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How to buy on eBay
March 2005

"The time has come," the Walrus said, "To talk of many things: Of shoes - and ships - and sealing wax - of cabbages - and kings". If the Walrus went to the giant auction site, he could probably buy or sell them too, and almost anything else.

Online auctions have proved to be one of the most effective uses of the Internet, and Ebay is the biggest. It now has more than 34 million items for sale at any one time and over 125 million users, 8.6 million of which are in the UK.

This month I'll run through buying stuff in an auction - next time we'll get to grips with selling things. First, some basics:

· Ebay makes money by charging sellers to display their goods, and by taking a slice of the sales proceeds, if any. There is no buyer's premium (yet).

· It is important to realise that Ebay is just a conduit - unlike traditional auction houses they offer no advice or warranty about what you are buying but simply provide a mechanism for two parties to find and trade with each other. If you offer to buy something, your contract is with the seller, not with Ebay.

· When a seller puts something up for sale, he states when the auction will end (up to ten days away) and the lowest initial bid he will accept. He may also set an (undisclosed) reserve price, and a "By it now" option - this is, a price he will accept to stop the auction and sell to you. He then sits back and waits. He is bound to sell to the highest bidder, and (usually) to arrange delivery.

So let's get started. As a potential buyer, you need first to register with them, and when you do you will have to choose a code name by which you will be known to the world.

This is because of a vital part of the Ebay procedure called "Feedback". Every time you take part in a sale, either as a buyer or a seller, the other party has the opportunity to grade your behaviour as positive, neutral or negative. These scores become a permanent and, crucially, a public record of your reputation. It means that if you are a regular non-payer, the world knows it, and sellers might refuse to take bids from you. Equally, if you come across a seller who has over 1,000 positive reports from satisfied customers, then you might feel happier about believing the description of his wares.

So let's look for something to buy. Don't make the mistake of thinking that Ebay goods are all second hand; whilst many sellers are individuals clearing lofts, thousands of small businesses, manufacturers, wholesalers, liquidators and retailers also use the site.

It works like any search engine. From the opening page, enter, say, "Glass octopus" and press the Search button. If there are any for sale, they will pop up in front of you.

Click on one of the octopuses to read the full details, including the postage costs (look carefully at these, as they can sometimes make an apparently cheap price much less attractive).

If you have questions, you can email the seller; press the "Ask the seller a question" link and fill in the form. He doesn't have to answer, but if he ignores you my advice would be to forget about buying from him.

If you do want to bid, press the "Place Bid" button and follow the instructions.

This brings us to a clever wheeze - Proxy Bidding. Bids in Ebay auctions rise in pre-determined increments, but you are free to enter your maximum bid and let the Ebay computer bid for you, in these steps. For example, if the last bid was 99p, but you are prepared to pay £5.00, you bid £5.00. Your initial bid, as far as the world outside is concerned, will be £1.04, but if someone else outbids you, Ebay will keep bidding on your behalf until someone bids more than £5.00.

Anyway, let's assume that you won the auction - you now have to stump up. Ebay will tell you that you've won and the seller will send you an email with payment details. The most popular method is by using PayPal; this is an Ebay subsidiary that acts as an intermediary and passes money between customers, allowing you to make payments using credit and debit cards. It is free to buyers and offers a very convenient, safe and quick way of sending the cash. Most sellers, at least in the UK, will also accept payment by cheque but may impose a delay before sending the goods to allow for the cheque to clear.

Once he has the money, the seller should send you the stuff. If it arrives safely and is what you expected, you should to leave a "Feedback" comment about the way you have been treated - not compulsory, but it helps others.

If there is something wrong, contact the seller at once by email, and try to sort matters out. If that fails, Ebay have a dispute resolving service, but let's hope it doesn't come to that. Most of the time, sellers are keen to retain their good Feedback score, and will be both helpful and generous in settling problems.

If you want to try it, I suggest that you buy something small and learn the system. There is also a lot of well written advice on the site - click on Help at the top of the page.

Next month we'll discuss selling the contents of your attic to pay for that round the world cruise.