"Flooding the market" is not a selling strategy.

[movieman630]

In every different "genre" of selling we all occasionally have to deal with sellers who simply don't understand the laws of "supply and demand".  It's one of the worst things we all have to deal with.

If you have 30K of a single item, selling them off in lots of 100 over and over again isn't going to make you long term gains or even sell them all.  Eventually you're going to over saturate the market for that particular item with 100 different sellers all trying to sell theirs individually for the cheapest price until they're utterly worthless.

In short it's a race to the bottom.  Smart sellers know when they corner the market in a particular item the best selling is to sell one at a time, long term with carefully selecting only a few other sellers to wholesale to and keep "healthy competition" and get a few bulk sale infusions. 

I just don't understand these self destructive sellers who would rather get a short "rush" of sales only to see their stock fizzle out in a short matter of time.  Usually when I encounter sellers like this I try to buy them out to get them out of the business.  Sometimes that works.  Other times they're just too stubborn to see how they're destroying their own market.

Just a rant, feel free to chime in.

[onefootflipper1]

I struggle with this knowledge myself. I have huge quantity in personalized Christmas ornaments. They make money every single year, however the rest of the year they take up basically an entire shelving unit and produce nothing. I would love to unload them all to someone with more storage space than I have, however I would have to find someone to sell ALL of them too, otherwise I would just be competing with them.

[luckythewinner]

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@movieman630 wrote:

That would have to be something really rare and special.  For everything else that kind of economic policy just makes it worthless.

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You are discounting the seller's time.

Even if I could list, sell, pack, label and ship each one of 30,000 items in 20 minutes, even with constant sales I would be working 24 hours a day for over a year to sell them all.

In that same scenario, selling 300 packages of 100 would take me 4 days.

[dbfolks166mt]

     In addition to understanding supply and demand it also depends a little bit on whether the item is elastic or inelastic. For an inelastic item it matters little what the supply is, or what the price is, buyers will remain pretty flat with regards to their demand for the product although the equilibrium price will change. Some inelastic goods from a demand perspective include: Gas, Prescription drugs, airline tickets, coffee, text books. However, the price for these goods may be elastic. 

     Elastic products are more sensitive to changes is supply or price and buyers will adjust their demand accordingly and of course the equilibrium price will move. Most consumable products like groceries, cosmetics, toiletries have an elastic demand but a pretty inelastic price. 

[tobaccocardyahoo]

Cornering the market is a technique to allow you to control the price of the item. This situation is the opposite. One does it because one expects the prices to drop and wants to be the only seller left to recover the pricing after it has hit bottom and other sellers have given up.

It can work.

A friend and I split a large lot of a collectible which was sold at an in person auction.

He priced his half aggressively and sold out on Ebay. I sold at a much higher price on Amazon. When he sold out, we had each collected about the same amount of revenue. I had a substantial amount of inventory left but made as much money.

Eventually, I listed some of my inventory on Ebay at the higher prices. I generated as much revenue on Ebay with a part of that inventory as either of us did before. I still own some.

There are multiple ways to meet your sales and profit goals. Sellers have different needs. My friend needed money to pay his bills, I did not.

[slati_2013]

A seller should only care about their own interest. If I can sell out all my items by cutting my prices, why not? You need to understand that some sellers get lucky and get hold of lots of wanted stuff for literally pennies. So when they sell the item for $10 instead of the going price of $50, they are still making a massive profit because they paid and average of 10 cents to obtain the item.