I don't quite understand where this Fee information on PayPal and eBay is coming from.

PayPal does not charge 5%, it charges 2.9% +.30 cents. Ebay also lets you list 5 auction items a month for free, and the maximum Final Value Fee you will pay is $20 on those items. So, on a hypothetical $1000 auction transaction, you are paying a total of $49.30, or less than 5%. Not unreasonable, I think.