[kevincox]

> I think it's more that, if an item is in genuinely resellable working condition, lots of people are willing to pay 70% for it

That isn't the author's point. If it cost 20% of the price to produce and ship a product to the end user (AKA 400% markup, which isn't unreasonable for many items) then providing a discount >20% is less profitable than selling a new item at full price. Obviously it isn't an exact formula (you may capture sales that you would have otherwise lost) but the larger the discount the less likely it is to make sense, even if the item is "free" to sell because your profit off of the discounted "free to produce" item is less than the profit off of the new item, even after subtracting the costs.

[crazygringo]

See my second paragraph. I addressed precisely that.

It is indeed what you say -- "you may capture sales that you would have otherwise lost" -- and that Amazon prefers to capture those rather than having another site capture then. Remember, people who are highly price-conscious compare sites.