The majority of drops you pick up won't sell on the exchange. Many that will won't sell for enough to be worth the effort.
In fact, I can regularly clean house on the exchange by systematically searching each category one quality/Mk level combo at a time and buying up everything that's posted for less than 50% - just today I made around 2 million EC just being lazy and feeding junk off the exchange to vendors.
Mk level combo? Not quite sure what you're saying, what combo? And, how much does discarding/recycling stuff get you, 30% or so?
No, he's saying he'll go look at, for example, starship weapons. He'll set the drop box to very rare, then type in mk xii. He'll make selections. Then type in mk xi. Make selections. Maybe change to rare. Type in mk xii again. Make selections. Type in xi...
The point is he's looking at all the items in a category which are the same rarity and mk lvl, and then move to another rarity/mk combination.
I feed my white and green loot drops to the vendors.
Blues and purples go into the exchange - the most I've made once was 1.1mil for a Mk XII Purple Phaser Cannon [Acc]x3. I'd imagine that if I did the Children's Toys assignment chain I could have potentially earned more.