Hi android.curve1,
All the new startups that are offering low prices aren't making any money in their business. They are mostly venture-funded, and have a high "burn rate", i.e. they are making huge losses each month all to attract and build a sizable customer base so their valuations increase.
Even flipkart is losing money - they are spending a large amount to build their brand (advertising) and in warehousing and logistics (next day delivery for most items). Thus they do have a loyal customer base even though some sellers on ebay might sell items for a lower cost than them.
Amazon took more than 10 years to become profitable in the US, which is a much bigger market than India.
It is very likely that very few of the new ecommerce startups will exist a few years from now. They will be acquired by larger competitors or simply shut shop after having burnt through their available funds.
Which brings me to the situation at ebay India. How many of the sellers are actually making efforts to build their own brand separate from ebay? Right now ebay is doing all the marketing and advertising and therefore it is justified in getting a lion's share of the margins. ebay India's profit figures are not published but it is likely to be negative right now, in spite of what the "7.5 Percent fees + Listing fees+ Features Fees" would make you believe. A lot of buyers use a coupon for every purchase they make, there are presently 10% coupons available. Do the math and figure out if ebay can make a profit on that transaction after paying bank/credit card charges, website charges, employee charges, etc.
In such a situation, sellers on ebay are amongst the very few people making a profit in the whole ecommerce environment in India. Asking ebay to increase their losses in India so that sellers can make a larger profit seems unfair in that case.
If you are serious about selling and looking at your business from a long term perspective, you should take the following steps:
1. Focus on building a better user interface - Have a well-designed website outside of ebay with shoppers forum / product review sections, have a better looking ebay shop (look at some of the excellent shops on ebay.com and ebay.com.au built using Magento for inspiration)
2. Build your own brand separate from ebay - advertise as much as you can, use custom images with your logo in them, engage with your account manager to offer exclusive deals / coupons on your items, etc.
3. Focus on growth - Once you achieve volumes through the above steps, your transaction costs can come down both on ebay (powersellers) or elsewhere. If you have successfully built your brand and your own website, moving part of your business from ebay to places like buildabazaar shouldn't affect you too much.
Buildabazaar has a higher fixed monthly cost, but charges lower transactional fees than ebay. But it also has a lower visibility and customer base than ebay.
If you think you can eventually grow big enough to have a standalone website like flipkart where your per-transaction cost would be the lowest (but your fixed costs would be very high), make good volumes and profit but compete on cost against all the present ecommerce websites that are making a loss, then you are living under a huge delusion.
So stick to the appropriate ecommerce partners as per your business size, and make the right investments in branding and user experience, and it will definitely pay off for you. All the best!