Bulk purchasing. It's a similar model to Groupon - if you can drive enough volume for a single product you can get it significantly cheaper. Walmart works the same way.
I'd definitely be curious as to how complicated those arrangements get.
When starting out they will typically have to guarantee a certain volume to get the pricing they need and eat the product they can't sell. So it does require a fair bit of capital to get started which is why they typically start out with clearance inventory where the wholesale price is so reduced.
To further pad this shortcoming in the early stages Gilt was invitation only, and had a lot of control of the influx of new customers to the site, which helped two-fold: promote the air of exclusivity and buffer for the smaller initial supplies/vendors from being out of stock too quickly. This also promotes traffic to the site as items, as they do today, sell out in popular sizes/prices fast, your users are logging in sooner/more frequently to grab a "deal".