The best way to get something up to be an alternative to ebay would to somehow involve a partnership with someone like Discogs or GEMM.
If I was Raj and wanted to take this site to the next level. I would step to Discog and form a corporation. I'd hire a few people with the needed backgrounds for the biz and I would then step to some major world dealers. Offering them shares in the corp to sell through the biz.
I'd take 6-12 months just building up the site. Making sure the nobody could fuck the site as far as resources go (It's all about information) Massive discography, label scan's, reviews, forums, etc. One of the beauties is that, site member's help build up the database and content the whole time.
I would offer incentives for people to sell. Example like, if they sell records on the site and they generate the site money through ads. Give them a portion of the ad revenue they create.
Once the site was getting pretty damn big, I would step to a company that was trying to take on Paypal. Maybe even step to google checkout or something and then I would drop the auction portion of the site.
I think somewhere down the line I would try to bring in indie labels and indie distribution. Where they would sell direct to the consumer thru the site with physical product & online music and you would get a small fraction of the sale.
And after all that. I would somehow figure out a way to offer music e-tickets to concerts & shows and charge a small faction of the service fee that's ticket master charges. FUCK THOSE ASS CLOWNS!!!
If you build it. They will come!!!!