How do you do that? Is it random?

You have to throw a into the bonfire (which you can make at Peka Glade by filling an with water between 8-9 am/pm Subeta time)

this makes since why i can never fill anything! Thanks for the information

Bandit is operational, so just in case he will steal from you toss a few other items in the bonfire first to make sure you get him as a challenger first.