We are getting ready to make our trip to Ecuador. we would like to do some shopping. We have looked at religious items in Quito, leather goods in Otavalo, weavings, etc. Can everyone suggest items to buy and where to find?

What are you actually interested in buying? Textiles, wood carvings, leather goods, pottery, Panama hats? Collectors' quality or small and inexpensive souvenirs? Where will your travels take you, and how far afield are you willing to go?
Cotacachi, not Otavalo, is the place is the place to buy leather.

Panama hats in Cuenca
Blue jeans in Pelileo
Leather goods in Cotacachi
Weavings/textiles in Otavalo
Gold and silver jewelry in Chordeleg

You can get panama hats in Otavalo too. We bought really good quality ones from the makers in the Manabi province in Jipijaja where the palms are grown which are used to weave the hats. They were even cheaper there than in Cuenca.
There is also a place about 12Ks from Ambato called Quisapincha which specialises in leather goods too and it isn't overrun by expats like Cotacachi is.
Salasaca near Baños also produces beautiful woven textiles. For wood carvings and furniture San Antonio de Ibarra is also worth a visit and is in the Otavalo region as is Cotacachi.

Gorgeous Tagua jewellery in the open markets in Banos - at least 3/4 less the cost as sold on the net
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