It Seems Too Good to be True. How Does eBay Make Money?

For you, the buyer, eBay is free. Sellers, though, pay all sorts of fees: a listing fee for each item they list, a final value fee (a percentage of what the item sold for). They can they pay optional fees for extra services, including Buy it Now, extra pictures, reserve prices, highlighting the auction, putting it in bold, listing it first in search results or even putting it on the front page. You can see a full list of fees at http://pages.ebay.com/help/sell/fees.html.

It’s obviously worth it to the sellers, though, or they wouldn’t carry on using eBay. The system is quite efficient, and basically forces both eBay and the sellers to keep their profit margins as low as possible – otherwise prices will simply go too high and the buyers will stop buying.