Skinning Knife

A Skinning Knife allows the player to skin the bodies of dead beasts, dragonkin, silithids, and (rarely) critters or humanoids to obtain leather, hides, dragonscales, scales, and silithid carapaces or chitin (Heavy Silithid Carapace, Light Silithid Carapace, and Silithid Chitin). sometimes yield Wool Cloth.

"Skinning knife" is also the name for general skinning tools.

Source
This item is sold by most trade goods vendors worldwide.