Learn Russian: Продавец работает в магазине.

This is the Prepositional case, which is used to talk about locations. The dictionary form of the word is магазин (shop). When we say 'in' the shop using the preposition в, we add -е to the end of the noun to answer the question 'where?'.

How do we get работает from the dictionary verb работать?

Работать means 'to work'. To say that he, she, or it works, we drop the -ть ending and replace it with -ет. Since продавец (the shop assistant) acts as a third-person 'he' or 'she' in the sentence, we use работает.

How should I pronounce the preposition в in this sentence?

It sounds like a 'v' and merges directly into the following word, so you pronounce them almost as one single word: вмагазине. The в keeps its 'v' sound here because the next letter, м, is a voiced consonant (a sound made using the vocal cords).

Does продавец only mean a male shop assistant?

Grammatically, продавец is a masculine noun. However, in Russian, job titles are often used in their masculine form to refer to a person of any gender in a professional context. There is a specific feminine word, продавщица, but you will frequently hear продавец used for anyone working behind the counter.