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When you've traveled all over Tamriel, especially if you're an established trader like me, you learn more than you might want to know about clothing. Every province—even every city—has its own tastes, styles, and unspoken rules. Since you've wisely chosen to purchase this book, you know fashion is more than just a pastime of the idle rich. Understanding which colors and styles mean what and who wears them can help you blend in, get better deals, or even save your life.
First, the obvious: if you're traveling in Cyrodiil during the tumultuous time of this writing, be careful what you wear! Only don the colors of one of the warring alliances if you know for sure the status of your destination—towns and keeps change hands so frequently. Why, once I was porting a cart of fine casks of Dream Madeira from Castle Alessia to Sejanus Outpost, knowing the Dominion forces there would appreciate (and pay well for) a good drink, but by the time I arrived, they'd been driven out by the Pact. Already in view of the outpost, I knew I'd been spotted in my brilliant yellow tabard, so I made no move to flee when a band of Pact soldiers began to approach. Luckily for me, the rowdy Nords who led the assault were in a festive mood, and though they commandeered the wine, they let me leave with my life.
You can tell quite a bit about someone by what they wear, of course. The more you know about a potential customer, the better, so pay close attention and you'll get better deals and have an idea of what someone might be looking for. Did you know that master anglers favor pinkish-purple tones? I've been told they wear them because the fish are unable to see that particular shade, making the fishers practically invisible to poor, tasty creatures. Prominent alchemists wear an earthy grey tone supposedly made of a secret Nirnroot concoction that protects the cloth from stains, and high-ranking Mages Guild members wear an unmistakable dusky blue. If you know who you're dealing with, you know what to sell them!
Another good tip is to keep your eyes open for colors and styles you haven't seen before. If you find someone wearing a bold, iridescent color and ornate armor or dress, find an excuse to talk to them. Anyone who stands out has a great story to tell at the very least, so buy them a drink or entice them with your rarest goods. I once met a dangerous-looking Khajiit clothed head to toe in a shining bronze color I'd never seen. After some friendly banter and a few mugs of aged sweetmilk, he gave up the locations of several dangerous ruins chock-full of Dwarven relics he couldn't carry out. Quite profitable, if you have the right connections.
So there you have it: fashion matters. Pay attention to local customs and dress as you travel, learn who wears what, and profit! There's much more to learn beyond my advice here, but you've got a good start now. Keep your eyes open, wear the right thing, and seek out the bold and you'll improve your margins substantially!