Is it more complicated than just going into the NPC, going to the Merchant Container tab, selecting the cell then selecting a container within the cell? When I try that the container I made for the merchant does not appear in the drop down.

Assign ownership of the chest to the merchant?

The chest needs to be a persistent reference, owned by the NPC, then choose it in the NPC drop down list.

ok I Have assigned it to him, now how do I get him to barter with the pc? I have him the merchpublican script because he is a bartender. still no option to buy anything from him

In the NPC editor, click on the AI box. There you can check off what you want the NPC to buy/sell. Give them some barter money in the Barter Gold box.
You'll then need to create a Travel AI package, with Offer Services checked and traveling to the location you want them to be when they are offering their services.

The publican script is only needed if the NPC is renting rooms out, not needed to get him to sell stuff.

I would like that but as the mod I am working on is a guild mod, I would like him to only offer the seervice to guild members. You could click on Beds and he could say something like "ofcourse its free to Guild Members". It would be cool to make some sort of reservation list where random NPC guild members would reserve the beds and if all are reserved you will have to wait for one to open up. I don't know how Ill do all that though seeing as I can't script yet.