Saturation is part of the territory on ebay and other auction sites.
If you try a new product, that involves risk and you could be left with a whole lot of stock. There are basically items that will always sell - but the mistake that many make is thinking that they are going to sell tons of any given product. In reality each seller is moving 4-5 of any specific item per month. Of course there are the exceptions, where someone has got such a low price on the product, or has risked a new product with success.
Even then within a short space of time other sellers will enter the market and you still run the risk of being caught with tons of stock.
I don't believe wholesale or bulk buying is a fool proof strategy for ebay. If you research with software like hammertap, you'll find products with a high % of sales to listings. Be careful of being taken in by that high percentage, you need to confirm that the volume of actual items sold is also relatively high like over 300 or 400 items sold per month. Once you check the number of sellers, you will find maybe 10-20 sales per seller in some categories.As long as you can be competitive in price and pay attention to your actual listing, there is no reason why you won't be able to perform similarly.
The strategy then may not always be in buying bulk. Calculate what you could reasonably expect to sell per month based on sales volumes, sell through rates, and number of competing buyers.
Use this data to determine which variety of products -- and that's the key, having more than one type of product. With a number of products selling 7-8 pieces per month, you could actually make a proft. You can use the data to calculate potential profit after fees and costs.
Many of our members on wholesalebuyersgroup looked for 60-70% sell through rate. Lets say you are selling bluetooth dongles and they have a high sell through rate -- that's great, but you would have to literally sell hundreds per month to make a living off it. Selling hundreds per month of any product is unlikely for a single seller. Add into it the effort of packaging and shipping 500-600 dongles at around $1 or $2 profit per piece and it's easy to see that we don't really want to be doing that.
Conclusion:
Research the highest volume sellers, not sell through rates.
Check how much competition there is in that line
Calculate what each seller could move in a month.
Calculate the monthly expected profit you could make on the product
buy enough stock for say three months supply - usually this will never be more than 50 pieces of any item.
Then you have to find supply at the right price - not easy for small volumes like that. Wholesalebuyersgroup was designed to accomodate exactly this- many buyers of 20-30 pieces buying different items, directly from China, as a group.
Perhaps I should get the group back up an running -- anybody interested?