What does this Balaur sell ? He has the merchant icon when you hover over him, but he doesn't have any shop or things to sell...

You have to talk to the statue in the middle. It will transform you into a Balaur. Then you will be able to see his store. He sells weapon skins, mount and a bundle which has a chance to have a lot of stuff. All for Protectorate Coins. 

Yes, but the one you're talking about is up the stairs; this one is right in front of them, directly to the left when facing the statue, and his dialogue shows the same thing when you're transformed into a balaur with the statue...