Check out the 400 auctions on Amazon offering Star Wars products. The auction business, as it grows, could improve Amazon's profitability margins considerably. It merely offers an area for others to transact, an area that can expand and scale effortlessly. Therefore, like eBay, Amazon will be able to leverage its customers into its auction business without needing to add much back-end support like fulfillment offices, inventory warehouses, and billing services. It simply provides an area to transact and collects a slice of profit from each and every auction.
Life is indeed beautiful.
Amazon's auction is slightly different than eBay's from the start, however. Though insurance will be offered on eBay soon, so far the company hasn't taken responsibility for fraudulent auctions. Many Amazon users have never used an auction before, and they probably never thought they'd need to. Because auctions are the ideal business for the Internet. It is a high margin, highly scaleable operation for the host.