Byrne has had help honing his bargain-hunting instincts. Warren Buffet, the worldwide shaman of value investing, was a friend of Byrne's father, and he indoctrinated Byrne junior in the creed of long-term value. Later, Byrne served a stint as CEO at a subsidiary of Berkshire-Hathaway, Buffet's company. The connection can't have hurt when Byrne went looking for backing for Overstock.com; the company raised tens of millions in venture funding, including several million from Byrne's
own pocket.

According to Byrne, Overstock.com was the first cyber-liquidator to show a profit and did so in one year and with only $27 million in capital. In comparison, he says, other e-tailers have spent years and hundreds of millions, and they have yet to turn a profit. His site's sales were $7.5 million in November, $9.3 million in December, and $6.2 million in January. Byrne says that translates into profits of about $100,000 a month, and he sees no end in sight.

Opportunity In Excess

Great business, right? For Byrne and the baker's dozen or so of other inventory liqui- dators, several of which now do business online, probably so. Webmergers.com reports that about a quarter of the more than 210 e-businesses that folded in 2000 sought to sell their merchandise and other assets, and they aren't the only sources of excess inventory. Manufacturers that overproduce to avoid shortfalls to big customers, retailers that turn to jobbers to sell off unsold items - excess inventory is a $59 billion business, and the online part of it is growing. The e-business research and analysis firm AMR Research predicts that the online portion of excess inventory market will grow to 34 percent of the total excess inventory business by 2004, from a minuscule 1 percent now.