This New York Times article explains the economics of used books and the Internet, including how Amazon.com doesn't lose money selling used books at the same time they sell new books.

"[T]here are two distinct types of buyers: some purchase only new books, while others are quite happy to buy used books. As a result, the used market does not have a big impact in terms of lost sales in the new market.

Moreover, the presence of lower-priced books on the Amazon Web site, Mr. Bezos has noted, may lead customers to "visit our site more frequently, which in turn leads to higher sales of new books."