How is Swoopo (http://www.swoopo.com/), an online auction site, able to make their prices so low?

It seems illegal to sell those items for a tiny fraction of retail cost! How does it work? Swoopo must be making some extreme profit! I’m not a member myself, but I’m curious as to how they do it.
No, I’m not promoting. I just find it curious that their prices are so low, and put the link and it’s category in the title so you know what you’re clicking on.

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