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Sun Aug 14 2011 23:27:27

How Will the Economy Affect Online Sales?

By: Ina Steiner

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Several articles were published over the weekend about how a bad economy could affect sales growth. For most retailers, the fourth quarter provides a major part of their revenue for the year, so this is a particularly poor time for bad economic news. However, if there is another downturn, there could be a silver lining for some.

The New York Times' Claire Cain Miller quoted Forrester Research analyst Sucharita Mulpuru stating that the flash-sale model has not turned out to be lucrative, and most flash-sale sites remain, unprofitable. However, Miller writes, "Analysts said that if stocks continue to tumble, consumers might cut back on spending yet again, which would be a boon for flash-sale sites."

Stu Woo writes in Monday's Wall Street Journal that, if there's a double-dip recession, online retailers are better poised than brick-and-mortar stores. Conventional wisdom says there would be continued growth in online sales, but that growth would slow in a down economy.

Woo writes, "Analysts say online retailing giants such as Amazon, which grew swiftly during the recession, and eBay could emerge as winners from another slump."

While performed very well in the last recession, eBay - which had always been thought to be recession-proof - did not fare as well as it had in previous economic downturns. eBay management says things are getting back on track after a multi-year initiative to turn the site around (Wall Street analysts agree, though longtime eBay sellers do not), and certainly a lot has changed in the past 3 years.

One thing in eBay's favor: the sale of gold and silver on its site. As the Associated Press wrote on Sunday, gold and silver sales on eBay has been rising steadily over the past several years. One month after we ran Brian Cohen's article, "Collectors Corner: Mining the eBay Exchange" (link), eBay launched a "bullion center" to make it easier for traders.

Sometimes small sellers have a good handle on where the economy is headed. Write your predictions for your holiday sales - good, bad, or ugly? - and what you're doing to prepare your business for whichever way the wind may blow.

Comments (27) | Permalink

Readers Comments

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: buck efay

Mon Aug 15 00:20:23 2011

Oddly enough, sales picked up right after the deal was announced & doubled last weekend. Then dropped again to normal levels when the market was going nuts all week. I think I should have a better year then last now that we have a much larger inventory on Amazon then a year ago & I'm busily listing more items daily for the prime season. Sales on Ecrater & Bonanza are still slow but steady & even Ebay sold 15-20% last 2 batches of 50 free auctions, up from the miserable 9% they have been sitting at almost 2 years there now. So I'm hopeful for a good season but who knows what tomorrow will bring? People need to calm down & realize the dollar is still #1 currency. Online sales can only be helped by the B&M retractions & impossibility to find anything unusual in any retail outlet. Local stores here are a joke for finding anything out of the ordinary.

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: JoyfulA

Mon Aug 15 00:40:47 2011

eBay failed in 2008 because it was trying to go upscale with diamond sellers and chasing out the attic sellers when everyone was broke and looking for bargains. Wal-Mart made the same dumb bad-timing mistake and hasn't recovered yet either.

I sell old books, and holidays aren't prime sales times for me.

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: 10% str

Mon Aug 15 01:09:26 2011

If this week sales are any guide it will be poor. My sell through rate has droped to a shocking 10% and the listing fees are eating up most of the profit. 900 auctions and only 92 sells is terrible. I sell glassware and porcelain  collectibles.

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: Rich

Mon Aug 15 01:33:32 2011

Ebay sales have been hurt since the depression began in 2008.  We're in the early stages of what will be a worse depression than the Great Depression.  But during the depression low priced entertainment and basics like household items and food and beverages held up okay, so Ebay sales for some sellers will be okay.  Consumers will be lookig to save money so internet sales of low priced items and the sellers who offer good deals; will be the ones who thrive.

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: John

Mon Aug 15 06:20:03 2011

I noticed something on the boards recently. There were several complaints by sellers who had been ripped of by bad buyers. They were sellers of silver bars or scrap silver.
With the economy the way it is the sellers on eBay will see more of this type of criminal behavior by bad buyers.
Since eBay sees buyers as their salvation, and does nothing really to stem the flow of increasing thievery from bad buyers....In their eyes the sellers always wrong and therefore takes the hit.
Buyers who look to game the system will see that eBay sellers of scrap, gold or silver, especially the small sellers are rip for the picking.
Because of the bad economy sellers will be forced to sell not only scrap silver and gold but pieces of sentimental value. Buyers gaming eBay's system realize this and will take advantage here as well. eBay's current policy allows such behavior, and john donahoe in my opinion walks and sleeps with Lucifer  

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: JB

Mon Aug 15 07:16:35 2011

The analyst cannot see past the numbers. They have no clue how the numbers have gotten to where they are, by what means or in house plan of manipulation, so their positive remarks are moot.

What really makes me laugh is wall streets look at flash sales and jd's insistence of moving away from auctions to buy it now's. Both sale practices/definitions new each other in 2008.

If flash sales are not working then how the h_ll can a buy it now  policy that jd has been pushing have worked. Buy it now's was a failed eBay pr from the beginning as nearly everyone has commented on at one time or another.

This recession has been ongoing since the real estate market tanked, and the banking system has looked to bankrupt the country which it appears it is succeeding in.  

I am willing to bet that any reputable seller of gold who has an account on eBay also sell on amazon as well.

Amazon knows eBay has a serious problem with their poorly executed feedback system, their grossly misunderstood  procedure of biting the hand which feeds them( this applies to both seller and buyer), and eBay's lack to proficiency.

You cannot treat your sellers as employees, and their buyers as your buyers and expect no repercussions from such a poorly designed business plan.

Amazon understands this eBay does not.  

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: anyone out there

Mon Aug 15 07:53:57 2011

So many business will be competing for the almighty dollar online sales this quarter.

Sales will depend on how much you inflate your prices to make a profit.

When you are selling a widget for 10.00 and your neighbor is selling the same widget for 8.00, who do you think is going to sell it.

Complain all you want as no one is going to listen to you.

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: John

Mon Aug 15 08:14:14 2011

I buy from the same seller(s). If my seller is selling a widget for $10, and your seller is selling one for $8, I buy from my seller because I know him and not yours.
This is no reflection on you or your seller or anyone else's seller for that matter.
It only means I am comfortable with my seller, I know him/her, and know what to expect whether a problem occurs or not. I am comfortable with paying a bit extra to maintain a long term relationship. I know my seller will take to up-most care in keeping me as an account.

I never buy from neighbors or family. I wish to maintain a civil relationship with them both and in many cases they could be the first to screw you. Have a nice day : )

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?


Mon Aug 15 10:20:45 2011

I think when money is tight then shoppers try to find the best deals and turn to sites like Amazon. Better price than discount stores along with the super saver shipping.  Saves gas and time. I shop Amazon a lot for everyday items I used to go to Sam's and Costco for, I even ''subscribe'' to many items for automatic shipping for even better savings.  Amazon is still the best.  Sorry ebay but you have too many hoops to jump through before you can find what you want....  

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: JohnGermaine

Mon Aug 15 10:32:29 2011

As stated by others, the economy started to tank and has only gotten worse since 2008. eBay is lost in space as usual from everything I read, and by the way I left there a year ago last April when they decided I worked for them. I didn't work for them, I work for myself. I sell at Bonanza now, which is an up and comer, and is honest with real support in this country with no canned responses. However it is starting to look to some of the mistakes eBay made but luckily the sellers have been able to point this out to them in forums, they ask for input over there, and it seems they are listening.

Making it through this Depression is going to be difficult for anyone, so your customer service will be your best asset. And expect this ''down turn'' to last another 10 years if this pace continues. The Uber Rich want all of the money back and they are doing what they have to so they can get it. They have most of the money now so crashing what's left of the world economy will accomplish what they are after. A sad state of affairs greed can be, but it is what it is. If they get away with crashing what's left of our economy, then this will continue for 20 or more years. Hang onto your hats, it's going to be a wild ride.

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: John

Mon Aug 15 11:30:29 2011

I should have added to my previous comment, that I do not purchase on eBay and have not since 2009. I stopped selling on eBay in 2008 and made a grand total of 5 purchases in 2009.
I have however stayed in touch with previous sellers, and purchase from time to time off eBay personally. My buying habits in that comment,  reflected how I did business when buying on eBay.
I have witnessed many changes with eBay. I remember single digit insertion fees when selling. (pennies). I remember when feed back was not only mutual but anyone could place feedback for anyone at anytime, even if no transaction occurred. I remember when email addresses were common place and if you forgot a sellers id, you only copy and paste their email into the search sellers box and their id and listing came up. I remember if the site went down  for a length of time that effected any sellers closing auctions to within a few hours, eBay automatically refunded everything to the seller. No need to look, no questions asked.
That was when eBay was operating under Pierre's original plan or ''business model''. Once Pierre signed over his operating rights to the Luciferian circle allowing the circle to implement their business model things changed to the dark side.

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: Ang

Mon Aug 15 12:24:53 2011

not only are my sales at an all time low on Ebay but the scams by Ebay buyers that have been waged against me have increased dramatically. So decreased sales increased criminal activity that Ebay continues to encourage. BTW I sell on several other venues and I have not been stolen from at all thru those. Not one single theft or chargeback except on Ebay where they continue to increase as sales go down. It will only get worse as people get desperate. And why not? If a penny-ante small time thief needs to make a buck why wouldn't they go to Ebay? If I was a criminal and I found out how easy it was to get free money and free stuff from people on Ebay, and then I found out that no one would take any sort or recourse against me, I would be crazy not to go on a spree. It's like handing over a big pile of cash. The best things for a thief are the facts that the authorities refuse to investigate and Ebay and Paypal dont care because they make more fees as crime goes up so they will let you steal with impunity. I had a guy try to steal $400 lamps from me last week. Paypal told me that many clients have different names and addresses then what's on their accounts and that many people really do live in a far away foreign country that's not on the account and ask for sellers to ship there so it's probably totally normal. I said "this man wants me to ship this to Taiwain. He won't even confirm the name on the credit card. I found out that the address on the account is an empty house. The guy is a thief." Paypal told me they saw nothing funny about the transaction and that it was probably perfectly fine. Seriously?! They knew good and well that I was being stolen from and they actually encouraged me to follow thru with the transaction. When I said "What happens when he claims NASD on me, then what?" Paypal said that there would be no recourse for me if that happened, but they just don't see that occurring. Sales are way down and headaches way up

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: Red Ink Diary This user has validated their user name.

Mon Aug 15 15:13:13 2011

Like JohnGermaine I don't expect this to be over soon. The last economic downturn in the 90's taught me not to use credit, I may be small potatoes but I OWN all my stock. It is one less thing to worry about.

I believe this economy is teaching people to differentiate between 'I want' and 'I need'. I have noted a decline in sales of fripperies but sales of well priced useful items are holding up, in fact a small increase over this time last year.

Personally, I am not looking at collectibles very much, things I used to buy frequently, mainly pottery and glass. As a seller I understand the cost of shipping, as a buyer it makes me question if I really need the item and of course the answer is usually 'no'. I still buy a lot of books. Price including shipping determines where I buy but I will pay a little more to buy from a good seller, I don't buy from questionable sellers at all.

On eBay I used to have repeat buyers, some of them still buy from my website. On Bonanza 90% of my sales this year have been one time purchasers driven by Google. Maybe one in a hundred leaves feedback on the site, a slightly larger proportion leave a review on Google.

This changing sales pattern means that I do not need to refresh my inventory as heavily. I bought my holiday inventory months ago and I bought less than in previous years. For the most part it is lower priced and lighter weight so I can continue to price competitively while including shipping in the price.

2006 was the last good Christmas on eBay, 2007 was worse all year, other than my repeat customers I was invisible. 2008 my first Christmas on Bonanza was about the same in gross sales as 2007 but my profit was higher due to the fee structure. 2009 & 2010 showed small but steady improvement, I don't expect 2011 to be a blockbuster either.

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: Brian Cohen
Web Site

Mon Aug 15 15:54:15 2011

Recently Closed

60 pounds of RAM for Gold Recovery
$980 +$30 S&H

12 LBS of RAM *Tips* for Gold Recovery
$1,500 + 30 S&H

But let's try to count how many Jelly Beans are in the jar...

Let say that the average weight of a single RAM in the 60 Lb auction above is is .8 Ounces (See Amazon ISIN B000F7QRTG  --- RAM from 2004 sounds old enough that it just might wind up as surplus)
60 pounds = 960 ounces
960/.8 = 1,200
1,200 peices of RAM ... or about a $1.20 for each stick of RAM. This sounds really cheap...i'm probably over estimating how many sticks there are... probably the best way to find out is to ask the seller directly----  Approximately how many RAM sticks are in a 60 lb box?

Anyone else want to guess... or know the answer?

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: John

Mon Aug 15 16:58:29 2011

Impossible to determine, A safe guess would be 50 cents worth of gold per stick. Less refining fees, but I think there would be less then that when all is said and done. There is some silver and platinum that can be removed as well. If I read you correctly they paid a grand for the 60lb listing and can retrieve about $600 if there is 1200 sticks and the 50 cents is accurate. Again less refining costs etc. It is all estimated though and the real numbers will not be known until the gold is removed.

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: Brian Cohen
Web Site

Mon Aug 15 18:55:28 2011

My numbers appear right
First video I queued it up to the eBay reference
Silver Palladium Scrap Recovery from DDR Sdram RAM PC Computer Memory CPU Motherboard

might be 4 grams per kilo

follow up here

0.6 – 0.9 grams of gold per 100 RAM units

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: Brian Cohen
Web Site

Mon Aug 15 19:17:02 2011

slightly off topic but perhaps worth bringing up here:
if eBay were visionary the time is ripe to start their own stock trading venue.  Although Pink Sheet Penny stocks are generally regarded as being rife with fraud, OTC Markets group has tiered their offerings including OTCQX with prestigious global companies (American Depository Receipts more commonly known as ADRs) that do not file with the SEC
i'm sure a deal could somehow be brokered just to acquire this top tier exclusive use of the technology and disassociate themselves from the other penny stock tiers

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

This user has validated their user name. by: Tula

Mon Aug 15 19:29:42 2011

@Red Ink Diary is correct. I think sellers who deal in "need" items vs. "want" items, like collectibles, will do all right. I do worry about all those folks needing cash who turn to eBay to sell things of higher value, like gold or silver. With all the thievery about on eBay, that's a recipe for disaster for desperate newbies who may see their items and money vanish into the ether.

I stick to light, low-cost items for my eBay inventory and move the more expensive stuff elsewhere, where it's less likely to be targeted by scammers. It's too bad eBay looks down its nose at sellers of used goods, since that's the kind of market that thrives during bad economic times. They were caught flat-footed by this recession and have been slow off the mark in changing their focus away from all the "bling" they've been so keen on attracting (and which is the first area where people cut back when dollars are tight).

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: John

Mon Aug 15 19:49:46 2011

@ Brian

I guess it is all debatable. I suppose  it depends on a lot of factors. In researching myself, I came across your last link several months ago.
I also think it depends on the age of the rams. Older rams will be plated heavier I would believe. I saved a link from when gold was at $700 an ounce.The 3 quotes in the forum from a person named Chris Owen, appeared  knowledgeable. His estimate was based on how thick the plating would be on a ram. I took that estimate and times  it by 4 and added a few cents + or -. This was how I understood it anyway.

How Will the Economy Affect Online Sales?   How Will the Economy Affect Online Sales?

by: John

Mon Aug 15 20:19:03 2011

I come up with approx 796.00 on the 1200 rams in the 60lb lot. After refining fees in NY, which I believe to be higher at around 35%.

The .6 cents quoted at the bottom of Chris's comment times $400 (their estimate at the time) is .24 cents per ram then again times 4.25 ( for the current gold value today at $1700.00....) equals 1.02 for each ram times 1200 rams equals $1224.00 for the 60lb lot. Now take that $1224 and times it by  35% which is what I believe the refining fees to be gives me a total of 795.60 when all is said and done. I could be wrong but think I am close based on the  plating thickness quoted by Chris.

If that thickness is correct, taking it into consideration of the time factor and spot price which changes daily, refining costs reshipment etc etc, I don't see it as a good deal. IMO.

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