BOOT CAMP 296 (14/10/03)


Online Auctions, part 1


Don’t throw it away sell it! One person’s junk is another’s treasure and if you need proof just log on to and have a look at what’s on offer. Buying and selling online can be fun; turn your unwanted goods into cash, or maybe pick up a real bargain! This week we’re going to see how an online auction works, in parts two and three some hints and tips for safe and successful buying and selling.


At any given moment there are upwards of 10 million items for sale on ebay’s international auction sites, from a ‘Giant one year old Battling Conker’ (selling for 5 pence at the time of going to press), to houses, cars and businesses costing tens of thousands of pounds. Ebay is now the world’s largest online auction having successfully seen off or bought out most of the competition over the past three years.


It’s a brilliantly simple idea. If you have something to sell – and there are very few things that can’t be sold on ebay – just register with the site and choose a user ID (it’s free but you will have to give ebay your credit card details), upload a description and preferably a photograph or two of the item you wish to sell and within a few minutes it will be available to millions of potential bidders around the world, or if you prefer you can limit it to buyers registered in the UK. If the item sells you pay ebay a modest listing fee (between 15 pence and £2.00) and a commission (1.75 to 5.25 percent) based on the final selling price.


At the end of the auction – most run for seven days -- ebay notifies the successful buyer and seller by email and it is up to them to make the exchange of goods and money. Buying is equally simple; again it is necessary to register with ebay and once you have logged on, use the powerful search facilities to locate the items you are interested in. The current bid price and number of competing bidders is shown on the auction page; to make a bid enter the amount you are willing to pay – the minimum acceptable bid is shown for guidance – click the Bid button and see how you get on. If you are outbid you can increase your bid at any time up to the end of the auction or enter a Proxy bid. A proxy bid is the maximum amount you are prepared to pay, ebay then bids automatically on your behalf, increasing your bid every time you are outbid. There are no charges for bidding and it is up to you to send your payment to the seller within a few days of the end of the auction.


It sounds easy, and it is, but you may have spotted a number of potential pitfalls. For example what happens if the seller runs off with your money or the product turns out to be faulty or not as described? The vast majority of auctions go smoothly but with so many transactions things can and do go wrong.


Ebay takes only limited responsibility for the legitimacy of an auction since the contract, whilst legally binding, is between the buyer and the seller. There is a rudimentary and largely toothless dispute resolution procedure, and a buyer protection programme that covers fraudulent transactions up to a value of £120, however, the system does have a number of built-in safety features, the most helpful of which is ‘Feedback’.


At the conclusion of each successful (or unsuccessful) auction buyers and sellers are encouraged to leave feedback for each other. This is a short message, which can be positive, negative or neutral, offering praise or serving as a warning to others. Legitimate traders soon build up a good reputation and in general anyone with a positive feedback rating of more than 15 to 20 ‘positives’ is regarded as trustworthy, and the higher the rating the less chance there is of something going wrong. Regular traders – and thousands of businesses have started as a result of buying and selling on ebay -- build up feedback ratings of hundreds and sometimes thousands of positives, earning extra ‘stars’ and a coveted ‘Power Seller’ logo. 


For the cautious there’s an extra safety net known as Escrow. This is where the payment – usually for a high-value item -- is held, for a fee, by a trusted third party and won’t be released to the seller until the buyer has received and is satisfied with the goods. Payments made directly to traders by credit card are also protected against fraud by credit card companies. Indirect credit card payment methods, such as PayPal have only very limited protection, however.


The system is largely based on trust and goodwill and for the most part it works well but there have been a number of ‘scams’, and there’s plenty of rogues and villains out there but if you are careful and follow a few simple rules the chances of getting caught out are relatively small, and that’s something we’ll be looking at next week.


Next week – Online Auctions part 2 – Buying and Selling Tips





Feedback profiles of 10 to 49 positive feedback points earns a yellow star, 50 to 99 points a blue star, 100 to 499 a turquoise star and so on



Instant credit card payment system whereby money is transferred directly into a seller’s account. PayPal is free to buyers but sellers pay a fee of between 3 and 5 percent.



Name chosen by buyers and sellers, actual identities are protected until the end of an auction



Although ebay is by far the biggest and best known online auction but there are plenty of others on the web, including Yahoo Auctions (, Amazon Auctions (

Ubid ( and OnSale ( There are also many specialist auction sites. For a comprehensive list go to

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