I'm not sure it's possible for charity shops to be simultaneously charging way more than market rate for records and sending dealers out of business by undercutting them is it?
Yes, I think so. Albeit not so much the undercutting on price - which can be haphazard, some charity shops have staff/volunteers who will under-price, some will over-price.
It's the fact that there's competition where there might have been none. (There are lots more charity shops nowadays, because other independent retailers on the high street have been going out of business over the past 2-3 decades as out-of-town box park stores and shopping malls took trade away and then internet shopping also took off. So commercial property landlords have been letting more and more property to charities (because iirc, I think they get business rates relief or something, it's definitely in their interest for a charity shop or other pop-up to open up, rather than them wait for another 'proper' retailer). So a local specialist vinyl shop might not have had any competition a couple of decades ago, or maybe one or two local charity shops selling a handful of vinyl, not enough to affect their business.
But now, it'll be harder for a specialist vinyl store to stay in business on a passing footfall and destination shopping basis, because there are more charity shops opening up locally and competing for business and also more online trade as a competitor for funds. The undercutting comes not only from pricing of stock, (and the charity shop stock might or might not be bargain price and undercutting the specialist vinyl trader, it might be over-pricing), but also the trading conditions, ie as mentioned above, the special treatment that charity shops get, so they're undercutting the specialist vinyl shop in that they don't have the same overheads, so whereas a specialist vinyl shop selling an album for, say, £10, might only make - using random made up figures here - £3 profit on that, by the time they've covered overheads, like rent for the shop, business rates, tax, insurance, PRS licence, staff wages, buying stock, etc, for that same £10 album sale, a charity shop might make £6 profit, because while they pay rent, as a charity they don't pay business rates (iirc, I think that's the case), and while they might have a manager and assistant manager, the rest of the staff are volunteers, so their staffing bill is lower than the independent retailer, and also they get their stock donated, free, they don't have to buy it like the independent specialist vinyl retailer. So that's how they manage to undercut, because they can sell things at a lower price and still make the same profit, or they undercut in overall terms, because they effectively get subsidies and support that the independent retailer doesn't.
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