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Author: sleejohnson Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 25817  
Subject: Re: EBAY's Price... Date: 8/23/2001 2:30 PM
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I'm not quite sure whether or not you're kidding

I was most definitely kidding, UR. But you raise an interesting point.

I've grown weary of this "logic":

1) If the economy does well, eBay does great, because more people have more money to buy stuff.
2) If the economy does poorly, eBay does great, because people will be looking for bargains (or, in your version, looking to sell their stuff).

These cannot both be true.


Setting aside the fact that I have never made argument 1 and only made argument 2, I'm not sure that both cannot be true. It seems to me that eBay may have high volumes in both a strong economy and a weak economy. However, I would expect the product mix available on eBay in a strong economy to be different than in a weak one. For example, in a weak economy, the product mix may be more commodity products where lowest cost is the primary feature. In a stronger economy, the product mix might include more collectibles and other non-essentials where the primary attribute is uniqueness, rather than low cost.

I submit that #2 is the more ridiculous argument; if people have less to spend, they have less to spend, period. Under what conceivable circumstances are people not looking for bargains? The assertion that they will only do so, or will do so with considerably more fierceness, during a recession, is ridiculous.

#2 may be less likely than #1, but not for the reason you cite. I submit that a significant portion of eBay buyers are not primarily concerned with price. I mostly buy antiques and collectibles on eBay that I simply cannot find without (literally) spending hundreds of hours in antique stores. What eBay does for me is save my time. Of course, given a choice, I would rather get items for a lower price. But the bottom line is that I am buying little indulgences for myself that I simply would not have the time to find if not for eBay.

Now, if things get tight for me, I might look to eBay more to provide necessities at a lower cost. What I don't know is whether I will be disappointed in eBay's ability to connect me with people who will sell me good quality "necessities" (auto parts, for example) at a lower price, including shipping, than I can find locally.

Slee


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