Bidding is the act of making an offer for an item that is up for auction. Bidding on eBay however is slightly different, and does not work in exactly the same way as normal auctions, at least in theory. Bidding on eBay is meant to be fun, but remember that all bids on eBay are binding, except in the sales of real estate or businesses and the sales of items that are prohibited by law or by eBay's user agreement.

On eBay, you enter the maximum amount for the item you are willing to pay, and then eBay's bidding system bids for the items on your behalf. Meaning supposing you are willing to pay $100.00 for an item, you can end up paying only $30.00 for the item, if that was the highest maximum bid anyone else placed.

Bidding on eBay can be very addictive, so its a good idea to have a pre - determined amount you are willing to spend for an item and not exceed it regardless of loosing out on the auction. A good strategy here is to use eBay's proxy bidding system to automatically bid on your behalf. This means you don't have to keep coming back to re-bid every time someone places a higher bid.

An Example of how eBay's Proxy Bidding Process Works

* Search for an item you want to bid on.

* You determine how much you are willing to pay for it, in this example $30.00.

* The current minimum bid on the item is $18.00.

* Enter your maximum bid of $30.00.

* If there are no other bids on the item, eBay's proxy server will bid for the item at the minimum of $18.00.

* If someone bids $22.00 for the item, eBay's proxy server will automatically increase your bid to $23.00, which is what it is currently bidding for plus the minimum increment.

* EBay then emails the other bidder to inform them that they have been outbid.

* If there is another bidder with a higher maximum, you will obviously be outbid. But if no other bidder has a higher maximum, you win the auction, and the item is yours and this saves you the time and effort of having to sit around to bid again anytime you are outbid.

And because the proxy bidding system bids using your pre - determined maximum amount, there is no tendency for you to overbid, which significantly saves you some money. Of course you will not always win if someone bids a higher maximum value, but then it will not make you over spend, and because it's eBay you can always come back again and bid on a similar item from a different seller.

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