That's true but not all of it: Glock also bought the old LEO trade in's at RETAIL

. How can they afford to do this? Easy. What do people buy? They buy what the LEO's use.
If 1 LEO sale gets you 20-30 civilian sales you did good!
What you quoted from my post was all true. All of it. I was commanding our R&D at the time so I had more than just passing knowledge of the process.
But since you're interested in the truth, here's the story. (all of it true)
We had been issuing S&W autos for 32 yrs. We were the first agency to issue autos in fact. In the late 1990s the legislature gave us $1/4 mil to upgrade our guns. Our director decreed we would be going to .40. We tested 15 different makes/models. After over a year of testing the top 3 were selected for bids. In ranking order they were SIG, S&W and Glock. The bids were for 2553 new guns, all new leather, 750 rds per sworn for transition training ammo, and duty ammo. We would be trading in our old 5904/6904 and had up to $1/4 mil to spend.
Glock's bid was a shade over $1/4 mil.
S&W's bid was about double Glock's bid.
SIG's bid was about $1.1 mil.
We had no desire to move from S&W as we'd been issuing it for 32 yrs, had a very good track record with it, and worked well with the S&W folks. What it came down to was the bids which was Glock. Unless there was some factual fault with Glock's bid then we're required to take the lowest bid of an acceptable product. Those are government purchasing laws. Can't spend more for something just because you want it if a suitable product can be purchased for a less price. You don't even want to try going around those rules. People lose jobs and go to jail for violating purchasing laws.
Figure the cost of 2553 guns, new leather ($100+/sworn), and almost 2 million rds of ammo and divide that into $250K. Glock would have had to sell our old S&Ws above retail to equal even police price for their guns.
So your "theory" that Glock was buying back guns at retail isn't exactly true. Everyone was bidding on the same package. If you've taken any business courses you would recognize what Glock was doing is called creative marketing. Glock wanted our business. They wanted to take us away from S&W because it was marketing for them. How much so? The year Glock got our business we were the featured article in the Glock annual. It's advertisemnt. So in that regard what you wrote is true. The public will buy what the police are buying. And in this case Glock made sure the public knew they had taken the business away from S&W. What was the impression left for the public? It was that Glock must be better or the wouldn't have gotten the contract and busted up a 32 yr hold by another company. Truthfully, that was not the case at all but that's the impression Glock wanted to give. Had the public known that the only reason Glock got the bid was because they were $250K under the next closest bid and it wasn't anything about superior quality.
All companies do the same thing to a degree. The local PD, about 300 sworn, had been carrying 6904/6906s and were looking to upgrade. This was just as the 357 rd came out but no one was really jumping on it. SIG made the PD a heck of a deal. SIG took the PD's old 6904/6906 and in return gave the PD new SIGs in 357 plus all new leather plus transition training ammo for everyone plus enough duty ammo to last everyone 2 yrs. SIG also promised that if the 357 rd didn't perform as expected or if it didn't pick up more during the next 2 yrs that SIG would trade them for new .40s at no cost. There's no way a very well used 6904 could be priced to make a profit over the price of a new SIG, new leather, and ammo. No way SIG could sell the old 6904/6906 to recoup the cost of what they gave the PD. But what SIG got was advertisement.
S&W was doing the same thing in the early 70s and 80s.
It's not just gun companies. Any business that deals with large population buyers do the same thing. Chevy did it in 1991/92. Dodge did it in the mid 80s. It's about getting their product out there in mass and then using that as advertisement.