billb

The Economics of eBay

You raise a good point about it being <i>the</i> place to go. In fact, eBay, while being nearly a monopoly, is forcing people (sellers) to compete in what was previously an illiquid market. Just take a look at your local newspaper classifieds under the "Stuff" section and see how much people are asking for junk that they perceive has value. Now go to eBay and look for the same junk and you'll see that the prices are much lower. It wasn't always this way. When there were far fewer sellers, say 10 years ago, eBay's prices were not that spectacular. Over the years though as it has become THE place to unload your junk, the sellers have had to compete with each other. They mostly competed by lowering prices. Begin diluting the sellers and you may end up paying higher prices for things. So who wins? Very hard to determine.