Nobody can compete with the the number of potential buyers you have with eBay though, regardless of whether a business sets up other auction sites with cheaper fees, they aren't going to change that. I think thats the main reason that a huge player like Google has not really seen it worthwhile.
As others have pointed out, the fees are very annoying for private sellers now, but with the number of people looking at your auction you can usually make far more money than you can on listing sites or newspapers, which offsets the fees.
For one you have the fact that many people go to ebay or find the product through searches without even looking at online shops. Thus you often get people paying more than where they can buy something online, plus people can get caught up in wanting to win the auction.
The important thing though as a private seller is to work out if what you are selling is going to work and when to sell it. If you want £400 for something, a phone lets say. If you list it when there are also tons of them available, including ones from businesses sellers, you are going to struggle and are unlikely going to get the price you want from a private listing site.
If you sell something though which isn't being sold in droves, you will likely fare much better than you would anywhere else.
