At Capclave last year, there was a panel on 'ways to use unpublished stories.' During that panel, the panelists discussed the "I'm sure it's good, but nobody will buy it" problem. Interestingly, some of them seemed to favor reconsidering the "I'm sure it's good" part after only a few rejections. One panelist--I believe it was Laura Anne Gilman, but I was taking notes very quickly so it might have been another panelist--said that if you get one rejection, maybe it's just the editor not clicking with the story, but by the time you get to three, it's more likely to be a problem with the story that you should identify and fix. So after three or so rejections, it's a good idea to take another hard look at the story, maybe get some feedback, to see if such a problem exists.
I can see the merits of this advice, but like all advice (including mine--shock horror, i know
) it might work for you, it might not, context and situation might make it more effective or less effective, etc.
It's all a balance thing, imo, and probably dependent on where we sit on the writing tree.
If we regularly sell to the pros and get 3 or 5 or how-ever-many-we've-determined Rs on a story, then yes, it may well be time to revise and rework. But if we don't sell regularly to the pros, then maybe not. For example: say my typical subbing order goes Clarkesworld, Lightspeed, Asimov's, F&SF, tor.com. If they all reject the story, should i be worried? What if it's then rejected by Shimmer, Strange Horizons, Arc, Interfictions & LORE? Nope, i still wouldn't be rushing to rewrite, unless i've gotten definitive feedback in those rejections that i can use.
But as i say, different writers will operate different ways.
Some writers prefer getting feedback on stories before they send them out, and then once they're sent out moving onto the next, only rewriting if they get a request or strong editorial feedback from multiple venues that there's a problem (i used to be strongly in this camp).
Some writers send stories out, and then get feedback after a certain number of rejections if it hasn't sold.
Other writers just write stories and send them out, never looking for feedback and only rewriting to editorial request (i'm heading more into this camp, though i flit between this and the first a fair bit still).
And others have other processes
We've all got to find (and do) whatever works for us.
As an aside: While i'm typically a person who likes to write a story and move on, for the first half of this year, my W1S1 challenge does consist of heavy rewrites on older stories, and them getting them back out there. Typically, though, these are stories i knew there were issues with but sent out anyway. I had a real issue up until recently with sending out stories way before they were ready--i knew it most of the time, too, but was just too eager; so, in another sidenote: i'd advise trusting your gut if it tells you a story isn't ready yet, because your gut is usually right.
Anyhoo, i'm rambling, and i should probably get back to the spreadsheets that earn me money.