eBay as a "tax ignored" channel for reselling chinese imports is screwed. But I would have thought that eBay as a place to buy cheap 2nd hand stuff would do quite well post-crunch.

Pity they've been squeezing the individual auctions out in favour of becoming a retail aggregator.

Last I heard, while the plunge in consumer confidence was causing widespread pain in the general retail sector, the budget end of the market is experiencing something of a boom. Name brands are being dumped for the generic labels.

I see no threat to eBay or Amazon there. They are both places people turn when they are willing to forgo quick access in return for a lower cost. And cost is becoming far more of a differentiator.

If there is a threat to eBay, it is not from the property bust, or credit squeeze but from defection of sellers getting increasingly fed up with the increasing costs of doing business through eBay.

In recent weeks I have, for the first time, started to hear non techie people around me discussing alternate online auction sites. If eBay lost their dominance of the online auction market, I think it will be their own doing and not something they can blame on external factors.

Much of the financial reporting about this has been recklessly hyperbolic. They see high LIBOR or TED spreads -- people still trading credit instruments at high volumes, but with historically high risk premiums -- and in their articles this turns into credit markets "freezing up." Think of it as a trust network with the trust ratings for institutions holding mortgage paper having dropped. As a result credit flows are being diverted away from peers who may hold bad mortgage paper to the big commercial and central banks (who also often hold this bad paper but can presumably absorb the risk, if anybody can). It's a flight to safety that, temporarily at least, snubs peers and favors the big central entities.

To avoid a worse credit crunch we need ways to rapidly discover the smaller sound institutions (i.e. those with many assets but little mortgage paper) and for those institutions to grow quickly to make up for the decline in credit from the shakier institutions holding the mortgage paper. A high risk premium combined with a sound counterparty means high profits.

Your observations of a particular class of niche items on eBay over a two month period would probably find similar results over any two month period and any category of niche item. Niche markets have a wide variability in both supply and demand on eBay. Dealers who specialize in a niche will buy at the low end of the range and sell at the high end. Such dealers always place their bids using a snipe engine, which places the bid automatically in the final seconds of the auction. Auctionstealer.com gives three free snipes per week. I've used them for several years and found them to reliably place bids for me within the final 10 seconds of the auction.

No, I don't think they will collapse, because they very well might be the two recession-proof industries. Either that or they know something that we don't.

Plus, you have the rise of sites such as craigslist that are cutting a swath thorough the sector because they provide local products with no fees or overhead.

Or it could be the best case scenario and people are spending less money on stuff they don't need and more money on things that matter. The money will end up somewhere, and the market cannot stay static forever.

It's now Jan '09, would you consider them tanked yet?

Ha, yes. when I wrote that it was 23, down from a long term 25-30 ... now it is down to 13. So, yup, tanked.

Actually I wouldn't profess to any real trading acumen here. I was just using ebay at the time, and the thought struck me.