• SF Gate, Friday, October 17, 2008 11:15 AM

Peter Vasilev owns an iSold It store in Pleasant Hill, Calif, where people can bring in their old belongings and have them sold on eBay. As the credit crisis has worsened and the stock market has tumbled, store traffic is up among those people looking to consign items. Unfortunately, selling those items on eBay has become a challenge.

"We're seeing a lot more people coming into the store who basically need money to pay bills," said Vasilev, whose sentiments were echoed by others who make their living selling on the auction site. "Fewer items are selling, and the ones that are aren't selling for quite as much."

That reality flies in the face of conventional wisdom, which has long held that sites like eBay would thrive in a down economy as consumers looked for bargains. But it shouldn't come as much of a shock. CEO John Donahoe has acknowledged that the Silicon Valley giant's financial performance was suffering amid the bank failures and emergency government bailouts. This month, he also announced plans to cut 1,600 jobs.

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