I would say the main reason that low level gear doesn't sell is because of materia. The reason why gear at 41+ is so popular is because that's the only range in which you can obtain grade III/IV materia. From 1-30 no matter what you turn into materia it'll always be grade I. From 31-40 it's either Grade I/II. So it's moreso that people aren't willing to take the time to make the gear since the materia just isn't worth the time. The other issue is the MW limit since gear doesn't stack it's less appealing to sell unless it's something rare that can fetch as much as a material going for 3-4k a piece which would be 297-396k.

A simple solution would be the ability to stack each piece of gear on a single line to a max of 10. At least then a person using a retainer could put up 10 different pieces of gear of 10 quantity, rather then 10 of the same item and hope people want it. Even 5 quantity would be nice but since gear is only a single stack people are less willing to put up low level gear for 1-5k when they can just as easily sell 50 logs for 500 each and earn more in that one slot then with that low level gear.