How eBay Makes Most of Its Money

There are lots of ways to make money online by participating in, or facilitating, e-commerce. Auction bidding pioneer eBay (NASDAQ: EBAY) has a business model that, in contrast to Amazon's (NASDAQ: AMZN), doesn't involve competing with sellers who use its platform. eBay also takes a far less active role in sales transactions by leaving things, like shipping and fulfillment, mostly up to the seller.

This approach has resulted in slower sales growth for eBay than for companies like Amazon and Wal-Mart (NYSE: WMT). But it also means much stronger profitability and cash flow for shareholders.

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Source: Fool.com