Most eBay sellers don't have a full on shop front, therefore don't have the overheads that a LFS has.
Also whilst working in a LFS they won't be buying the items from API directly they buy it through another company who buy it from API otherwise they'd have to be chasing around a hundred independent companies. That middle company controls the price so majorly, I remember one day working there to find within a month the price had more than double on light tubes because they decided they weren't making enough money. Obviously we then had to keep up with the price change and well I was disgusted.
You also have to remember though that for a lot of LFS you will have to talk to the customer for about 15-20 minutes for a good sale and that cuts into wages and other potential sales that may have been missed.
You open up a whole can of worms when you look into it really. Most LFS will barely make a profit if at all on Fish, the place I worked also had a pet department which was where most of my responsibilities lay.
We sold hamsters at £7.95 and we bought them in at about £3 I think each, we then had to take into account the wages consumed for the hour each day it took to clean ALL the hamsters/gerbils/rats and birds. We also had to take into account the disinfectant spray which we use to go through bottles of it a week we replaced all bedding, paper/straw and woodshavings and replacing all the food. Each food had it's own price and life expectancey then you also had to take into account things like water bottles.
In the end my boss told me he wasn't happy as it appeared we were only making around 30-50p per hamster sold and that we really had to push home on the other products. However due to the fact a lot of people were going else where for the hamster homes etc he had to drop the price and once again he stumbled into the situation. Business is hard even harder when you get blamed for not making sales when no one is the store