Regarding "free" auction sites vs. commission-based auction sites:
There are plenty of examples of successful business that charge more for their products/services than do their less successful competitors.
(1) Online brokers. Last I saw, Schwab was still the leading online broker in terms of trade volume, despite the fact that they charge 3 times or more for each order execution than do other, less successful brokers (E-trade, Suretrade, Web Street, etc).
(2) Internet providers. Many ISP's charge less than AOL does. Some are even "free". But AOL is still dominant as a business.
(3) Operating Systems. There are several "free" operating systems available via the internet. However, DOS/Windows is clearly dominant (and it isn't supposed to be free.)
These are just the ones that first occurred to me. In each case the dominant and more "expensive" company offers some kind of perceived value for the higher price. In the case of Ebay, I bet the final selling price on Ebay would more than compensate the seller for the listing fee and commission.
By way of illustration
I list a retired beanie baby (let say Peanut the Royal Blue Elephant) on Ebay and Yahoo. My highest bid on Ebay is $3,500 and my highest bid on Yahoo is $2,900. Even though I paid no explicit listing fee or commission on Yahoo and I paid a listing fee of $2 and commission of $35 on Ebay, Yahoo wasn't exactly "free". It cost me $563 to use Yahoo rather than Ebay, because of the lower final bid price.
I know this is an fictitious example, but I think it is realistic at this point in time, given the relative popularity of the sites.
However, from the looks of the recent posts to SI, I don't think traders traders care a whit about Ebay's viability and long-term prospect.
However, from the looks of the recent posts, on the Ebay thread on SI, I don't think traders much care right now about the long term viability of Ebay. |
