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This creates increased price competition since there are more buyers willing to purchase items at higher prices. Ultimately, eBay has provided both buyers and sellers an online marketplace for these auctions and the prices are solely determined by the highest auction bid. Therefore, eBay is not directly influenced or pressurized to reduce its costs.
Initially eBay did not charge fees to buyers or sellers. However, as traffic on the site grew, eBay’s founder Pierre Omidyar, was forced to charge sellers a listing fee to cover Internet service provider costs. Omidyar later noticed that the fees had no impact on the level of bids...
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