Every product has a Manufacturer Suggested Retail Price (MSRP) and a lot of retailers tend to dip their prices a little bit below that amount so that their customers can save a little money. If you go to any website you will see small 5% to 10% discounts off of merchandise but if you go to eBay you will see larger discounts of 50% to 75% off of merchandise.

Due to the fact that everyone wants to sell merchandise on eBay, supply is exceeding demand. When supply exceeds demand the price of goods will decrease dramatically. Everyone knows eBay is the place to get a good deal but it is difficult to realize how people still can sell merchandise on eBay at such low prices and still make money. Especially with eBay fees and shipping cost being so high.

The fact that profit margins are being cut so drastically should make eBay store owners question the future of their eBay businesses and maybe even eBay in general. The more competition that arises on eBay the lower prices will go and the less money people will make. That will eventually leave them to close shop and that will hurt eBays revenue stream in the process.