Sounds similar to an issue brought up on u.l.m recently.
An estate agent introduces tenant to landlord and gets paid their commission, later (unexpectedly) the tenant offers to purchase the property, estate agent then claims commission for the sale.
eBay is a textbook "natural monopoly": buyers want the widest choice of goods/services from the greatest number of sellers; sellers want the greatest number of potential bidders.
Consider eg if A wants to sell a used angle grinder. On eBay A can expect to get GBP 25 after net (after all fees and charges). Why would A list it on another site - even one with no fees at all - if A can expect to get only GBP 15 net there there are so few potential bidders?
That's why what might have been potential competitors mostly advertise stuff for fixed prices.
Ebay's market capitalisation is $41 bn. A competitor could develop the software and infrastructure for say $100m. That would make it worth a competitor's while to spend say $20 bn to attract ebay's customers away. You could do an awful lot of attracting with just $1 bn.
In practice, a competitor would probably go for a different business model, so as not to compete head to head.
Amazon marketplace is my preferred option for buying stuff. A different business model, but highly successful.
Another one was getting some multitool blades advertised as OK for nails etc. The Bosch one had done about 8 nails then decided to quit. The new ones
- well! - one nail and done. Did the return bit via email and discoversd that the place was about a mile or so from the town centre, so got the OK to deliver by hand. Day after dropping off the package I had the money credited. It's the sort of place that I'd use again. Hole-in-the-wall on and industrial estate and stacked with every tool I'd ever want.
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