When workers lose their jobs, they begin to tap their savings to make ends meet. But in a long recession with high unemployment, people start looking for alternative sources of income to continue to feed themselves, according to Bruce Hutchinson, professor of economics at UTC.
"Lots of things that you have accumulated around your apartment or home can be sold, so it is not a surprise that you see more selling on eBay," Hutchinson said.
Business has been booming at SmartHotBuys, which according to the owner is a Chattanooga-based business in which consumers drop off their valuables to be sold on eBay, Amazon, Overstock, Yahoo and other online storefronts.
Anil Anand, owner of SmartHotBuys, said that while more people have been selling rare and personal items, buyers have been getting harder to find.
For instance, rare lithographs that went for $300 in the fourth quarter of 2009 go for $200 now, he said.
"You're looking at about a 20 percent decrease on the typical price of a product," Anand said.
DOWNWARD PRICE PRESSURE
For those who are buying, however, this is the chance of a lifetime to pick up unusual or unique items, he added.
"We've seen more band instruments, Star Wars stuff from the '70s and Dale Earnhardt Jr. mementos, because people are trying to get rid of those collectibles now," he said. "Maybe times are tight for some of these people - maybe people have lost their job."
Debbie Wilson, a pensioner on a fixed income, found herself going to Anand to be able to pay for essentials such as gasoline, groceries, prescription drugs and her utility bill.
"Selling family heirlooms pulls at the heartstrings, but may be necessary in an economic downturn," she said.
She's sold dinnerware, a 16-piece wine glass set from the 1950s, a valuable stained-glass window hand painted by her sister and other treasures she's picked up secondhand.
"Smart shoppers can buy high-ticket items at bargain-price yard sales and goodwill stores," she said.
But Wilson said it's critical to maintain standards of decency when bargain hunting. After picking up the 1942 first-edition Ernest Hemingway book "Man at War," Wilson said she promptly returned it when she realized its value.
INVENTORY CLEARANCE
On the other end of the spectrum, retailers are increasingly using SmartHotBuys to make ends meet and freshen up their inventories, they say.
At Sports Spectrum on Highway 58, Jeff Covington said he uses SmartHotBuys to clear "dinosaurs" such as 2009 basketball shoes from his shelves.
"You look at gas prices, and have to ask if it's cheaper for a guy to sit at his computer to buy stuff rather than jumping in the car and going shopping," Covington said.
Last season's shoes, while holding little interest for America's youth, get snapped up by customers in New Zealand, France, Australia and England, according to Covington and Anand.
CASH CRUNCH
Darren Brown, director of operations for credit-card equipment seller Total Payment Solutions Source, said that he, too, turned to eBay in a time of need.
"I basically started because the business had declined a little bit, so we were using it to supplement some of the costs that I had," Brown said. "I had some outdated equipment and I basically just took it over there to them to sell for me."
The only problem with this method as a long-term strategy, according to Hutchinson, is that consumers and businessmen don't have an unlimited amount of excess goods.
"They're selling out of what economists call a stock, and as they sell them, eventually they run out." he said. "It's not a good substitute for a job that generates a continuing flow of income in order to continue paying all those reoccurring expenses of life."
And some things will never generate as much cash as a seller expects.
"Confederate money doesn't sell real well," Anand said.
SmartHotBuys bought out eBay seller NuMarkets, which went out of business in 2007.