How have companies such as ebay (and the internet more generally) lowers transaction costs? economics?

1. Absence of Rent

2. No Salesperson's salary

3. Absence of Utility Bills

4. No inventory Holding Costs

5. Average Cost Per Unit

Explanation:

Companies such as ebay (and the internet more generally) lowers transaction costs because of the following:

1. Absence of Rent: Companies such as ebay (and the internet more generally) lowers transaction costs because they do not pay store rent which is a significant business cost for offline businesses that operate in brick and mortar stores.

2. No Salesperson's salary: Online companies like ebay do not pay salesperson's salaries and by so doing they reduce transaction costs

3. Absence of Utility Bills: Online businesses like ebay do not pay utility billslike lighting costs and water rates etc, and this is another way of transaction cost reduction

4. No inventory Holding Costs: Online businesses do not incur transaction holding costs as they keep no warehouses for their inventory.

5. Average Cost Per Unit: In an internet business, you are bound to make profit even for one unit because you don't have to sell a number of units to cover for monthly fixed costs before you make profit. Transaction cost is same whether for one or a thousand units.

These are some of the ways online businesses have reduced costs.