Ahhhh, eBay… the ultimate worldwide flea market. Everyone from Midwestern grannies to jobless goatee-ed neo-hippies (as if there are any other kind) are in on the action, peddling their wares in the wee hours of the morning. Chances are if you want to buy, some poor sucker is selling, and if you want to sell, there's some poor sucker willing to buy.

We know what you're thinking: How do I avoid being the aforementioned "poor sucker"? Well, we're here to save your sorry ass. But first we have to make one thing clear: This article will assume you have at least a basic understanding of how eBay works. Why eBay, and not some lesser known online auction service? Because it's the largest and most high-profile service around. However, if you're an anti-establishment type who prefers to frequent the underdog (i.e., you use Bn.com instead of Amazon.com), realize that you can still use this SYW - most of our pointers are applicable to all online auctions, no matter where you choose to buy and sell your crap - we mean "valuables."


First things first: eBay requires all registered users to enter the following:

  • Name.
  • E-mail address.
  • Mailing address.
  • Phone number.
  • Credit card number. This last criterion is new as of October 22, 1999, and doesn't apply to everyone. For example:

  1. Sellers who sold items prior to October 22, 1999 can ignore this policy. These sellers are not required to list a major credit card in order to sell items.

  2. If you have a free e-mail address from a service such as Hotmail.com or Yahoo.com, you MUST register with a credit card. No exceptions.

  3. For those who don't wish to register with a credit card, eBay provides an "ID Verify" service. ID Verify will match your personal information with the information on your credit record in order to verify your identity. There's a $5 fee for using ID Verify, and the service is good for one year.

There's also a bunch of optional information that you can provide. Whether you give it or not is up to you; just make sure that you don't lie about any of your information.

As soon as you've registered, you may be tempted to start bidding on stuff, most of which you probably don't need. ("A glow in the dark towel rack! Just what I always wanted!") Not so fast. First you've got to become aware of three invaluable tools offered by eBay that every savvy participant should utilize:

  • User feedback allows users to comment on each other's activities. When commenting, the user either assigns a positive, neutral or negative ranking to his/her description. By looking at the user feedback, a user's reliability can be determined easily by their rankings, with a high positive ranking meaning that the user received a large number of positive comments. This feedback can indicate if a seller sells quality merchandise, if a seller is recommended by others, and if a buyer submits his/her payment quickly. All good things to know!

  • Security Center is eBay's "comprehensive safety resource and protective arm"-basically a service that allows eBay to monitor its users. Whenever users log into the system, eBay's servers record their Internet addresses. Although users cannot view this information, SafeHarbor personnel will respond to complaints by users and will determine whether, for instance, an eBay user is using multiple usernames in order to manipulate auction prices. So it prevents you from registering 15 times with 15 e-mail addresses, and bumping up an auction price to get people to pay more.

  • Users may also view each other's bidding histories. A bidding history shows which auctions a user has bid on, and also lists the other users who have bid in those same auctions. This can be helpful in determining whether users are playing by the rules. We'll elaborate on this later.

In the meantime, you should familiarize yourself with the two types of auctions eBay offers:

Single winner auctions
Dutch auctions

Single winner auctions

With these auctions, the item goes to the highest bidder, just like any normal auction. So you're first question may be "Do I have to go to eBay every day and submit a new bid?" Not at all! eBay has this amazing feature called "proxy bidding." This allows a buyer to enter the maximum amount he's willing to pay for an item. But instead of instantly putting your bid on the item, it'll put in a lower bid for you, and if anybody makes a higher bid, eBay will automatically increase your bid for you until it hits your maximum. Hmmm... an example may be called for.

Jimmy really wants to bid on a donkey-bone yo-yo. The current bid is $100. If Jimmy's willing to go as high as $500, he can ask eBay to proxy bid on the item for him. eBay will then put a bid in for him of, say, $150, which is the highest amount of any other user's proxy bid. Jimmy will now be the high bidder, and eBay will keep increasing his bid to keep it the highest until another buyer bids over $500. Then Jimmy loses, or he can go back in and place another bid.

Another feature of single winner auctions is the reserve price, which is the amount at which the seller is willing to sell the item indefinitely. Another example, you say? No problem.

Jimmy puts his Playboy collection up for auction, starting at $1. Jimmy is worried that only one person will bid on the Playboys and that they will be auctioned for $1 (much less than Jimmy is willing to sell them for). So Jimmy puts a reserve on the auction of $100. This means that until someone bids over $100, he doesn't have to sell the collection. If someone only bids $99, Jimmy will get a report at the end of the auction stating that the reserve was not met and that the highest bidder offered $99. At this time, if Jimmy is willing to sell the Playboys for $99, he may contact the buyer and offer them for $99. However, the buyer has no obligation to buy the Playboys since the reserve was not met.

Dutch auctions

These auctions can have multiple winners, all of whom are bidding on the same item. Since you love our examples so much, we'll oblige with another one (starring that social miscreant, Jimmy!).

Jimmy has 10 banana trees that he wants to sell, starting at $1 per banana tree. This means that 10 people could go and bid on an individual banana tree, and each would win one banana tree.

Dutch auctions also allow buyers to bid on multiple quantities of an item. The great thing about Dutch auctions is that, specific to eBay, the lowest winning bid for any user is the amount that all users will pay. Dutch auctions are complicated, so please read the complete rules.

Of course, none of these special auction features are required. You can always just put in a real bid and if anyone bids above you, you can go back and make another one. Whatever floats your eBoat.