The above mentioned is true. I have discussed with redline quite a bit. What he is experiencing is similar to our situation, just on a different scale.
In response to some of the topics mentioned, unpaid items are pretty rare in auto parts. People purchase items as a necessity and if they haven't bought it right away, they typically aren't going to. The only items we really have that are paid in > 2 hours are "Make An Offer" purchases.
Regarding inventory, what he says is true as well. In this industry, you typically have to do a buy in to get competitive pricing at all, and depending on who you're purchasing on, this could be anywhere between a thousand and 25-50 thousand monthly. If you aren't selling any sort of bulk, you'll be getting pricing that's not competitive, and likely only dropshipping rather than stocking your own inventory, which will limit your profit.
In response to Lucky's comments... auto parts don't work like that "cream" example, unless you're selling something along the lines of a luxury item. In this industry, something breaks, a customer needs it, they buy it. This is why certain changes eBay has done hit very hard, such as their penalties for Stagnant Listings. Many items are slow movers by design, a part that sells consistently annually, but not every month. These items have to constantly be relisted, actually increasing how much time has to be spent on listings rather than "just selling".
Another overlooked issue is things like "Variations" don't work in many Motors categories. Combined with the stagnant issues, it's a nightmare. As an example, we can use "Performance Engine Mounts". These typically come in four "stiffness" levels. 60A, 75A, 85A, 95A. Softer ones are ideal for street use, stiffer ones are ideal for racing use on track, or depending on horsepower of the vehicle.
Problem is, since variations are NOT enabled for our category, rather than just having 1 listing with 4 variations, we have to make FOUR INDIVIDUAL LISTINGS. This not only wastes our listing limits, but is a nightmare on metrics/statistics. You can't just sell a 60A one month and then have your item be free of any Stagnant penalties. You sell 60A, but then 75A, 85A, 95A all go stagnant, and have to be relisted.
It's a nightmare, as the performance items actually are very popular, but there's no way all 4 stiffness levels are going to be selling monthly. This is not any fault of sellers, but is eBay's fault for not enabling variations in Motors. It's one of the things that is hitting our industry particularly hard since they started punishing stagnants in 2018.
Furthermore, "sourcing" isn't really how it works in our industry either. As mentioned, you need a deeper relationship with manufacturing and investment in them before they offer you good enough prices to be competitive. This means once things start going bad, things come tumbling down quickly unless if you already spent enough to get yourself in the cheapest pricing tier for the rest of the year. If you get to the top pricing tier, you basically already "sourced" everything you need in the category, as you had to invest X amount of funds in to that product line and already have your warehouse stocked.
But then what happens when those listings of your items filling the warehouse suddenly stop getting traffic?
I'll let you in on something known in our industry, that shoots down a lot of the claims that it's about "pricing" being the problem. The most competitive sellers in each category? There's probably less than 5 sellers total who are getting the "best pricing tier" from those manufacturers, and those 5 sellers are getting the SAME EXACT PRICES as each other. Let's say three of those sellers are on eBay. If one of them is offering it at cheaper prices than the other? All that means is he's accepting a lower profit margin than the others. They are sacrificing profit just to try getting the sale.
But at the end of the day, they're all working on the SAME AMOUNT OF STOCK from the manufacturer. Manufacturer may have had 1000, Seller A might have purchased 400. Seller B purchased 350. Seller C purchased 250. Seller A might get the idea "Let me cut prices to sell items faster"... but what happens when they sell all their inventory? They will have to wait months for the item on back order to be manufactured.
Competing with the other sellers at the top of their category is not something they "want" to do. These sellers typically have a relationship with each other anyway, and are aware that dropping the price hurts EVERYONE. It cuts down ALL our margins by deprecating the value of your own products, so it's avoided as much as possible. Because aside from those 3 sellers, NOONE else in the category can truly compete with price/availability.
Considering all that, the problems when sales stop coming in are obvious. Pricing obviously isn't the issue, as you're in the top pricing tier. But you're at risk for losing that pricing without sales. If you're forced to drop price you'll be damaging yourself and the entire industry, and even then still won't be getting sales. You can monitor the category and see people guided to obvious dropshippers with worse offering that are shipping from across the country from their stated location.
Or even worse, a situation we see a lot: We see sales come to people who buy FROM US, whos prices are obviously HIGHER than ours, and eBay buyers are being guided to THEIR listings rather than ours.
The problem is NOT pricing. At least in our industry. Anyone who works in this industry and claims that it is, is likely someone that only had experience with dropshipping and never actually having items manufactured or close relationships with manufacturers. If it was pricing, people would not be using YOUR listings to drop ship to other people when THEIR sub par listings sell.
