"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.

[rosszonebricks]

No one perfect selling strategy, of course.

In this scenario, maybe the person with 30,000 of an item doesn't want to deal with shipping 30,000 packages.  Lots of 100, is 300 packages.    They make a reasonable profit, and sell that 30,000 in a few months instead of 5-10 years.   

 "Strike while the iron is hot" mentality.    If you can rid yourself of that level of inventory quicker, you are safer against the fickle market, the next big thing, or some other competitor that also caught on to this 'hot item to sell'.   thus you beat the 'race to the bottom'. (maybe even caused it? but... you already sold your inventory, so you are out.)

Almost like some of the lines from the movie Margin Call:

"There are three ways to make a living in this business.  Be first, be smarter, or cheat.  I don't cheat.  While we have a hell of a lot of smart people in this building, it is sure a hell of a lot easier to be FIRST."

[movieman630]

If that's the case selling all 30K to one seller is better than flooding the market.  In flooding the market you only make enemies.  Eventually your "customers" get savvy to the fact that you're creating a highly competitive environment where the first few buyers of those 100 pc lots (usually also paid the most) are eventually not going to be able to sell a single one because every week they're listing 100 more. 

My point is you can't keep that up forever before people get wise.  You WON'T be able to sell all 30k off in "record time" because people will eventually stop buying them or you're constantly selling to the same few people and they will only spend so much on those items.  You'll end up with 20k still sitting around and a bunch of angry customers who wasted their money buying from you 100 at a time without asking you how many you had.

It might be a "strategy" but it's not a winning one. 

My point is, if you consider yourself a "liquidator" the good ones know when they get a load of stuff that's the same the best way to "flip" said inventory is to find a single buyer who is in that field and sell it for a quick profit to them in bulk.

Sellers who do it the way I described never win in the end.  They might get 10.00 the first time but in a matter of weeks they won't be able to get 10.00 because everyone is savvy to their scheme now.

[movieman630]

I see that you sell building blocks.  With that type of product it's different.  It's a kind of product that it's ok to sell that way because they're constantly being made and people don't need 30k of the same block. 

I get that.  I'm more or less speaking about things that aren't mass produced all the time.  New Old Stock items, things that were only made in a limited amount.

Things that are being mass produced day in and day out are generally exempt from my OP because it doesn't really matter anyway, they're constantly produced and "consumed". 

[mintsfmintsf]

This is a problem that is especially true with Chinese sellers that all are trying to sell esentially the exact same item in different packaging.  It is annoying to have to sort through all of the different ways that they are trying to sell the same darn items with some things being off by a penny or two or one maybe having some extra trinket to make theirs a bit more special.

Very often, the items I sell don't have a huge number of items that are the EXACT same thing although they might be the same nomenclature.  When I find that there is a glut in the market or a a number of sellers that are selling lower than they should, I usually look at the quantity that they have in inventory and then I kind of figure out how many people need to sell their item before I reach the price I want to sell mine at.  Usually, I only have 2 or 3 people lower than me, if I am not the lowest, and I am totally fine letting them sell well before me.  A lot of times I notice price clusters where 3 are at say $1 and 3 are $3 and 5 are $4.  In a case like that I normally would try to sell the item lowest in of the group of 5 at $ or at the top of $3 range assuming that those items would still provide a profit.  I also look at the ratings of the competition, and if I see the group of sellers are mediocre, I will put my prices more to the middle of the top group because I know that many people read the reviews and if my scores are far better than my competition I know that many people will select me over the others.  

One final thought, if the market is swamped with a bunch of guys racing to the bottom for peanuts, I will just hold off listing until it clears or if there are some people that don't know what they have and are sellingg it way lower than they should be I will snatch it up and relist it.  Example:  Recently a man had a Mexican coin for sale that was worth over $100 in the condition it was in so I snatched his mistake up at $4.95 with free shipping and then relisted it at a discount for serious buyers at $75.00 or so as I recall.  I now continue to watch for that particular coin to pop up by another seller at a low price so that I can snag up the top quality cheap ones to make sure that any I list in there I can simply keep the category clear and that leaves people with mine that I can still make a fat profit on and sell it still well below market.  It works, but it takes a little work, and when I do that I never immediately list the coin I just got, although I might offer it to some of my non-eBay customers at a special price.

Hope this helps some.

[dhbookds]

Agree with Rosszone.........different strategies and, if one isn't interested in the long term....and is successful selling short term at the price they ask........what's wrong with it?   I understand it can hurt long term sellers...but supply/demand is always a risk.......

[movieman630]

You make a good point there.  Waiting them out is usually what I choose to do if I get stuck with a lot of over saturated items.  Put them on the shelf and come back to them in a year or two when the market thins out a bit or the original seller gives up listing them.  (Also a good time to revisit the original seller to see if you can buy them out).

Again, this really doesn't work for things that are still being mass produced.  I'm really only referring to things that "aren't being made anymore" or only in limited quantities in the first place.  Let's say "GI Joes" from the 1980s.  Say some lucky buyer cleans out a storage unit that hasn't been touched in 40 years and is full of original GI Joes.  It would be dumb to sell those GI Joes off in lots of 10 because while you might get that initial "shock" surge of sales eventually you are flooding the market and the value drops significantly.  One at a time over the years is best because nobody knows how many you have and you're not creating other "resellers". 

[movieman630]

My point is you won't sell them all because you're creating your own competition and flooding the market.  It's a lose, lose situation.  You'll end up sitting on a good portion of them that you can no longer sell because you made them "worthless."

[dhbookds]

lol, you changed the goalpost........ I sincerely doubt anyone is going to find 30,000 GI joes in a storage unit.....but if he finds 30/300 and sells all at once at his desirable profit margin.......it's a win for him.  I doubt he's concerned about future sales because there's no guarantee he will find such a bargain again........

[chevymontecarlo88]

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@movieman630 wrote:

 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.

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This is a great way to corner the market and can be a great buying opportunity. Its hard to say what motivates sellers and/or buyers. The other option of pulling like inventory (until market adjusts inventory/price) you have listed is another great option. I will admit its a bummer when you have something cool and once you list it, someone else under cuts you. That being said, i can't say that i am not guilty of doing that (want to move an item and price it the lowest available) either. 😉

[movieman630]

It's just an example of what I mean.  I don't mean nails, screws, solo cups, beach chairs, etc. 

[luckythewinner]

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.

Unless it does make you long-term gains and you do sell them all.

[mr_lincoln]

@movieman630 

I wish that would happen on Ford F-150 4x4 pickup trucks so I could get one for a ridiculously low price ... but that ain't happen' ... 

[movieman630]

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

[movieman630]

No, the automotive industry is smart.  They just take the "extra" used vehicles or overstock and send it overseas somewhere or scrap them.  If they allowed every single used vehicle to remain in stock and in the country we'd all be able to buy a used vehicle for a few thousand dollars (you know like back in the good ol' days). 

They can't allow that anymore.

Actually it's one of the main reasons the "car dealership" tyranny hasn't been ended yet.  There's really no reason why we shouldn't be able to buy a car direct from the manufacturer like everything else.  But that would leave a whole lot of used vehicles on the market and that would drive down prices and demand.