While eBay (NASDAQ:EBAY) is the dominant player in auctions, there are also a variety of strong competitors -- Loopnet (NASDAQ:LOOP), for example -- looking for a piece of the action. Another upstart is Liquidity Services (NASDAQ:LQDT), which reported fourth-quarter earnings this week. While the stock moved little on the news, the company's long-term growth looks promising.

In the fiscal fourth quarter, revenues surged 64% to $39.8 million. During this time, net income increased to $2.2 million, or $0.08 per share from $1.6 million, up from $0.07 per share in the same period a year ago.

Essentially, Liquidity Services is a Web-based auction for wholesale, surplus, and salvage assets -- done on an "as-is, where-is" basis. Sellers have access to a liquid market, where there is competitive bidding from professional buyers. As for buyers, they get a comprehensive selection and access to large-volume sellers. In other words, centralization should make for greater efficiency.

Liquidity Services also manages the key phases in the liquidation process. The company receives the merchandise, provides marketing services for the seller, and has buyer qualification. Once an auction is complete, Liquidity Services handles payment collection, settlement, and reporting. Basically, this "hands-on" approach helps to build trust in the marketplace. For all of these services, the company gets a profit-sharing arrangement.

No doubt, the surplus marketplace has a variety of major growth drivers. First, with worldwide innovation, products can easily become obsolete. Second, the return policies of retailers are often generous. What's more, governments are now requiring companies to focus more on recycling.

So how big is the market? A study from D.F. Blumberg Associates estimates that the North American market was $38.5 billion in 2004. The estimate is that it will grow to $63.1 billion by 2008.

In terms of guidance, Liquidity Services forecasts earnings at $0.40 to $0.42 per share in fiscal 2007. However, the company is ramping up its expenditures on distribution capacity, which may be a sign that there will be continued strong growth.

Thus, given the size and sophistication of its platform, Liquidity Services certainly appears to be positioned to benefit from a large market opportunity. And, so far, management has been able to handle the growth. In other words, the company has the kind of ingredients that long-term investors look for.

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Fool contributor Tom Taulli does not own shares mentioned in this article. He is currently ranked 736 out of 15,200 in CAPS.