How eBay Works

EBay is, first and foremost, an online auction site. You can browse through categories like Antiques, Boats, Clothing & Accessories, Computers & Networking, Jewelry & Watches and Video Games. When you see something you like, you click on the auction title and view the details, including pictures, descriptions, payment options and shipping information. If you have a pretty good idea of what you're looking for, you can search for it using simple keywords, such as "Apple iPod," or using more advanced search criteria that helps narrow the results, such as keywords to exclude, item location, price range and accepted payment methods.

If you place a bid on an item, you enter a contractual agreement to buy it if you win the auction. All auctions have minimum starting bids, and some have a reserve price -- a secret minimum amount the seller is willing to accept for the item. If the bidding doesn't reach the reserve price, the seller doesn't have to part with the item. In addition to auctions, you can find tons of fixed-price items on eBay that make shopping there just like shopping at any other online marketplace. You see what you like, you buy it, you pay for it and you wait for it to arrive at your door. There are also auction listings that give you the option to "Buy it Now" for a price that's typically higher than the auction's start price. If you choose to buy the item for the "Buy it Now" price instead of bidding on it, the auction ends instantly and the item is yours.

You can pay for an item on eBay using a variety of methods, including money order, cashier's check, cash, personal check and electronic payment services like PayPal and BidPay. It's up to each seller to decide which payment methods he'll accept. PayPal is the easiest way to buy something on eBay, because eBay owns PayPal. The PayPal payment process is already built into any auction listing on eBay.

Just as you can buy almost anything on eBay, you can sell almost anything, too. Using a simple listing process, you can put all of the junk in your basement up for sale to the highest bidder. Lots of people sell their old laptop once they've upgraded, the clothing their kids have grown out of or the brand new couch they bought on final sale without realizing it wouldn't fit in their den. Some people even make a business of eBay by opening their own "eBay store." When you sell an item on eBay, you pay listing fees and turn over a percentage of the final sale price to eBay.

Once you register (for free) with eBay, you can access all of your eBay buying and selling activities in a single location called "My eBay."

EBay is a massive operation with something like 4.8 million new listings per day. Before we learn more about how to buy and sell on eBay, let's find out how eBay manages this level of activity.