Further to that point and to their credit, ebay smashed Amazon in auctions.[1]
Auctions was one of a dozen or so large failures on the part of Amazon to find a profit center. eBay wiped the floor with them and Amazon gave up relatively quickly. Since then, eBay has generated over $15 billion in profit in auctions, a figure Amazon struggles to match in its entire retail history despite the scale difference.
All these years later, eBay is generating ~$2.3 billion in operating income and their auction business is under no serious competitive threat (it is a slow growth business however, basically fully saturated). Amazon's huge retail business is only barely able to match the profit of eBay's auction business.
The ultimate value in Amazon of course wasn't retail. For eBay, the value is actually in the ecommerce.
eBay has indeed found an amazing niche. I've been gladly forking what one would consider an outrageous fee for auctioning off one's items, simply because the stuff sells so predictably. I regularly list stuff that one would consider junk and make a buck. Just auctioned off a decade old Asus eee PC for $50 (it still works though). Im so okay giving ebay 5 bucks for this ability! I made a few dollars, a working laptop found some home, and i threw less into the trash!
> I made a few dollars, a working laptop found some home, and i threw less into the trash!
I love this about auctions, it seems to preserve value. Rather than e-waste going for scrap it might go to a collector, upcycler, charity, or specialist recycler.
Since then, eBay has generated over $15 billion in profit in auctions
Source? eBay has squashed most of its own auction activity in favor of fixed-price items. Participation in auctions has been spiraling downward for years, resulting in underpriced items, resulting in sellers abandoning auctions altogether.
I suspect part of the decline of auctions is that they're risky for low-velocity products.
Example: your item is worth $200 on the fair market, but might only sell one or two a month. There are simply not that many people chasing, say, a Commodore 4040 disc drive or a high-grade 1898 half-crown. You can park it on a Buy it Now listing forever until you get $200. If you try to auction starting at $200, or with a $200 reserve, people will pass because if they're not getting a deal, they'd better at least get immediate gratification rather than waiting 10 days for the auction to close. You can list at $100 or $1 at auction and get interest, but then you're praying people get interested enough to push it back to $200. Buy it now is the safest route for that.
I tend to use eBay these days as "one step above Banggood/AliExpress/etc." They have many of the same items but there will usually be a few sellers offering it dispatched from the US, letting me get it in 3 days instead of 25, for a couple dollars more.
Maybe not the best analogy? eBay and Amazon both started in the 90s and were both HUGE successes for investors.