Obviously, none of dot-coms can claim it is absolutely vulnerable to the economic downturn, but it seems worse for eBay for its traffic is falling steadily even before the downturn as Nielsen’s data show below.

Traffic graph from Complete tells the same story and points out the acceleration in declines since the downturn hit US economy, no surprise however.

“eBay’s (EBAY) core business continues to fall apart.  Some of the decline is likely the result of the declining economy. The rest of it is likely the result of the trends that have been clobbering eBay for the past two years: competition, overpricing, and the deterioration of eBay’s value proposition.  eBay’s efforts to turn around this business do not appear to be working.” said Henry Blodget on a blog post.

Many customers don’t feel confident purchasing items auctioned on eBay. “I’ll never know why they allow scammy spammy hanky-panky in shipping and handling trickery, fine print auctions like posting photos of an item but selling info or accessories for the item.” a buyer recalls his bad experience. “Who on Earth would recommend that their kids, parents, grandparents, siblings, or friends should shop on eBay?” he questions.

Sellers feel uncomfortable too. Jeremy Toeman, Live Digitally, writes about his experience when he decided to post his VAIO laptop to eBay for auction and received no serious inquiries, many of them were just scams because he had zero rating at that time.

“The above experience is the core problem of eBay today.  It works for power sellers, and is probably still just fine for the collectibles and hobbyists.  But “regular people” trying to sell decent-sized items are unable to leverage the millions of people who use eBay.  It’s almost off-limits to us.” he concludes.

How does eBay benefit power sellers? Let’s listen to one of them:

“…they pushed so many sellers away with all the changes.  Between listing fees and a 12% fixed-price Final Value Fee and then PayPal fees, it’s too much.  This is the time that people should be turning to eBay to find deals.”

Now comes no users appears happy with eBay no matter they are buyers or sellers of all levels. So, is it the core problem of eBay: user confidence?