One of my friends is such a "liquidator", he buys up both excess inventory (never sold) and returned items for rock bottom prices.

He has developed a keen sense in finding the profitable jewels. For example, women's cosmetics. They are unused (damaged boxes and such), he buys them up < 10% of the retail price then puts them up at 90% retail price on his own website.

Women are spamming him to death. When do you have the cheap "item X" again?

It should be said though that it's a very laborious business model. He needs to quality check, inventorize, publish, tax report, etc on a huge amount of items. He has a "no return" policy. Which is actually illegal here (Netherlands), but he seems to get away with it as nobody bothers with a 5$ item.