Another charity shop volunteer here - I can confirm much of what is being said here. We get swamped with poor quality, unsaleable (dirty/damaged etc) donations but we do open every bag and sort through it, which can be a bit of an eye opener!! We get supplied with gloves and really need them sometimes.
For example, a recent donation of two large black bags of women's clothing, gave us just 3 saleable garments, out of around 50 in total, with the rest going to rag. This is fairly typical. We also rag certain categories of clothes regardless of condition if we are over stocked with them. Currently, that includes women's jeans: yesterday I ragged 12 pairs of Levis in clean and wearable condition.
We do get high end items and have an Ebay function for these (a recent example being a beautiful LV bag). Staff and volunteers are allowed to have "first dibs" on items but only do so on rare occasions, so we don't hoover up all the best stuff as someone up thread has said.
Re-sellers are a factor too but not as common as may be expected. It's not perfect, but we do provide a service to local people in our town.