Newbie Arena EXTREME confusion

I just started this game and I enjoy it immensly, but I have one problem, what am I supposed to do in Arena mode? I understand the fighting yada yada, but my guy is inept, and all my weapons are for at least one class above that, so I cant use any. The merchant doesnt sell anything I can use either, only pants and boots. I managed to defeat a few guys with my fists, but it seems weird to not be able to use anything else.