Many people have access to bottom of the barrel closeouts which is why they can purchase items at pennies on the dollar. I'm in the beauty industry and buy all of my things at what's called "Salon cost", it's the equivalent to wholesale or about 50% of retail. But, before Salon Cost is that's called "Distributor Cost" and that's even less than Salon Cost. But then you've got people out there who negotiate the close out cost. They're the people who sell the items to places like Big Lots, The Dollar Store, etc. It just depends where your connections put you on the food chain! haha.
The company I work for manufactures appliances like blow dryers, curling irons, etc. We are the largest manufacturer in the world and I have a whole garage FULL of items that are NIB. I get each and every item that is launched. My position at the company is one that as a working stylist, I test and develop new items so I sometimes receive up to 5 of each item before I even recieve the finished product! I don't pay a red cent for those items so ANY monies I would make would be profit! Those are things I could easily sell on eBay for pennies of the dollar, but I choose not to.
This particular seller looks like he has many connections in the industry, if you look at his Me Page. That is why he gets items so inexpensively. Anyone who has access to the garment district in LA can tell you how that works. Those people go into closeout centers and there's literally boxes and racks of clothing that sell for $1-5 per hanger. No matter what is on that hanger, it's a flat rate. Some of those items are garbage and some are designers like BeBe, Cache etc. Can you imagine what that would fetch on eBay? The items are closeouts that did not sell, last years style, whatever.
So, as you can see, simply buying an item on sale at a department store will not generally get you to the top of the eBay food chain. You need to be the guy who can buy that item after it's been on sale at the department store and marked down 3 times, sent to a closeout center and then ends up in the garment district for $1.00!