The Goblin Merchant sells Leather sometimes, it's a low probability though.
You can make Leather yourself though (without any skills). You need a Tanning Knife which you can buy from the Goblin Blacksmith. When you use it, it will let you turn 2 Rat Pelts into 1 Leather. Or 1 Wolf Pelt into 1 Leather. Or 1 Pyrodon Pelt into 2 Leather.
You can buy Pelts from the Hunter NPC in Amber Wilds or by hunting Rats, Wolves or Pyrodons.