This isn't the case. I have one real competitor and he has around 5000 feedback more than I do. My products often show up before his, and I sell much more (of my product) than he does, but he sells other items as well.I was an ebay seller to for a few years, long time ago. I think it's harder these days to sell for profit on ebay. Their feedback rating is tricky. If your rating is less than your competitor's, your item will be displayed below your competitor.
My store specialises in a product, and I carry a lot more lines of this product than he does. His does not. I feel that some customers prefer a 'specialist', someone they can ask questions of & get an informed answer, or someone they can buy everything they need from the one store.
In saying this though, although I don't tell many people, I actually have two stores. One is my real store, where I sell the most product, the other is my 'junk' store. It has built up over time starting from getting rid of stuff from home, as I didn't want to clutter up the real store, and I've got a heap of stuff at home that needs to go, ranging from sporting equipment built up over the years from my family, cupboards of fabric, cupboards of leotards, etc.
Then a friend invited me to an auction that she goes to regularly, and I was hooked. I've now got all matter of stock, picked up at rock bottom prices. This store has more items than my real store, but does not make nearly the sales that the other one does, but that's fine, it ticks along & I slowly get rid of my junk. Once it's listed, it just stays there until it's sold, and it is really amazing sometimes what things sell. I haven't bought any new stock for over 6 months for the second store, but there's still heaps of stuff I've got floating around here to list, when I've got the time.
Sometimes it helps to keep the listings 'live'. For instance, if you have 100 of an item, then order more well before you run out, so you can upgrade the number of available product.
I think with small baby and another child, it might be too much hassle, especially if the older child is at school. The timing of your item (auction) is also crucial. And with feedback system, you only need one grumpy buyer to spoil the business.
Grumpy customers are a problem, but like I said previously, just be polite. Even if they annoy you. It takes more than one nasty customer to ruin a business, and you can get the feedback removed sometimes. And I NEVER use auctions. Everything is listed as Buy It Now, and will just sit there until it's sold.