It's actually pretty simple: for a while sanctions are ineffective because the Nazis can simply take what they want.

The Nazis can loot consumer goods/industrial equipment from occupied western Europe, oil from occupied/allied Romania, food requisitioned from occupied Soviet Union, even labor through enslaving PoWs and foreign workers etc.

In fact, the ability to achieve Autarky (no trade) for Germany was one of the chief reasons for why Hitler started the war.

The Nazis were also particularly sophisticated at this. One of the way they looted France was for instance artificially set the Mark to be overvalued relative to the Franc so that they can "buy" things from France for pennies on the dollar so to speak. At one point occupied France was transferring ~40% of its GDP to Germany during the war.

They also artificially repressed consumption within Germany (through encouraging people to save/buy bounds etc) as means of alleviating their lack of material.

That being said though this was not particularly sustainable, and throughout the war Germany had shortages of oil, baxalite, and other raw material which crippled the war effort. Eventually the inability to access overseas markets and goods really did hurt Germany. Near the end of the war, the Nazi economy really did collapse even before the allied armies reached the Germany industrial heartland.

Sources:

Wages of destruction by Adam Tooze

Hitler's Empire by Mark Mazower