1) Ebay / Paypal take too high a cut. 2) Forced use of the Paypal payment method. 3) The auctions aren't real auctions - if they extended the bidding time each

1) Ebay / Paypal take too high a cut. 2) Forced use of the Paypal payment method. 3) The auctions aren't real auctions - if they extended the bidding time each time a bid was placed, it would eliminate sniping software. 4) Instead of fraud prevention via software triggers placing arbitrary limits, they should devote some money to a team that would buy and sell igconito and seek legal prosecution of people who commit fraud. 5) A specific kind of fraud, shill bidding, is actually in Ebay's interest in the current setup, because it tends to raise prices overall. If you start a competitor, you will face the chicken-and-egg problem of all social or peer to peer businesses - no sellers will come if there are no buyers, no buyers will come if there are no sellers. You might be able to break through this by focusing on products that Ebay currently bans, such as guns or used software. Another method of breaking in might be to focus on people who are doing well on Etsy but moving up and out of craftsman to small manufacturing. To get them you would offer a combination of capital ( pre-pay for the product, for example ), connections and advice in dealing with various manufacturers, and a fullfillment service. That presumes you can get capital your self, of course.