Does anyone know the final vaue of all the domains they sell in a year? Lets assume its 100 million. If thats the case they would make 5 MILLION when charging 5% and that of course does not include all the thousands (if not millions) they make on featured listing fees, appraisals ect. 5% of 2.6 million is $130000 b...thats just 1 example (pizza.com). 1 sale and you get over 100 grand. Seems like a pretty good roi to me.
They have an first entry advantage like Ebay. Even if someone builds a second Ebay (which many companies have done) it won't succeed because everyone else is using Ebay already. So even if there is a competitor it won't take much of the share because everyone is using SEDO and is bidding on it. So listing on SEDO will get you a higher bid even after they take the big cut.
im not sure that had that advantage tbh, there have been many platforms (Afternic, GreatDomains) which I think were before Sedo. Sedo isn't even locking up the market. Plenty of players have successful sales venues such as BuyDomains (which ended up buying Afternic). Selling domains, in my opinion, is having quality domains to begin with, end users choose the domain generally speaking, not the other way around. Sedo has a good model is being the free listing site (also kinda hurts because there is a TON of crap on there) but I guess it comes down to who you are targeting, and people parking on sedo and selling make it that much easier for sedo's services to sell themselves rather than them doing any work.