I have a idea for a new kind of auction site. I want to use it, but I don't have time to make it right now... but I think it could make decent money, if someone else wants to make it.
A central idea is to have auction bids be paid both to the original seller and to the other buyers who lost the auction. The seller sets a flat price for each item they're selling. If multiple bidders raise that price, the extra is distributed amongst the other bidders as follows:
The winning bidder pays the bid of the second-highest bidder. After the original price goes to the seller, the remaining is paid by paypal to the other bidders, with the second-highest bidder gets the amount they bid above the third-highest bidder, and so on, all the way down. If the lowest bidder originally bid more than the original price, they get that difference.
This way, losing bidders can price how much trying and failing to get the item in question cost them. The winner bidder is paying the other bidders to not have the item, just as they're paying the original seller. There is no concept of "market price" involved here.
The site could take a flat percentage of the winning bid, but it would have to be tiny. The seller can also set a percent of winning bid to take away (also not too large), sweetening the deal a bit for them.
The other central idea is organizing the site as a garage sale, rather than an auction, in that people can post items and expect to leave them up for a long time. When someone bids on an item, a countdown starts, and items with active bids are featured on the site. Combined, these ideas make it possible to have an auction site that serves a much smaller population than eBay: items could be published only within a group of friends, or just the people who live close enough that shipping isn't necessary.