Is the credit crunch that bad ??

[Candra]

AAAAARRRRRRGGGGGGGHHH !!!

 

Is anyone else having the same problems ?? My sales have really slumped over the past couple of months, is this affecting anyone else ?? I'm assuming its this worldwide depression I keep hearing about. Most of my sales come from the US, and I'm getting hardly a fraction of bids that I used to get.

 

Anyone else with the same experience ?? Or with a conspiracy theory as to why it's happening ??

 

C.

[joshuaslater]

It's a depression. Everything is going up, food, gas, utilities, and healthcare, and salaries are not keeping up. Every news story is something worse, so I would hold on 'cause the ride's just beginning.

[Joe Kutz]

The exchange rate is what is harming your sales from the UK to the US. No depression - no credit crisis - no recession. There are local economic factors which may be affecting some people, but over all - the economy (US and globally) really isn't all that bad.

 

Food prices are affecting developing countries to some extent (but no actual shortage of food). Gas prices are affecting developed countries to some extent (but no actual shortage of gas). Credit is mainly affecting idiots who bought more house than they could afford and on top of that bought in on an adjustable rate mortgage (remember currently the "credit crisis" i.e. - foreclosures, only effects less than 1/4 of 1% of US households...not much of a crisis). Worse case scenario you might see a 6-12 month down turn like we saw after the dot com bubble popped. People will have to shift from trying to scheme on housing to trying to scheme on something else...probably the green scheme (I'll take wagers on the green bubble popping by 2012).

 

For those who actually are interested in the economics (as opposed to the "sky is falling" reporting that news agencies like to push) - take a look for the actual cause/effect relationships in the various sectors of the markets. Unlike other periods which could be considered recession or depression - there is no real world cause to what is currently going on. Everything is panic and panic begets panic. And 24 hour news channels like panic, because it gives them something to talk about for 24 hours.

 

Over the past year, sales have been steadily climbing and a lot of the items which I sell are considered high priced by a lot of hobbyists ($100+). Last quarter I posted $20,000 in sales, which was up by about 20% over the previous quarter and this is still only part time for me. The nice thing for me is that the weaker dollar makes my products more attractive to overseas customers, due to favorable exchange rates.

 

Stick in there, and try not to fan the flames. You might consider banking a few items that you would normally be selling for a few months till everyone comes to grips with the fact that the world isn't coming to an end - and the sun will still continue to rise.

[vutpakdi]

The US and world economy as a whole are not experiencing a depression. Prices are rising, wages are roughly stagnant, but it's nowhere near the level of the worldwide depression of the 1930's. But, unemployment rates have only risen slightly and prices, while generally rising, haven't generally risen dramatically.

 

People are cutting back on discretionary purchases and that includes commissioned minis.

 

But, it's not a depression, and in most/all developed nations, the unemployment rates and level of inflation are much lower than in countries that really are in severe economic straights (the worst example being Zimbabwe, but others include Iraq, "Palestine", and a number of other countries in Africa). Unemployment is still relatively low.

 

Ron

[morganm]

My perspective as a US customer who just bought a few gaming items from Europe. It was asinine! I paid almost twice as much as the listed price. I'm not laying any blame on vendors or manufacturers here either. They were things I REALLY wanted and couldn't find any cheaper so I bought them and bit the bullet on it. Instead of paying 15.00 pounds or euros for them I paid 32.00 USD. Everything else now I'm buying either locally or finding priced reasonably in USD. I simply won't be buying anything in a currency higher than the USD until the USD value climbs back up.... or if I simply can't restrain myself =P However after paying those last two bills it's given me some hard reasons why not to order things overseas. Must be nice for those ordering things priced in USD and paying in Euros! Essentially that's why US exports are doing so well now and why foreign companies are building factories here.

 

Don't here that in the news much eh? All you hear is "OMG JOBS GOING OVER SEAS WHAA WHAA". How about the new foreign automotive plants that opened up in the US? That's providing jobs for Americans! I'm with Joe; people think the economy is so bad because of mostly psychological reasons. It's too bad McCain had to throw his old economics guy under the bus for saying so much. I guess it works to Obama and McCain's advantage to paint more people as victims who need help from the government and they are here to save the day! Turn on the radio, tv, or read a news paper. All you hear is mortgage crisis this, jobs going over seas that, credit crunch crisis hysteria, and to pad this you see the gas prices shoot up 400% and food prices 50% in the last year or two. Look at the numbers though; 98% of people are keeping up with payments on credit cards and less than (as Joe pointed out) 1/4 of 1% of US households are in foreclosure. I'm not saying it's all sunshine and roses here but it's no depression or rescission. I agree with vutpakdi (and others I've heard explain it) that it's more like "stagflation". The combination of a stagnant economy with out of control inflation. Wages and revenue is getting stagnant, commodities are inflating in value, and the strength of the US Dollar is weakening.

 

It's no wonder Congress' approval ratings are trailing the big bad evil abominable succubus and most venerable war lord; Premiere Bush by a long shot. I could just slap The Fed and Congress right now; but that's for another thread I think =)

[kristof65]

As a US citizen working for a Canadian company, I've noticed that the exchange rate is having a huge effect. The falling US dollar has affected our buying power with most foriegn companies - and while that may seem to be a downfall, it's having it's a positive effect, too.

 

For example, I have the contract work I have now because it's actually cheaper for that Canadian company to pay me and for my office than it would be for them to hire a Canadian of equivilent experience to work in their shop. Even though they bought out the US company I previously worked for and closed it down, they're actually providing more jobs inthe US now than they were before because they're switching to primarly US suppliers. Most of the materials and parts they're buying are now coming from American shops, where as before they would have been built in Canada. Which leads to the situation where they are buying their source materials and parts in the US, shipping them to Canada for assembly, and then selling between 1/3rd to 1/2 their production back into the US.

 

As far as ebay and other auctions are concerned - I think that US sellers are now preferred by both US and foreign customers because of the exchange rate. The last spat of hobby stuff I put up on eBay was mainly going to foreign customers - even if like items were being sold in their own country!

 

So I can see how someone located in Canada or Europe could see a drop in auction sales, particularly if the bulk of their sales were to US customers. The US customers just can't afford as much because of the exchange rate, and European/Canadian customers have a LOT more buying power when dealing with US sellers.

[Joe Kutz]

Yep.

 

Funny bit of it all is that there are several lines of miniatures which I deal with from the EU markets which I sell back to European customers for less than what they can buy them locally...including the extra $20-40 or so in shipping.

 

Personally I wish that the politicians would take there hands off the wheel and stop trying to "fix" things. They are just waisting more of my taxes, and delaying the inevitable. One thing to keep an eye on though, once they do stop messing around - the dollar will bounce back rather quickly since the money which will be lost, is funny money that will actually disappear. Once that happens, related indexes will run into a bit of a wall and fall like rocks.

 

Remember, as it stands right now - the Euro is about twice the value of the dollar compared to 2000 price points. Since a lot of commodities are tied to the dollar, when the dollar goes down...those commodities go up in apparent cost without any increase in demand (oil for example...gold as well...tin too...and corn...and...well you get the idea). Conversely when the dollar goes up in value, the apparent costs of those items will drop. Now that drop in commodities prices will likely cause an increased loss of that funny money, and increase the value of the dollar even more.

 

Right now we are about a year into a two year cycle (assuming Congress doesn't screw with things too much more) which normally follows bubbles popping. You should actually start to see the shift in the markets and dollars value fairly soon. You can go back and take a look at the charts from the last couple of bubbles which have occurred to see how the markets will react.

[Candra]

Hmm,

 

Some very intelligent responses, I'd never seen the bigger picture that you guys have pointed out, just what's in the Daily Mirror.

 

I suppose everything will sort itself out in the long run, in the meantime, it's just 'suck it and see'. I actually sell in USD on ebay as it encourages the US bidders, i think, because of the exchange rate - and yes, it's nice for europeans buying from the US at the moment

 

thanks for the responses,

Reformed Chicken Little

[Beowulfthehunter]

I do not want to get political, but I can usualy judge things by my e-bay sales. This summer I have listed about 100 items, give or take. Of those 100 items, 90 have sold. Many of the miniatures I have posted have sold for a great deal more then what other minis are selling for.

 

In terms of private commision work, I have been doing an average ammount. I know prices have gone up, but I have been buying a great deal. I know I have looked for deals and and try to maximize my dollar.

[Joe Kutz]

Just some food for thought - today the GDP numbers for last quarter here in the States came out. 1.9% growth on the quarter in spite of the best efforts of politicians and media (who were already saying we were in a recession back in February).

[Chrome]

Thanks for the great read guys. I'm not much on the theory of economics, but when I see things like the record-setting profits The Dark Knight made, the thousands of people who camp out over night for Wiis, X-Boxes and iPhones, and the fact that the video game market out-grossed Hollywood last year, I really have to doubt we're in a recession. People have money to spend, they're just not spending it wisely.

[Dragon Snack]

And don't forget that, Economically speaking, you need two or more successive quarters of declining GDP to technically be in a recession...

[morganm]

Just some food for thought - today the GDP numbers for last quarter here in the States came out. 1.9% growth on the quarter in spite of the best efforts of politicians and media (who were already saying we were in a recession back in February).

 

I was pleasantly supprised to hear that on the radio yesterday. Had to sneak over to the AM band to find anyone talking about it!

 

Then today what do I hear on a different station? Whaa whaa economy is shedding jobs, general motors blah blah, the economy is contracting boo hoo... the drum beats on.

[buglips*the*goblin]

If you're talking eBay sales, it's probably a combination of things.

 

eBay has brought in a lot of changes which have shaken things up. For good or for bad, so many changes in such a short time do have the effect of creating confusion in the marketplace.

 

I haunt the eBay U.S. boards as my primary spot, and I think on the buyer end two things may be affecting user confidence.

 

The first is eBay's response to fraudulent offers by anonymizing all userID's. This has been going on for a while, and I'm still amazed at the sheer number of people who are confused by this and think something fishy is going on. It's a pretty high percentage of posters, and only a small fraction of users post on the discussion boards. So there could be a lot of people confused/suspicious who don't post and just curtail or suspend their buying.

 

Second, and perhaps the worse of the two, eBay keeps volunteering people into its New Search Experience. Which, I can attest personally, is virtually USELESS. It's also frustrating and unpopular, and the "opt out" link is hidden away at the bottom in tiny text.

 

These two factors alone would have at least some negative impact on sales, but combined with reduced consumer spending it's a recipe for slumping sales.

 

However, this is not a uniform effect. Some categories are shrinking or suffering more than others, some categories and items still do well or even better. So the above observations are only some possibilities as to why sales might be slow.

 

Of course if you're not talking about eBay sales, then none of it applies anyway.

[Enchantra]

Me and Tanker22 have noticed a slump in Ebay sales. He posts things for me for sale and has noted that things of mine and his that before used to go for at least the asking price if not more, now don't get a single bid. It's not that there is anything wrong with the product - people are just pulling in their purse strings tighter and spending their money on things like food and gas...Not like I blame them. If I had a family and had to feed them and pay other bills to support them and the cost of food kept going up when wages aren't, I'd be watching where I spent every last penny as well.