The Egyptians have had a tourist industry for over 4000 years. Trade with the Mediterranean civilizations and movement of the ancient Egyptians up and down the Nile to visit temples probably resulted in some souvenirs. The most famous ones were the "reverse" souvenirs, the purchase of offerings such as cat mummies to offer to the gods. Some of these traveled back home with the tourist, but most were taken from the souvenir merchants (the priests) to the temple alter.
After Napoleon invaded and the British Protectorate began, the real business of selling "souvenirs" began, but many of the items sold were original antiquities from the original tombs, temples and cemeteries. Of course, some of the antiquities were faked, but that was only after the source of original items became scarcer.
Today you have a made-for-tourists souvenir industry in Egypt. Beautiful replicas are made and specialty items are created. You probably will only see real antiquities in the museums. But if you are offered any "real antiquities", remember that it is illegal to buy them, and most probably they are beautiful fakes, anyway. So begin bargaining at a very low price and tell them you are only interested in buying reproductions. If they continue to bargain in your price range you can probably safely complete the sale without violating the law. They may even take the item away and bring back a surprisingly similar "reproduction". If they decline to continue, just politely tell them how beautiful their items are, but your husband (wife, tour guide, driver, etc.) is waiting for you!
Most souvenirs you will be offered in Egypt are made in Egypt. And most of the ones in museums outside of Egypt are made in those countries or in China. So while you are in Egypt, take a look around and don't be afraid to enter into a bargaining process for items that you are really attracted to. You can always walk away, but don't be surprised if they follow you out the door, lowering the price as they go.
It's a bit of a show, so don't be embarrassed, or get angry. There is no best price, only the price that you and the vendor agree on. The vendor won't sell you anything on which they lose money, and you will end up paying what your heart and pocket book dictate. There will always be another price and another item along the way, but each item you buy will create a memory.
I have lived in Hong Kong, and know that the item you want may or may not be unique, but it probably won't be there the next time you come around, so I shop by "Hong Kong Rules". If I really fall in love with it, I just try to get the best price I can, because the only souvenir purchases I have regretted are the ones I didn't make.
The souvenir industry is a major source of income for the Egyptians. They take great pride in producing new, innovative items for each tourist season.
Souvenirs are named after the French verb "to remember", and that is what they do, they create a memory of your trip associated with the country you visited.