Good one. Ebay is just such a force to be reckoned with, but they've completely lost their soul. They've pissed their sellers off like none other. You would have to have something so different and innovative to start stealing their thunder. Maybe you start in a different niche ie- Etsy. I really like what Etsy is doing.
that is the biggest issue. they are the giant in the industry. their name is a word for selling something online, just like 'to google' is 'to search'. taking down that giant would be serious business. but its a giant that can be taken down, and would be seriously worthwhile to do so.
So far the only auction site I have seen that has gone anywhere is tfields.com which started as a transformers toys auction site and grew from there. It is a real catch-22, you need lots of buyers and sellers suddenly.
I think the best model to beat ebay is to create a "Ning" style auction site where you have separate auction sites dependent on the community that they target.
The best strategy for a startup to topple a massive corporation is to flank them. Hit them in their weak spots, grow, and eventually you might get enough resources to topple them.
my initial thoughts on how to make that happen would be to round up some medium-sized ebay sellers, ask them what their needs are, build the site to meet them, and offer them free auctions for a period of time to switch and help promote.
