How Does Ebay Work?

By Shelley Frost

EBay is an online auction site allowing users to buy and sell items. Almost any item can be sold on eBay, whether it is new or used. Sellers set the terms of the auction, including the shipment options, payment methods and return policy.

User Accounts

EBay visitors have the option to search for item without logging in or creating an account. To sell or bid on items, you need a registered account with eBay. Registration is free and requires your name and email address, along with a password. Once registered, you have the option of connecting a PayPal account for fast payments. Some sellers only accept payment through PayPal.


Sellers create listings for the items they want to sell. Anyone with an eBay account can sell items on the site. You do need to confirm your address and telephone number and set up an automatic payment method for fees before selling. The “Sell” link at the top of each eBay page takes the user to the listing creation template. The template includes numerous fields, such as the title, product description, condition, starting price, length of auction, shipping methods, return policy, acceptable payment methods and auction format.

Auction Bids

Search eBay for items you want to purchase, using the search bar at the top of the page. Browse using the Category listings. Search results include an image, description and price. Click the description of an item to see the entire listing description, which you should review carefully before placing a bid. Contact the seller with any questions before placing a bid. Once you place a bid, you commit to buying the item if you end up as the top bidder. To bid, enter the amount of your bid in the box at the top of the listing. The minimum amount for the next bid appears below the box. The person with the highest bid at the end of the auction wins the item. Watch the auction for last-minute (or last-second) bids. If you win the item, you are prompted to make payment according to the seller's preferences, at which point the seller will ship the item.

Fixed-Price Auctions

EBay also offers fixed-price options marked with the "Buy It Now" sticker. The seller determines the price and specifies the number of of that particular item available. After clicking to purchase the item, you enter the payment information. Once payment is verified, the seller ships the item.

New Seller Payments

If you are a new eBay seller, expect a hold on PayPal payments. PayPal may hold the funds received from the buyer anywhere from 3 to 21 days after the buyer receives the item. This is to encourage prompt shipment and to protect the buyer. Sellers with little or no history and those with ratings below standard often are subject to this hold on funds.