Yes, the auction house has overhead, employees and needs to turn a profit. But don't forget that they also charge a fee to the sellers. For years auction houses made a go of it based on the percentage charged to the sellers. It was only after they figured out that buyers would willingly pay for the privilege of buying an item that they really wanted that the buyer's premium became accepted practice.
I don't know all the ins and outs of the auction business but it looks like a pretty good business model to me.
