Lucas de Galvez is a huge marketplace in downtown Merida selling everything from leather goods to traditional Yucatecan cuisine (via live chickens and hardware!) Arrive early to get the best picks of flowers, fruits and vegetables
It's a full sensory overload from early in the morning until late at night (where it's a rite of passage to sit at one of the many taco stands and order tacos al pastor until you can't move) Cheaper than the more 'touristy' markets throughout town, you can pick up hand made leather goods for incredibly cheap prices (prepare to hunt and haggle!)
On Calle 56A there's a great little store selling every type of basket imaginable