The reason is that listing and selling on Craig’s List is free, while selling on eBay is expensive, especially for items priced higher than $500. First, there’s the listing fee of $0.20, then the Final Value fee of $0.50 + 3.25% * price. But wait, there’s more: EBay all-but- requires you to use their PayPal service to settle transactions, and PayPal in turn requires you to use a “Premier” account if you receive more than $500 in eBay payments in one month, which you automatically would if the item you’re selling is more than $500. Using a “Premier” account requires that you pay PayPal 2.9%+$0.30 per transaction, even for cash transactions. (The processing fee is less if you are doing a high volume of business through them.)
So the total eBay selling cost is in the range of 6.15%. That’s $50 on a $800 item.
You could avoid accepting PayPal, but since accepting PayPal is the norm on eBay, it’s very likely that your auction will be shunned, and you will receive a lower price.
Besides the hefty fees, using PayPal is riskier for the seller than using cash. This is because it is possible for a disgruntled buyer to reverse the transaction. (Of course this same ability is a plus for the buyer, as is the ability to use credit cards.)
Even without using eBay to sell the product, it makes sense to use eBay as a price setter. eBay makes this easy to do by reporting the final price for closed auctions that you are “watching”. Since auctions last between 3 and 10 days, and an auction must be active in order for you to watch it, you will need at least a week to track enough auctions of similar items to make a fairly accurate estimate of the market price.