Mail Stop 4561

      January 5, 2005




William P. Angrick, III
Chief Executive Officer
Liquidity Services, Inc.
2131 K Street, N.W.  4th Floor
Washington, D.C.  20037

Re:	Liquidity Services, Inc.
      Amendment No. 1 to Registration Statement on Form S-1
      Filed December 21, 2005
      File No. 333-129656

Dear Mr. Angrick:

	We have reviewed your filing and have the following comments.
Where indicated, we think you should revise your document in
response
to these comments.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.



Form S-1
General

1. You indicate in your response to comment 1 that you are aware
of
other e-commerce providers or auction websites that provide online
services for auctioning or liquidating assets.  Since these
companies
do not disclose their revenues, earning, market share or other
measure with respect to those specific merchandise and services,
please tell us why you believe you are "a leading online auction
marketplace."  We may have further comments.

Risk Factors, page 11

If we fail to accurately predict our ability to sell
merchandise...,
page 16

2. Please revise to quantify the amount of goods that historically
have been returned by buyers.

3. We note your responses to comments 26 and 50.  The extent of
the
discount to estimated market value or acquisition cost, as the
case
may be, of products acquired under the profit sharing model would
appear to have a significant impact on the extent of your
inventory
risk.  While we acknowledge that the specific discount will differ
for each item, please provide additional disclosure regarding the
extent of the discount.

If we do not response to rapidly technology changes or upgrade our
systems..., page 14

4. We note your response to comment 12.  Please disclose that you
currently have no specific plans to upgrade your technology.

Management`s Discussion and Analysis of Financial Condition and
Results of Operation, page 35

5. We note your response to comment 24.  Please disclose that you
currently have no specific plans to expand your operations.

Management`s Discussion and Analysis of Financial Condition and
Results of Operations

Overview, page 35

6. We note your response to comment 25.  As disclosed in your risk
factors, each pricing structure has a different risk profile.
Consequently, we continue to believe that the percentage of
revenue
derived from each structure is relevant to an investor.

Key Business Metrics, page 37

7. We note your revisions to the title of your operating metric
from
gross merchandise value to gross merchandise volume in response to
our previous comment 23.  However, in the first paragraph of this
description on page 37, you continue to discuss this operating
metric
in relation to the amount of revenue recognized in your financial
statements.  Please revise accordingly.

Stock-Based Compensation, page 43

8. We note your additional disclosure in response to comment 33,
please update this discussion upon including pricing information
in
your document to address the factors contributing to the
differences
between the IPO price and the fair values obtained through your
contemporaneous valuations.

Liquidity and Capital Resources, page 51

9. We note your response to comment 34.  Please revise the
disclosure
to clarify that "working capital" includes capital used for
inventory
purchases.

Principal Shareholders and Selling Stockholder, page 83

10. We note your response and will review your disclosure in the
subsequent pre-effective amendment.

Underwriting, page 97

Underwriting, page 96

11. Please revise to identify the underwriters that may engage in
electronic distribution of your prospectus.  Also, please advise
us
how your procedures for the electronic distribution of your
prospectus comply with Section 5 of the Securities Act.  In
particular, please provide your analysis of how you or the
underwriters will provide investors with a prospectus that
satisfies
the prospectus delivery requirements.  In addition, please
describe
the following to us in more detail:

* The communications used;

* The manner of conducting the distribution and sale, such as the
use
of indications of interest or conditional offers; and

* The funding of an account and payment of the purchase price.

Your analysis should address the communications made during the
pre-
effective and post-effective periods.  If the underwriters`
procedures for electronic distribution have already been approved
by
the staff, please confirm that the procedures have not changed
since
the time of our approval.

12. Tell us whether you or the underwriters have any arrangements
with a third party to host or access your preliminary prospectus
on
the Internet.  If so, identify the party and the website, describe
the material terms of your agreement and provide us with any
written
agreement.  Provide us also with copies of all information
concerning
your company or prospectus that appeared on their website.  If you
subsequently enter into any such agreements, promptly supplement
your
response.

13. We note your disclosure in the penultimate paragraph on page
99
that, at your request, the underwriters have reserved shares for
sale
shares for officers, directors, employees and other individuals
who
have family or personal relationships with your employees.  Please
confirm to us, if true, that:

* except for the underwriters commission, the offers and sales are
on
the same terms as those offered to the general public;

* no offers were made prior to the filing of the registration
statement;

* offers were made only with the prospectus; and

* no funds have or will be committed or paid prior to
effectiveness
of the registration statement.

14. Please provide us a copy of the materials that you sent to the
directed share program participants and explain to us in more
detail
how the program will work.

15. Please revise to clarify whether the shares issued through the
directed share program will be subject to lock-up agreements and,
if
so, briefly describe the lock-up agreements.




Financial Statements

Note 2 - Summary of Significant Accounting Policies

Revenue Recognition, page F-9

16. We have reviewed your response to our prior comments 49 and
50.
Please expand your critical accounting policies and your revenue
recognition policy to include disclosure of your evaluation of
other
indicators that support a gross presentation similar to the
discussion included in your supplemental response to us.

Note 9 - Debt

Note Payable, page F-16

17. Based on your response we note that you accounted for the put
warrants as a liability under EITF 00-19 and continue to classify
these amounts as liabilities under SFAS 150.  Since you do not
appear
to qualify for equity treatment, we are unclear why you are
amortizing the changes in the redemption value to the earliest
redemption date by analogy to D-98.  Furthermore, since the amount
to
be paid at settlement appears to vary based on certain earnings
calculations, advise us why you are recording the redemption
amount
at present value.  Tell us how your accounting treatment complies
with paragraphs A10 and 20-24 of SFAS 150.

Part II

Item 16.  Exhibits and Financial Statement Schedules, page 5

Legal Opinion

18. Please revise the opinion to remove the assumption in (a)(i)
in
the third paragraph on page 3.

* * * *

      As appropriate, please amend your registration statement in
response to these comments.  You may wish to provide us with
marked
copies of the amendment to expedite our review.  Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

      We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.

      We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement.  Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration.  Please provide this
request at least two business days in advance of the requested
effective date.

	You may contact Kelly McCusker, Accountant, at (202) 551-3433
or
Cicely Luckey, Accounting Branch Chief, at (202) 551-3413 if you
have
questions regarding comments on the financial statements and
related
matters.  Please contact Jeffrey Shady, Attorney-Advisor, at (202)
551-3471 or me at (202) 551-3852 with any other questions.


      Sincerely,



      Michael McTiernan
      Special Counsel


cc:	Michael C. Williams, Esq (via facsimile)
      Hogan & Hartson L.L.P.
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William P. Angrick, III
Liquidity Services, Inc.
January 5, 2005
Page 6