The definition of recession is the crisis of overproduction. Literally, the shelves are full of goods, but consumers have run out of money. This crisis is a natural byproduct of capitalism. Workers produce 10 chairs, but only get paid enough to purchase 9 chairs. Eventually the economy locks up with excess inventory, and adjustments are necessary. The banking system can delay the crisis onset with credit, but eventually that too maxes out.

During the recession, inventory gets liquidated and sold off below cost until the available money supply in the economy once again equals the value of the remaining inventory to be sold. Unpayable debts are cancelled and written off. At that point the economic crisis is over.

So, as you say, in normal economic growth, liquidation deals are few, and credit is easily accessible, and consumers prefer to purchase brand name, retail, new products, often on credit.

However, during recessions, liquidations are everywhere, and cash is in short supply. Credit is also tight, as is employment. People are looking for deals to maximize their purchasing power because getting more cash is the hardest part. This is the time when you can make good money in the liquidation game. It lasts only as long as the recession itself.

Okay - retail is the market set retail price in this scenario.

Say computers - market says the price for the computer is $1000.

Because it's a recession, some computer stores cannot sell their inventory and are forced to declare bankruptcy. Bankruptcy means the store can no longer pay it's bills, so it asks the court to appoint a trustee to liquidate the remaining inventory and wrap up the operations, with remaining assets distributed equitably.

The trustee comes in, and sends the inventory to be sold at auction. That inventory commonly is sold for 10% or less of market retail price. The trustee is not in the business of maximizing value of the inventory sold. The trustee is in the business of efficiently ending the business, and that means about as quickly as possible.

So, this is the inventory you want to buy. Inventory in distress sale condition. Inventory being liquidated that is usually sold for well below production cost.

You buy at 10% of retail, or less. It should become obvious that this stage involves a fair amount of shopping. You can short cut this process by dealing with large liquidators where you can still get bulk deals at a slightly higher than auction price.

If the store has 50 computers in inventory at the time of liquidation, there is a good chance you can purchase some or all of those computers for $100 each.

Now, selling at 50% off retail. Why so cheap? Because you want to move these goods as rapidly as possible. Because there is a recession on, consumers are extra focused on maximizing the purchasing power of their money. They are looking for deals, and will go the extra mile in order to get deals. Remember, credit is tight during a recession.

You enter the market with computers at $500 each. Undercutting the market by 50%. These are grey market products. Liquidation. End of line. One time sales. Available only while supply lasts.

You bought at $100, and sold at $500, and earned a 400% ROI.