How to deal with pissed competitor?

I’m kind of new to Amazon. I started pushing a few FBM SKUs in December for market research, pushed some FBA last month for a little more research before packing what I thought would be a months worth of a few SKUs.

I’ll try to skip all the details, my research showed a single guy operating out of a shared office space in Las Vegas has been selling these SKUs for years at super high margins, but he has no warehouse space of his own and does all 3pl/AWS/FBA or something like that. It’s got to be costing him a fortune, but he’s also making one.

Enter me and I start cutting him just enough to get the buy box using automatic repricing. It takes him a little while to notice and then the price battle starts. Most of the SKUs are low dollar items, but one is a $95 item that costs about $10. Friday he finally noticed and down came his price. Now I’m sitting here seeing that my last 8 all sold to the same person and the price is back to $95, and I know he’s not using automatic pricing.

I’m certain this is him buying up the last of them and going to open a return which I’m guessing will hurt our newer account. How do I deal with this problem? Just pack and ship more?