UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

o

Rule 13d-1(b)

x

Rule 13d-1(c)

o

Rule 13d-1(d)

CUSIP No. 53635B107

13G

Page 2 of 11

1.

Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person

Trigran Investments, Inc.

2.

Check the Appropriate Box if a Member of a Group

(a)

o

(b)

x

3.

SEC Use Only

4.

Citizenship or Place of Organization
Illinois company

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

5.

Sole Voting Power
0

6.

Shared Voting Power
1,266,657 shares of Common Stock

7.

Sole Dispositive Power
0

8.

Shared Dispositive Power
1,266,657 shares of Common Stock

9.

Aggregate Amount Beneficially Owned by Each Reporting Person
1,266,657 shares of Common Stock

10.

Check Box if the Aggregate Amount in Row (9) Excludes Certain Shares o

11.

Percent of Class Represented by Amount in Row (9)
Approximately 4.6% as of December 31, 2010 (based on 27,326,365 shares of Common Stock issued and outstanding per Form 10-K dated December 10, 2010).

12.

Type of Reporting Person
CO

CUSIP No. 53635B107

13G

Page 3 of 11

1.

Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person

Douglas Granat

2.

Check the Appropriate Box if a Member of a Group

(a)

o

(b)

x

3.

SEC Use Only

4.

Citizenship or Place of Organization
U.S. Citizen

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

5.

Sole Voting Power
0

6.

Shared Voting Power
1,266,657 shares of Common Stock

7.

Sole Dispositive Power
0

8.

Shared Dispositive Power
1,266,657 shares of Common Stock

9.

Aggregate Amount Beneficially Owned by Each Reporting Person
1,266,657 shares of Common Stock

10.

Check Box if the Aggregate Amount in Row (9) Excludes Certain Shares o

11.

Percent of Class Represented by Amount in Row (9)
Approximately 4.6% as of December 31, 2010 (based on 27,326,365 shares of Common Stock issued and outstanding per Form 10-K dated December 10, 2010).

12.

Type of Reporting Person
IN/HC

CUSIP No. 53635B107

13G

Page 4 of 11

1.

Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person

Lawrence A. Oberman

2.

Check the Appropriate Box if a Member of a Group

(a)

o

(b)

x

3.

SEC Use Only

4.

Citizenship or Place of Organization
U.S. Citizen

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

5.

Sole Voting Power
0

6.

Shared Voting Power
1,266,657 shares of Common Stock

7.

Sole Dispositive Power
0

8.

Shared Dispositive Power
1,266,657 shares of Common Stock

9.

Aggregate Amount Beneficially Owned by Each Reporting Person
1,266,657 shares of Common Stock

10.

Check Box if the Aggregate Amount in Row (9) Excludes Certain Shares o

11.

Percent of Class Represented by Amount in Row (9)
Approximately 4.6% as of December 31, 2010 (based on 27,326,365 shares of Common Stock issued and outstanding per Form 10-K dated December 10, 2010).

12.

Type of Reporting Person
IN/HC

CUSIP No. 53635B107

13G

Page 5 of 11

1.

Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person

Steven G. Simon

2.

Check the Appropriate Box if a Member of a Group

(a)

o

(b)

x

3.

SEC Use Only

4.

Citizenship or Place of Organization
U.S. Citizen

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

5.

Sole Voting Power
0

6.

Shared Voting Power
1,266,657 shares of Common Stock

7.

Sole Dispositive Power
0

8.

Shared Dispositive Power
1,266,657 shares of Common Stock

9.

Aggregate Amount Beneficially Owned by Each Reporting Person
1,266,657 shares of Common Stock

10.

Check Box if the Aggregate Amount in Row (9) Excludes Certain Shares o

11.

Percent of Class Represented by Amount in Row (9)
Approximately 4.6% as of December 31, 2010 (based on 27,326,365 shares of Common Stock issued and outstanding per Form 10-K dated December 10, 2010).

12.

Type of Reporting Person
IN/HC

CUSIP No. 53635B107

13G

Page 6 of 11

Item 1(a)

Name of Issuer:
Liquidity Services, Inc.

Item 1(b)

Address of Issuer’s Principal Executive Offices:
1920 L Street, N.W. , 6th Floor
Washington, D.C. 20036

Item 2(a)

Name of Person Filing

Item 2(b)

Address of Principal Business Office

Item 2(c)

Citizenship

Trigran Investments, Inc.

630 Dundee Road, Suite 230

Northbrook, IL 60062

Illinois company

Douglas Granat

630 Dundee Road, Suite 230

Northbrook, IL 60062

U.S. Citizen

Lawrence A. Oberman

630 Dundee Road, Suite 230

Northbrook, IL 60062

U.S. Citizen

Steven G. Simon

630 Dundee Road, Suite 230

Northbrook, IL 60062

U.S. Citizen

2(d)

Title of Class of Securities:
Common Stock

2(e)

CUSIP Number:
53635B107

Item 3

If this statement is filed pursuant to Rules 13d-1(b), or 13d-2(b) or (c), check whether the person filing is a:

(a)

o

Broker or dealer registered under Section 15 of the Exchange Act;

(b)

o

Bank as defined in Section 3(a)(6) of the Exchange Act;

(c)

o

Insurance company as defined in Section 3(a)(19) of the Exchange Act;

CUSIP No. 53635B107

13G

Page 7 of 11

(d)

o

Investment company registered under Section 8 of the Investment Company Act;

(e)

o

An investment adviser in accordance with Rule 13d-1(b)(1)(ii)(E);

(f)

o

An employee benefit plan or endowment fund in accordance with Rule 13d-1(b)(1)(ii)(F);

(g)

o

A parent holding company or control person in accordance with Rule 13d-1(b)(1)(ii)(G);

(h)

o

A savings association as defined in Section 3(b) of the Federal Deposit Insurance Act;

(i)

o

A church plan that is excluded from the definition of an investment company under Section 3(c)(14) of the Investment Company Act;

(j)

o

Group, in accordance with Rule 13d-1(b)(1)(ii)(J).

Item 4

Ownership:(1)

(a)

Amount beneficially owned:

Incorporated by reference to Item 9 of the cover page pertaining to each reporting person.

(b)

Percent of class:   

Incorporated by reference to Item 11 of the cover page pertaining to each reporting person.

(c)

Number of shares as to which such person has:

(i)

Sole power to vote or to direct the vote:  

Incorporated by reference to Item 5 of the cover page pertaining to each reporting person.

(ii)

Shared power to vote or to direct the vote:

Incorporated by reference to Item 6 of the cover page pertaining to each reporting person.

(iii)

Sole power to dispose or to direct the disposition of:

Incorporated by reference to Item 7 of the cover page pertaining to each reporting person.

(iv)

Shared power to dispose or to direct the disposition of:

Incorporated by reference to Item 8 of the cover page pertaining to each reporting person.

(1)  Douglas Granat, Lawrence A. Oberman and Steven G. Simon are the controlling shareholders and sole directors of Trigran Investments, Inc. and thus may be considered the beneficial owners of shares beneficially owned by Trigran Investments, Inc.

CUSIP No. 53635B107

13G

Page 8 of 11

Item 5

Ownership of Five Percent or Less of a Class:

If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following x.

Item 6

Ownership of More than Five Percent on Behalf of Another Person:

Not Applicable.

Item 7

Identification and Classification of the Subsidiary which Acquired the Security Being Reported on by the Parent Holding Company:

Not Applicable.

Item 8

Identification and Classification of Members of the Group:

Not Applicable.

Item 9

Notice of Dissolution of Group:

Not Applicable.

Item 10

Certification:

By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.

CUSIP No. 53635B107

13G

Page 9 of 11

TRIGRAN INVESTMENTS, INC.

By:

/s/ Lawrence A. Oberman

Name:

Lawrence A. Oberman

Executive Vice President and Director

/s/ Lawrence A. Oberman

Lawrence A. Oberman

/s/ Douglas Granat

Douglas Granat

/s/ Steven G. Simon

Steven G. Simon

CUSIP No. 53635B107

13G

Page 10 of 11

INDEX TO EXHIBITS

PAGE

EXHIBIT 1: Agreement to Make a Joint Filing

11

CUSIP No. 53635B107

13G

Page 11 of 11

By:

/s/ Lawrence A. Oberman

Name:

Lawrence A. Oberman

Executive Vice President and Director

DOUGLAS GRANAT

/s/Douglas Granat

LAWRENCE A. OBERMAN

/s/ Lawrence A. Oberman

STEVEN G. SIMON

/s/ Steven G. Simon