eBay's Weakening Bid

| About: eBay Inc. (EBAY)

Monthly spending at eBay (NASDAQ: EBAY) is down 30% from January through October 2008. Geezeo customers spent an average of $163.56 during October, compared to $232.50 spent in January 2008.

This data is according to the new Main Street Spending Index (MSSI) compiled by Geezeo, a personal finance Web site that helps consumers track their spending.

 

The number of transactions has remained strong at approximately 2.5 purchases per month. However, the amount spent per transaction has decreased significantly from $95.05 in January, to $63.92.

 
 
Although eBay’s customers are spending less, the overall market for second-hand goods has recently risen as consumers tighten their belts.

Sales are up at local resale shops nationwide. According to the national Association of Resale & Thrift Shops, 62.5% of its members reported higher sales in August. Goodwill has seen a 6% increase in retail sales for the first seven months of 2008 versus the same period in 2007.

With more people searching for a bargain, customer spend at eBay may stay at deflated levels until the economy turns. However, given their strong customer loyalty and retention, eBay is poised to make a comeback once the economy turns.

Disclosure: no positions