Zim is a merchant in the Town of Grove. He can be found in front of a building west of the central fountain.
Zim allows the player to "gamble" by purchasing enchanted equipment without knowing what those enchantments are beforehand. Although his prices are very high, many items purchased this way are sold for much less than another merchant would have charged. Occasionally, the equipment will have penalties or very small bonuses, but that's the nature of gambling.
There is a special statistic tracked in the Journal ("Times Gambled") that counts the number of items purchased from Zim.