My mates dad has done just this for the last 30 years (and judging by his house, done it very well).
As well as auctions, he struck a deal with a main dealer to buy cars they had taken in part exchange. This worked well but the downside was he had to agree to buy a certain number of cars per month and on occasion had to take some real crap and get rid as best he could.
The real heaps were put straight through auctions but the odd loss on these was more than balanced out by the decent motors he got from them. One final point, he wasn`t the only trader the dealers used but by being willing to buy a greater number of cars than the others he, more often than not, got 1st choice. (still didn`t prevent him having to take the crap when the dealers hadn`t taken much in in any given month though)
Hope this helps.