Evaluate Ebay’s fee structure. Is it optimal or could it be improved? Why? How?
eBay doesn’t sell or buy anything itself. It earns its money by collecting fees: an insertion fee for each listing plus a final value fee based on the auction or fixed price. This pricing structure was developed to attract high-volume sellers and deter those who list only a few low-priced items. This price setting is also known as second degree price discrimination: eBay charges less to buyers who buy in a larger volume. This pricing strategy is a good way to attract larger volume buyers, but I think that eBay should not forget the small consumer who will also buy more and more online. It is not a good idea to charge the small consumers with high fee’s because this can scare them off to other online marketplaces.