If eBay is feeling hurt by the economy, then you know it must be bad.

For the first time in 10 years, sales dropped at the San Jose, Calif., company, according to a story in the New York Times, with revenue dropping 7% to $2.04 billion. It's Marketplaces unit, which includes the core eBay auction site, reported a 16% decline in revenue.

It reported that its profit fell 31%. Ouch.

The Times reported that the online marketplace company made considerable efforts last year to reduce its dependence on its auction business, where growth has slowed in favor of fixed-price sales.

I guess bidding can be fun, but I never understood how eBay, or any other company, can make much money from auctions. As a shopper, I want a fixed price that is fair. If I don't like the price, I'll go somewhere else. If I want to haggle, I'll go to a flea market.

Maybe as part of that theory, gross merchandise volume, the total of all transactions on the eBay Marketplace, dropped 12% during the quarter, its second consecutive quarter of decline. If shoppers aren't getting tired of eBay, then they must have less money to spend shopping online. When the economy turns around, I'll bet eBay will be the first place people go to buy a new watch to celebrate.

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As a seller on ebay since 1998, I am of the opinion that ebay has basically shot itself in the foot. They have created so many barriers to dealing that their worst than the Federal Government. They have regulated themselves into a downward spiral that seems to have no end. In the beginning they start out with the concept that people are basically good. Now it seems that they have gone 180 degrees and now their model seems to be that people are basically bad. I decided to stop doing ebay because now they have created a system where if you don't live up to a certain standard (their standard) of sales volume they now make a seller wait up until 21 days to get their money through paypal. I understand that they want to make their buyers happy, as they should, but if a seller does everything to rectify problems and and has a good feedback record, they shouldn't tie up the sellers money like that. Many sellers sell on behalf of consignors, and consignors don't want to wait that long to receive their money. Eventually they stop consigning merchandise to you. I'm sorry to have to let ebay go, but I think I've had enough.

December 06 2011 at 11:17 AM Report abuse rate up rate down Reply