What Sells on eBay in an Economic Downturn

Consumers are still spending. They are just spending their money on different things.

Being a little older than the average person has its advantages.  I have been through about 5 of these recessions and so far all of them have ended.  This one may be a little deeper and a little longer than past ones but it too shall pass.  In the meantime, what does the eBay seller do to keep your business going? the answer may be in the stock market.

The market looks pretty bad but some companies have fared better than others.  Obviously luxury goods and high-end retailers are down –most of them more than the market average.  But other more basic companies, Kellogs, Wal-Mart and other consumer basics have not done as bad.  This points the way to a salient fact. Consumers don’t really stop spending in a recession, they just change their spending habits. 

Here is an example: Last Friday I drove by our local movie theater and the parking lot was empty despite several new movies that had opened.  But when I went to Blockbuster I couldn’t get in the parking lot.  I dropped our movies off and went inside.  All of the hot titles were gone and the line to check out was 15 deep.  We live in a very small town and I had never seen lines that long at Blockbuster.  This points to a salient fact. When a recession takes hold people tend to stay at home.  They still spend money on food and drink and activities they can do at home. I just saw a report that game sellers expect to see sales gains this holiday season. And when I dropped into our local kitchen shop I was chatting with the owner and she said her sales were much higher than she thought they would be. And it’s not only people buying for themselves. She told me she is seeing a lot of gift giving of items that people will use at home.

This tracks with our sales on eBay.  My sales of value items and items that can be used around the home are doing well. Our sales of discretionary items are down.

So what does this mean for sellers?  Here are some of the items you may want to look at selling in the coming months:

Entertainment: Books, movies, games

Apparel: Value clothing including off brand as long as its good quality and used clothing in good condition

Home: People tend to stay home and entertain at home, so cooking and kitchen items, small appliances and even specialty foods and gadgets should do well. You might think of an espresso machine as a luxury item, but I spoke with a seller of these who said she is doing great because people are more interested in buying a machine rather than paying $3.00 a cup at Starbucks (Starbucks stock in down to almost $10 a share from it high of in the 30’s.)

Baby Goods – People will always spend money on their small children no matter how bad the economy gets. But sales of high end baby items are tanking. Stick with the basics especially anything that is value oriented. And savvy moms will be purchasing good quality lightly used items.

Crafts: Craft items and supplies will continue to sell as people look for things to do at home.

Tools: home improvement items and supplies will do OK as fewer people buy a home and more people put money into their own homes.

Sporting goods – This is always a solid category but you may want to look at used and value items.  When the weather gets better in the spring I predict that hiking and camping goods will be hot if the economy is still slow as more people with visit state and national parks and fewer stay at resorts.

Toys & Hobbies – Once again parents and grandparents will always spend money on their kids especially on things they can do and use at home.

Collectibles — Very expensive collectibles will probably crash but collectors are a funny lot. Even in a recession their passions rarely cool. Prices will probably retreat but this can be a good buying opportunity for sellers especially in moderate to lower priced collectibles.

There are a lot of keys to running a successful eBay business, but one of the most important is product selection and the ability to be flexible. One thing every seller must do is to closely watch your inventory. If something isn’t moving or is moving very slow –get rid of it even if you have to sell at a loss.  Then put that money into items that are selling. Sitting on unproductive inventory is one of the fastest ways to go broke.   

See Also

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