In 2004, a South Florida woman listed a partially eaten grilled cheese sandwich on eBay. The sandwich sold to the highest bidder for $28,000. She believed, and showed in the auction's photos, that the sandwich had the image of the Virgin Mary in one of its slices of bread.

EBay is a global phenomenon -- the world's largest garage sale, online shopping center, car dealer and auction site with 147 million registered users in 30 countries as of March 2005. You can find everything from encyclopedias to olives to snow boots to stereos to airplanes for sale. And if you stumble on it before the eBay overseers do, you might even find a human kidney or a virtual date.

In this article, we'll find out how you can buy and sell items on eBay, examine how the bidding process works, look at ways you can protect yourself from auction fraud and take a look at the business and technology of the largest auction site in the world.

eBay Basics

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.

Search results for keyword "Apple iPod"

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.

In this auction, the Starting Price is $8.99, and the Buy it Now price is $9.99.

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 Infrastructure

A series of service disruptions in 1999 caused real problems for eBay's business. Over the course of three days, overloaded servers intermittently shut down, meaning users couldn't check auctions, place bids or complete transactions during that period. Buyers, sellers and eBay were very unhappy, and a complete restructuring of eBay's technological architecture followed.

In 1999, eBay was one massive database server and a few separate systems running the search function. In 2005, eBay is about 200 database servers and 20 search servers.

The architecture is a type of grid computing that allows for both error correction and growth. With the exception of the search function, everything about eBay can actually run on approximately 50 servers -- Web servers, application servers and data-storage systems. Each server has between six and 12 microprocessors. These 50 or so servers run separately, but they talk to each other, so everybody knows if there is a problem somewhere. EBay can simply add servers to the grid as the need arises.

While the majority of the site can run on 50 servers, eBay has four times that. The 200 servers are housed in sets of 50 in four locations, all in the United States. When you're using eBay, you may be talking to any one of those locations at any time -- they all store the same data. If one of the systems crashes, there are three others to pick up the slack.

When you're on the eBay Web site and you click on a listing for a Persian rug, your computer talks to Web servers, which talk to application servers, which pull data from storage servers so you can find out what the latest bid price is and how much time is left in the auction. eBay has local partners in many countries who deliver eBay's static data to cut down on download time, and there are monitoring systems in 45 cities around the world that constantly scan for problems in the network.

This infrastructure lets millions of people search for, buy and sell items simultaneously. On the user end, it all works seamlessly. Let's try it out.

Using eBay: Browsing for Items

The best way to learn how to use eBay is to dive right in. What do you feel like looking for today? A surround-sound system? A mink stole? HowStuffWorks could use a Homer Simpson Pez dispenser. Let's look for one.

There are two ways to go about finding a Homer Simpson Pez dispenser. We can browse, or we can search. Let's start by browsing -- it's the slower, more round-about method, but it's a good way to get a feel for eBay's category system. The most popular categories are listed right on the eBay homepage, on the left side.

Pez dispensers are typically considered collector items, so the Collectibles category is a good place to start browsing. If we click on the Collectibles link on the homepage, we end up at a page listing all of the Collectibles subcategories.

At the very bottom of the page, you can see that there's actually a subcategory called Pez, Keychains, Promo Glasses, and within that subcategory is another subcategory called Pez.

That seems like a good fit. Clicking on "Pez" brings us to an auction-level page:

On this page, you can see that:

• There are 3,355 listings in the Pez category.
• The listings are currently sorted by time, with the newest auctions first.
• We can search within Pez listings.

Since we're looking specifically for a Homer Simpson Pez dispenser, "Homer Simpson" is a good term to use to narrow the results. If we enter "Homer Simpson" in the search box directly above the listing, it's only going to search the Pez subcategory, not all of eBay (although you can search all of eBay using a dropdown menu in the category field). Here's what comes up:

Thirteen items isn't bad, but we might be able to find more. When you enter a search term and there are fewer results than you'd like, the first thing to do is go back up to the search field and check the box for "Search title and description." The first search we did checked only the auction titles for the term "Homer Simpson." Searching only titles is a good way to narrow your results if you know exactly what you're looking for and what most people call it -- for example, if you're looking for a GPS receiver, it's a pretty safe bet that anyone selling one would put "GPS" in the title. On the other hand, someone selling a Homer Simpson Pez dispenser might not put "Homer Simpson" in the title -- she might put "Simpsons" or only "Homer." So now we're going to search entire auction descriptions, which typically returns more results:

We now have 23 listings to look through. But there is a much faster way to get to the place we've ended up at. If you're just looking for a bargain on some type of collectible, browsing is the way to go; but if you're looking for something specific, the eBay search function is the quickest way to it.

Using eBay: Searching for Items

At the top of the eBay homepage, there's a search box where we can enter what we're looking for.

Here's what comes up in our simple keyword search:

Our simple keyword search delivered nine matches.

When you do a simple search, the auction results page also tells you which categories your results are in. You'll notice that there are matches for Homer Simpson Pez dispensers in other places besides the Pez category. So when we search both titles and descriptions, we end up with 25 results -- more than we did when we were browsing.

There's a listing about halfway down the page for a full set of Simpsons Pez dispensers, including Homer, with a starting price of just 99 cents.

That seems like a good deal. Here's the top of the auction page, where you'll find the basic auction stats:

The starting price is low, the shipping price is reasonable, and the seller has 99.6% positive feedback. Always check the shipping price, as some sellers mislead buyers by selling the item for cheap and then making up the difference by severely overcharging for shipping, and always check the seller feedback. The feedback is how you know if you can trust the seller (and your feedback is how the seller knows he can trust you). We'll talk more about feedback in the next section, but for now, we just need to know that 99.6% positive feedback is a good sign.

Since we're interested in this auction, we'll click on "Watch this item in My eBay" (top right of the auction page) so we can get back to it easily.

Using eBay: Buying Items

To look for an item, you don't need to register -- you can browse, search and watch items (up to 10) as a guest. You can't bid or buy as a guest, though. So the next step is to register with eBay here. It's quick and free.

Now we can place a bid on the set of Simpsons Pez dispensers. If we click on the link in our watch list, we end up back at the auction page. There are four main sections to any auction page:

• Title/Overview - This is where you see the basic information, like auction title, price, shipping price, seller information and how many bids have been placed so far.

• Description - This is where the seller provides details about the item.

• Shipping, payment and return policy - This is where you can find full shipping information, any details the seller wants a bidder to know about making payment (including which methods are accepted) and what the seller's return policy is.

• Bidding - This is where you place a bid on the item.

eBay's bidding process works like this: You enter the maximum amount you are willing to pay for the item, and eBay bids incrementally on your behalf until the bidding reaches the maximum amount you entered. So if we decide we are willing to pay $2.00 for this set of Pez dispensers, we enter $2.00 in the bid slot.

When we click "Place bid," the next screen is a confirmation screen where we can see the bid price and commit to it. Once we place and confirm our bid, here's what the auction page looks like:

We are now the current high bidder.

The top portion of the page with the blue background is for our eyes only -- no one else can see what our maximum bid is. Why is the current price $0.99 and not $2.00? It's because when you're the first bidder, no matter what you enter as your maximum price, your first bid is always the starting price. If someone bids against us, eBay will bid on our behalf up to $2.00 in $0.05 increments (low-price auctions use very small increments, while high price auctions use larger increments). So if another user comes along and enters $1.25 as his maximum, eBay will bid $1.31 on our behalf, and we'll still be winning. But if another user places a maximum bid of $2.01, we've been outbid (and eBay will send us an e-mail to this effect in case we're not watching the auction). At this point, if we still want these Pez dispensers, we have to enter a new maximum bid.

This is where eBay's bidding process doesn't work exactly like it's supposed to -- and starts to get exciting. If every bidder truly entered the maximum he was willing to pay, auctions would end with little fanfare. The person who entered the highest maximum bid would quietly win. But humans being human, the actual maximum amount they're willing to pay is usually "a tiny bit more than what everyone who's bidding against me is willing to pay." If we still want our Pez dispensers, we'll enter a new maximum bid of, say, $3.00; and as long as the other bidder's maximum amount is less than $3.00, we'll be winning the auction again. Our coup might be temporary, though, because if the other bidder wants these Pez dispensers as much as we do, he's going to bid again until he outbids our maximum. And now we have a bidding war.

Bidding wars are a rush -- and they're sometimes very expensive. If this war continues for the three days until the auction ends, we could end up paying a hundred bucks for these Pez dispensers. It happens. The adrenaline takes over and people start bidding to win -- not necessarily to win a few Pez dispensers, just to WIN. For this reason, most of the bidding happens in the last two minutes of an auction. People wait to place a bid until an auction is about to close -- this way, they can catch other bidders off guard, and hopefully no one will get the chance to outbid them. The last 10 seconds of a bidding war often becomes a battle of bandwidth. Someone using a dial-up connection will never be able to place a winning bid in 10 seconds. Someone using a cable modem can place a winning bid in two seconds.

There is at least one reason why someone would place a bid very early in the auction: to remove a "Buy it Now" option. Remember that when an auction item also has a "Buy it Now" option, if someone decides to "Buy it Now" the auction is over. But the opposite is also true: As soon as someone bids on the item, the "Buy it Now" option disappears. If someone comes across an item she wants but she's not willing to pay the "Buy it Now" price, she'll enter the minimum starting bid just so another user doesn't come along and buy it out from under her.