points is a tad dull on the face of it. Maybe I'm making more of the problem than there really is because my ADHD brain lacks the patience required to care about those few percentage points but my gut tells me it's not much of a draw. I mean, it's hardly the sort of thing that game companies advertise. "Explore a world filled with magic and monsters galore. Go on epic quests to defeat evil. Find the items that add a few percentage points to your fire damage." I'd almost rather not see the numbers at all. If I'm trying to create a cool ice build point me to a frozen cave containing the ice-staff of Amanthul and I don't really care if it does 5% or 10% ice damage as long as it presumably does extra ice damage and, more importantly, makes me feel like a cool ice mage. 

Now, when it comes to in game vendors there's obviously not going to necessarily be much of a quest involved in getting to them for the most part. Maybe they can require me to go on a special quest to either access or get discounts on the really good stuff but the vendors generally indicate the relative value of an item by appearance on the vendor screen and, of course, cost. If they have ten useless weapons that aren't even better than what I'm currently carrying then they're basically useless to me other than as a place to restock usable equipment and as a converter to turn junk into gold, however without an item worth having the gold isn't all that valuable except inasmuch as gold is lighter than the junk I was just carrying and so removes encumbrance issues. However, give that vendor the McGuffin 3000 at the low low price of one million gold and at that point he might as well have a quest marker over his head. The quest is, get enough money to purchase the McGuffin 3000. 

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What's important at the end of the day is that one way or another the player needs to invest in the items emotionally and build a unique relationship with the item. These relationships are built up by the stories told in pursuit of the item and the stories they can tell about what they did with the item. If I had to attempt to recap the categories of ways they can build these relationships I would say the main ways are: aesthetic accenting, backstory revealing, and investment demanding. Aethetic Accenting covers items whose models and effects can be seen which fit with a particular aesthetic, either belonging to a set such as belonging with an armor set or reflecting the theme of some interesting power in the world like the ice staff of Amanthul. Backstory Revealing items, like those in the Dark Souls franchise, tell the player more about the world they're in through item description, world placement (found on the corpse of a particular guy in a particular place), and through effect (The Ice Staff I found on the frozen corpse of Amanthul has a 5% chance of freezing enemies solid preventing them from moving or attacking for 10 seconds). Investment demanding items like the McGuffin 3000 and the legendary death blade I obtained for defeating General Killzyu require the player to undergo some sort of ordeal so that the value comes from undergoing the ordeal itself. Well, there is a fourth I'm forgetting because it's the most obvious: Power Increasing. At the end of the day if the legendary death sword looks cool, and required a heavy investment of time and effort, and tells part of the story of the world, etc... and yet it's weaker than my Rusty Pig Sticker Blade then it's going to have to be shelved for practical reasons even if it breaks my heart.

Now, me personally I think one of the best ways to handle a lot of this is by making upgradable items that can grow with the player to any level. If all of my junk can be converted to materials to upgrade my Rusty Pig Sticker Blade into The Ice Pick and eventually the Ice Pick of Frozen Doom then what might have been just a junk sword in the beginning becomes, now, a canvas onto which I can paint my identity, tell my own backstory by the time the game is done, make it as powerful as my level of investment allows, and prevents it from becoming irrelevant. Plus I can potentially tailor it to whatever set I want to make for it and now this worthless junk sword is potentially the most beloved sword I've ever wielded. It is MY sword, my beautiful sword made just for me with my own blood, sweat and tears. The vendors, in turn, now become more than mere junk alchemists but purveyors of the precious life blood of resources I need to feed my precious baby pig sticker in order to turn it into the Ice Blade of Frozen Doom. Isn't that, after all, the reason that we put up with going to the store in the first place? Very rarely do we go to a store just to pawn off useless junk, but ultimately we do go because the things we hope to buy are investments in the things we care about most. We buy food for our children so they can grow up to become the irl human equivalent of the Ice Blade of Frozen Doom, we go to home depot to buy things we need to fix and maintain and even improve our homes which we would hope to grow old in and potentially pass down to our loved ones if fate is kind. Occasionally we purchase more creative items like craft supplies so that we can stamp our identity onto the world and have it better reflect the things that we cherish. I'm not saying this is right for every game of course, everything is more or less situational, but this is sort of the culmination of my takeaway from considering the things that give items their in game value, generally speaking of course.