Ebay Pricing and Method of Pricing

-How does ebay price their service? Is it an effective method of pricing?

Pricing as per buyer/seller perspective:-
eBay started their business on the concept of bidding for products that are listed on their website.   In the bidding pricing eBay asks seller to list a product on their website for a base price that seller can afford to sell for. After setting up the base price a seller selects the duration for which the product should be listed on the website. Once the product is listed with appropriate categories it reaches out to the buyers and then buyers quotes bid for the listed product.
After the expiry of auction for a particular product the product is sold to the most suitable buyer by the seller. Apart from this eBay also has an option of buying goods for a fixed price.
This option is given under ‘Buy it now’ option which is suitable for those who doesn’t want to wait for auction. Sellers can also use the fixed price format with a ‘best offer’ option that allows seller to counteroffer, reject or accept an offer.
Pricing of services:-
eBay doesn’t keep any inventory for them or doesn’t own any of the product listed on their website, this helps them to minimize the operating cost and hence they work on very lower pricing strategies. eBay collects their fees from sellers by charging an insertion fee for each listing and final value is charged based on the auction or fixed price.
The final price turns out to be very less compared to the costs that might be incurred to sellers if the product would have sold on shops and hence it is very attractive to sellers.
SELLING FINAL VALUE FEE 
- Up to $50 - 12.0% of selling price 
- $50.01– $1000 12.0% of the initial $50 + 7.0% of the remaining selling price over $50 
- >$1000 12.0% of the initial $50 + 7.0% of the initial $50.01- $1,000 + 4.0% of the remaining selling price balance over $1,000 
eBay keeps the lower prices to attract the people and build the new community for selling and buying. It...