It needs to be sold to the pawn merchants, or to other players. Pawn merchants do not give good prices but they are used to give some (very little granted) back to the player and they are used because it does not cause lag on the server (by loading up a store--which causes lag). There are three different types of pawn merchants, small towns, mid towns, and large towns. Large towns will give a little more gold for items.
We have talked about a player run store system a few times and one is actually being designed considered right now. We have even brought in player run stores a few times but took them out due to the heavy lag load that they cause on the server.