I like the idea of a buyable compass. But as long as quest-related NPCs wander around the game world there are going to be compass markers.
Certainly there needs to be a way of finding wandering NPCs, and it isn't really feasible to do it through dialogue ("You'll find him in his home. Let me mark it for you. Except in the evening, when he'll be at the Wolf's Head Inn. Let me mark it for you. And during the morning he'll be working his field, except at lunchtime when he might go home unless he needs to buy food in which case he'll be at the inn..."), so for these we
need magic markers.
But for places, like dungeons, cities, temples and landmarks, magic markers aren't needed at all. For these we can have verbal and journal descriptions of their location. Vague verbal descriptions and accurate journal descriptions, to allow for Bethesda having to (perhaps) move them on the map after recording the dialogue. Yes, there were big problems with this in Morrowind, but that was mostly a production and quality control issue, with directions that were misleading or downright wrong.
Fixed locations could be found using the directions, a world map and a regular compass.